Economic News 1999 January

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updated: 2018-03-30
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Michael Volker _BC Technology_
Tech companies will shine in 1999
"In 1998 May we launched the T-Net 20 B.C. high tech index to track the performance of BC-based public technology companies.   The intent was to draw more public - and investor - attention to the technology sector in B.C.   We selected the 20 largest companies, by market cap, and set the index to 1000 as of 1998 January 1.   At year end, the index stands at approximately 1400, an increase in value of 40% over the past year.   Two years ago, on 1997 January 1 the value of the index was 812.08...   According to the Batelle Institute, U.S. companies plan to increase their R&D spending in 1999 by 9.3%, following 9.7% in 1998...   I'm optimistic that our T-Net20 index will reach 2000 by 2000.   After all, where are the great investment opportunities if not in technology?"


unemployment insurance weekly claims







1999-01-07 10:28PST (13:28EST) (18:28GMT)
1998 was a record year for lay-offs: 103,166 in December
"In 1998, a lot of employment records were broken, all of them at the expense of workers, a key employment survey revealed Thursday.   Capping an already grim year, USA companies in December laid off a studding 103,166 employees -- double the number they let go in November and the highest monthly figure for the year, according to employment consulting firm Challenger, Gray & Christmas...   The December figure - the highest total since 1994, when 108,946 people lost their jobs -- also brought the 1998 fourth-quarter total to 246,339, the highest since tracking began in 1989...   By industry, 30,040 workers in aerospace/defense companies lost their jobs, while 17,219 in commodities cleaned out their desks.   And those in the financial and automotive industries followed, with 11,234 lay-offs and 10,573, respectively...   For 1998, U.S. companies cut 677,795 jobs in all, which far surpasses the previous decade-high of 615,186 in 1993.   The yearly total surpassed the 1997 figure of 434,350 by 56% and the previous decade-high 1993 figure of 615,186 by 10%...   Among industries, electronics took the biggest hit for the year, registering 84,186 job cuts in 1998.   Not far behind were industrial goods companies, which slashed 75,504 jobs.   On a regional basis where companies' head-quarters are located, California led the way with 91,920 lay-offs.   Texas and New York vied for a distant second place, with 66,624 and 65,677, respectively.   And Illinois, with 60,443 job cuts, and New Jersey, with 38,490, came in fourth and fifth."


Danny Arao
Under-Employment Has Increased as "Flexible" Working Conditions Intensify

_Corpus Christi Caller Times_
Job cuts show worry: String of lay-offs may signal that 1999 could be rocky
VNSA archives
Progressive Economic Network archives
"The number of Americans claiming unemployment checks fell by 22K to a seasonally adjusted 350K during the week ended January 2, the Labor Department said Thursday.   But that only partly reversed a surge of 83K, the biggest in 6 years, to 372K the week before.   Claims had fallen to an 8-month low of 289K during the week ended [1998] December 19...   The out-placement firm, Challenger, Gray & Christmas Inc., said announced lay-offs totaled 103,166 in December, a 5-year high and double November's job cuts of 51,642.   Fourth-quarter lay-off announcements totaled 246,339, the most since the firm began compiling the report in 1989."


Dave Skidmore _Corpus Christi Caller Times_/_AP_
1998 job market allegedly best in 41 years
"Economists who believe the jobless rate will rise somewhat this year point to a report Thursday from the out-placement firm Challenger, Gray & Christmas Inc. that lay-off announcements doubled to 103K in December from November."



William C. Symonds, De'Ann Weimer & Andy Reinhardt _Business Week_
Why the 4th Quarter Looks Like a Stinker: Profits are still historically high, but weak over-seas sales, price deflation, and high wages [sic] are taking a toll
"By December 28, some 400 such [low revenue] warnings had been issued...   Through November, corporations had unveiled plans to cut 574,629 jobs, just 7% shy of the decade's record high, set in 1993, according to out-placement specialists Challenger, Gray & Christmas.   With Citigroup, Case, and others wielding the axe in December, 1998 may be 'the worst year for corporate lay-offs in the 1990s', predicts Rick Cobb of Challenger.
  With many companies figuring 'they might as well get all the bad news out at once' with huge write-offs, net earnings will fall 5.5% in the fourth quarter, figures David A. Wyss, chief economist at Standard & Poor's DRI...
  Multi-nationals, buffeted by the Asian crisis for 18 months, will continue to feel the pain.   Coca-Cola, which gets 80% of operating earnings over-seas, recently warned that fourth-quarter net will come in some 25% below the $817M earned a year earlier.   And weak markets from Asia to Russia will continue to hammer Coke, which analysts say may not hit its goal of increasing unit volume 7% to 8% in 1999.   On December 17, Nike Inc. said second-quarter earnings fell 51%, and warned that future orders are down 37% in Asia, versus just 7% in the U.S.A.   Things won't get any easier for multi-nationals in 1999.   Asia 'is still showing no signs of recovery', says James E. Goodwin, president of UAL Corp., which lost $600M of business there in the 12 months ended September 30."







Michael A. Verespej _Industry Week_
It's time to find a better way.   There were an estimated 635K lay-offs in 1998, indicating that management is still far from treating employees fairly.
"The lay-offs and labor clashes in the last 6 months serve as a sober reminder that top management still isn't any closer to mastering its greatest challenge: treating employees with respect and dignity and rewarding them as fairly as they reward those in top-management ranks...   As the year ended, company after company in country after country announced job cutbacks -- some because of mergers, others because of a decline in business, and still others because of plain old-fashioned mismanagement.   Boeing, 48K workers.   Volvo, 5,300.   Thomson-CSF, 4K.   Johnson & Johnson, 4,100.   Deutsche Bank AG and Bankers Trust Corp., 5,500 each.   9K jobs will be lost from the Exxon/Mobil merger and 6K from the BP/Amoco union.   Not to mention the cut-back in jobs announced in December by RJR Nabisco, Quaker Chemical, Kellogg. Corp., ITT Industries, B.F. Goodrich, Texaco, and Union Pacific.   Indeed, the number of lay-offs in 1998 was expected to exceed 625K, making it the worst year of the decade, according to out-placement firm Challenger, Gray & Christmas Inc...   As for the labor disputes, most stem from management requests for more concessions from workers, even after they pitch in to help restore a company to profitability, or from management's self-stated desire to sub-contract work to obtain lower labor costs.   For example: The value of Oregon Steel's initial investment in CF&I Steel LP's Pueblo, CO, mill has increased by 657% since 1993 March and workers improved productivity by 78% between 1995 and the end of 1997 June.   Their 'reward' from management was a contract proposal that included higher health-care copayments and deductibles and a wage offer that would still keep the firm's workers below the industry average.   That has triggered an on-going 15-month strike.   Yet while companies ask workers to do more for less, the ratio of CEO pay to that of the average worker has jumped from 27:1 in 1973 to 48:1.   And that gap has grown from 45:1 to 173:1 when restricted stock, stock options, and other long-term pay-outs are included.   Lest anyone think it is just workers who are frustrated, think again.   A survey last month by international management consultant Kepner-Tregoe Inc. found that 69% of workers and 47% of managers say that their organizations do not give financial rewards for good work done by either management or workers."








Justin Kruger & David Dunning _Cornell University_/_American Psychological Association Journal_
Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments
alternate link
APA link
more meta-cognition
just an interesting article and discussion
Self grading in a project-based software engineering course
"People tend to hold overly favorable views of their abilities in many social and intellectual domains...   Not only do [some] people reach erroneous conclusions and make unfortunate choices, but their incompetence robs them of the metacognitive ability to realize it...   participants scoring in the bottom quartile on tests of humor, grammar, and logic grossly overestimated their test performance and ability.   Although their test scores put them in the 12th percentile, they estimated themselves to be in the 62nd.   Several analyses linked this miscalibration to deficits in metacognitive skill, or the capacity to distinguish accuracy from error...   'It is one of the essential features of such incompetence that the person so afflicted is incapable of knowing that he is incompetent.   To have such knowledge would already be to remedy a good portion of the offense.' (W.I. Miller, 1993 _Humiliation_ p. 4)...   as Charles Darwin (1871 _The Descent of Man_) sagely noted over a century ago, 'ignorance more frequently begets confidence than does knowledge' (p. 3)...   Perhaps the best illustration of this tendency is the 'above-average effect' [or Lake Woebegone effect], or the tendency of the average person to believe he or she is above average, a result that defies the logic of descriptive statistics (M.D. Alicke, 1985 _Journal of Personality & Social Psychology_; Alicke, Klotz, Breitenbecher, Yurak, & Vredenburg, 1995 _Journal of Personality & Social Psychology_; Brown & Gallagher, 1992 _Journal of Experimental Social Psychology_; P. Cross, 1977 _New Directions for Higher Education_; Dunning et al., 1989 _Journal of Personality & Social Psychology_; Klar, Medding, & Sarel, 1996 _Organizational Behavior & Human Decision Processes_; Weinstein, 1980 _Journal of Personality & Social Psychology_; Weinstein & Lachendro, 1982 _Personality & Social Psychology Bulletin_)...   Work on the nature of expertise, for instance, has revealed that novices possess poorer metacognitive skills than do experts...   This criterion problem, or lack of uncontroversial criteria against which self-perceptions can be compared, is particularly problematic in light of the tendency to define ambiguous traits and abilities in ways that emphasize one's own strengths (Dunning et al., 1989)...   One of the ways people gain insight into their own competence is by comparing themselves with others (Festinger, 1954 _Human Relations_; Gilbert, Giesler, & Morris, 1995 _Journal of Personality & Social Psychology_).   We reasoned that if the incompetent cannot recognize competence in others, then they will be unable to make use of this social comparison opportunity...   Despite the fact that top-quartile participants were far more calibrated than were their less skilled counterparts, they tended to under-estimate their performance relative to their peers...   bottom-quartile participants failed to gain insight into their own performance after seeing the more competent choices of their peers.   If anything, bottom-quartile participants tended to raise their already inflated self-estimates, although not to a significant degree...   after grading the test performance of 5 of their peers, top-quartile participants raised their estimates of their own general grammar ability...   because top-quartile participants performed so adeptly, they assumed the same was true of their peers.   After seeing the performances of others, however, they were disabused of this notion, and thus the they improved the accuracy of their self-appraisals.   Thus, the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others...   In particular, work on overconfidence has shown that people are more miscalibrated when they face difficult tasks, ones for which they fail to possess the requisite knowledge, than they are for easy tasks, ones for which they do possess that knowledge (Lichtenstein & Fischhoff, 1977 _Organizational Behavior and Human Performance_)."


Milton Friedman _Wall Street Journal_ pgA18
Socialist Insecurity
"To preserve the fiction that [Socialist Insecurity] is insurance, federal government interest-bearing bonds of a corresponding amount have been deposited in a so-called trust fund.   That is, one branch of the government, the Treasury, has given an interest-bearing IOU to another branch, the [Socialist Insecurity Abomination].   Each year thereafter, the Treasury gives the [Socialist Insecurity Abomination] additional IOUs to cover the interest due.   The only way that the Treasury can redeem its debt to the [Socialist Insecurity Abomination] is to [further extort the public, to] borrow money from the public, run a surplus in its other activities or have the Federal Reserve print the money -- the same alternatives that would be open to it to pay [Socialist Insecurity] benefits if there were no trust fund.   But the accounting sleight-of-hand of a bogus trust fund is counted on to conceal this fact from a gullible public."

1999 January
Gerald McDonnell & A. Denver Russell _Clinical MicroBiology Review_/_NIH_
anti-septics and dis-infectants: activity, action, and resistance

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