CPD IN THE NEWS

This article is published in collaboration with Scutify, where you can find real-time markets and stock commentary from Robert Marcin, Cody Willard and others. Download the Scutify iOS App, the Scutify Android App or visit Scutify.com.

Daily Reckoning founder Bill Bonner thinks central banks are waging war on the markets. He also believes they will lose.

I wholeheartedly agree with Bonner's rationale. Let's tune in.

This is a guest post courtesy of Bill Bonner and the Daily Reckoning.

Why the Feds Will Lose Their War on the Markets

The markets continue to dawdle. Not much conviction in either direction.

We've already looked at the War on Poverty, the War on Drugs and the War on Terror.

So let's move on...using our new lens to look at another of the feds' fake wars.

Dirty War

No war was ever officially declared against the markets.

But for four decades the feds conducted covert operations...a dirty war in which they've tried to mislead, obstruct, and suppress market forces.

They used fake money, fake savings, and fake interest rates to confuse investors, businesses, and consumers.

They didn't say so directly, but their purpose was to give out false signals so that people would change their behaviour.

'Demand' was too weak, they said. What to do about it?

They flooded the system with phony savings (credit).

Price signals were distorted. Credit limits seemed to disappear. Debt limits were eased.

Then, in 2008, the war turned hot...with the feds actively and overtly holding down interest rates to push up stock and bond prices.

In response to the crisis they caused - by encouraging too much debt in the housing sector - they claimed that the 'free market' had failed.

They were just responding to the 'emergency', they said.

Soon, everybody got in on the act - expressing an opinion about how high (or low) interest rates should be.

Force and fraud

Believe it or not, an activist group called 'Fed Up' argues that raising rates is...you guessed it...racist!

Institutional Investor magazine reports that a group funded by 32-year-old Facebook cofounder Dustin Moskovitz is lobbying against rate increases on the grounds that higher rates are bad for US workers. From the website:

'The truth about the economy is obvious to most of us: not enough jobs, not enough hours, and not enough pay - particularly in communities of color and among young workers.

'Some members of the Federal Reserve think that the economy has recovered. They want to raise interest rates to slow down job growth and prevent wages from rising faster. That's a terrible idea.

'We stand with millions of workers and their families in calling on the Federal Reserve to adopt pro-worker policies for the rest of us. The Fed can keep interest rates low, give the economy a fair chance to recover, and prioritize full employment and rising wages.'

What? Who are these people? Do they have tails? Horns?

They're right about one thing: When the Fed tries to control the economy, it is politics, not markets, at work.

Markets work by persuasion and voluntary exchange. Politics works on force and fraud. Fed Up is a political organisation trying to influence how the force and fraud is applied.

But let's look at the feds' War on Markets through our now-familiar scope.

Victory is impossible

First, is this a war the feds can win?

No. Of course not.

Markets can be suppressed, delayed, and denied...but never eliminated.

Markets do not stop working just because you try to bend, distort, and even outlaw them. Victory is impossible.

The market for drugs does not stop just because the feds make them illegal. Instead, they reprice illegal drugs, taking into account the increased cost of doing business.

Nor does poverty disappear just because the feds make war on it.

'The poor will always be with you,' said Jesus, wisely.

Wealth and poverty are relative; there will always be some rich and some poor. Passing laws will not change that.

And 'terrorism'?

Those who do not have access to conventional armies always resort to unorthodox attacks.

That's what American colonists did when they launched their war against the British in 1775.

It's what the Jews did when they launched their 'insurgency' against the British in Palestine in 1939.

And it's what the Maquis did during the occupation of France by the Nazis during the Second World War.

Terror won't stop any time soon. Nor will markets cease to function.

Bubbles, bankruptcies, and misery

Second, does the enemy gain strength from the 'war' against it?

Well, yes and no.

Markets work perfectly well whether you make war on them or not. Governments can put any price on anything they want. But only markets can tell you what they are worth.

Just look at what happened in the Soviet Union. Or China, pre-1979. Or Venezuela.

Who bought anything from China when the communists were setting prices?

Who goes to Venezuela to do his shopping today?

We visited Russia soon after the Soviet Union was disbanded. Markets were just opening up. But after 70 years of price fixing, there was almost nothing to buy. Almost everything that was being sold had been pilfered from the army. We bought a pair of boots for $1.00. We still have them. The soles are so stiff they barely bend.

There are really only two types of economies - command economies and market economies. The latter work for everyone - but you never know who the real winners will be. The former work only for the commanders. Then, when they have stolen everything there was to steal, markets reassert themselves.

Economies are price-discovering, information-generating learning systems. On the world market, every economy has access to the same resources, more or less. It's what you do with them that counts.

Dictating prices is like teaching students that Japan won the Second World War...or saying that two plus two equals five...or rounding off Pi to three just to make it easier to remember.

But the more fake information you give out, the more valuable real information becomes.

A war the feds will ultimately lose

Third, did it create a new, corrupt Deep State industry? And fourth, do the combatants on both sides gain as the public loses?

Not exactly.

This is different from other 'wars' announced by the Deep State. This is how the insiders fund their other wars...and how they shift trillions of dollars from the public to themselves.

The War on Markets distorted almost all industries and corrupted the entire economy.

As reported here many times, suppressed interest rates alone probably cost savers as much as $10 trillion since 2008. Goosing up asset prices probably shifted another $10 trillion or so to the people who own them (typically, the elite).

As in all of these fake wars, the casus belli is phony.

Markets do not hurt people; they help them. Price signals, set by markets, are essential. Otherwise, you don't know whether you're adding wealth or subtracting it.

Trying to suppress free markets or abolish them always leads to confusion, bubbles, bankruptcies, and misery. Economies weaken; people grow poorer.

Since 2008, wages have been stagnant or falling for most people...GDP growth has declined and is now probably negative...productivity growth has declined more than any time in the last 40 years...world trade levels are back to 2009 levels...and the bounce-back from the Great Recession was the weakest on record.

For now, the war serves its real purpose: to increase the power and wealth of the Deep State insiders.

But it is a war that the feds will ultimately lose.

Trying to suppress markets is like putting a giant cork in the mouth of a volcano. It doesn't stop the eruption; it just makes it more violent.

Regards,

Bill Bonner,

For The Daily Reckoning, Australia

End Bonner - Mish Start - Fed Up

Let's start with three truths by Bonner.

By Scutify

Source

Starbucks employees say their schedules aren’t nearly as sweet as those pumpkin spice lattes they’re serving up this fall.

In a new report from the Center for Popular Democracy, a nonprofit that works with community groups, Starbucks workers said the coffee company has failed over the past year to make good on a promise to improve employees’ schedules. Instead, employees said they still face unpredictable workweeks, obstacles to taking sick leave, insufficient rest and staffing, and a failure to honor their availability.

“Starbucks’ frontline employees bear the brunt of the management imperative to minimize store labor costs, which takes precedence over attempts to stabilize work hours, provide healthy schedules, and to ensure employees have real input into their working conditions,” the report states.

The issues detailed in the report are familiar to anyone to many who work on “non-standard” schedules common among low wage jobs.

Starbucks first came under fire after a New York Times article from August 2014 described the struggle of a Starbucks barista and single mother, whose irregular work schedule caused turbulence in her personal relationships, other jobs and parental routine. The source of such chaos was supposedly Starbucks’s sophisticated scheduling software that cuts labor costs by arranging workers’ weeks based on sales patterns.

While this technology can boost a business’s profits, it can also leave workers working back-to-back shifts (also known as ‘clopening’), or not receiving enough hours to make ends meet. Sometimes, as the Timesarticle pointed out, employees would commute to work just to find their schedule changed.

After the public backlash, Starbucks promised to revise its policies and end the irregular scheduling practices for its roughly 130,000 baristas in the U.S.

To achieve this, Starbucks said it would post all work hours 10 days in advance, and give any baristas with more than an hour long commute the option to transfer to a more convenient location. Starbucks also said it would revise the scheduling technology and kill the clopening shift.

But much has remained unchanged, according to the 200 workers across 37 states the Center for Popular Democracy interviewed.

Nearly half of the surveyed Starbucks employees said they received their schedule one week or less in advance, and one in four workers said they still had to work clopening shifts.

Employees also reported feeling as though managers disregarded their availability, and denied them more hours when they needed additional work. Finally, 40 percent of employees said they faced barriers to taking sick leave when they were ill.

None of this seems to fit with Starbucks’s reputation as a “fabulous company” to work for, as jobs and recruiting website Glassdoor described it in its annual ranking of the 50 best places to work in 2014. Starbucks came in at No. 39.

The Center for Popular Democracy’s report did have some suggestions for improvement, however, recommending that Starbucks guarantee minimum hours and full-time work for those who want it. It also said the company should mandate that managers provide predictable schedules so working families can have a more stable work-life balance, in addition to taking the pressure off sick employees to find a replacement for a shift.

Source: Boston.com

The Express-Times – October 21, 2013, by Colin McEvoy -

Hilda Gonzalez, who moved from Mexico to Allentown 12 years ago, was handed a speakerphone tonight and asked to tell an assembled crowd of 50 people her personal story.

But when the time came, Gonzalez said she couldn’t bring herself to do it because her own experiences felt so small compared to the roughly 11 million undocumented immigrants living in America.

“These are immigrants who have experienced the fear of being separated from their families,” she said. “Immigrants who have many times had to duck their heads. Immigrants who aren’t treated with dignity.”

Gonzalez was one of about 50 people who took to the streets of Allentown tonight in protest, urging their legislators to take action on immigration reform now that the government shutdown has been resolved.

“I think it’s well overdue that we as a nation do the right thing,” said Guillermo Lopez Jr., of Bethlehem, as the group marched on Hamilton Street. “No human is illegal. That is the truth of this land.”

With the debt ceiling crisis temporarily averted, President Barack Obama has urged Congress to pass a comprehensive immigration reform bill by year’s end.

The Senate approved such a bill in June that included investments in border security and a path to citizenship for millions of undocumented immigrants. But the House did not take action on such a bill and many in Congress have expressed skepticism that action will be taken now.

The Allentown protesters held such signs that read “We yearn to breathe free” and “We bleed red, white and blue,” and chanted phrases such as “Undocumented, unafraid” and “No papers, no fear.”

They carried candles and flashlights, which symbolized the hope that reform could bring immigrants out from the darkness, according to organizer Max Cohen, of the Center for Popular Democracy, which organized the event in conjunction with Communidad Unida de Lehigh Valley.

A similar rally will be held Tuesday in Easton, urging support for a resolution Easton City Council is scheduled to consider urging Congress to enact immigration reform.

That rally, run by Organizing for Action, will be held 5 p.m. in Centre Square, with the city council meeting starting at 6 p.m.

The Allentown protesters voiced particular hope that U.S. Rep. Charlie Dent, who they called a “level-headed, moderate Republican voice in Congress,” would be an outspoken voice on the issue.

Dent previously said the Senate’s bill had major problems, saying the border security elements in particular needed strengthening.

“We will work on practical solutions that respect the rule of law while responsibly dealing with the 11 million people, slightly less than the population of the Commonwealth of Pennsylvania, who are in this country unlawfully,” Dent said in July.

But the protesters said they hope Congress will move quickly before the midterm elections become too much of a distraction.

Among the participants was Adrian Shanker, president of Equality Pennsylvania, who said there are about 1 million gay, bisexual or transgender immigrants in the United States, and about one-third are undocumented.

“We can’t be equal until we are all equal,” Shanker said. “Eleven million people live in the shadows. That is not freedom.”

Source

Mahita Gajanan, The Guardian, 06.22.2015

Black customers at Spanish fashion retailer Zara’s New York stores have been disproportionately identified as potential thieves, a significant proportion of employees surveyed by the Center for Popular Democracy have claimed in a new report released on Monday.

A survey of 251 employees and a round of focus groups conducted by the union-allied workers’ rights campaign group claims there is a practice within Zara to label suspicious customers or potential thieves with the code words “special orders”. Once a “special order” was identified and his or her location radioed to employees’ headsets, an employee would follow that customer around, the report claims.

Forty-three percent of the respondents did not answer questions referring to “special orders” or said they did not know the term.

But out of the 57% that did respond to that question, 46% claimed black customers were called special orders “always” or “often”, compared with 14% who said the same about Latino customers and 7% about whites.

Employees quoted in the survey claimed special orders were identified by “dressing a certain way” and were “mostly African American”, according to the CPD. One employee told the group he felt “that black customers were targeted when it came to stealing”, the report said.

One black employee claimed that when he had come in to pick up a check one day wearing a hooded jacket he was identified as a special order and prevented from entering a back office.

Connie Razza, CPD’s director of strategic research, said the code words used at Zara had now changed from “special orders” to a request for “customer service” to go to the location of the suspicious customer.

The report also claims that employees of color face unequal conditions within the company’s eight New York City stores.

“I was expecting some level of discrimination, but the degree of disparity with workers getting raises and hours that vary so dramatically was surprising,” said Razza.

The report claims:

Black employees are more than twice as dissatisfied with their hours as white employees.

Darker-skinned employees were least likely to be promoted, and received harsher treatment from managers.

Lighter-skinned employees of color and white employees experienced better treatment within the company, with higher status assignments, more work hours and a stronger likelihood of being promoted.

Many of the employees interviewed felt there was favoritism within the company based on race.

Razza said that while the retail industry was known for unpredictable working schedules and low wages, the situation was “even worse for black employees”.

The report, compiled from surveys conducted between February and April, claimed employees said that managers showed favoritism, and “many of the employees interviewed felt that favoritism is based on race”.

Such favoritism, they said, can have an impact on promotions, the distribution of work hours and management evaluation and treatment, the report claimed.

Of the 251 employees surveyed, 130 identified as Hispanic, 59 as black, 34 as white, 12 as Asian and 11 as mixed race. Employees were also identified by their skin color on a scale of one to four, with one indicating very light skin and four indicating dark skin. There are approximately 1,500 Zara employees in New York, suggesting one-sixth were surveyed.

“We found darker skinned employees were least likely to be promoted, and received harsher treatment from managers,” Razza said.

In some instances, the report claims, managers told employees not to take the survey. On at least one occasion, managers called the police on one of the employees taking the survey, the CPD claims.

A spokesperson for Zara USA denied any of the claims were accurate.

“Zara USA vehemently refutes the findings of the Center for Popular Democracy report, which was published without any attempt to contact the company,” the spokesperson said in a statement to the Guardian.

“The baseless report was prepared with ulterior motives and not because of any actual discrimination or mistreatment,” the statement went on. “It makes assertions that cannot be supported and do not reflect Zara’s diverse workforce. Zara USA believes that the report is completely inconsistent with the company’s true culture and the experiences of the over 1,500 Zara employees in New York City.

“We are an equal opportunity employer, and if there are individuals who are not satisfied with any aspect of their employment, we have multiple avenues for them to raise issues that we would immediately investigate and address.”

Referring to the claims about black customers being disproportionately identified with the code words “special orders”, it said: “We are a global multicultural company serving valued customers across 88 countries, and do not tolerate discrimination of any form.”

In a later statement, a Zara USA spokesperson added: “The expression ‘special order’ is a term used to designate a common situation in which associates are requested to enforce customer service and zone coverage on the floor. It does not designate a person or group of people of any category.”

Referring to claims about discrimination in promotions, the spokesperson said: “In its most recent round of internal promotions at Zara USA, approximately half were Hispanic or African American employees. In addition, approximately half of all hours are regularly allocated to Hispanic or African American employees. These facts clearly demonstrate that diversity and equal opportunity are two of the company’s core values.”

According Zara, approximately half of all Zara USA’s employees are Hispanic or African American.

The report arrives on the heels of a $40m discrimination lawsuit filed earlier this month by Ian Miller, who was general counsel for Zara USA Inc from 2008 until this March. According to the lawsuit, Miller – who is Jewish, American and gay – said he was excluded from meetings, given smaller raises than co-workers and subjected to racist, homophobic and antisemitic remarks because he did not fit the company’s “preferred profile” of Christian, Spanish and straight.

Miller also claimed his harassers were protected from punishment by company founder Amancio Ortega Gaona. He sued Zara, his former supervisor Dilip Patel and former Zara USA CEO Moíses Costas Rodríguez, under various New York state and city laws prohibiting pay discrimination, wrongful discharge, retaliation and hostile work environments.

Razza claimed discrimination pervaded the whole company.

“It’s a corporate culture that’s very problematic,” she said. “The lawsuit brings to light the depth that discrimination pervades Zara USA. Given the revelations of the lawsuit, we felt it was very important to reflect that it happens across all levels.”

The lawsuit and report follow a number of occasions during which Zara was criticized for selling items with racially insensitive designs. A bag embroidered with swastikas was pulled from stores after customers complained in 2007. In 2013, Zara sold necklaces with figurines in blackface.

Last August, the retailer was the subject of a backlash from customers for two different shirt designs — one striped and emblazoned with a gold star that resembled uniforms worn by Jewish victims in Nazi concentration camps and the second a white T-shirt displaying the words “White is the New Black”.

There is a recent history of controversies over alleged racism in the New York retail sector. In 2013, Macy’s and Barneys, two of New York’s most famous department stores, faced investigation from the state attorney general after several customers accused the stores of racially based discrimination.

Macy’s and Barneys both came to settlements for $650,000 and $525,000, respectively, in August 2014.

Razza said the CPD focused on Zara because of the company’s concentration in New York City and recent organization efforts by workers for fair wages at Zara.

Source: The Guardian