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March 31, 2010

Financial Crisis Tracker

Hey, what's that new thing at the top of the left column?

What happens is you click it?

What about clicking this?

It's something I have been helping out with a bit.

Posted by Dave Johnson at 8:31 PM | Comments (0) | Link Cosmos

Today's Must-Read

Prosecuting Financial Crimes: Will Anyone Bunk with Bernie?

Apparently no one at the Department of Justice (DOJ) or the FBI really cares about the greatest white-collar crime wave in the history of the world -- even if it did rob average American of some $14 trillion dollars in lost wages, savings, and housing wealth. After eighteen months, it is difficult to point to one CEO from a major Wall Street bank, hedge fund, or fraudulent mortgage company who is behind bars.

How does this compare to the S&L Crisis?

. . . According to government statistics, no less than 1,852 S&L officials were prosecuted and 1,072 were jailed. Over 500 of these were top officers

Go read..

Posted by Dave Johnson at 3:13 PM | Comments (0) | Link Cosmos

G-20 Standing Up To China, Now It’s Your Turn

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

As the manufacturing infrastructure of suppliers, technology knowledge, etc., moves to China, dependence follows. China appears to be ready to answer, "So what are you going to do about it?"

The world is starting to realize this. Financial Times, yesterday, China reprimanded by G20 leaders

Five prominent members of the Group of 20 leading economies, including the US and UK, sent a coded rebuke to China on Tuesday against backsliding on economic agreements.

In a letter to the rest of the G20 that shows frustration at slow progress this year, the leaders warned: “Without co-operative action to make the necessary adjustments to achieve [strong and sustainable growth], the risk of future crises and low growth remain.”

Reuters says,

The letter was signed by U.S. President Barack Obama, Canadian Prime Minister Stephen Harper, French President Nicolas Sarkozy, South Korean President Lee Myung-bak and UK Prime Minister Gordon Brown.

Meanwhile Business Week looks at China, in China: Closing for Business? (turn your sound off before clicking)

Nearly a decade after China's entry into the World Trade Organization, many foreign companies say the warm reception they once received has turned frosty. ... A new government procurement program known as "indigenous innovation" features rules favoring local firms: It could block sales worth billions of dollars a year. ... Beijing has written strict standards for everything from cell phones to cars, often couching them in a way that gives an advantage to domestic producers.

Summary, China used the promise of access to its huge market to grab control of much of the world's manufacturing. "You want to sell to us, you have to build your factories here." Now that they have it they are no longer as interested in sharing. And while they subsidize manufacturing in various ways - including currency manipulation - to lure companies to move factories and jobs to China, they are not letting those companies sell inside China. So the huge trade imbalance continues to grow.

China pursued an effective industrial policy. Meanwhile, we don't even have one.

What are we going to do about that?

Here is something you can do today: Click here to tell Washington: Tell the truth. China is manipulating its currency and playing by its own set of rules.

The Treasury Department must report twice a year which countries are practicing unfair trade by artificially lowering the value of their currencies, making their imports cheaper and our exports pricier.

The next Treasury report on currency manipulation comes on April 15. The Chinese government is spending an unprecedented $30 billion a month buying dollars and selling yuan to keep its currency low and its exports cheap.

Yet regardless of who is in charge of the White House, the US has yet to follow the law and state the truth.


To share this:
Direct Twitter share link (click on this, don’t copy it): http://bit.ly/dAKD4P

Direct Facebook share link (click on this, don’t copy it): http://bit.ly/clpBmC

And then, after you have done these, demand that our government formulate and follow a national industrial policy so we can start bringing the jobs back home.

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Posted by Dave Johnson at 12:21 PM | Comments (0) | Link Cosmos

March 30, 2010

Dear Deficit Commission, It's Not Hard

Dear Deficit Commission,

It's not hard to figure out why we have a huge deficit. It's so easy I don't have to use words. Here are some pictures:

Bill Clinton raised taxes on the rich. Bush cut them.

Now, about that huge national debt...

That second chart kind of explains itself.

The third chart can help you find a place to get some money:

(Note: There is no more Soviet Union.)

In case that isn't clear enough, try this:

Let me know if you still have any questions.


This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

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Posted by Dave Johnson at 6:32 PM | Comments (0) | Link Cosmos

Chinese Currency Manipulation Is Just One Piece

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

I've been focusing on the Chinese currency manipulation problem because the Obama administration is supposed to make it's twice-a-year declaration on this on April 15. But even if this problem is addressed as it needs to be, keep in mind that it is just one piece of the larger problem of Chinese trade policies.

In a post the other day I listed the main unfair advantages China uses to its advantage:
1) Currency manipulation. China "pegs" its currency at a very low, or "weak" rate, so goods from China cost up to 40% less than they otherwise should.
2) Labor-rights suppression has lowered manufacturing wages of Chinese workers by 47% to 86%.
3) There is massive direct government subsidization of export production in many key industries.
4) China allows environmental degradation that ends up affecting all of us.
5) Intellectual property theft and piracy mean that American products that could be sold are stolen instead.
6) China has a number of policies that block U.S. firms from market access.

It is necessary to bring their currency to market rates, but this is not all that must be done to bring trade into balance. It helps, it doesn’t fix it.

All of these things that China is doing are collectively called a national industrial policy. China has one. We don't. China's share of the world's business has grown exponentially because they have and follow a national industrial policy. Ours has declined dramatically because we don't. I'm trying to drop a hint here, but for those in Washington who aren't following let me spell it out more clearly: America needs to develop and follow a national industrial policy.

One more thing, Senators Graham and Schumer have introduced a bill, S. 295, that will "level the playing field" with China.

Specifically, the amendment allows for a 180 day negotiation period between the US and China to revalue its currency, if the negotiations are not successful, a temporary across the board tariff of 27.5% will be applied to all Chinese products entering the United States - a penalty that corresponds to their estimated currency advantage.

It's time to call the President and your member of Congress, and tell them to let the Treasury Department know that they need to declare China a currency manipulator. And ask them to support the Graham-Schumer bill.

When you call, you can use info from this report by The Alliance for American Manufacturing and Economic Policy Institute titled, “Unfair China Trade Costs Local Jobs.” Accompanying the report is a website with an interactive map that shows job losses to by state and Congressional District:

AAM_Map
Click the map.

Also, look at CAF's breakout page on the China trade problem: On Jobs, China Has Us In The Red

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Posted by Dave Johnson at 12:33 PM | Comments (0) | Link Cosmos

March 27, 2010

After Waiting 14 Months Obama Finally Chooses To Show Up, Govern

After being in office for 14 months President Obama is finally, finally, finally, finally, finally, finally choosing to begin to govern the country. Today, for example, he finally, finally, finally, FINALLY decided it would be a good idea to put a few people into vacant offices. See President Announces Fifteen Recess Appointments, Including Craig Becker,

The President today announced recess appointments for fifteen nominees who have been waiting for confirmation in the Senate for an average of 214 days. Included in those nominees are two members of the National Labor Relations Board, which has been non-functional without a quorum for over two years.

Of course, this is only putting 15 appointments into vacant positions when there are literally hundreds of vacancies. But heck, it's something, after months and months and months and months of nothing.

Here is what is going on. President Obama is way behind in nominating people to vacant posts and judgeships. On top of this the Republicans have used the filibuster to block many of the candidates that Obama has nominated. In the case of the Labor Board there were only two people left serving on the 5-member Board when 3 are required to make rulings, and some 600 cases have backed up.

The President has the power to make what are called "recess appointments" which means he can just put people into many of these vacant slots when the Senate is not in session. Such use of legitimate power to make the government operate as it should is also known as "governing." Until today he has refused to use this power to get the government operating. Today he finally, finally, finally, finally put 15 people into positions where they can start getting their agencies operating.

Finally.

A couple of weeks ago, after a year of delay that enabled Republicans to almost start a civil war, the President finally showed up and started working to get health care passed, and today it is law. Of course, the President didn't fight for a public option -- he was afraid that Republicans would call him a Socialist if he did --so instead he fought for a Republican-originated plan to make us all buy insurance from the monopolistic insurance giants that have been ripping us off. But at least that kept him from being called a Socialist.

So maybe the President will learn that actually showing up and fighting for something is a good way to get things done. Maybe. We'll see.

Posted by Dave Johnson at 1:47 PM | Comments (0) | Link Cosmos

March 26, 2010

Even Chinese Officials Understand -- Their Currency Must Rise

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

When a policy is just wrong it's just wrong. I have written about how Chinese CEOs and Chinese economists have been making the case for China to bring its currency up to market rates.

Even Chinese government officials are making the case for a stronger currency. In a must-read NY Times story, China Officials Wrestle Publicly Over Currency,

The current drama began on March 6 when the governor of China’s central bank stunned analysts by saying that the bank’s policy of keeping the renminbi at a constant exchange rate against the dollar was a “special” response to the global financial crisis.

The new description suggested to many economists that the current value of the renminbi was temporary and that the central banker, Zhou Xiaochuan, was preparing the Chinese public for a stronger renminbi.

Why is all of this discussion about Chinese currency coming to a head now?

The debate is far from academic. In the coming weeks, the Obama administration faces a series of politically charged deadlines set by Congress to decide whether to continue negotiating with China over currency and trade issues or to take a more confrontational stance and name China a currency manipulator.

If the administration labels China a currency manipulator, it would face further Congressional pressure to impose punitive tariffs on many Chinese goods.

Please read the entire NY Time story for its explanation of some of China's internal tensions over the currency-rate problem. The Commerce Ministry is close to exporters who have been enjoying this manipulated advantage, and fights for their interests. The central bank has accumulated a vast store of foreign currency and would be blamed for the value drop of this pile of foreign cash as their own currency gets stronger. But the pile also means that the central bank cannot easily raise interest rates to fight rising inflation. Because of this inflation companies are starting to import and stockpile commodities. Etc. It's a tense mess with the highest of stakes. (Yes, I feel the excitement of a thriller when I read about economics. My wife rolls her eyes.)

The Chinese government is trying to just manage all of these market forces instead of letting them operate as markets. The resulting imbalances are causing tremendous pressures - and bubbles - to build up both inside and outside of China. If China won't resolve this as the danger to the world's economy grows, the rest of the world must step in. On April 15 President Obama has an opportunity to start restoring balance to the world's economy by declaring China a currency manipulator and taking steps designed to force them into balance with the rest of the world. Think of it as an intervention for their own good.


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Posted by Dave Johnson at 8:09 AM | Comments (0) | Link Cosmos

March 25, 2010

Pressure Rises For China Currency Fix -- Yesterday Chinese CEOs, Today Chinese Economists

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Yesterday I wrote about Chinese CEOs calling for China to bring its currency up to market rates. Today Chinese economists are joining the call.

Chinese economist Gong Shengli, in his book, China is Very Happy, calls for a strong yuan,

"In order for China to survive and to continue developing, it is imperative that the renminbi goes global," says Mr Gong. "That means it is absolutely necessary and inevitable that the currency should appreciate."

From the Financial Times story,
A small but prominent group of economists at the Chinese Academy of Social Sciences has been pushing in recent months for a sizeable appreciation of the currency. In an article published this year, Zhang Bin called for a 10 per cent rise and greater flexibility in daily trading limits in order to give the authorities more control over monetary policy and to restrain inflation.

"There is a very urgent need" for reform of the currency system, he wrote.

Zhang Shuguang, another Cass researcher, said a stronger currency was needed to boost China's services sector and reduce the emphasis on exports.

The fact is that this currency imbalance distorts everything in the world economy. Chinese consumers face a barrier of up to 40% keeping them from being able to buy goods produced outside of China. Chinese businesses face the same problem. Meanwhile the rest of the world continues to lose jobs, factories and purchasing power.

On April 15 the President must declare China a currency manipulator and take the necessary steps to being to remedy the problem.


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Posted by Dave Johnson at 11:39 AM | Comments (0) | Link Cosmos

March 24, 2010

Even Chinese CEOS Call For Chinese Currency Fix

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

The pressure from the huge Chinese currency imbalance shows up in surprising places. Even Chinese CEOs are calling for China to increase the value of its currency to market rates.

China CEOs Join Obama in Supporting Yuan Appreciation

Yang Yuanqing, chief executive officer of Beijing-based computer maker Lenovo Group Ltd., said gains would boost consumers’ purchasing power. Qin Xiao, chairman of China Merchants Bank Co., said an end to the yuan’s 20-month peg to the dollar would let lenders set market-based interest rates. Chen Daifu, chairman of Hunan Lengshuijiang Iron & Steel Group Co., said a stronger currency would cut import costs.

[. . .] Chinese banking executives blame the yuan peg for disrupting money markets. China’s dollar purchases to maintain the link have driven currency reserves to $2.4 trillion and flooded the financial system with yuan.

By pegging its currency to the dollar the Chinese government is distorting the entire world's economy. This has negative effects for the Chinese as well as positive effects, and as the imbalance becomes greater those affected negatively are going to apply more pressure. In this case it is Chinese people and companies who want to buy from outside of China who are feeling the pain.

Chinese currency is only one part of the trade imbalance equation -- but it is a very big part. It accounts for a price differential of as much as 40%! Another part of the equation is China's suppression of labor rights. Chinese workers would be calling for a currency revaluation -- if they could. If workers were allowed to organize they would apply pressure on the government to ... revalue its currency so they could afford things made elsewhere. And they would certainly apply pressure on the government to clean up its environmental act - one more area where China is distorting the natural balance.

P.S. In case you missed it yesterday, see this interactive map showing just how many jobs have been lost to China since 2001.

Everyone knows that we have lost a lot of jobs to China since 2001. Now you can find out exactly how many, and where.

The Alliance for American Manufacturing and Economic Policy Institute released a report titled, “Unfair China Trade Costs Local Jobs” by EPI's Robert Scott. Along with the report AAM has set up a website with an interactive map that shows job losses to by state and Congressional District.

AAM_Map
Click the map.

Sign up here for the CAF daily summary.

Posted by Dave Johnson at 11:33 AM | Comments (0) | Link Cosmos

March 23, 2010

Find Out How MANY Jobs Have Been Lost To China Where YOU Live

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Everyone knows that we have lost a lot of jobs to China since 2001. Now you can find out exactly how many, and where.

The Alliance for American Manufacturing and Economic Policy Institute released a report today titled, “Unfair China Trade Costs Local Jobs” by EPI's Robert Scott. Along with the report AAM has set up a website with an interactive map that shows job losses to by state and Congressional District.

AAM_Map
Click the map.

It's bad. According to the report, between 2001 and 2008, 2.4 million jobs were lost or displaced with losses occurring in every Congressional district. (Note - This report does not track service industry job losses, and does not track indirect job losses.)

Here's the surprise: since 2001 we have lost more tech jobs than manufacturing jobs! -- We lost 628,000 tech jobs -26 percent of all jobs displaced by trade- between 2001 and 2008.

The main unfair advantages China uses to its advantage are:
1) Currency manipulation. China "pegs" its currency at a very low, or "weak" rate, so goods from China cost up to 40% less than they otherwise should.
2) Labor-rights suppression has lowered manufacturing wages of Chinese workers by 47% to 86%.
3) There is massive direct government subsidization of export production in many key industries.
4) China allows environmental degradation that ends up affecting all of us.
5) Intellectual property theft and piracy mean that American products that could be sold are stolen instead.
6) China has a number of policies that block U.S. firms from market access.

I joined a press conference call announcing this report, with Senators Charles Shumer (D-NY) and Lindsey Graham (R-SC).

Senators Schumer and Graham are introducing legislation in which "the wiggle room will be gone" and the Treasury Department must cite the Chinese for currency manipulation if currency is misaligned without having to say there is "intent," and impose additional penalties. Schumer:

"In the past Dem and Rep admins turned a blind eye to this problem. We are tired of the Chinese not playing by the rules that everyone else has to play by.

Later on the call Senator Schumer said,

Imagine if you had two stores across the street and one had a 40% price advantage – could charge 40% less than the other, where do you think people would shop?

[. . .] Every day we wait is a day we lose wealth, we lose economic advantage, we lose jobs.

Sen. Graham,

It is hard for American political leaders to keep their head in the sand any longer. ... To ignore China''s currency manipulation is to ignore economic reality and the way economics works. ... I am hopeful they [the Treasury Dept.] will go ahead and speak truth to power and the truth is that China's currency is misaligned.


Previous administrations allowed all of this to continue with impunity. It is time to do something about it and bring the world's trade back toward some kind of balance.

To help you read the report:

“Unfair China Trade Costs Local Jobs” by Robert Scott of Economic Policy Institute.

Download the PDF


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Posted by Dave Johnson at 12:08 PM | Comments (1) | Link Cosmos

The Coffee Party This Weekend

Helping spread the word: the Coffee Party is setting up local events this weekend. They have reached 178,000 members, held 350 gatherings in coffee shops, and so far have 400 planned for this weekend.

We're calling on the Coffee Party Movement to have coffee shop gatherings all across the country next Saturday and Sunday. (Can't do March 27 or 28? No problem. You can create your event on a different date.)

Visit their website to either join a local gathering, or set one up: Coffee Party | Wake Up and Stand Up.

There is a lot at that website, so go explore.

Posted by Dave Johnson at 8:21 AM | Comments (0) | Link Cosmos

March 22, 2010

Ten Million Jobs Needed - Ten Million Jobs That Need Doing

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Dot: No net job gains since 2000. 8 million jobs lost in the recession. Never mind jobs for the 86,000 new people entering the labor force every month...

Dot: According to the American Society of Civil Engineers (ASCE)

“congested highways, overflowing sewers, and corroding bridges” were creating a “looming crisis that jeopardizes our nation’s prosperity and our quality of life.”

Dot: From a recent NY Times story on our country's water systems,

Today, a significant water line bursts on average every two minutes somewhere in the country, according to a New York Times analysis of Environmental Protection Agency data.

. . . State and federal studies indicate that thousands of water and sewer systems may be too old to function properly.

[. . .] “There’s a lot of evidence that people are getting sick,” he added. “But because everything is out of sight, no one really understands how bad things have become.”

Connect the dots.

Ten million jobs needed. Ten million jobs that need doing.

It's called the infrastructure deficit. Right around 1981 we stopped improving the country's infrastructure and even started to defer maintaining it. We started "living off the seed corn." Now it is all catching up to us.

I'll be writing about infrastructure. Boring. Until it isn't.

Workers were repairing corroded joints on Minnesota's busiest bridge when it collapsed into the Mississippi River yesterday, killing at least four people and leaving more than 20 missing, state officials said.

... As many as 50 cars plunged into the river along with the six-story structure, authorities and eyewitnesses said.

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Posted by Dave Johnson at 2:01 PM | Comments (0) | Link Cosmos

The Coming Republican Campaign For Medicare Buy-In

Step one of health care reform has passed. Republicans vow to campaign on repealing it, which means that from now until the election they will use all of their communication channels to tell the public about all the problems with the health care bill. This is an opportunity. We have to tell the public that the answer to the problems the Republicans describe is not repeal, it is Medicare Buy-In, leading to Medicare-For-All.

Like the Iraq War there are facts and there are Republican lies. Over time facts catch up with lies. In spite of what the Republicans had most of the country believing, over time the public came to understand that Iraq did not attack us on 9/11. Over time the public came to understand that Iraq was not preparing to attack us with nukes.

And just as with Iraq, over time the public will come to understand that Republicans have lied to them about health care. There are no "death panels." There is no "government takeover." Etc. Over time the public will become comfortable with the reform that has passed and it will become unthinkable to go back.

The coming Republican campaign to turn the public against items in the legislation should be answered by saying this is why we now need to add Medicare Buy-In before it takes effect. As Republicans proceed with their campaign to knock down the legislation we must make the solution a choice between going back to the bad old ways, and adding Medicare Buy-In.

Posted by Dave Johnson at 11:38 AM | Comments (0) | Link Cosmos

Health Care Newspaper Front Pages

Go see: Health Reform Victory: Front Pages

Posted by Dave Johnson at 11:28 AM | Comments (0) | Link Cosmos

March 21, 2010

On To Medicare Buy-In

Start tomorrow! Sign the petition.

Posted by Dave Johnson at 8:48 PM | Comments (0) | Link Cosmos

WTF Does That Even Mean?

OK I turned on the TV and saw about a minute of the health insurance debate. A Republican was saying "A government big enough to give you what you want is a government big enough to take it away."

WTF? WTF does that even MEAN?

It sounds scary and sinister, but I WANT the government big enough to give people what they want and need. I mean WTF?

And government is rule by the people. So I WANT it BIG. I WANT the people having lots of control over our affairs. I mean, what is the alternative if not big corporations making the decisions for us?

Posted by Dave Johnson at 6:30 PM | Comments (0) | Link Cosmos

Health Care Bill

So finally, after a year of disengagement, President Obama steps up to the plate and works to get something passed, and we get a health care bill. I wonder if we'll see him get involved on labor rights, financial reform, infrastructure investment and so many other things the country needs..

Posted by Dave Johnson at 6:10 PM | Comments (0) | Link Cosmos

Repeal Social Security

In 1936 the Republicans campaigned on repealing Social Security. How'd they do?

Posted by Dave Johnson at 8:18 AM | Comments (0) | Link Cosmos

Brad Friedman -- Blog Hero Award

Brad Friedman is hereby awarded the coveted Seeing the Forest Blog Hero Award for his tireless work pursuing the NY Times for getting the ACORN story so wrong. See: The BRAD BLOG : NYT PUBLIC EDITOR FINALLY ADMITS ACORN 'PIMP' HOAX REPORTING FAILURE: 'TIMES WAS WRONG, I HAVE BEEN WRONG DEFENDING PAPER'

Posted by Dave Johnson at 7:53 AM | Comments (1) | Link Cosmos

Today's Must-Read

Long, and worth the time: What's It Going to Take to Make the Bastards in Finance Pay? Excerpt:

There is no arguing that there is no greater method of creating economic growth than capitalism. Even Marx had no qualm with that. But growth is like crack cocaine for bankers and economists, both of which see the world purely in terms if wealth accumulation and production. For we who do the producing (or once did the producing back when workers were still considered a necessary evil)the truth is that American capitalism is like a wine press. It squeezes the masses for the money representing their productivity, in a process otherwise known as the virtual economy. A few people in the virtual economy become multi-millionaires. The rest of us pay the freight financially, socially and ecologically.

Posted by Dave Johnson at 7:41 AM | Comments (0) | Link Cosmos

March 18, 2010

China's Currency Manipulation Manipulates The World

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

China's currency manipulation is a worldwide problem, not just a job-killer here.

U.S. Ambassador Calls China’s Currency Stance ‘a Real Concern’,

In a speech to students at Beijing’s Tsinghua University, the ambassador, Jon Huntsman, said that economic problems in the United States had increased pressure there for a change in the value of the renminbi, which China currently ties to the value of the dollar. That has kept Chinese exports comparatively cheap and, critics say, hampered other nations’ recovery from the global recession.

“My Chinese friends like to pitch this as just an American issue. I like to say that there are many countries that feel the same way,” Mr. Huntsman said. But he focused on the growing political backlash from Americans who feel the currency policy is hurting them. [emphasis added]

The managing director of the IMF - the 'I' stands for "International" - agrees. IMF Head Says Yuan Remains Undervalued

International Monetary Fund Managing Director Dominique Strauss-Kahn said Wednesday that China's currency remains undervalued.

The resulting huge trade imbalance is hurting the entire world. From the NY Times editorial that I linked to yesterday, Will China Listen?,

China’s decision to base its economic growth on exporting deliberately undervalued goods is threatening economies around the world. It is fueling huge trade deficits in the United States and Europe. Even worse, it is crowding out exports from other developing countries, threatening their hopes of recovery.

In the Financial Times, Martin Wolf writes in China and Germany unite to impose global deflation,

[. . .] Surplus countries insist on continuing just as before. But they refuse to accept that their reliance on export surpluses must rebound upon themselves, once their customers go broke. Indeed, that is just what is happening. Meanwhile, countries that ran huge external deficits in the past can cut the massive fiscal deficits that result from post-bubble deleveraging by their private sectors only via a big surge in their net exports. If surplus countries fail to offset that shift, through expansion in aggregate demand, the world is inevitably caught in a “beggar-my-neighbour” battle: everybody seeks desperately to foist excess supplies on to their trading partners. That was a big part of the catastrophe of the 1930s, too.

The United States is not alone here. If the United States takes a stand the world will be behind us. We need to do what is right. On April 15 the President should declare China to be the currency manipulator that it is. Then trade can start to rebalance.

Posted by Dave Johnson at 10:48 AM | Comments (3) | Link Cosmos

March 17, 2010

Chinese Currency Manipulation: "Not A Small Issue"

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

The Chinese currency manipulation issue continues to make news.

Economist Paul Krugman lays out the stakes,

China is in effect imposing an anti-stimulus of that magnitude — which plausibly means 1.5 percent of GDP. This is not a small issue.

Senators Schumer, Graham and Brown revive legislation to push China: Schumer, Graham Push Bill to Pressure China on Yuan

Senators Charles Schumer, Lindsey Graham and Sherrod Brown revived U.S. legislation that would increase pressure on China to raise the value of its currency.

. . . “President Obama has outlined a plan to double exports but you simply can’t do that if you don’t address the currency issue,” Brown, an Ohio Democrat, said at a news conference in Washington today. “China’s current policy is out-and-out protectionism.”

130 Members of Congress call on the President to act,

Today a bipartisan group of 130 members of Congress, ranging from Dennis Kucinich on the left to Joe Wilson on the right, wrote to President Obama asking him to stop Chinese currency manipulation.

. . . The crisis has gotten so severe that economists who have long fought for conservative ideology and against tariffs are saying we need them to correct the imbalance.

NY Times editorial shows that establishment opinion is moving against China, Will China Listen?,

China’s decision to base its economic growth on exporting deliberately undervalued goods is threatening economies around the world. It is fueling huge trade deficits in the United States and Europe. Even worse, it is crowding out exports from other developing countries, threatening their hopes of recovery.

[. . . ] The world’s battered economy is certainly in no shape to keep absorbing China’s exports, subsidized through a cheap currency policy. The more countries that say this, the more likely Beijing will consider changing course — and the less likely this disagreement will escalate into a fight that no one can win.

China says this is all just "scapegoating": Senior Chinese diplomat rejects currency move,

"I don't think the call by over 100 congressmen from the U.S. is well founded on facts. They should not blame the problems they have by finding a scapegoat in China," He Yafei, China's new ambassador to the United Nations in Geneva, told a briefing.

Wall Street takes China's side: Congress Is Playing ‘Football’ on China Currency, O’Neill Says,

U.S. lawmakers are playing political football by pressing China to boost the value of its currency, which isn’t particularly undervalued, Goldman Sachs Group Inc. Chief Economist Jim O’Neill said.

. . . The concern in Congress “is sort of understandable but it misses the point,” O’Neill said today at a press conference in London. It’s “the equivalent of a football” and is part of “the usual hobby of bashing China,” he said.

CAF's Bob Borosage discusses the Showdown With "Chermany",

... The Chinese continue unprecedented measures to manipulate their currency, now starkly undervalued against the dollar. This is a centerpiece of a comprehensive mercantilist policy to grow by dominating export markets.

. . . China’s Premier Wen Jiabao scorned US pressure on the Chinese to revalue its currency, summoning up the wondrous gall to accuse the US and other countries of “protectionism” for seeking to depreciate their currencies.

. . . The Chinese, meanwhile, are openly recruiting US companies with subsidiaries in China to lobby against any US action. The China lobby – think tanks, multinational companies and banks – will unleash a howl about US protectionism, warn of trade wars, discount the importance of Chinese mercantilism, and remind us of the benefits of a cheap yuan. Chinese threats to dump dollars from their $2.4 trillion cache will rattle financial markets (even though a declining dollar will cost the Chinese bigtime).

This could easily get out of hand, but the showdown with Chermany can’t be avoided. We can’t go back to a world in which the US is the consumer of last resort, borrowing $2 billion a day to buy goods from abroad. ... Rebalancing is best done cooperatively but it must be done. And it can no longer be delayed.

The Alliance for American Manufacturing issued the following statement:

“The Alliance for American Manufacturing (AAM) strongly supports efforts designed to end China’s ongoing currency manipulation, which is harming American manufacturing and its workers. In the last week, a bipartisan group of Senators have introduced legislation, and more than 130 Members of Congress have signed a letter urging the Obama Administration to take action, strong indications that the mood in Congress is growing more proactive.

“The United States has lost 5.5 million manufacturing jobs in the past decade. Tackling the currency issue is imperative in saving America’s industrial sector. Economists of all backgrounds agree that an undervalued Yuan continues to make Chinese imports cheaper and American exports more expensive.

“The next step is for the U.S. Treasury Department to list China as a currency manipulator in its semi-annual report on currency exchange, due by April 15. Naming China as a currency manipulator, and taking further steps to hold them accountable, would be an important first step toward stopping the systematic dismantling of our industrial base.”

Posted by Dave Johnson at 11:05 AM | Comments (0) | Link Cosmos

March 16, 2010

CNN - From Unwatchable To Even Worse

I haven't been able to watch CNN for years. Now they just get worse.

"Feminazis?" "Ugly feminists?

Seriously, why not just watch Fox news if you want to expose yourself to horrible right-wing crap?

Posted by Dave Johnson at 2:49 PM | Comments (0) | Link Cosmos

China's American Enablers

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

China argues that some American companies will suffer if China stops subsidizing manufacturing and adjusts their currency to market levels. They're right. The fight over Chinese violations of trade rules is also another story about Wall Street and big, monopolistic corporations vs Main Street and American workers.

A China Daily story says China's huge export surplus is being "misread." The Chinese government says that US companies -- the ones who close US factories, lay off workers, devastate communities and throw the costs onto the government -- are also beneficiaries of China's government subsidies. From the story,

China's large trade surplus is often used by the United States to argue why China should allow its currency to rise.

Yet most US officials ignore a very important fact: a majority of China's exports to the US are produced by US-funded companies and huge profits go back into American pockets. . . .

"China's cheap labor helps foreign companies cut wage costs and increase their profits. Ironically, the rising profits go into foreign bosses' pockets and China is left to take the blame for the trade imbalance," said Tan Yaling, an expert at the China Institute for Financial Derivatives at Peking University.

This story is correct. SOME Americans do benefit from closing our factories. Actually, "benefit" might even be the wrong word here. SOME Americans are getting fabulously wealthy from these policies, beyond anything seen before in history, with the rest of us falling further and further behind as a result. Wal-Mart, for example, with their stores full of Chinese goods, has for decades been wiping out regional and local retailers and lowering the local wage and tax base.

So yes, SOME Americans are doing very well, thank you, from these policies. They gain a quick buck today, the rest of us pay the costs later. In Wall Street's War Against The Real Economy & We, The People, I wrote,

Over and over again we see the consequences of conservative economics and Wall Street domination: Short-term profits for a very few with devastating long-term consequences for the rest of us.

Wall Street firms have been making vast fortunes from this game,

The private equity company-buyout game works like this: buy a company, borrow against the company name and assets and put the proceeds straight into your pocket, sell off assets, outsource jobs, lay people off, cut pay and benefits for the rest, close facilities and factories, externalize costs onto the community, cheapen whatever the company makes or does, run up the debt some more, squeeze money out and pocket it and then sell. Hopefully you make off with the pension fund in the process.

They have been backed by American conservatives who have have long argued in favor of these "free market" and "free trade" scam that, close US factories, instead importing goods subsidized by China's government. A few get fabulously wealthy at the expense of the rest of us. To persuade people to support this nonsense they say that adjusting China's currency to market rates would "punish" consumers. Typical of this line is this from the Heritage Foundation a couple of years ago, China's Undervalued Currency Benefits Americans,

To the extent that the renminbi is undervalued ... the benefit goes to U.S. consumers and businesses, which pay lower prices for Chinese goods imported into the United States.

. . . U.S. consumers have the most to lose by congressional efforts to force revaluation of the renminbi. Chinese goods in the U.S. are cheap because the renminbi is cheap. Revaluation will weaken the purchasing power of the American consumers, mostly from the middle and lower economic strata, who depend on Chinese products to maintain their standard of life.

So here we are at a crossroads. April 15 the President has to officially declare that China is manipulating its currency and impose tariffs that will start to bring back factories and jobs to America. There is going to be tremendous pressure from the usual suspects to do the wrong thing, but the wrong thing has been going on long enough.

Posted by Dave Johnson at 10:11 AM | Comments (0) | Link Cosmos

March 15, 2010

Pass Health Care And Start Fixing It

I hate the health care bill. I hate that they are going to order us to buy insurance form the greedy monopolistic corporate snakes.

But it gets people care they need, and we can immediately start working to fix it, get Medicare buy-in and ultimately single-payer. If it doesn't pass, then there is nothing to build on, and won't be. So pass it and then get to work fixing it.

Posted by Dave Johnson at 11:11 PM | Comments (0) | Link Cosmos

Upload Your "I Am Not Wall Street's ATM" Pic

Upload your picture expressing that you are not Wall Street's ATM, at I Am Not Your ATM

Go have a look!

Posted by Dave Johnson at 1:54 PM | Comments (0) | Link Cosmos

Today's Radio Show

I'll be doing my regular segment on the Fairness Doctrine radio show shortly. You can listen live at the link.

I'll be talking about the Chinese Currency Showdown.

Posted by Dave Johnson at 1:31 PM | Comments (0) | Link Cosmos

Chinese Currency Showdown

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

China is holding down the value of its currency, which means goods made there cost less everywhere else. This undercuts American companies that make things, so they close factories here and buy from there. This costs us jobs, forces down our wages and savings rate, and forces the country to borrow heavily. This imbalance has built up to a breaking point. It is past time to face facts and something about it.

Just how much is China undervaluing their currency? Paul Krugman today: "This is the most distortionary exchange rate policy any major nation has ever followed." Yes, that much. And the result? Krugman says: "And it’s a policy that seriously damages the rest of the world."

A NY Times story yesterday explained how it works,

China buys dollars and other foreign currencies — worth several hundred billion dollars a year — by selling more of its own currency, which then depresses its value. That intervention helped Chinese exports to surge 46 percent in February compared with a year earlier.

This creates a huge, huge -- and growing -- imbalance. China undercuts everyone else so they can't afford to manufacture and have to buy things made there instead. Of course, that means China is sitting on massive piles of foreign cash. This is a bubble that grows and grows and grows. Everyone is worried, and it just gets worse.

But China won't change policies. They are worried that the value of that pile will drop if their currency rate rises. In Pledge to China's Leaders: You Will Lose Money on Government Bonds Dean Baker writes about why this would be great for us,

The logic is very simple. At the current exchange rate, the United States is running a massive trade deficit. ...

This is of course unsustainable. The only way that this deficit can be corrected is by reducing the value of the dollar. ...

. . . We should beg them to become unhappy with our fiscal and monetary policies and stop investing in Treasury bonds. The improvement in the trade deficit that will result from the fall in the dollar will create ten times as many jobs as any "jobs bill" that President Obama can possibly get through Congress.

Does all of this cash give China enormous power? In Is China's Politburo spoiling for a showdown with America? Ambrose Evans-Pritchard writes,

Michael Pettis from Beijing University argues that China's reserves of $2.4 trillion - arguably $3 trillion - are a sign of weakness, not strength. Only twice before in modern history has a country amassed such a stash equal to 5pc-6pc of global GDP: the US in the 1920s, and Japan in the 1980s. Each time preceeded depression.

The reserves cannot be used internally to support China's economy. They are dead weight, beyond any level needed for macro-credibility. Indeed, they are the ultimate indictment of China's dysfunctional strategy, which is to buy $30bn to $40bn of foreign bonds every month to hold down the yuan, refusing to let the economy adjust to trade realities. The result is over-investment in plant, flooding the world with goods at wafer-thin export margins. China's over-capacity in steel is now greater than Europe's output.

Change is in the air. The establishment is moving – recognizing that we will have to confront this. Dealing with this currency manipulation is the bipartisan solution that creates 3 milion jobs and costs us nothing. How bipartisan is it? Last Week conservative Pat Buchanan wrote about what he called China's "disemboweling of America" and I agreed. I wrote,

So, this "free trade" stuff has worked out for us about as well as the "free market" stuff worked out for the economy. Free market and deregulation ideology destroyed the economy. Free trade has destroyed our ability to earn money and recover from the destruction of the economy.

The lesson to learn is if you want more jobs and don't think we should have so much debt then you want a China to raise the value of its currency against the dollar. America has avoided formally labeling China a currency manipulator and taking appropriate steps, so things continue to get worse. We can't keep hiding from reality forever. When something is unsustainable it can't be sustained.

Next month the administration is going to have to change directions. A lot of air will come out of that Chinese currency bubble that was allowed to build up over the past several years, but the result will be a world starting to return to balance -- and jobs here.

Posted by Dave Johnson at 11:06 AM | Comments (0) | Link Cosmos

March 14, 2010

Admin Says Israel Endangers Our Troops -- Then Does Nothing About It?

After Israel's "insult" -- announcing new settlements just as the US Vice President arrived to launch peace talks -- VIce President Biden told Israeli Prime Minister Netanyahu that Israel's intransigence,

“is starting to get dangerous for us… What you’re doing here undermines the security of our troops who are fighting in Iraq, Afghanistan and Pakistan. That endangers us and it endangers regional peace.”

OK, they identified the problem: it puts our troops in danger. That was Tuesday, this is Sunday. That is five days of our troops in increased danger with no action from Obama. Now Israel has said, "too bad." Still no action.

This morning Tom Friedman pointed out one problem with letting them get away with this:

"...what the Israelis did played right into a question a lot of people are asking about the Obama team: how tough are these guys?

There is a larger problem than just whether they are tough or not. After identifying Tuesday that this is endangering our troops, as of Sunday there is no action. I remember that on August 6, 2001, the Bush administration was told, "Bin Laden Determined To Strike In US and went on vacation instead of acting.

Posted by Dave Johnson at 4:11 PM | Comments (1) | Link Cosmos

Supreme Court Corporate Speech Quid-Pro-Quo?

So soon after Supreme Court Clarence Thomas votes to allow corporations to put unlimited money into politics his wife sets up an organization that will accept unlimited money from corporations hoping to influence politics. I wonder how much she'll be paid?

Is this the quid-pro-quo that it obviously seems to be?

Posted by Dave Johnson at 3:46 PM | Comments (0) | Link Cosmos

Israel's Insult

Driving Drunk in Jerusalem

[Biden] should have snapped his notebook shut, gotten right back on Air Force Two, flown home and left the following scribbled note behind: “Message from America to the Israeli government: Friends don’t let friends drive drunk. And right now, you’re driving drunk. You think you can embarrass your only true ally in the world, to satisfy some domestic political need, with no consequences? You have lost total contact with reality. Call us when you’re serious. We need to focus on building our country.”

...First, what the Israelis did played right into a question a lot of people are asking about the Obama team: how tough are these guys?

. . . It is a measure of how much Israel takes our support for granted and how out of touch the Israeli religious right is with America’s strategic needs. [emphasis added]


So, just how tough are these Obama people? So far, not tough at all. And the whole world can see it, apparently.

Tom Friedman being right lately is starting to make me think that The Village is catching on to the danger that the conservative movement (and its Israeli branch) - in combination with Obama's appeasement attempts - present to the country.

Posted by Dave Johnson at 9:52 AM | Comments (0) | Link Cosmos

March 13, 2010

Sec State Says Israel Insulted The United States

This is pretty serious: Following Israel's astonishing announcement -- issued just as our Vice President arrived in their country -- that they would increase building settlements after the US asked them to hold off, Secretary of State Hillary Clinton made it clear that the United States sees this as an extremely serious action. Clinton says Israel announcement 'insulting to the United States'

"It was insulting," Clinton told MSNBC's Andrea Mitchell in an interview airing today. "And it was insulting not just to the vice president, who certainly didn't deserve that. He was there with a very clear message of commitment to the peace process solidarity with the Israeli people. But it was an insult to the United States."

An action like this by any other country would lead to some degree of breaking off of relations, and certainly a cut or elimination of financial and military support. The arrogance and assumption of impunity reflected by Israel's action is almost unprecedented.

Posted by Dave Johnson at 5:19 PM | Comments (0) | Link Cosmos

Julie's House

Leo Kottke:

Posted by Dave Johnson at 4:08 PM | Comments (1) | Link Cosmos

Horrible Right-Wingers

This is just horrible: Isn't It Time To Euthanize Reid's Wife?

Of course, the press will dig up something that was posted in a comment on a liberal blog several years ago, and tell the public "both sides do it."


Posted by Dave Johnson at 12:45 PM | Comments (1) | Link Cosmos

March 12, 2010

Bailing Out The Banks Changed The Way People Think

Tax-free municipal bonds are selling like crazy because they pay a very high yield. The thing is, they have a high yield because so many states and municipalities are on the edge of going broke, like California. If they go broke the bond holders are supposed to lose their money. But California's bonds are assumed by buyers to have no risk because everyone believes the government will step in and bail the state out, like they did with the big banks.

From Lockyer Sells 25% More California Bonds Than Forecast

The state, whose budget deficits have left it with the lowest credit rating among U.S. states, raised $2.5 billion, paying a top yield of 5.65 percent on 30-year bonds.

5.65 percent tax-free, when money in a bank might pay you half a percent, taxable.

meanwhile California's Republicans are working to force the state to go bankrupt, thereby forcing the federal government to come in and bail out the mess they leave behind.

Posted by Dave Johnson at 10:38 PM | Comments (0) | Link Cosmos

When Conservatives Are Right...

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Pat Buchanan has a column today on manufacturing, The Disemboweling of America, that hits the nail on the head. In fact, if I fairly excerpt enough of the column and send you over to read it, my work here is done. For today.

Buchanan begins by outlining just how much our country has lost by allowing others, particularly China, to take over manufacturing.

Though Bush 41 and Bush 43 often disagreed, one issue did unite them both with Bill Clinton: protectionism.

Globalists all, they rejected any federal measure to protect America's industrial base, economic independence or the wages of U.S. workers.

. . . From 2000 to 2009, industrial production declined here for the first time since the 1930s. Gross domestic product also fell, and we actually lost jobs.

In traded goods alone, we ran up $6.2 trillion in deficits — $3.8 trillion of that in manufactured goods.

And what are the implication of this loss of manufacturing?

. . . for every dollar we send abroad for oil or gas, we send $4.20 abroad for manufactured goods. Why is a dependency on the Persian Gulf for a fraction of the oil we consume more of a danger than a huge growing dependency on China for the necessities of our national life?

... How many know that every modern nation that rose to world power did so by sheltering and nurturing its manufacturing and industrial base...

. . . No nation rose to world power on free trade. ...

Nations rise on economic nationalism; they descend on free trade.
[emphasis added]


Buchanan wrote an excellent, important column today and I encourage readers to click through and read the whole thing.

So, this "free trade" stuff has worked out for us about as well as the "free market" stuff worked out for the economy. Free market and deregulation ideology destroyed the economy. Free trade has destroyed our ability to earn money and recover from the destruction of the economy.

It is time to formulate a national industrial policy/economic strategy, impose tariffs as necessary to balance trade - especially in the case of Chinese currency manipulation - and set up taxes and penalties to stop companies from moving any more manufacturing out of the country.

Posted by Dave Johnson at 11:27 AM | Comments (1) | Link Cosmos

March 11, 2010

Why Won't Obama Label China A Currency Manipulator?

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

There is a great deal of pressure on the Obama administration to declare China as a currency manipulator, and with very good reason: they are manipulating their currency. This manipulation gives goods made in China a huge price advantage over goods made in other countries, and is a large part of the reason so many of our companies move manufacturing and jobs from here to there. This is, of course, not "free trade" it is a stacked deck.

In What Chinese Currency Manipulation Looks Like, Eric Lotke shows how China gains this trade advantage,

The dollar exchange with China “defies the laws of monetary physics.” During this U.S.-led global recession, dollars aren’t worth as much as they once were. The natural physics of exchange makes U.S. goods relatively less expensive for others to buy, but makes foreign goods more expensive for Americans to buy. In a free market for currency, that would help bring accounts back into balance.

[. . .] In the American heartland the issue isn’t exchange rates, of course. The issue is jobs. American workers can compete dollar for dollar against Chinese workers. They can’t compete dollars against manipulated Yuans.

Many say the resulting price advantage is 25% or more. The Peterson Institute for International Economics in Washington has estimated that the yuan is undervalued by about 40 percent against the U.S. dollar. So before any other factors in the competition for goods, Chinese-made goods have a 25-40% advantage out the door. That's hard to compete with and a trip through any Wal-Mart will demonstrate the results - as does a look at any chart of American manufacturing job losses. This job-devastation has occurred since the conservative "free traders" got their hands on US policymaking.

Last month in Our Great Recession is China and Southeast Asia's Great Opportunity Leo Hindrey wrote,

In just the last year, China's share of our nation's trade deficit in manufactured goods jumped from 69% to an almost unbelievable 80% today, while its share of U.S. imports overall, non-resources and resources combined, increased 20%. In dollars, China right now is exporting about $330 billion annually to the United States, while purchasing less than $90 billion here.

. . . Something on the order of 90% of China's domination in manufactured goods vis-à-vis the U.S. is due to its subsidies to domestic and foreign-owned manufacturers alike - subsidies based around plant sitings and financings, taxes and of course currency - and to its extremely low environmental standards. And the sad reality is that after years of accumulating market share and building the infrastructure it needed in order to dominate much of the global marketplace, all with the help of massive (often illegal) subsidies and a massively undervalued currency, China's trade advantages in many vital industries are now so embedded that they will exist for years to come even if President Obama is successful in confronting China's manipulated exchange rate, which of course is far from assured.

Please read the whole post, there is much more to learn.

The Obama administration has twice declined to state the obvious and declare China a currency manipulator. Of course we don't know what is going on behind the scenes leading to these decisions. Perhaps there are threats to dump the bonds the hold. Or perhaps previous administrations have tied our hands with secret deals. But our government is supposed to be transparent and we are supposed to be informed and in charge, so these are not excuses. And, if we are ever going to pay off those bonds, we have to regain manufacturing so we can earn the money to do it with.

Next month the President again must decide whether to label China as a manipulator. If he does this regulations require that we enter into negotiations that could end up with trade sanctions.

It is time to state the obvious. The Obama administration is starting to look like Ben Bernanke did when he said there was no housing bubble and that it wouldn't hurt the economy when it popped.

Last month 15 senators, including an astonishing 6 Republicans wrote a letter to Commerce Secretary Gary Locke "expressing serious concerns about the department's failure to conclude that China's currency manipulation is in fact a "countervailable subsidy" to its domestic exporters." So the pressure is on for the President to put it on the record that China is doing what everyone knows they are doing, and start the process of readjusting and rebalancing, so we can get things back on track.

Tomorrow (Friday) there is an all-day Economic Policy Institute forum, Currency manipulation: how should the US respond? Panelists include Paul Krugman and Steelworkers union President Leo W. Gerard. Click through for details. The forum will start at 9 AM at The Mayflower Room in the East Room.

If you can't make it to the forum be sure to watch the live webcast here.


Posted by Dave Johnson at 4:42 PM | Comments (0) | Link Cosmos

March 10, 2010

It Is Time To Put Our Foot Down: Ten Steps We Can Take To Stop Closing Factories And Eliminating Jobs

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

The economy is still getting worse more slowly. We lost "only" 36,000 jobs last month. We need to create 11 million new jobs just to get back to where we were before "free-market" conservatives took over our government and dismanted the protections and regulations that had protected us from this.

Jobs lost, communities devastated, lives destroyed. Over and over again. Yet with all of this going on companies like Whirlpool and Toyota are still closing factories, laying of American workers, and moving manufacturing out of the country! Toyota is closing the NUMMI plant in Fremont, California, which could lose up to 50,000 jobs across California. Whirlpool -- recipient of stimulus dollars from the government -- is closing a factory in Evansville, Indiana and moving the jobs to Mexico where people will be paid $70 a week and certainly won't be buying anything made in America.

It's the system. While the executives collect bonuses and tax breaks for their destructive actions We, the People have to pick up the tab. We pay the unemployment, the stimulus, etc. Our communities pay the cost of losing the jobs and the tax base, our economy pays the cost of losing the manufacturing capability. And the executives and private equity firms and Wall Street get rich. So of course they do more of it.

How crazy is this? In the middle of this terrible jobs crisis companies are still closing factories here and shipping the jobs out of the country. Why do we allow this?

Whirlpool and Toyota (and Wall Street's $140 billion bonus pool this year) ought to be the last straw. It is time for We, the People to put our foot down and say not one more factory closed, not one more job sent out of the country! In fact, it is time to start bringing jobs BACK.

It is time to stop letting goods into the country that are made by exploited workers in areas with no environmental protections without a tariff to take away the price advantage gained from going around the protections that We, the People have fought so hard for.

There is only one way the country can earn the money to pay back what we borrowed from China, Japan and others. That is to make and sell things to others!!! THAT is what "trade" means. "Trade" does not mean allowing greedy executives to sidestep the laws and regulations and protections that We, the People fought so hard to get.

Look around us. Jobs lost, communities devastated, homes foreclosed, lives destroyed, governments going broke. All because of a runaway system that encourages the destruction of our economy. Our system actually encourages executives to close factories and lay people off! Executives make profits and get bonuses (that benefit from tax cuts) if they can figure out how to eliminate YOUR job or close a factory or cheapen a product or keep you from talking to customer support or make you pay an extra fee, etc.

Wall Street and executives benefit from this -- and get tax cuts, tax breaks and subsidies for doing it. But the economy-at-large is destroyed by these same actions when they are widespread. On top of that, we know that when we lose the factories we have to borrow money to buy the things we used to make. But we give tax breaks instead of penalties to companies that do this.

Here are just some steps that We, the People can take to start turning this around:

- A border tariff on imports to remove the price advantage of goods produced by exploited, underpaid workers.

- A border tariff to remove the price advantage of goods produced in ways that harm the environment.

- A border tariff on goods from countries that are not democracies, to remove any pricing advantage gained from not allowing people to vote and set rules that benefit themselves.

- A border tariff on goods from countries that restrict workers from organizing to improve their wages and working conditions, to remove any pricing advantage gained from not allowing workers to bargain. (America currently doesn't meet this standard.)

- Remove tax benefits and instead impose tax penalties and fines on companies that close factories here. Don't let it be profitable to do this!

- Increase taxes on the big monopolistic companies to remove the advantages that help them destroy America's smaller, regional and local businesses -- the very job creators we need.

- Increase income taxes on high incomes to reduce the incentive to pursue short-term windfalls instead of long-term interests. Make it take a long time to accumulate a fortune. Making a fortune is great but it should be a reward for helping our economy and society, not destroying them.

- Break up the "too big to fail" Wall Street firms that wrecked the economy. And get the money back -- all of it.

- Explore the use of Eminent Domain to keep factories in communities and workers in the factories.

- Formulate and follow a national economic/industrial strategy to build a new green manufacturing economy

Please add some ideas in the comments. I will have more to say on all of this.

Posted by Dave Johnson at 12:20 PM | Comments (1) | Link Cosmos

March 9, 2010

Cost Of Tax Cuts Catching Up To Us

This post originally appeared at Speak Out California

The following letter appears in today's San Jose Mercury News:

State not geared up for high-speed rail

Is high-speed rail really the answer in California? I think not. I originally thought, great, let's match Europe's and Japan's advanced transportation with our own high-speed trains.

However, California is not Europe or Japan. We do not have convenient trains and buses running everywhere you could possibly want to go in every city.

Consider that if you traveled from San Francisco to Los Angeles by high-speed train in 2½ hours, what do you do when you arrive? Catch a bus or light rail to your destination? Sorry, too inconvenient and time-consuming. Rent a car? Sorry, now you have lost the economy of train travel as well as the time savings.

Either alternative adds at least two hours to your trip making the time equivalent to driving.

I say, "no on high-speed rail." Let's save the money and reduce our debt in California!

Let it sink in what the writer is saying here: We should not even try to catch up to the rest of the world, because we have already fallen so far behind that it will cost too much. Instead let's just try to pay off some of the accumulated debt.

The writer is bearing witness to the results of many years of tax cutting and cutbacks in our government. After the tax cutting started in the 70s and 80s we stopped maintaining the infrastructure, so now we do not have convenient trains or buses or mass transit to use after the high-speed rail reaches your destination. We instead accumulated debt.

So here we are. The consequences of decades of cutbacks are arriving. The rest of the world leaps ahead of us. China has nearly completed a network of 42 high-speed rail lines connecting the major cities, and we can't even get one project off the ground.

It's certainly not going to get any better until we start asking corporations and the wealthy to pitch in and pay back some of what they gained from the infrastructure that we built in California, back in the decades before they got tax cuts.

Click through to Speak Out California

Posted by Dave Johnson at 6:03 PM | Comments (0) | Link Cosmos

Yes, Please, Please, Please Remind The Public About Bush!

Some Republicans are entering the 2010 campaign season with the slogan, "Miss Me Yet?" accompanied by a picture of Bush.

See Do You Miss Him Yet? - Opinionator Blog - NYTimes.com

Oh please. Please, please, please campaign in this election by reminding the pubic of the things that happened when Republicans ran things. Please. Please, Please.

Please.

Miss him yet?

I just have to say it again: Please, please, please run for office saying you'll bring back the Bush years.

Maybe if I said it the way Republicans offer advice. Republicans will lose the election unless they remind people what the Bush years were like.

Posted by Dave Johnson at 10:55 AM | Comments (1) | Link Cosmos

Low Interest Rates Are A Tax On People Who Don't Take Risks

Low interest rates are a tax on people who save money. And they are a subsidy for the big banks. They are just one more Wall Street bailout.

Holding interest rates as low as they are causes hardship for many. It makes savers look for higher returns. Retired people who were lucky enough to put money away can't afford to get by. It causes people to take risks like putting money in the stock market, where it can be lost. It makes people susceptible to scams.

But the consequences can be a lot worse than that. Read this: Public Pensions Are Adding Risk to Raise Returns

But states and other bodies of government are seeking higher returns for their pension funds, to make up for ground lost in the last couple of years and to pay all the benefits promised to present and future retirees. Higher returns come with more risk.

“In effect, they’re going to Las Vegas,” said Frederick E. Rowe, a Dallas investor and the former chairman of the Texas Pension Review Board, which oversees public plans in that state. “Double up to catch up.”

. . . Most have been assuming their investments will pay 8 percent a year on average, over the long term. This is based on an assumption that stocks will pay 9.5 percent on average, and bonds will pay about 5.75 percent, in roughly a 60-40 mix.


They assume 8%? Who is kidding who? Everybody knows this is not realistic, but they are allowed to keep the assumption on the books.
“Nobody wants to adjust the rate, because liabilities would explode,” said Trent May, chief investment officer of Wyoming’s state pension fund.

This is the same thing as allowing banks to not "mark to market" their mortgage portfolios. Everyone knows the banks are insolvent, but they are allowed to keep from writing down these toxic assets. Or the government buys them up from the ones with political influence...

Just HOW bad is the problem?

Colorado has been assuming its investments will earn 8.5 percent annually, on average, and on that basis it reported a $17.9 billion shortfall in its most recent annual report.

But the state also disclosed what would happen if it lowered its investment assumption just half a percentage point, to 8 percent. ... the plan’s shortfall would actually jump to $21.4 billion.


So they are reporting a $17.9 billion shortfall if the assumption is a fantasy 8.5% return. If they lower that to a still-fantasy 8% assumption they would have to report a $21.4 billion shortfall.

So just how bad would it be if they reported an honest assumption?

We are not out of the financial crisis until all of the accounts are honest and transparent.

Posted by Dave Johnson at 8:52 AM | Comments (2) | Link Cosmos

March 8, 2010

WTF - Senate Dems To Confirm RWer To Legal Services Corp?

This is beyond belief. Senate Dems just don't get it! Senate Democrats Unwilling To Fight Widely-Opposed GOP Nominee To Legal Services Corporation,

A Senate panel will likely approve the Republican-chosen nominee on Wednesday as part of a package that includes five other nominees supported by Democrats. Outside groups say Democrats are unwilling to try to separate Browne from the package for an up-or-down vote.

Citing her track record as a principal at the conservative Pacific Legal Foundation, Browne's critics say she's unfit for the job because she has directly opposed funding for legal services agencies.

... "Ms. Browne should not be placed in a position to help determine the future of legal services for poor Americans," says a letter sent by the Alliance for Justice, a coalition of liberal groups, to members of the Senate committee that will vote on Browne's nomination Wednesday. The letter was signed by more than 70 fair-housing and civil rights advocates.

What is the MATTER with these people? We elected Dems, and we get far-right ideologues confirmed ANYway!

Posted by Dave Johnson at 4:49 PM | Comments (0) | Link Cosmos

This Is What Is Great About Blogging

This is what is great about blogging. Go read it and see what I mean: Alec Baldwin: Thoughts on Hosting the 2010 Academy Awards

Posted by Dave Johnson at 2:40 PM | Comments (0) | Link Cosmos

Who REALLY Runs Things?

A story out today, Business Lobbyists Push to Revive Estate Tax They Tried to Kill

The National Federation of Independent Business and more than 40 business organizations wrote Senate and House leaders last week asking for quick action on a proposed 35 percent levy on inheritances worth more than $10 million per couple. The Associated General Contractors of America is urging members to contact lawmakers about the plan.

Why are CORPORATE lobbyists working to kill the estate tax? Wouldn't you think they would be lobbying for corporate, not personal interests?

Think about the implications of this. Just who does the corporate lobby work for? If you thought it was corporations it would appear you were wrong.

At the very least, are the beneficiaries of the lobbying paying for the lobbying? If corporate funds are being used to pay these lobbyists, are the beneficiaries claiming the value of this lobbying benefit as income on their tax forms?

Posted by Dave Johnson at 11:25 AM | Comments (0) | Link Cosmos

We Already Have A Huge Carbon Tax - But Oil And Coal Companies Get The Money

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

We all pay a huge "hidden" tax when we burn oil and coal. Oil companies get the money. This is holding our economy back.

Today when we burn oil or coal we put the toxic waste that results straight into the air. This causes damage to all of us, in many ways. First, of course, the carbon dioxide accumulates and over time causes the planet to get warmer, which causes the climate to change. Then there is the standard air pollution, smog, etc. that we are so familiar with, and the effect this has, especially on our health.

This pollution is a hidden tax on all of us. We don't make the oil and coal companies pay anything for the consequences of the use of their products. WE pay the price instead of them. They just get the profits. This is called socializing the costs and privatizing the profits. We collectively pay the price of the pollution. They privately get to keep the profits.

This failure to collect the cost of using coal and oil holds our economy back. By collectively paying this pollution price instead of adding it to the price of coal and oil itself, burning coal and oil appears to cost us less than it actually costs us. This makes it appear that other forms of energy are more costly, which discourages investment in these other forms of energy. For example, using solar panels appears to cost more than just getting electricity from the power company. But the power company is burning coal and the public-at-large is directly paying the price for the pollution. This subsidy for coal makes a kilowatt-hour have a lower price on your bill than what solar coasts. This coal and oil subsidy keeps solar power from getting the kind of investment it deserves, which keeps coal and oil on top.

Keeping the price of oil and coal lower than it should be keeps us dependent on oil and coal as our energy source. It keeps us from investing in now, more efficient ways to generate the power we use. It keeps oil and coal companies in charge of the direction of the economy. We should see this for what it is, and see the opposition to a carbon tax for what it is. Enriching an already-wealthy few is not what our public policy is supposed to be about.

So we need to set a "price" for burning carbon - a carbon tax - which makes its use reflect the cost of the damage it does and which we are all therefore paying anyway. Using a tax to add this cost to the price means that investors will find solar, wind, biofuels and other forms of energy production more attractive, and will develop these. And We, the People would get the money for use fighting the effects of burning oil and coal.

Another cost that we are paying is that this oil and coal subsidy is not in effect in the rest of the world. So in other countries investment in energy alternatives is taking off. They are becoming the leaders in the 21st century economy. When the price of oil and coal reflect their true cost the green manufacturing revolution will take off in our own country as well..

In January, Senator Lindsey Graham said,

“Every day that we delay trying to find a price for carbon is a day that China uses to dominate the green economy.”

This is the reason Jimmy Carter tried to wean the country off of oil and coal. We could have gotten started 30 years ago and by now could be well ahead of the rest of the world in green manufacturing. But the big oil and coal companies were able to stop the effort.

This is the reason that Al Gore tried to get a "BTU Tax" in 1991. We could have gotten started 20 years ago and by now could be well ahead of the rest of the world in green manufacturing. But the big oil and coal companies were able to stop the effort.

This is the reason President Obama is trying to get "cap and trade" passed today.

So we haven't gotten started yet. Senator Graham is right. We need to find a price for carbon -- instead of all of us just continuing to subsidize the oil and coal companies. They already have plenty of money.

Posted by Dave Johnson at 11:01 AM | Comments (0) | Link Cosmos

March 6, 2010

Conservatives Caused Huge Deficits, Blame Obama

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.

Headline at Drudge Report: Obama policies projected to add $9.7 trillion to debt by 2020... points to this story, National debt to be higher than White House forecast, CBO says,

President Obama's proposed budget would add more than $9.7 trillion to the national debt over the next decade, congressional budget analysts said Friday. Proposed tax cuts for the middle class account for nearly a third of that shortfall.

So here is the deal. This Drudge headline, saying Obama's spending "adds to the deficit" is a trick. Here is how it works. Suppose you take over a company that is losing $100 million a year, and your jobs is to turn it around. So perhaps the second year the company only loses $70 million, $30 million the third year, and breaks even in year four. You saved the company. But in those years the company "lost" another $100 million. Should you be fired?

President Obama took office as President of a country with a $1.4 trillion deficit - thanks to the failure of conservative policies. Their tax cuts, wars, military buildups, corruption and incompetence drove the borrowing WAY up, and then their deregulation, corruption and incompetence destroyed the economy, driving the borrowing up into the stratosphere.

If the borrowing just stayed the same at the $1.4 trillion level Obama inherited each year -- never mind that interest on all that borrowing gets higher and higher each year -- that would mean $14 trillion would be added to the deficit by 2020. That's a LOT more than the $9.7 trillion that Drudge and the conservatives are making so much noise about. Obama is dramatically reducing the borrowing, but they use trickery to make it look like he is causing it.

What about that $1.4 trillion deficit? That was the deficit for the 2009 budget year. Conservatives say -- over and over -- that Obama "tripled the deficit" in 2009. This isn't even a trick, it is just a lie. The final Bush budget year ended with a deficit of $1.4 trillion. Conservatives have been telling the public this was an "Obama Deficit" and use graphics and charts that label this last Bush budget as Obama's. Look at that chart, and then look at this. The first chart is nothing more than a lie, of course repeated endlessly.


But what else should you expect? Like the scorpion that stings the frog as the frog ferries it across the river, it's what they do. They screw things up, and then point the finger of blame at everyone else.

Posted by Dave Johnson at 9:57 PM | Comments (2) | Link Cosmos

March 5, 2010

Economy Still Getting Worse More Slowly

Total unemployment increased to nearly 17 percent

The US total unemployment, including all unemployed workers, even those who have stopped looking for work, increased to nearly 17 percent in February.

Posted by Dave Johnson at 4:07 PM | Comments (0) | Link Cosmos

March 4, 2010

California Factory Closing - HUGE Impact - Steps You Can Take

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Toyota is planning on closing the New United Motor Manufacturing, Inc. NUMMI auto-manufacturing plant in Fremont, CA on March 31. The immediate effect is a loss of 5,000 jobs. But, as with any factory closing, the effects ripple out well beyond the immediately obvious. The public has put up a lot of money to have the plant here, and the costs this closing will put on the public will be enormous.

Toyota takes off with a ton of cash, we pay the costs, it's the way the system is set up -- by us.

The effect? From The California Labor Federation, Toyota NUMMI Closure Would Kill Jobs, Destroy Communities,

...more than 5,000 autoworkers at the plant will be out of work, and another 1,500 Teamsters who transport the cars from the NUMMI plant to the dealerships will also be jobless. Additionally, as many as 50,000 workers at hundreds of businesses in California are completely dependant on NUMMI to stay afloat, from the suppliers that manufacture car parts to the restaurants where the NUMMI workers go for lunch and even the shoe stores where the plant workers buy their specialized work boots.

Toyota has benefited tremendously from this plant, as well as receiving state and federal money. A study released yesterday by the NUMMI Blue Ribbon Commission says,

The United States is Toyota’s largest market in the world. California accounted for almost 18 percent of Toyota’s U.S. sales and 5 percent of the automaker’s global sales in 2007. Toyota led California sales with a quarter of the market, more than the combined share of General Motors and Ford in 2009.

. . . Toyota has benefitted considerably from federal and state programs over the years. ... the automaker captured first place in “Cash for Clunkers” sales ... In a similar program in Japan at about the same time, U.S.-based automakers were excluded initially.

California has invested heavily in NUMMI ... The state has given NUMMI more than $18 million for training
since the plant’s inception... Millions more have gone to NUMMI suppliers for training. Major infrastructure improvements have been done explicitly for the plant and to meet its needs. The Port of Oakland, for example,
was dredged 12 years ago to accommodate the kinds of cargo ships the plant requires at a cost of $410 million.

When the plant closes the public takes up the costs -- paying unemployment, for example, for the up-to-50,000 people expected to become unemployed. The Federal Government will pick up the costs of the workers' pensions.

The Pension Benefit Guaranty Corporation (PBGC) announced yesterday it will assume responsibility for the underfunded pension plan of the 5,800 employees and retirees of New United Motor Manufacturing (NUMMI), pending the plant's liquidation by the end of the month.

Just as I wrote this week about Whirlpool, this is the way WE have chosen to make the system work. We can and must change the way the system works.

This is what companies today do. It is just the way the game is played, the way the system works. ... There aren't "good" or "bad" companies; ANY company will do these things because if they don't they lose out to the companies that do. BECAUSE WE LET THEM. In fact, by letting this happen we make it happen because, as I just wrote, if one company doesn't the next will, and the company that doesn't loses out. The system.

So here is what we have to do. We have to change the rules to stop these jobs from leaving the country.

We are going to have to put our foot down, as a people, and take control of the system to make it work for us. This is not only something we can do, it is our responsibility to do this.

Call Congress and demand that they stop companies -- ALL companies -- from closing factories in the US and moving the jobs out of the country.

I have more coming about this.

Here is one immediate action you can take. American Rights At Work has an action page with a petition: Take Action: Tell Toyota: Don't Abandon Your Workers

Toyota got its start in America 25 years ago when it opened a plant in Fremont, CA. But on March 31, Toyota plans to close the plant.

Laying off 5,000 people will only be the beginning. 50,000 workers, vendors, and suppliers – and the families who depend on them – could immediately lose their livelihoods. And hundreds of thousands more will be affected by the loss of tax revenue and consumer spending.

Will you help us demand Toyota do right by the workers who helped it get a foothold in America?

Posted by Dave Johnson at 10:14 PM | Comments (0) | Link Cosmos

Communist In The White House!

The House of Substance: A Nut:

Posted by Dave Johnson at 10:28 AM | Comments (0) | Link Cosmos

March 3, 2010

Friedman On Competitiveness: Identifies Problem, Offers Exactly Wrong Solution

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Americans who travel out of the country will tell you about how the US is so visibly falling further and further behind the rest of the world. This hurts our ability to compete economically. The cause of the problem was tax cuts. The solution is certainly not more tax cuts.

Thomas Friedman, in A Word From the Wise flies in from Asia and, using LAX as an example, observes how the US infrastructure is starting to fall apart because of deferred maintenance. He writes,

Walking through its faded, cramped domestic terminal, I got the feeling of a place that once thought of itself as modern but has had one too many face-lifts and simply can’t hide the wrinkles anymore.

Like so many problems we have today this one traces directly to failed conservative policies. Conservatives cut taxes for the rich, which forced the country to defer maintenance and borrow money. So we don't keep things in good shape and we certainly don't invest in new 21st-century infrastructure. Friedman writes,

We are the United States of Deferred Maintenance. China is the People’s Republic of Deferred Gratification. They save, invest and build. We spend, borrow and patch.

The problem goes beyond crumbling buildings, slow trains, and potholes. The long-term cost is that we fall behind the rest of the world in our ability to compete economically. Other governments are investing in 21st-century infrastructure, and we are not, because of our tax cuts:

"... a 2009 study ... measured ... ‘the rate of change in innovation capacity’ over the last decade — in effect, how much countries were doing to make themselves more innovative for the future. The study relied on 16 different metrics of human capital — I.T. infrastructure, economic performance and so on. On this scale, the U.S. ranked dead last out of the same 40 nations. ... When you take a hard look at the things that make any country competitive. ... we are slipping.” (emphasis added)

So what is the solution? The column advocates engaging in a race to the bottom by lowering corporate tax rates even more! So Friedman (a billionaire) and the CEO of Intel identify the problem and then get the solution exactly wrong (in a way that enriches billionaires, CEOs and big companies at the expense of the rest of us). He starts by saying we have been deferring maintaining our infrastructure (which is the result of tax cuts) and then says we need to CUT corporate taxes!

Tax cuts are the reason we are not maintaining our infrastructure and reducing our country's competitiveness -- so let's do it more? What is the matter with this guy? How are we ever going to bring our country's infrastructure and education up to 21st-century standards if we further weaken our financial position with even more tax cuts?

Another way that we are falling behind other countries in the global economic competition is that other countries have strategies to take our factories and jobs but we have no strategy for fighting back. Again, this is the result of our slavery to conservative policies. Conservatives say it is wrong for our government to get involved. They say "free markets" will come up with the solution.

How is this "free-market" keep-government-out-of-it approach working out? Friedman interviews Intel CEO Paul Otellini on the advantages of building new manufacturing facilities in other countries,

... If I build [a] factory in almost any other country in the world, where they have significant incentive programs, I could save $1 billion,” because of all the tax breaks these governments throw in. ... “And it wasn’t because the labor costs are lower. ... when you look at it after tax was substantially lower and you have local market access.”

In other words, in order to seize the manufacturing capacity from us these countries lose money on the deal, with their governments putting up subsidies in the form of tax breaks. isn't this "dumping" -- selling below cost, paid for by government subsidies -- which is illegal under trade laws? The idea is to seize the manufacturing capacity today, make us pay later.

The right solution is to fight back - not further weaken ourselves. When other countries are cheating we have to fight back. It is time to develop a national economic/industrial strategy.

Countries that use tax breaks to subsidize products are already fighting a trade war with us - and winning because we refuse to engage. If other countries want to play the game that way then we should play the same game back.

The US is still a huge market and companies want to sell things here. Let's use that. If they want to subsidize goods to cost less here, let's make their goods cost more here instead. Impose a border tariff that compensates for subsidies, cheap labor, lax environmental standards, etc., so their goods do not cost less here. This way we capture the revenue that other governments are pumping into subsidies. Then we use that revenue to 1) modernize our own infrastructure and maybe even 2) subsidize our own exports.

We need to stop weakening ourselves. Increase taxes so we can stop borrowing, start building a 21st-century infrastructure, and make our country competitive again.

Posted by Dave Johnson at 12:12 PM | Comments (1) | Link Cosmos

March 2, 2010

Whirlpool Tells Callers: Call Congress. They're Right!

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

In the middle of this terrible jobs crisis Whirlpool is closing a factory in the US and sending the jobs to Mexico. Their Mexican workers will be paid $70 a week. As I wrote the other day,

Our system is broken when "the market" encourages companies like Whirlpool to close factories, destroy the lives of American workers, devastate the surrounding communities and ultimately destroy the very economy that the Whirlpools depend on.

No one getting $70 per week is going to buy any refrigerators from Whirlpool. That is the bigger picture here. When American companies close down a factory and lay off workers they are also eliminating customers. Ultimately, as we are seeing, the economy breaks down.


So I received this email today:
One of my coworkers just got off the phone with Whirlpool. She called the number that the AFL or ARAW is providing for folks to complain to the company.

Her call was shuffled around till she ended up talking with someone at HR who identified herself as "Security". The woman at Whirlpool told her "My boss told me to tell you guys to contact congress about it and not call us"

Wow. Can you believe it? I guess Whirlpool wants us to change trade policy so they aren't allowed to close their plant and move it to mexico?!?! Yeah right.
I love how they take NO responsibility for the situation.

Here's the thing: I think Whirlpool is right -- we need to call Congress.

It isn't entirely Whirlpool's fault that "the market" and "the system" is forcing companies like Whirlpool to destroy workers' lives, the surrounding communities and the economy. The system itself is broken and Congress must address the core issues here.

It has become crystal clear that "free markets" don't exist, "free trade" doesn't work, and deregulation doesn't lead to positive results. Because of the failed "free market" and "free trade" and "deregulation" nonsense all we are doing is sending our manufacturing capacity and our jobs out of the country, killing our economy and borrowing more and more to make up for the losses. (And with no national economic/industrial strategy in a world of countries that do have strategies, it just keeps getting worse.)

Things Companies Do These Days

Whirlpool is closing factories, even while receiving millions of dollars from our Federal Government stimulus dollars. And they get government contracts. And when they lay people off our government steps in and provides unemployment, etc. And our local governments also are put on the spot with lost taxes, while providing local services. And, of course, Whirlpool pits states against each other for tax breaks and subsidies just to keep a few jobs, like what they are doing with Indiana vs Iowa. This is called socializing the costs and privatizing the profits.

This is what companies today do. It is just the way the game is played, the way the system works, the way the incentives are structured, the way the ball bounces, the way the cookie crumbles...(someone stop me, please)... There aren't "good" or "bad" companies; ANY company will do these things because if they don't they lose out to the companies that do. BECAUSE WE LET THEM. In fact, by letting this happen we make it happen because, as I just wrote, if one company doesn't the next will, and the company that doesn't loses out. The system.

So here is what we have to do. We have to change the rules to stop these jobs from leaving the country.

We have to write into Federal contracts that companies that get these contracts can't close factories here and move the jobs there.

We have to write into Federal tax breaks that companies receiving the break can't close factories here and move the jobs there.

We have to write into Federal stimulus bills that companies receiving the stimulus money can't close factories here and move the jobs there.

We have to write trade treaties that respect pay and benefits and workers' rights and communities and the environment. We have to set up a tariff structure that respects our own workers' democratically-obtained pay and benefits, and the environmental protections that we fought for.

These are just a few of the things we have to start doing.

Whirlpool asked us to call Congress, not them. This is partly right. Call Congress and demand that they stop companies -- ALL companies -- from closing factories in the US and moving the jobs out of the country. AND keep the pressure on Whirlpool.

I have more coming about this.

Posted by Dave Johnson at 5:17 PM | Comments (0) | Link Cosmos

March 1, 2010

Oppose President's Agenda - Get President's Endorsement

Want to explain this winning strategy to me? Blanche Lincoln has helped sabotage much of the President's agenda. So she gets a primary opponent who supports the President's agenda. The President's response? White House Backs Blanche Lincoln In Primary

Update - Thinking about it some more, I can see why the President's people would be discouraging the idea of running primary opponents against Dems who aren't getting things DONE that most people want done...

Posted by Dave Johnson at 12:18 PM | Comments (2) | Link Cosmos

Green Jobs Are NOT A Myth!

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Last week the Washington Post ran an op-ed with the curious headline, “The Green Jobs Myth.”

Oil and coal lobbyists everywhere, well-aware that most people only read headlines and a few paragraphs at most, were giving each other high-fives. You see, a headline like this “propels the propaganda” that anything remotely environmentally-conscious “costs jobs.” And being in the Washington Post, it signals that the “powers-that-be” are officially poo-pooing the concept.

The op-ed begins by setting up a straw man to knock down. It claims that the Obama administration has the “assumption that a "clean-energy" economy will generate enough jobs to mitigate today's high level of unemployment … and to meet the needs of future generations”, But seriously, has anyone, anywhere, ever said that new green jobs alone will solve the jobs crisis? Just asking.

The basis for the headline’s premise that green jobs are a myth was that installing smart electric meters means there will be fewer meter-readers employed. Well duh! But this op-ed -- with its curious headline -- uses some curious math to reach its conclusion that automating meters means fewer meter-readers will be employed. It claims that only 400 installation jobs would be created to install 20 million meters, 1600 if the rate of installation is increased. Huh? Then it gets better. To calculate how many meter-reader jobs will be lost it claims that meter-readers only read 30 meters an hour, causing 28,000 meter-reading jobs to be lost.

Now, I was already sold on the idea that automating meters means fewer meter-readers would be employed, but come on! Clearly the Post is betting that most people don't read past the first few paragraphs if they're thinking this kind of "let's play tricks with math" will just slip by.

Curiously, the op-ed doesn’t mention that people will be employed to manufacture these 20 million smart-meters! How many jobs will be created to manufacture 20 million smart meters? The op-ed doesn't say. perhaps saying how many would negate the curious title.

How Many Green Jobs Are There?

But never mind smart meters. If we’re going to talk about green jobs we need to talk about the jobs that would be created by:


  • retrofitting every building and home in America to be energy efficient, and the management, supply chain, transportation, tools, etc.

  • manufacturing, installing and maintaining wind turbines

  • manufacturing, installing and maintaining rooftop solar installations

  • manufacturing, installing and maintaining solar power generation facilities

  • everything associated with biofuels, geothermal power generation, nuclear power, advanced batteries, hydro power, carbon sequestration, carbon credit trading and transportation alternatives including building an advanced high-speed rail system connecting every major city in the country.

Think about the huge number of jobs all of this involves – and the huge payoff to our economy. And remember, these will all be in addition to the existing energy infrastructure, for now.

I suspect that the reason we see curiously misleading op-eds like this one in outlets like the Washington Post is that all of these coming technologies mean lower profits for the big, monopolistic oil and coal giants.

They can try to stop the green manufacturing revolution but it is coming. The question is, do we let op-eds like this one stop it from being Made in America?

Posted by Dave Johnson at 8:34 AM | Comments (0) | Link Cosmos