Sunday, November 30, 2008

5 reasons to go to the Carnegie if you're in town in December

K. and I visited the Carnegie Museum of Art this afternoon after brunch at Kiva Hahn. As a working artist, I am quite guarded about when and where I see new art - the secret conversation that I have with my own artwork can be interrupted by the 40-100 voices that jump in when I go to see work in a museum setting, polluting the in-studio dialogue.

But. It was time. I had to get a look at the International before it takes off. And then there was the pleasant surprise of Worlds Away, a show about suburban architecture.

That's where I'll start, with all my illegal, copyright-violating, guard-pissing-off in-Museum phone photography.


A powerpoint with voiceover projected on the semi-topographical map of a mall in Fishkill.


The guard was too close, no pictures. You'll have to just go visit.



Its made of thread and wax, by someone with an Indian name. Stunning.

You'll notice I make no mention of all the wall text and heady theory etc. The work, overall, is beautiful, if, for the most part, on the clinical side. Mario Merz condenses language into an object better than anyone, and still riffs on fibbonacci numbers with neon. Lots of graffitti-influenced surface-vs-surface, some giving the Museum halls pregnant walls ... whatev... I'm way more interested in --


WTF??? These drawings and etchings are magnificent mental landscapes of imaginary penury. In Piranese's incredible draftsmanship. Oh god, the torturous details ... The CMA provides big magnifying glasses, too, to let you examine stroke by stroke the master drawings of piers with people strapped to pillars and suspended cages. Not to mention his stray line drawing in pen and ink of a lady with chained wrists facing the viewer, and random domestic exchange happening behind her.

RUNNER UP : In every third gallery, a dad asking a guard, "Where's the dinosaurs?"

BONUS ROUND : Friedrich Kunath inherits Miro and Klee's strange-map draw/paint technique. Intimate. The lines get a little soft, turning things towards nostalgia in general, and he has his moments of clumsiness. But it works in creating painting that is not an argument (for once) but is instead a collection of natural gestures, a private language accessible enough to be public.

Rust Belt Blogger December Event: Public Art Walk

OK, this isn't really an artwalk but I think people could cheat or stretch it. The idea is for people across the rustbelt to simulaneously post on their favorite local public art work. The last neighborhood walk post had many participants from Pittsburgh with posts about Downtown, Shadyside The South Side, Beleview, Squirel Hill, Point Breeze, Friendship, Allentown and Milvale.

"Pick a piece of public art and tell us why you picked it. Do you love it? Did you make it? Do you hate it and hope it gets torn down? This "assignment" should be easier than the neighborhoodwalk. You can even "cheat" and take a picture from flickr (respecting the creative commons license of course.)"

Post it on December 11th.

New artist initiated endeavors


With the downturn in the market, some artists are taking matters into their own hands. just a few short months ago, Tracy Helgeson started a new blog, showcasing small works at incredibly reasonable prices. I've followed Tracy's blog, Works by Tracy Helgeson, for quite some time now and have always been impressed with her sharing the trials and tribulations of showing and selling her work. Just two weeks ago, Tracy began a new endeavor, The Fine Art Department. This new blog is a showcase for other artists who have begun sites where collectors can purchase work directly from the artist. The selection is curated by Tracy from artist submissions and is limited to just twenty-some artists.

Jeanne Williamson has begun Small Art Showcase in the same vein. Small Art Showcase tags itself as A collection of fine artists who are making their work accessible and affordable to art lovers and collectors. Neither of these two very generous artists are benefiting from any sales. Both seem to be just doing this because they see the need. Both sites provide links to artists sites. It's a great idea, especially at this time of year.

This is such a great idea. It is something that is only possible through the use of the internet.

Friday, November 28, 2008

The Scarlet Letter

I know, it's been a while since I put up a drink & draw post. The last month or so has been a bad health for me and my family. And with the move to once -a-month sessions, I was just not able to get to the session last month. Anyway, Lauren modeled for us at drink & draw on Tuesday. Great session! When she walked out after changing into this costume, I didn't know what to think. We rarely do holiday themes for these costumed session, but this was really great!


Below is a slideshow of the sketches from the session --


drink & draw is moving to once a month! We will be meeting on the last Tuesday of each month. Sessions will start at 6:30pm.

Drink and Draw
is an open studio live model drawing session that meets last Tuesdays on the second floor of brillobox, located at 4104 Penn Ave, Pittsburgh, Pa. This session is relaxed, surprising, and inspiring. amazing models dressed in various themes, old timey music, great company, and decor. All mediums, except oils, welcome.

Drink & Draw
Upstairs @ 6:30PM | $10

get on our mailing list. email us at
4104 penn ave

Get Saved At The Church Of Stop Shopping

I once subletted a loft in Brooklyn with some of the first apostles of Reverend Billy's church. They tried to warn us all. Reject Paulson, Bernanke, and anyone else telling you to spend what you don't have. Save yourself, Sisters, Brothers, Fathers, Mothers---- The Shopocopalypse has come

Listen to the word. Drop the ipod, don't buy the Apple, say no to Elmo. Reject Victoria and all her Secrets. Stop Shopping!

He tried to save us but we didn't listen. But it's not too late. Repent. Reject before you are repossessed.

Thursday, November 27, 2008

Pittsburgh Steel's Lessons For Detroit

A Times story, believe it or not suggests that the auto industry take a lesson from the Steel industry collapse of the eighties, whose vital restructuring and ultimate, at least partial revival came in part through the pain of bankruptcy.

"Yet steel’s savior was not the government bailouts it ardently sought but exactly what it so long tried to avoid: bankruptcy. Only when the companies failed were they successfully slimmed down and retooled into smaller but profitable ventures. As debate continues over what, if anything, should be done for G.M., Ford and Chrysler, the steel industry may offer a model.

The steel and auto industries are both capital-intensive enterprises that peaked a half-century ago and have been intermittently embattled ever since. Both secured peace with their unions by vastly expanding benefits, a bargain that eventually hobbled them. Both had entrenched layers of management that believed — despite all evidence — they could wish away change."

One should always remember to distinguish between the disease of bloat, legacy costs, toxic business culture and failure to satisfy customer demand is the problem and that as long as it lasts-- death is inevitable. My post about Homestead talked about the diseased culture that had grown in the mills and management by the 1960's and 70's. This was the problem as was the chain letter of unrealistic entitlements which sapped the companies of the capital. Most doctors don't tell patients who are obese, smoke or do heroine to keep it up cause the pain of withdrawal is to great. But this is what politicians do every day.

"The failures also allowed for the renegotiation of labor contracts, something Wilbur L. Ross Jr., a specialist in distressed assets, realized when he began looking at the moribund industry. The only bidder for the bankrupt LTV Steel, he proceeded to buy Bethlehem and other old-line companies, putting them together as International Steel Group. He cut more employees and revamped work rules, taking Bethlehem, for example, from eight layers of management to three."

Ross, today thinks the pain and impact of the free fall bankruptcies impact on the economy would be too great to bear and recommends that the government make near term loan guaranties and force a tough restructuring on them, something to my knowledge there is no record of the government ever doing.

Please feel free to argue with me but come to the table with more than a tale of how painful and devastating the death of these companies will be. Death is usually a drag.

Weimar America 2 : Start The Presses

I want to warn you that there may be a bit of bold type in this post. Even I am still occasionally shocked by the actions of the government, by large numbers and still have the quaint belief that America is still a semi rational nation under the rule of law.

So, in my last Weimar America (yes it looks like a series) post, I warned about the risk of hyperinflation and what might happen if Fed began to "monetise" our ballooning debt by creating money out of thin air. Please tell me they are not doing it, but more and more wise people (the people who predicted this mess, like Peter Schiff, Jim Rogers and many others) are telling me this is what has begun to happen.

"You’ll also find this little snippet in the article, “Most of the money, about $5.5 trillion, comes from the Federal Reserve, which as an independent entity does not need congressional approval to lend money to banks or, in “unusual and exigent circumstances,” to other financial institutions.

Just another reminder that the private, run for profit, Federal Reserve has the printing presses cranked on overdrive in order to bailout Wall Street and the big banks, while the homeowner and the middle class see their savings devalued out of existence.

“If you print money all the time, the money becomes worth less,” warns Diane Lim Rogers, chief economist with the Concord Coalition, but its an empty threat to delirious traders and investors drunk on a record stock market rally after the government pumped more fake liquidity into the bloated bubble.

Veteran investor Jim Rogers echoed the sentiment, predicting the dollar is “going to lose its status as the world’s reserve currency,” adding, “It will be devalued and it will go down a lot. These guys in Washington, they want to debase the currency.”

A website called Prison Planet might be run by kooks you say, but the story's link is to an article in The San Fransisco Chronicle and quotes major investors and other sources like The Concord Coalition which could hardly called fringe.

"A deficit arises when the government's expenditures exceed its revenues in a particular year. Some estimate that the federal deficit will exceed $1 trillion this fiscal year as a result of the economic slowdown and efforts to revive it.

The Fed's activities to shore up the financial system do not show up directly on the federal budget, although they can have an impact. The Fed lends money from its own balance sheet or by essentially creating new money. It has been doing both this year."

The article also points out that these 8.5 Trillion in obligations and promises represent 60% of America's GDP.

Now one other question might come up. It sounds like other countries like England are also deep in a hole and are doing the same thing. Doesn't this mean that we are OK cause the dollar can't fall against anything if other currencies are falling too? The short answer is that all these currencies will fall against any real store of value like gold or any reasonably sound currency like those of Japan, China and other countries we owe money to.

The whole process is accompanied by constant reassurances that this is a temporary thing, and we will act responsibly in the future even though 60 years or more of U.S. history tell you that is very unlikely. The goal as usual is to kick the pain and hard decisions down the road to another administration or generation.

Wednesday, November 26, 2008

Weimar America

Sorry, they pulled that one since they want you to see the full film.

I've put a lot of videos and links about America's debt and financial condition in this post. I think that only by understanding this condition fully can one see the connection between America today and that of Weimar Germany.

Most people, to the extent they know anything about the Weimar Republic know only a few things-- it was a period of interesting art, Mann, Kandinsky, Klee, Grosz; -- something about carts of money to buy loaves of bread-- and finally, that it was shortly followed by the Third Reich.

Here is an extended quote from the book, The Age Of Inflation. The roots of Germany's problems began with the promises of Bismark's welfare state and the way Germany financed the costs of WWI.

"Like all the other banks, it offered assistance to the central government in financing the war effort. Since taxes are always unpopular, the German government preferred to borrow the needed amounts of money rather than raise its taxes substantially. To this end it was readily assisted by the Reichsbank, which discounted most treasury obligations.

A growing percentage of government debt thus found its way into the vaults of the central bank and an equivalent amount of printing press money into people's cash holdings. In short, the central bank was monetizing the growing government debt.

By the end of the war the amount of money in circulation had risen fourfold and prices some 140 percent. Yet the German mark had suffered no more than the British pound, was somewhat weaker than the American dollar but stronger than the French franc. Five years later, in December 1923, the Reichsbank had issued 496.5 quintillion marks, each of which had fallen to one-trillionth of its 1914 gold value.[1]

How stupendous! Practically every economic good and service was costing trillions of marks. The American dollar was quoted at 4.2 trillion marks, the American penny at 42 billion marks. How could a European nation that prided itself on its high levels of education and scholarly knowledge suffer such a thorough destruction of its money? Who would inflict on a great nation such evil which had ominous economic, social, and political ramifications not only for Germany but for the whole world? Was it the victors of World War I who, in diabolical revenge, devastated the vanquished country through ruinous financial manipulation and plunder? Every mark was printed by Germans and issued by a central bank that was governed by Germans under a government that was purely German. It was German political parties, such as the Socialists, the Catholic Centre Party, and the Democrats, forming various coalition governments, that were solely responsible for the policies they conducted. Of course, admission of responsibility for any calamity cannot be expected from any political party."

This was just the start of the problem. Germany was already deep in debt but it didn't feel like it could handle the sharp recession all the industrial countries had as they demobilized. To put off this pain and potential instability, they began to spend more and more. Many, many people, soldiers, farmers, workers and businesses needed help.

"Immediately after the war the German government, under the leadership of the Socialist Party, embarked upon heavy expenditures for health, education, and welfare. The demands on the treasury were extremely heavy anyway because of demobilization expenses, the demands of the Armistice, the disorders of the revolution, and the staggering deficits of the nationalized industries, especially the railroads, postal services, telephone, and telegraph. Public administration by the new men raised to power by the revolution, nevertheless, was extravagant, as the resources made available by the creation of new money were apparently unlimited. A number of measures for the nationalization of certain industries (e.g., the coal, electrical, and potash industries) were introduced, but failed to become law. The eight-hour day was enacted, and labor unions were given many legal immunities and privileges. In fact, a system of labor councils was set up which authorized the workers in each enterprise to elect representatives who shared in the management of the company! While government expenditures rose by leaps and bounds, the revenue suffered a gradual decline until, in October 1923, only 0.8 percent of government expenses were covered by tax revenues. For the period from 1914 to 1923 scarcely fifteen percent of the expenses were covered by means of taxes. In the final phase of the inflation the German government experienced a complete atrophy of the fiscal system."

The immediate effects of their actions weren't clear to most and the monetary authorities went to great lengths to tell people that the inflation people saw in their daily lives wasn't really there.

The other thing that reminds one of this time was not just that Germany was up to it's eyeballs in debt but that this debt was largely owed to foreigners who had once considered it a good credit. They continued to lend and only slowly realized their mistake. When they did, the Mark dropped like a stone and the real pain began.

Tuesday, November 25, 2008

The Long Depression

The recent market situation has a lot of people researching the word "Depression". For most people, the word evokes one era alone but there are perhaps closer links between our current problems and other periods in world history. One that I know about pretty well (but most Americans don't) is the inflationary depression in post WWI Germany. Another that some people are mentioning is the long serious depression of the 1870's. I thought I'd do a post on it because it was also a critical period in the history of Andrew Carnegie and early Pittsburgh. I'd like thoughts and feedback on this from history buffs, historians and people who heard tales from that time.

One thing that seems to come out is that real deep brutal downturns across entire economies seem to linked to fiat money. This was of course very true in Germany's crisis, and most economists now admit the Great Depression's original root cause was in the careless monetary expansion since the creation of the Federal Reserve. That is not to say particular regions and industries cannot suffer downturns in any economy. I also noticed that Depressions often closely follow wars and the debts they leave behind 1873 followed the Civil War and the Franco Prussian War, The Weimar period followed WWI as did the Great Depression.

Anyway here are a bunch of quotes and links to make sense of. Scott Reynold's Nelson places the starting point of the downturn in Europe.

"The problems had emerged around 1870, starting in Europe. In the Austro-Hungarian Empire, formed in 1867, in the states unified by Prussia into the German empire, and in France, the emperors supported a flowering of new lending institutions that issued mortgages for municipal and residential construction, especially in the capitals of Vienna, Berlin, and Paris. Mortgages were easier to obtain than before, and a building boom commenced. Land values seemed to climb and climb; borrowers ravenously assumed more and more credit, using unbuilt or half-built houses as collateral. The most marvelous spots for sightseers in the three cities today are the magisterial buildings erected in the so-called founder period."

I'm going to make a wild guess from the little I know of Bismark's ideology that the German and likely the Austrian States had some role in this credit promotion. And similar policies were promoted in the U.S. "expressed by railroad speculator Jay Cooke in 1869: "Why," he asked, "should this Grand and Glorious country be stunted and dwarfed--its activities chilled and its very life blood curdled by these miserable 'hard coin' theories--the musty theories of a bygone age." [1]

Of course Jay Cooke appears again at the center of the storm."In September 1873, Jay Cooke & Company, a major component of the United States banking establishment, found itself unable to market several million dollars in Northern Pacific Railway bonds. Cooke's firm, like many others, was invested heavily in the railroads. At a time when investment banks were anxious for more capital for their enterprises, President Ulysses S. Grant's monetary policy of contracting the money supply made matters worse. While businesses were expanding, the money they needed to finance that growth was becoming more scarce.

Cooke and other entrepreneurs had planned to build the nation's second transcontinental railroad, called the Northern Pacific Railway. Cooke's firm provided the financing, and ground was broken near Duluth, Minnesota, for the line on February 15, 1870. But just as Cooke was about to swing a $300 million government loan in September 1873, reports circulated that his firm's credit had become nearly worthless. On September 18, the firm declared bankruptcy.[6][7][8] The Northern Pacific would not be completed until 1883, and then by another financier: Henry Villard.[9][10]

This period also marks the transfer of global power from Europe to America. At the end of it, the few strongly operated firms with cash and little debt were able to buy out their weaker competitors. Carnegie Steel and Standard Oil come to mind.

Next Up --- A comparison to Weimar Germany.

World Turned Upside Down Part 2

The Times reinforced my thesis about American emigration trends with a story about American lawyers looking overseas for work. Again, it's not just that there's demand in other places and countries or that firms are opening and expanding offices in places like Tokyo, Hong Kong, Dubai, Doha and Singapore. The shift is that this growth is now firms growth engine. These jobs used to be very hard to fill.

"When Kirkland opened its Hong Kong office in 2006, Mr. Eich says, it was hard to complete its hiring locally. American and British firms there were willing to make candidates the kind of fantastic offers they’d rarely see at home. “Two years ago I saw third-years asking to be made partners,” Mr. Eich says. “With the market crash we immediately felt the inflection of that. These days I see partners happy to take a salary adjustment for their circumstances.”"

Monday, November 24, 2008

The World Turned Upside Down

The NY Times had a story the other day about the growing trend among Americans of Indian decent to return to India. This has of course always happened to some degree, but what strikes one is the number of wealthy and highly skilled people doing it and more importantly their reasons. Many see more economic opportunity and increasingly even basic stability and security in India.

This strikes against the deepest mythology held by most people in the world, that we are the land of economic opportunity and social stability. Even more scary is that the world economy is so intertwined with this belief and America so dependent on it that even small cracks in it would have a devastating effect. Remember that our country needs to import billions of dollars a day in new foreign loans and investment to finance it's debts.

The motivations seem like those that brought so many people here, only now they are reversed.

"Pessimism crept into the sunniest nation. A vast majority saw America going astray. Books heralded a “Post-American World.” Even in the wake of a historic presidential election, culminating in a dramatic change in direction, it remained unclear whether the United States could be delivered from its woes any time soon.

“In the U.S., there’s a crisis of confidence,” said Nandan Nilekani, co-chairman of Infosys Technologies, the Indian software giant. “In India,” he added, “for the first time after decades or centuries, there is a sense of optimism about the future, a sense that our children’s futures can be better than ours if we try hard enough.”

Dovetailing with this phenomenon is that millions of native born Americans are making similar decisions to pursue life abroad, for political reasons or to stretch out limited retirement savings, escape taxes or chase greater opportunities.

"But if the government is not counting, others are. Estimates made by organizations such as the Association of Americans Resident Overseas put the number of nongovernment-employed Americans living abroad anywhere between 4 million and 7 million, a range whose low end is based loosely on the government's trial count in 1999. Focusing on households rather than individuals (and excluding households in which any member has been sent overseas either by the government or private companies), a series of recent Zogby polls commissioned by New Global Initiatives, a consulting firm, yielded surprising results: 1.6 million U.S. households had already determined to relocate abroad; an additional 1.8 million households were seriously considering such a move, while 7.7 million more were "somewhat seriously" contemplating it. If the data collected in the seven polls conducted between 2005 and 2007 are fairly representative of the current decade, then, by a modest estimate, at least 3 million U.S. citizens a year are venturing abroad. More interesting, the biggest number of relocating households is not those with people in or approaching retirement but those with adults ranging from 25 to 34 years old."

Will new reasons emerge like real fear of a collapsing economy and currency dramatically losing it's purchasing power? This is actually the first major economic downturn we have experienced in the post Soviet world of expanded global options.

Wednesday, November 19, 2008

Rust Belt Blogger Update: Neighborhood Walks

I've been to busy enjoying the country slide into a replica of the Weimar Republic and gathering canned goods to have noticed hopeful signs of life on Rust Belt Bloggers which now has 111 members.

On November 11th a number of bloggers each put up a post on their blogs with the aim of creating a visual slice of daily life in the places they live. To many this might seem like a waste of time but I really don't think so. Many of our towns are chock full of real, honest assets that need to be remembered and rediscovered. Hopefully, after the government's desperate efforts to keep millions of people underwater in overpriced homes finally falls through, people will come back to looking for real value-- and find a lot of places shown in the walks.

"The Neighborhood Walk is a chance for individuals throughout the Rust Belt of the U.S. and Canada to recognize the place they live, work, or call home -- and to introduce it to the world. The project is the inspiration of a social network called Rust Belt Bloggers.

On November 11, 2008 (11/11/2008), bloggers, podcasters, vloggers, photobloggers and others throughout the Rust Belt region will each take a walk around their neighborhood, make media about it -- a blog post, photo gallery, video, or whatever you prefer -- and post it on the web.

These individual perspectives and accounts of life at the street level will show both strengths and weaknesses of these neighborhoods: new businesses taking root, old factories and shops closed and abandoned. By raising awareness this way, the people involved hope to build interest in simple revitalization efforts.

How can someone get involved? Take a walk around your block and photograph what you see. Sit outside and write about the people who pass and the world around you. Turn on your video camera and give a guided tour of your neighborhood.

Post your media anywhere -- your blog, Facebook, MySpace, anywhere. Tag it as "neighborhoodwalk" so everyone can seek out what everyone else has posted. Then do a search and see everyone else's neighborhood.

This is the first project of its kind dedicated to documenting and raising awareness of life, work, and culture in the Rust Belt of the United States and Canada. More than 20 bloggers throughout the region have already committed to the project, with more joining each day."

Looks like around twenty folks posted walks from areas all around the Pittsburgh region and places like Butler, Youngstown and Dayton, Ohio. See them here.

By the way-- Elmira, NY now has the nation's hottest housing market.

The New Yinzer presents

If you are out and about tonight, stop by Modern Formations for The New Yinzer readings. As always, The New Yinzer brings the best Pittsburgh voices out for readings and immersion into the literary efforts of our city.
The November installment of TNY Presents is a feast with all the trimmings. Join us as Karen Lillis, Yona Harvey, Amy Guth, and Boca Chica give us all a little something extra to be thankful for.

As always beverages will be provided the kind folks at Penn Brewery.

The New Yinzer Presents
Where: ModernFormations 4919 Penn Ave. (Garfield/Friendship)
When: Wednesday, November 19
Cover: $4

Friday, November 07, 2008

Homestead: The Glory and Tragedy of an American Steel Town part 2

"The corporation was said Life in 1946, "the most fabulous giant yet produced by the industrial revolution." Steel was the basic metal on which the development of America, and the building and rebuilding of the post war world, depended. The steel making facilities in Germany and Japan had been destroyed in the war and those in Great Britain substantially damaged. since no other countries had had a sizable steel industry, the corporation and the rest of the American steel industry faced almost no competition. There were no steel imports to America and American companies dominated the export trade."

The result was astronomical profit and sleepy complacency. "In 1950, the corporation produced 31.4 million tons of steel, surpassing it's war time high of 30.8 million tons per year. It's workforce in 1950 reached 288,265, the highest level in it's history except for the war years. Profits were immense. In 1950, the corporation made 215 5 million (that was real money back then folks-- multiply by something like 20 to come up with what that equals today) three times 1946 earnings and the largest amount since 1917, during World War I, when earnings were 224 million."(Page 243)

In spite of a string of additional acquisitions, mostly of new plants built during the war and the clear intent to create a safe monopoly environment, U.S Steel's market share had dropped dramatically from the 65% it had at it's creation to 33% in 1950. The company's lazy nature breed competition from smaller American firms like Bethlehem and Republic and also soon from a few foreign competitors. The basic oxygen furnace was developed in Austria, but there was no need to worry and more than enough business to go around.

And, the workers and their union's shared the prosperity with substantial wage increases in the 1947 contracts as well as new efforts to study plant safety and provide worker health plans. The succeeding contracts grew ever more generous and the once militant union grew into a stagnant giant resembling the industry it operated in.

It seemed like the problems of production had been "solved" once and for all. The plants were looked at as giant money trees that could never die or fail and perhaps could bear fruit with little water or fertilizer. The big issue was sitting down and sharing all the fruit. Investment and invention were a dangerous, disruptive hassle, best left to somebody else. New foreign mills adopted continuous casting technologies and new management methods based on continuous improvement. In fact, most USS plants were running on obsolete equipment, but that wasn't seen as an important issue like providing higher and higher salaries and increasingly large health and pension benefits for which to little was set aside. The patient was fat, happy and terminally ill. The union and management wanted one thing--- stability and a nice even lifestyle free of change or strikes.

A new sick culture had developed in the mills. " The notion of "getting it at the mill"was now a way of life---pencils:toilet paper; hammers, wrenches, pliers and screwdrivers; nickel, brass and other metals which could be sold to scrap dealers--- almost anything people wanted, they took, blue collar and white collar workers alike." Some workers slept on the job and golf became the universal path to success among management.

"The 1963 contract contained a new item-- an extended vacation plan that gave every worker with more than five years of service a thirteen week vacation with pay every five years. The plan was extremely costly and no other American industry had anything like it. But it was, for the most part, not questioned and highly praised." One worker called the situation in the early 1970's as " harvest mode". " Take everything out you can get and abandon the rest. And when you just take out and don't put anything back in, well pretty soon your holding pieces together with baling wire." The truth is that the company was eating it's seed corn leaving future workers to starve. The union's new goal was "total job security"; the only path to anything close to that meant producing the best possible products at at the lowest possible price and it looked like that hadn't been a priority in years.

A few years later when the reckoning came, both labour and management bent over backwards to act shocked at the company's condition and to shift the blame. Kind of looks like America today, doesn't it? We were in harvest mode for too long, most of our seed corn is gone and if we don't wake up we will starve.

Thursday, November 06, 2008

Homestead: The Glory and Tragedy of an American Steel Town

I had a long list of books related to the region's history and culture, I wanted to get around to reading. One of them that, I'm so glad I got around to was a book called Homestead: Tragedy of an American Steel Town written in 1992. It was written by a the former labour and workplace corespondent of the NY Times during the tragic and tumultuous years between 1979 and 1986 which saw the death and near death of much of industrial America. The writer's deep association with the industry and committed work talking to people in the town over many years really pays off.

The first few chapters and the last are in some sense, not that interesting to me---The massive pain of catastrophic job loss in all it's devastation are laid out in painful detail. Several other chapter's paint a vivid picture of the incredibly tough and insanely dangerous life in one of the world's largest steel mills-- a place where the author estimates more than 1000 workers lost their lives in the the works more than 100 year history.

The middle of the book holds a somewhat more dry but clear and concise history of both the massive Homestead works and the company of which it was a central part-- U.S. Steel as well as the birth of the American labour movement.

While, Pittsburgh had been a central part of the American iron, glass and industrial history almost from it's birth, the scale of the massive industrial complexes in the Mon Valley that kicked off with Carnegie's Edgar Thomson works in Braddock in 1873 were unprecedented. Carnegie copied the new Bessemer process used by a few new English mills, to build a company marked by an almost brutally competitive nature, quick to innovate in new technologies, aggressive in sales and driven to be the lowest cost producer. Soon other mills followed, opened by both Carnegie and a host small host of other operators. The business was very tough on everyone and required massive amounts of upfront investments in fixed capital. Miscalculations in projected demand or disruptive new innovations can and did bankrupt many, but the potential profits were huge. Workers in a Carnegie Mill and most competitors worked 12 hour shifts, six or seven days a week. Not surprisingly, both the managers, investors and workers dreamed of an easier way.

Carnegie bought the new Homestead mill across the river from Braddock from it's financially strapped competitor and and in a few years new mills were built by Carnegie in nearby towns on the Mon as many of the smaller competing mills were bought out and consolidated into companies controlled by JP Morgan. The stage was set for a tragedy that few saw coming. Carnegie was ready to retire from the brutally competitive industry he had worked so hard to dominate through pricing and relentless innovation and Morgan who never could take the strain. " Although he was regarded as the archetype of the American capitalist, Morgan was in many ways not a capitalist.... but as as Joseph Frazier Wall wrote: " He did not really believe in the free enterprise system.. Like most ardent socialists, he hated the waste, duplication and clutter of unrestricted competition". It was for this reason that he had been so intoxicated by Schwab's portrayal of a combined, efficient steel industry."

Morgan made Carnegie an offer of a massive payment in gold for Carnegie's mills to create a company controlling 65% of the existing industry and once and for all stop the unpredictable, competitive free for and replace it with a stable comfortable and reliable business that would run almost as a perpetual machine. The deal was done and most of the rest of the book deals with the results. The combined company seemed indestructible and the only central issue seemed to be one of dividing the profits among the owners and also increasingly with the workers. Problem solved-- capitalism was just too much work!

"By 1936, the stagnation at U.S. Steel was such that Fortune magazine "recalled that the Corporation's policy had once been summarized as 'No inventions: no innovations'" (p. 132) and Charles M. Schwab reported that "the chairman of US Steel admitted to him that the Corporation, in fact, had missed every 'new thing' in steel" (p. 132). Under Carnegie's reign, Pittsburgh-based steel facilities had competed successfully against growing location-based advantages of other regions by relying on innovation, efficiency, and superior management. U.S. Steel under Gary did participate in the geographic dispersion of American steel-making but its "Pittsburgh Plus" pricing (an artificial attempt to exercise industry price discipline by linking prices across America to steel prices in Pittsburgh plus freight from Pittsburgh) led to a hobbling of the corporation's growth into new markets and eventually shrank the region in which Pittsburgh-area steel was competitive. Even in its infancy, U.S. Steel was an illustration of inertia and captivation by sunk-cost investments."

A further quote from an industry expert was even more honest about the results.

"Actually the operation of basic processes has not changed significantly in either theory or fundamental design of equipment in the past 75 years. While automobiles were being made better and cheaper with ever newer processes.... tonnage steel as distinguished from the specialty or the alloy steels grew neither cheaper or better"
Charles Ramsayer 1935

Much of the rest of the book deals with the struggles of workers to attain a larger and larger share of company output. In fact-- it sort of looks as if distribution of profits was the primary thing people thought about more and more as the years went on. The post WWII period ushered in what seemed like a golden age, culminating in what were increasingly cosy relations between workers and management. There was more than enough money to go around, seemingly little prospect of competition from abroad and no need to sweat. The company spent big-- but rarely, if ever took the lead and often built new plants and expansions with equipment that was obsolete from the start.

Anyway, great book, well worth reading. I hope to get back with more thoughts about it.

Monday, November 03, 2008

Where in the world is kevin Stokes?

These things are starting to come in at greater frequency. Artists File Online has a discussion board with a lot of these scams listed. If in doubt about someone contacting you, please be sure to check in there to see if a history already exists. Please feel free to share your communiques'. The more these people are exposed, the less likely it will be that someone will get caught up in their salacious scheming.
My name is kevin, I am an individual art agent and interior decorator from Glasgow,
scotland. I got an order for the supply of some artworks from a group of client, and when
i came across your portfolio on your site, while searching for good artworks, I found some
of them to interest me and fit what i am looking for, and I intend to market these items
to my client and also negotiate a price that will include your price (i.e your selling price) and a mark-up as a profit for my effort.
Payment will be made directly to you at the price i am selling and i will expect you to ship after payment clears and send me my commission /margin afterwards.
My client prefers to make payment using a credit card as this is much easier and cost
effective for an international transaction thus will provide you directly their credit card for payment.
Please let me know if you do commission work and if you accept master card payment after which I will let you know the items we are interested in, and we can proceed with the order.
I am looking forward to a long term working relationship beyond this order.I am sorry I do
not have a website yet but it should be ready soon however you can always contact me if
you have any question and I would get back to you as soon as possible.
Hope to hear from you soon.
Best Regards.
kevin Stokes