Category Archives: economics

Mayor of Glendale, host of the Super Bowl, doesn’t get a ticket to attend Super Bowl

From the New York Times

Jerry Weiers lives less than two miles from University of Phoenix Stadium, where the New England Patriots will play the Seattle Seahawks in the Super Bowl on Sunday. Weiers also happens to be the mayor of Glendale.

Yet as politicians, chief executives and tens of thousands of well-heeled fans rub shoulders that day in the stadium in Glendale, a western suburb of Phoenix, he plans to watch the game on television in his living room, because he has not been offered a ticket.

“It was on my bucket list, but it’s not going to happen,” Weiers said. “If I had my druthers, I’d rather be in the stadium. I’ve had people say that if I was a team player, I might have gone to the game. But I’m a team player for my city.”

Weiers is not shy about making that point, so he is not surprised that he was snubbed. Critics have called Weiers ungrateful because the Pro Bowl and the Super Bowl will draw thousands of visitors to his city, and some of them will visit restaurants and hotels there. Glendale will also receive lots of free advertising during game broadcasts, though a vast majority of people visiting Arizona for the Super Bowl will visit the city only on game day.

James Cassella, the mayor of East Rutherford, N.J., was also criticized after he complained last year that his borough had been overlooked even as the Super Bowl was played at MetLife Stadium there.

But the friction in Glendale is acute because the city has a reputation for betting big on sports — and paying a price for it. In the last decade, the city spent hundreds of millions of dollars to build a hockey arena for the Coyotes and a spring training complex for the Chicago White Sox and the Los Angeles Dodgers.

The hope was that the facilities would prompt residential and commercial development. But when the recession hit in 2008, the Coyotes went bankrupt, the mall next to the arena foundered, and the city was overwhelmed by its debt payments and was forced to slash public services.

“The city of Glendale is the poster child for what can go wrong” when a city invests heavily in sports, said Kevin McCarthy, the president of the Arizona Tax Research Association. “You don’t want to be building stadiums and not be able to hire police officers.”

Glendale is by no means the first city to have sports facilities turn into albatrosses. Cincinnati and Miami, to name just two, built stadiums for wealthy owners in deals that backfired.

But the scale of spending in the city of 230,000 residents is unique. According to Moody’s Investors Service, Glendale’s debt is equal to 4.9 percent of its tax base, nearly four times the national median and twice the average rate for cities in Arizona. More than 40 percent of the city’s debt is dedicated to paying off sports complexes.

What the NFL does to Super Bowl host cities is a crime.  NFL owners want to host a big party and the taxpayers pay for it.  It is insane.

As for his Super Bowl ticket?

Whether that attitude gets Weiers invited is another question. Cassella, the East Rutherford mayor, said that after stories surfaced that he, too, had been unable to get a Super Bowl ticket, Jim Irsay, the owner of the Indianapolis Colts, invited him as his guest. John Mara, an owner of the Giants, sent him a parking pass.

Will Saskatchewan Fall into Recession?

Will Saskatchewan experience a recession because of falling oil prices?

The Conference Board of Canada predicts this drop will cause Alberta to slip into a recession by the end of the year. Jeff Rubin, the author of “The End of Growth” and former chief economist of CIBC World Markets believes the dip in the sector could affect Saskatchewan as well, though not as seriously.

“I don’t expect Saskatchewan or Newfoundland to be as adversely affected as Alberta,” Rubin said.

“But it’s going to impact the economy, it’s going to impact tax revenues. Governments are going to be challenged in the sense that if they don’t challenge spending, they’ll see their deficits go off side.”

It could also affect property prices.

The Conference Board of Canada predicts that Alberta will slip into a recession before the end of the year. Rubin echoes that warning. He said Alberta could experience its worst recession since the late 1980s.

At the end of the day, Saskatchewan will be okay because we have what the world needs.  It may not be as great as it was in 2009 but we will be okay.  That being said, we are so reliant on commodity prices that these kind of dips are going to impact us forever with no way out.  In that way the new Saskatchewan under Brad Wall isn’t a lot different than the old Saskatchewan under Grant Devine or Roy Romanow.  Like the rest of the world, the global economy will always have a big impact on us for good or for bad.

Cam Broten has said before that he wants more eggs in more baskets.  I think we all do in Saskatchewan but man is it hard to do.  I posted before about Alberta’s struggles in diversifying their economy and the same thing has happened here.  I agree with diversification but we are a province of a million people and there are going to be times that the world economy conspires against us and makes it really hard.  This is one of those times.

What is Obama’s Legacy?

New York Magazine asked 53 historians what Barack Obama’s legacy will be

Almost every respondent wrote that the fact of his being the first black president will loom large in the historical narrative — though they disagreed in interesting ways. Many predict that what will last is the symbolism of a nonwhite First Family; others, the antagonism Obama’s blackness provoked; still others, the way his racial self-consciousness constrained him. A few suggested that we will care a great deal less about his race generations from now — just as John F. Kennedy’s Catholicism hardly matters to current students of history. Across the board, Obamacare was recognized as a historic triumph (though one historian predicted that, with its market exchanges, it may in retrospect be seen as illiberal and mark the beginning of the privatization of public health care). A surprising number of respondents argued that his rescue of the economy will be judged more significant than is presently acknowledged, however lackluster the recovery has felt. There was more attention paid to China than isis (Obama’s foreign policy received the most divergent assessments), and considerable credit was given to the absence of a major war or terrorist attack, along with a more negative assessment of its price — the expansion of the security state, drones and all. 

Alberta has already tried to diversify it’s economy. It failed

From the Calgary Herald

As for policy, the Alberta government tried to diversify the Alberta economy in a deliberate fashion back in the 1980s and early 1990s.

Starting under then Premier Peter Lougheed and also under his successor, Don Getty, the provincial government provided loans, loan guarantees and equity stakes to companies in the non-energy sector.

In one example, the provincial government backed “made in Alberta” banks, trust companies and investment firms. After the early 1980s recession and then a mid-decade collapse in oil prices (to $10.25 a barrel in April 1986, down from $26 in December 1985), Alberta’s real estate values also plummeted. That took down many of those same provincially guaranteed financial institutions, themselves heavily invested in real estate.

The price tag to the provincial government for that diversification effort was $1.8 billion, for everything from failed loan guarantees to partially covered consumer and investor deposits.
In another diversification attempt, the province also loaned, guaranteed and took equity partnerships in everything from a forestry company to a meat packing plant, a provincial bitumen upgrader, a waste treatment plant and a high-tech company. By the early 1990s, defaults and foregone capital investments from all of the above cost the province $2.2 billion — in addition to the $1.8-billion financial sector collapse.

These efforts didn’t help Albertans adjust to a new reality or diversify the economy. It was simply activist industrial policy, where governments pick winners and losers. The latter cropped up more regularly than the former.

Introducing the 33rd Street Business Improvement District

Some really good news for Mayfair and Caswell.  From the City of Saskatoon news release.

Saskatoon City Council has recently made possible the final step in creating Saskatoon’s newest Business Improvement District (BID), which includes both sides of 33rd Street from Alberta Avenue to Avenue G.

“We are tremendously excited about establishing a BID for 33rd Street.  The business owners in this area have worked very hard to achieve this goal, and it has now become a reality.  We couldn’t be more pleased with Council’s decision,” says Nicola Tabb, representing the 33rd Street BID Organizing Committee.

At its November 24, 2014 meeting, City Council approved Bylaw No. 9235 – The 33rd Street Business Improvement District Bylaw, 2014.  A BID is an area of commercial and industrial property owners and tenants who work in partnership to create a thriving and competitive business area.

Over the past two years, a group of dedicated business owners on 33rd Street have worked toward organizing a BID, which is made up of a variety of unique businesses such as restaurants, shops, services, and a major grocery store.  The business group saw the potential in forming a BID to improve and enhance the appeal and viability of the district now and into the future.

“The creation of a BID benefits not only the 33rd Street commercial district, but the city overall,” says Alan Wallace, Director of the City of Saskatoon Planning and Development Division.  “The success of other BIDs in Saskatoon has directly resulted in thriving, attractive areas where residents and visitors alike can come to work, shop, and play.  The 33rd Street BID will certainly create the same positive impact for their commercial area.”

The 33rd Street BID will begin operations in 2015.

Great job by the businesses that reside on 33rd Street.  If they can accomplish a fraction of what has been done by the Riversdale BID; Mayfair, Caswell, and of course some businesses in the area are going to benefit greatly.

The Twilight of the Indoor Mall

The Awl looks at the death of the mall

In the nineteen fifties, people with money began leaving the cities in unprecedented numbers. They were getting married, getting jobs, starting families, and buying houses—they were moving to the suburbs. A Time Magazine article in 1954 observed: “…since 1940, almost half of the 28 million national population increase has taken place in residential suburban areas, anywhere from ten to 40 miles away from traditional big-city shopping centers. Thus, to win the new customers’ dollars, merchants will have to follow the flight to the suburbs.”

They did, and the suburban shopping mall was born.

But the original idea for the mall was not just about retail. Victor Gruen, the father of the suburban shopping mall, envisioned something much bigger. He wanted outdoor areas, banks, post offices, and supermarkets; he wanted to give the suburbs a soul, one inspired by the public squares of European cities. But that never happened. Instead malls were faceless, sprawling. Gruen was so disappointed with what malls became, he gave a speech in 1978 in which he said, “I refuse to pay alimony for those bastard developments.” Malls turned out to be the very monoliths of soullessness that Gruen had tried to overcome.

It’s not just that there are better malls than Collin Creek in the Dallas area. It’s that there are so many malls; Dallas has more shopping centers per capita than any other city in the United States. And according to some estimates, fifty percent of indoor malls nationwide will die over the next two decades—partly because some shoppers are opting for newer, better malls, but also because, as a recent Guardian article put it, “the middle class that once supported” mid-market malls is dwindling. Or, put yet another way, by retail consultant Howard Davidowitz: “What’s going on is the customers don’t have the fucking money.” Which, of course, wasn’t always the case.

As these old malls die off, they’re being replaced more and more by upscale, outdoor shopping centers—with lofts, grocery stores, offices, public meeting areas, and day cares. At least four have popped up in Dallas within the past ten years, and they’re always packed. Sixty years after Gruen’s ideas were bastardized by short-sighted developers, they are finally seeing their day. Inklings, maybe, of the suburbs finding their soul.

To counter this, maybe there is some life for malls in winter cities.

You can hardly blame the Finns for wanting to shop in giant, self-contained malls. After all, winter tends to start early in Finland (like, November) and end late (say, in April). Temperatures in Helsinki, which is at the nation’s extreme south, with a relatively mild maritime climate, rarely get above freezing in the coldest months, and have been known to go as low as -30 degrees Fahrenheit. In late December, the sun in Helsinki doesn’t rise until well after 9 a.m., sets soon after 3 p.m., and stays low in the sky — only getting to about 6.6 degrees above the horizon on December 27, for instance (compare that to New York, where it reaches an altitude of 26 degrees on the same day).

So it’s no surprise that the idea of walkable urban centers are a hard sell in Finland. Still, some in the nation are calling for Finland to rethink its love affair with the shopping mall.

Yet recently I have been shocked at how quiet Confederation Mall is (a ghost town), Lawson Heights Mall, and Midtown Plaza is when I am in there.  Then you look at how busy at the same time other places are.  Maybe we are growing tired of malls as well. 

The $9 Billion Witness: Meet JPMorgan Chase’s Worst Nightmare

This is an extremely depressing read in Rolling Stone about how incredibly corrupt the U.S. banks and are how comfortable the Obama administration has been in letting in continue

In September, at a speech at NYU, Holder defended the lack of prosecutions of top executives on the grounds that, in the corporate context, sometimes bad things just happen without actual people being responsible. “Responsibility remains so diffuse, and top executives so insulated,” Holder said, “that any misconduct could again be considered more a symptom of the institution’s culture than a result of the willful actions of any single individual.”

In other words, people don’t commit crimes, corporate culture commits crimes! It’s probably fortunate that Holder is quitting before he has time to apply the same logic to Mafia or terrorism cases.

Fleischmann, for her part, had begun to find the whole situation almost funny.

“I thought, ‘I swear, Eric Holder is gas-lighting me,’ ” she says.

Ask her where the crime was, and Fleischmann will point out exactly how her bosses at JPMorgan Chase committed criminal fraud: It’s right there in the documents; just hand her a highlighter and some Post-it notes – “We lawyers love flags” – and you will not find a more enthusiastic tour guide through a gazillion-page prospectus than Alayne Fleischmann.

She believes the proof is easily there for all the elements of the crime as defined by federal law – the bank made material misrepresentations, it made material omissions, and it did so willfully and with specific intent, consciously ignoring warnings from inside the firm and out.

She’d like to see something done about it, emphasizing that there still is time. The statute of limitations for wire fraud, for instance, has not run out, and she strongly believes there’s a case there, against the bank’s executives. She has no financial interest in any of this, no motive other than wanting the truth out. But more than anything, she wants it to be over.

In today’s America, someone like Fleischmann – an honest person caught for a little while in the wrong place at the wrong time – has to be willing to live through an epic ordeal just to get to the point of being able to open her mouth and tell a truth or two. And when she finally gets there, she still has to risk everything to take that last step. “The assumption they make is that I won’t blow up my life to do it,” Fleischmann says. “But they’re wrong about that.”

Good for her, and great for her that it’s finally out. But the big-picture ending still stings. She hopes otherwise, but the likely final verdict is a Pyrrhic victory.

Because after all this activity, all these court actions, all these penalties (both real and abortive), even after a fair amount of noise in the press, the target companies remain more ascendant than ever. The people who stole all those billions are still in place. And the bank is more untouchable than ever – former Debevoise & Plimpton hotshots Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC. As for the bank itself, its stock price has gone up since the settlement and flirts weekly with five-year highs. They may lose the odd battle, but the markets clearly believe the banks won the war. Truth is one thing, and if the right people fight hard enough, you might get to hear it from time to time. But justice is different, and still far enough away.

 

Detroit with a Boardwalk

A great piece on Atlantic City in Politico

Four of its 12 casinos have closed in the last year, including the Revel, the newest and glitziest, despite a $260 million, taxpayer-funded gift courtesy of Gov. Chris Christie. A fifth, the Trump Taj Mahal, is on the brink. The gaming industry—proponents never call it gambling—has lost nearly 8,000 jobs since the beginning of the year and its revenue, which hit a high of $5.2 billion in 2006, is down nearly 50 percent. Add to that the city’s $65 million budget shortfall, pending layoffs of as many as 300 city workers and a tax base in free fall.

Sure, the still-sluggish U.S. economy is a factor. The loss of the East Coast gambling monopoly that Atlantic City enjoyed for nearly 20 years is another. Poor planning, lack of foresight and the failure to expand the city’s attractions beyond casinos are part of the mix. Even acts of God played a role: Though the city wasn’t devastated in 2012 by Hurricane Sandy the way other Jersey Shore towns were, tourism plunged in the immediate aftermath at a time when the city could least afford it.

But there is something else at play, something in the city’s DNA that is painfully obvious to anyone who’s lived or worked there.

Even during its halcyon days, Atlantic City was an enterprise built around blue smoke and mirrors. Think, Nucky Johnson, the inspiration for HBO’s Boardwalk Empire, and the wide-open rackets of gambling, booze and prostitution during Prohibition.

It was all about grabbing whatever you could, whenever you could from whomever you could. The city worked on a 12-week economy, Memorial Day to Labor Day. Get the tourists and vacationers into town. Sell them the beach and the Boardwalk and then send them home broke. The Miss America Pageant, held in Atlantic City for most of its years, was part of that con. It was the 1920s brainchild of a city huckster looking for a way to extend the summer season for another week. The city was born as a come-on, a fugazy.

Wonder why Atlantic City is failing? The better question, the one asked by people who know the town: Why did anyone think it would ever succeed?

What happens to a countries maritime assets when it disappears beneath them?

From the Boston Globe

The president of the Pacific atoll nation of Kiribati, which averages only about 2 meters above sea level, has already spent millions of dollars to buy land in Fiji as a potential new home for his 100,000 people. As sea levels rise, the Intergovernmental Panel on Climate Change suggests, large ocean waves will increasingly taint the country’s groundwater and threaten its agriculture; Kiribati can expect to become at least partly uninhabitable long before seas rise enough to submerge it. Other island nations like the Maldives and Tuvalu face the same plight.

So far, the world’s attention has rightly focused on how much these places have to lose: their homes, their communities, their cultures, their vistas. But these countries have another, less visible set of assets at stake as they consider their survival—assets that won’t necessarily be lost, but which raise substantial questions. These are their large and valuable maritime zones.

Kiribati, like other island nations, controls hundreds of thousands of square miles of the ocean that surrounds it. Kiribati’s land area is about that of Kansas City, while the ocean territory it controls is larger than India. Within these “exclusive economic zones,” to use the UN term, island nations possess the power to regulate, tax, or disallow any economic activity, including mining or drilling for oil. The tuna fishing alone in the domain of Pacific island nations is worth an estimated $4 billion a year.

Rising Inequality: Most American Households Contain Nothing at All

From The New Yorker

No, that wasn’t Elizabeth Warren, or the editor of the Nation, or Paul Krugman (or even me) banging on about how the rich are getting richer and most everybody else is struggling to keep up. It was Janet Yellen, the chairwoman of the Federal Reserve, addressing a conference in Boston on Friday morning. It’s not unheard of for a Fed chief to discuss rising inequality: Ben Bernanke addressed it in a 2007 speech. But Yellen’s speech is surely the first time a Fed chief has pointed out that rising inequality threatens America’s sense of itself.

Here is what she said.

Since the top five per cent of households own almost two-thirds of the wealth, it stands to reason that most American households don’t own very much at all. But the figures that Yellen presented are still shocking. In 1989, the bottom half of the distribution owned just three per cent of all wealth. By 2013, that figure had fallen to one per cent. No, that’s not a typo: half the country owns one per cent of its wealth.

These numbers confirm an old but rarely stated truth. Many, if not most, individual American households possess next to nothing. In 2013, the average net worth of the sixty-two million households in the bottom half of the distribution was eleven thousand dollars. (To get net worth, you add up the value of all the assets a family owns and subtract its debts, including mortgage debts.)

And it’s not just that most households don’t have much wealth. According to this measure, anyway, they have been getting poorer—a point that is often vigorously contested. In 1989, the average net worth of families in the bottom fifty per cent was twenty-two thousand dollars. Twenty-four years later, the average net worth had fallen by half. (These figures are adjusted for inflation.) At the top of the distribution, of course, history has proceeded along very different lines. In 1989, the average net worth of families in the top five per cent was $3.6 million. By 2013, that figure had risen to $6.8 million.

How our shopping habits cause asthma in California children

Here is the story of how globalization is ruining the health of California children

The community that epitomizes the pollution warehouses can bring is Mira Loma.“Our quality of life is in the tubes,” said Gene Proctor, 73, who has lived in Mira Loma Village for 43 years. “I wish people shopping in Tucson, Arizona, in other places, I wish they could see the little kids around here, their respiratory problems.” His great-granddaughter has asthma, and his 3-year-old great-grandson, he said, “coughs like a smoker.”

Population 21,000, Mira Loma is so small and poor it doesn’t have a movie theater, a community center, or even a moderately upscale restaurant. What it does have are 90 warehouses and a whole lot of big rigs: Trucks rumble through 15,000 times every day. In just half an hour on a recent afternoon, 269 trucks passed by the big plate glass window in the front of the Farmer Boys truck stop on Etiwanda Avenue.

That is more than one every seven seconds.

Avol, the professor at the USC Keck School of Medicine, began visiting the town in the early 1990s as part of a study of air pollution and children’s health across Southern California. Back then, he said, researchers chose Mira Loma because it sits at the “end of the tailpipe” of the Los Angeles basin, meaning the prevailing winds off the Pacific Ocean blow L.A.’s infamous smog east until much of it arrives in Mira Loma. So it was rural yet had a lot of ozone and smog. Other places in the study, such as Santa Barbara and Long Beach, were picked because they were thought to boast clean air or because they were in industrial areas.

When the study began, Mira Loma residents complained to researchers about the smell of dairy cows, herds of which clustered on vast pastures and cow yards. But in 1987, Riverside county supervisors revamped the general plan for Mira Loma, clearing the way for massive warehouse development.
“In the course of a few years, the dairies disappeared,” and what had been “open pasture became streets and warehouses, lined with trucks,” Avol said. “Mira Loma turned out to be a very interesting place to study.”

The trucks made the already bad air worse, bringing in diesel particulates, very small particles that can enter the lungs and travel to tissues throughout the body. They are associated with asthma, heart disease, neurological problems, and cancer.

In Mira Loma, children were found to be growing up with stunted lungs compared with children living in places with better air. Their lungs were growing at a rate that was 1 to 1.5% slower, Avol said, so that “after their teen years, they were about 10 to 12% lower in lung function than children who had grown up in cleaner places.”

He added: “We have no information at this point that supports the idea that they ever catch up.”

Studies from other Inland Empire communities are also dire. In a neighborhood near the BNSF rail yard in the city of San Bernardino, Loma Linda University researchers found that adults have more respiratory problems, and children alarmingly high rates of asthma, even when compared with other polluted communities.

America’s underground Chinese restaurant workers.

From the New Yorker

There are more than forty thousand Chinese restaurants across the country—nearly three times the number of McDonald’s outlets. There is one in Pinedale, Wyoming (population 2,043), and one in Old Forge, New York (population 756); Belle Vernon, Pennsylvania (population 1,085), has three. Most are family operations, staffed by immigrants who pass through for a few months at a time, living in houses and apartments that have been converted into makeshift dormitories. The restaurants, connected by Chinese-run bus companies to New York, Chicago, and San Francisco, make up an underground network—supported by employment agencies, immigrant hostels, and expensive asylum lawyers—that reaches back to villages and cities in China, which are being abandoned for an ideal of American life that is not quite real.

Rain, who asked that I use his adopted English name to protect his identity, is reedy and slight, with a wide face and sloping cheekbones. He is observant, in no hurry to speak, but he is more cagey than timid. Like his boss, and like everyone else who works at the restaurant, he is primarily concerned with saving as much money as possible. He needs to pay the snakehead that got him to the U.S. and send money to his family in China. He harbors the vague suspicion that everyone around him is angling for more money, less work, or some other benefit at his expense. So, instead of conversation, Rain occupies himself with the math of a transient cook: the time it takes to clean the shrimp, the days before he can visit his girlfriend in New York, and the balance of his debts. At night, he lies on a cot in his boss’s otherwise empty living room, mulling the slow processing of his green card. During the day, if he’s feeling bold, he walks across the strip-mall parking lot to order lunch at Subway, pointing at the menu when he doesn’t know the English word for something.

“I understand why he acts like this,” Rain told me, about his boss. “He’s been working in that restaurant for almost twenty years. He goes back and forth between the restaurant and the dorm where we live. Back and forth, back and forth, every day for years.” The boss’s wife and kids are in China. “You do this kind of work for that long, and you start to lose perspective.” Rain pinched his fingers together. “Your world is this small.”

It can get kind of better

Six mornings a week, the boss picks up Rain and the other workers from their dorm and takes them to the restaurant. Their preparations have a catechistic order: first the rice cooker, then dishes for the buffet, then those for the lunch rush. Twice a week, a Chinese-run company brings supplies, and everyone gathers to butcher meat, hacking it into small pieces for quick cooking. They put on rubber gloves and pour salt and cornstarch over the meat, mix it by hand, then seal it and put it into the freezer. Chinese kitchens in the U.S. have none of the badinage that makes for good reality TV. In Rain’s kitchen, the only person who talks is the boss, complaining. When a buffet tray gets low, a waiter calls through an intercom, set at a startling volume: “We need more pineapple chicken up front!”

When Rain arrived in the U.S., he assumed that he had a fair proficiency with Chinese food. His father had prided himself on his culinary skill, and his mother was a capable cook, too. She taught him when to add spice to a dish, when to temper it with Chinese celery. Rain worked briefly as a fry cook in his village, and found that he had absorbed some of his parents’ knowledge. “Even if I’ve never cooked a dish before, I can think about it and draw from my experience,” he said. Having grown up on his father’s subtly flavored fish soups, he was surprised by American Chinese food. Americans seemed to eat like kids: they love starches and sweet things, and are frightened of meat and fish with bones in it. “Americans eat all that fried stuff,” he told me. “It’s not healthy.” Real Chinese food is more refined: “You have to spend a lot of time studying and really understanding it.”

In Maryland, most of the patrons seem to come for the buffet and eat as much as they can. Still, Rain loves watching people in the dining room. “I like seeing a clean plate,” he said. “I like it when people take the first bite of my food and they start nodding their head.” He spends hours trying to create a perfectly round Chinese omelette. “There’s a lot of kung fu in making egg foo young,” he told me. “If you have time, you’ll make it really perfect. You’ll make it bigger, better-looking, rounder. They’ll think, I spent so little money and I got such good food, and on top of that it’s good-looking. And then maybe they’ll come back.”

Rain viewed the job in Maryland as an opportunity to expand his repertoire. “In a takeout restaurant, people order the same dishes over and over,” he said. At a bigger restaurant, he could learn new dishes. And his salary—twenty-eight hundred dollars a month—was good, but not good enough to arouse concern. “If you come across a job paying three thousand, you think there must be something wrong with that restaurant,” he told me.

Rain lives with five co-workers in a red brick town house that his boss owns, part of a woodsy development near the restaurant. The house is tidy; there are three floors covered with white carpeting, and each worker has been supplied with an identical cot, a desk, a chair, and a lamp. “Some bosses don’t take care of the houses,” Rain said. “If they’re renting the house, especially, they don’t care. The rooms will actually smell.” Every restaurant worker has a story of sleeping in a dank basement or being packed in a room with five other people. Many complain of living in a house that has no washing machine, and being forced to spend their day off scrubbing their grease-spattered T-shirts in a sink.

So this is why he stays

For many restaurant workers, the decision to come to the U.S. is irrevocable. But, as the disappointments of immigrant life accrue, it can be hard not to imagine that things might be better elsewhere. Chinese-Americans, despite a good public image, suffer higher rates of poverty than the general public. Mental-health problems are an increasing concern in New York’s immigrant communities. In parts of China where the growing economy has given people more options, the allure of working in the U.S. has faded. This February, in a hostel in Queens, I met a woman who had just returned from a difficult day of job hunting. “I thought America would be heaven, and all it is is cold!” she complained. She returned to Beijing after four months. In Fuzhou, a taxi-driver told me that he was glad his attempts to emigrate had failed. “My father says that having a son in the United States is like having no son at all,” he said.

Rain tried not to dwell on returning to Maryland, where he was due in a few days. Everyone else who had worked at the restaurant when he started had been driven off by the boss’s temper. “And it’s so far away,” Rain said. If he could find a job somewhere closer, he could see Annie every weekend. As his family’s only son, Rain feels increasing pressure to send money home to his mother. But, he reasoned, everyone who comes to the U.S. should be prepared for hardship. “Everything we do, we do for the next generation,” he said, and added, “No matter what, it beats sitting around in the village.”

What happened to Motorola

Interesting article on what happens when your corporate culture goes bad.

Meanwhile, in arguably one of the worst decisions ever made by a major corporate CEO, Zander struck a deal with his Silicon Valley friend Steve Jobs, the CEO of Apple. Together their companies created a Motorola iTunes phone, the first phone connected to Apple’s music store. “We can’t think of a more natural partnership than this one with Apple,” Zander said at the time. Named the Rokr, the phone launched in the fall of 2005. Jobs, who introduced it, called it “an iPod Shuffle right on your phone.”

Zander says he believed that by working with Apple, Motorola could become cool again. But much as it had taught the Chinese to compete with it years before, Motorola was teaching one of the most creative, competitive, and consumer-savvy companies of all time how to make a phone.

Two years later, when Jobs introduced the first iPhone, Zander’s Motorola was still pushing Razrs, pumping up sales by taking new variations further and further downmarket. The result: ever-lower profit margins. One analyst calculated that the company made, on average, only about $5 per device.

Partly because of the huge layoffs of recent years, Motorola’s innovation machine was stalling. The company had long numbered among the top 10 American firms registering U.S. patents, notes analyst Joan Lappin; by 2006 it dropped to No. 34.

Zander insists that he saw the smartphone onslaught coming but that Motorola “didn’t have the DNA or the people” to understand the software involved. He also blames a less-than-speedy Motorola supplier that, he says, caused the company to miss nearly a year in the product cycle. “We should have just broken the contract” with the supplier, he says now. “The one regret I have is that I should have taken myself out of the CEO job and run the [phone] division [myself].”

Another mistake: Zander never engaged in China the way the Galvins had, leaving the details to his division heads and country managers. When China upped its networks to 3G, his managers pushed what they had—older 2G phones—at steep discounts in order to preserve market share, unbeknownst to the CEO. The collapse of the China business in 2007 left Zander dumbstruck. That year the South Korean company Samsung topped Motorola in phone sales for the first time, and it never looked back.