February 8, 2012

Manufacturing On Planet Economus

Economist Christina Romer had an op-ed in the NY Times this weekend, Do Manufacturers Need Special Treatment? The question that keep coming back to me is why did she feel the need to write an op-ed to diss manufacturing? Is it just an economist thing? Or is she, like so many economists, from another planet?

In her op-ed Romer claims those of us who argue for a national manufacturing policy do so out of “the feeling that it’s better to produce “real things” than services.” But, she says,

American consumers value health care and haircuts as much as washing machines and hair dryers. And our earnings from exporting architectural plans for a building in Shanghai are as real as those from exporting cars to Canada.

Here is the difference: We can't just keep servicing each other. This "service economy" thing hasn't worked out so well here on Earth, and now we have a huge trade deficit. It is "better to produce real things" because that is what you sell to others to get the money to pay each other for haircuts (and scissors).

Once You've Got It It's Hard To Lose It, Once You Lose It It's Hard To Get It Back

Manufacturing brings so much along with it that entire economies have been, are and will be supported. China isn't making its living by cutting each others' hair. Neither is Germany, or other countries that have realized the importance of manufacturing and manufacturing policy to an economy.

Manufacturing brings with it all the businesses in a supply chain, it brings the research and innovation that manufacturing requires, and it brings a lasting real infrastructure that requires enormous investment to duplicate elsewhere before competition is enabled. Today we have a tremendous current account imbalance that resulted from the terrible trade deficits suffered since we were invaded by this crowd from planet Economus, who told us we don't need manufacturing - that we should transform ourselves into a "service economy." And it will require enormous investment to restore the ecosystem that we allowed to escape to other countries in that period.

Once you've got it, it's hard to lose it, and once you lose it, it's hard to get it back. Not so much with services.

Romer's Three Straw Arguments

Romer sets up three arguments made of straw for helping manufacturing, only to knock them down:

One: Market Failure. Romer says "government intervention" is only justified when you can demonstrate "market failure." In essence she says markets must make our decisions, not We, the People. “For example, when competition in a market is limited, antitrust laws that prevent monopoly can be helpful.”

Romer writes that another “market failure” comes when it can be shown that there is a benefit to having clusters of businesses. When benefits leak beyond where a company is putting their money then tax breaks and other government help may be due.

Romer knocks down this justification for government “intervention” with two arguments. She says, “large clustering effects have been hard to find.”

Perhaps cluster effects don’t have benefits on planet Economus, where Romer apparently resides, but on earth all you have to do is look from the development of the auto industry in Detroit to the development of the semiconductor industry in Silicon Valley to understand that yes, clustering effects matter.

Romer also says if clustering does brings benefits why single out manufacturing for government benefits when other sectors also benefit from clustering? Well, of course we shouldn't just help our manufacturing if it can be shown that government involvement boosts the businesses of We, the People in other sectors.

Romer also says there is market failure if a learning period means that future companies benefit form work done by early companies. Romer says, “ a study of the semiconductor industry found that although learning by doing was substantial, most of the rewards went to companies doing the early investing.”

The Silicon Valley Romer talks about is located on that planet Economus. The Terran Silicon Valley I live in has seen many, many startups fail, only to see later companies take up their ideas and succeed.

Romer concedes that we might need manufacturing to make things with which to defend the country, justifying government intervention in markets. The argument that we need a strong manufacturing base here in case of war must be taken seriously. But she says it still doesn’t follow that all manufacturing deserves special treatment. Which industries are truly essential in a war effort, she asks? I guess she asks this is because on planet Economus service industries are essential to a war effort. On Economus you apparently win wars by cutting each others’ hair.

Two: Romer’s second case-of-straw for “government intervention” is to create jobs and reduce unemployment. Romer says, “Unfortunately, those effects are probably small.”

In the 2000-2009 "service economy" decade we lost 5 million manufacturing jobs, more than 50,000 factories, and the hope to capture several industries of the future. Those are not small effects. And the effects on the surrounding communities are severe.

Romer rightly says that the current problem with the economy is lack of demand. She prescribes tax cuts for households, help for state and local governments and investment in infrastructure. (The old "taxes take money out of the economy" argument?)

But then she says that a tax break to encourage insourcing of jobs in manufacturing won’t create demand so we shouldn't do it. It might make our goods cheaper to export, but challenging China’s currency manipulation would do more, so we shouldn’t do this. This is the old "don't do anything if it doesn't fix everything." We need to do all of these things, and more.

Three: Romer’s third straw argument is income redistribution. Because manufacturing jobs “are seen as” better-paying “for less educated workers” then manufacturing is a way to distribute more income to people with less education. But no, she says, “Increased international competition has forced American manufacturers to reduce costs. As a result, the pay premium for low-skilled workers in manufacturing is smaller than it once was.”

Romer says government should help people get a better education instead of helping create jobs for people who do not go to college. Perhaps on planet Economus all the IQs are above average, but on Earth the average IQ is 100, and not everyone can or should get a college degree. If we send more people to college without bringing back manufacturing, we'll just have more unemployed people with college degrees than we do now.

Romer also says, "If increasing income equality is the goal, it might be wiser to put money into infrastructure than to subsidize manufacturing. Construction also pays good wages, but with lower educational requirements. And America’s infrastructure needs are enormous." Well, yes. But again this is the old "don't do anything if it doesn't fix everything." Do those things. And revive American manufacturing.

Why is "the pay premium for low-skilled workers in manufacturing ... smaller than it once was"? Here is why: Before we became a plutocracy we were a democracy. When We, the People had a say we demanded good wages, benefits, good working conditions, a clean environment and dignity on the job. But workers in China have no say. They are stuffed 6 to a room in dormitories, rousted in the middle of the night to work extra shifts …

"Free trade" agreements made democracy a competitive disadvantage. To people from planet Economus, these conditions in places like China are just “lower costs” that the rest of us need to learn to compete with.

Are All The Other Countries Wrong?

The countries that are successful in today's economy have national industrial/economic policies. We do not. They work to capture parts or all of key strategic industries, and line up the infrastructure, finance, education, supply chains, power grid, tax policies and everything else needed to compete in the world economy. We do not.

We send our companies out against these national systems, and even our largest companies cannot compete with national systems. So we lose.

Are China, Germany and so many other countries just wrong, putting so much into these efforts to capture parts or all of strategic industries? Or are they being smart? Look at who has a trade surplus and who has a trade deficit, and see if you can guess the answer.

The Fix

1) Romer says we should not have special treatment to help manufacturing. Well, let’s start by removing the special treatments that are hurting manufacturing. After that we can begin to talk about "special treatment" to help manufacturing. Out tax policies encourage outsourcing and make it economically beneficial to close a factory rather than maintain it.

2) Countries like China offer subsidies to strategic companies and industries. They manipulate their currency to keep their prices lower in world markets. Let’s enforce trade rules against that, and if we can’t then let’s get out of these "free trade" agreements that are killing us and put tariffs on their goods so they are not unfairly competing with goods made here. And start matching subsidies on exports so they compete in world markets.

3) Other countries have national industrial policies, lining up everything needed to capture part of all of strategic industries. We don't so we send our companies out alone against countries. We have to change this, or ultimately our companies have to lose.

4) Planet Economus is a place far from Earth. On planet Economus they apparently have free markets, and free trade. But on Earth free markets and free trade never existed anywhere at any time, and never worked when they were tried. So on Earth we have to have policies that reflect what happens on Earth, not on planet Economus.

This Time Isn't Different

Romer concludes,

AS an economic historian, I appreciate what manufacturing has contributed to the United States. It was the engine of growth that allowed us to win two world wars and provided millions of families with a ticket to the middle class.

Right, and it still is. This time it isn't different.

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 12:20 PM | Comments (0) | Link Cosmos

February 6, 2012

The Chrysler Ad

I come from the Detroit area, even worked in the auto industry, so this means a lot to me:

I love that "imported from Detroit."

Posted by Dave Johnson at 7:52 AM | Comments (0) | Link Cosmos

January 23, 2012

To Get Our Economy Back Hold Cheaters, Fraudsters And Exploiters Accountable

The spiral-to-the-bottom and inequality we are suffering is not an inevitable result of globalization, it is what happens when we don't hold cheaters and exploiters accountable and stop them. This is not just about Wall Street, it is the story of what has happened to our wages and benefits, jobs, factories, companies, industries, economy and democracy in the last 30-or-so years.

Cheaters, Fraudsters and Exploiters

If cheaters and exploiters are not held accountable and fraudsters are not prosecuted, then the advantages this brings them forces honest players out. We're all waiting to see if there is a deal in the works that lets big banksters off the hook for mortgage fraud and other (uninvestigated) crimes, making their shareholders pay fines for them instead. But that story of the 1%'s fraud and cheating and the consequences to the 99% are not what I am writing about here. This post is about how letting 1%er cheaters, fraudsters and exploiters off the hook has hurt America's manufacturing and trade.

Apple Can't Make It Here

Recent news stories about Apple hilight how we allowed our thriving, high-paying manufacturing sector to erode, with the result that our middle class is in decline. Apple used to proudly make their computers in the United States, but now everything is made in Asia. The NY Times' Charles Duhigg and Keith Bradsher, in How the U.S. Lost Out on iPhone Work describe how China's massive government subsidies and exploitation of workers mean “Those jobs aren’t coming back.”

The Entire Supply Chain Is Over There

China has done what it needs to do to bring factories, which bring supply chains, which bring industries. The NYT story describes what it means to have an entire supply chain located where the factories are,

When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.

The Chinese plant got the job.

“The entire supply chain is in China now,” said another former high-ranking Apple executive. “You need a thousand rubber gaskets? That’s the factory next door. You need a million screws? That factory is a block away. You need that screw made a little bit different? It will take three hours.”

Subsidies are often a violation of trade rules. Even so, as the article says, "The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory." So, of course, "the Chinese plant got the job." Meanwhile, our own country has resisted having an "industrial policy" to keep our industries and foster new ones. This is finally changing, but good efforts like "Buy American" and President Obama's green energy policies are fought tooth-and-nail.

Exploited Workers

Another key part of China's advantage is the ability to exploit workers and get away with it -- which lets Apple get away with it, too. And when Apple sees violations, it doesn't stop them.

One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

Later in the story,

The first truckloads of cut glass arrived at Foxconn City in the dead of night, according to the former Apple executive. That’s when managers woke thousands of workers, who crawled into their uniforms — white and black shirts for men, red for women — and quickly lined up to assemble, by hand, the phones.

... The company disputed some details of the former Apple executive’s account, and wrote that a midnight shift, such as the one described, was impossible “because we have strict regulations regarding the working hours of our employees based on their designated shifts, and every employee has computerized timecards that would bar them from working at any facility at a time outside of their approved shift.” The company said that all shifts began at either 7 a.m. or 7 p.m., and that employees receive at least 12 hours’ notice of any schedule changes.

Foxconn employees, in interviews, have challenged those assertions.

Apple Audits Its Suppliers, Finds Many Violations

Earlier this month Apple released a report describing the practices of its suppliers. NY Times: Apple Lists Its Suppliers for 1st Time,

Apple said audits revealed that 93 supplier facilities had records indicating that over half of workers exceeded a 60-hour weekly working limit. Apple said 108 facilities did not pay proper overtime as required by law. In 15 facilities, Apple found foreign contract workers who had paid excessive recruitment fees to labor agencies.

And though Apple said it mandated changes at those suppliers, and some showed improvements, in aggregate, many types of lapses remained at general levels that have persisted for years.

William K Black, writing in Apple's Foreign Suppliers Demonstrate Widespread Scamming and Horrific Abuse of Employees at AlterNet, looked at Apple's report. Black writes that the audit of suppliers, "shows that anti-employee control fraud is the norm."

Black says that two things stand out in the report,

First, Apple rarely terminates suppliers for defrauding their employees – even when the frauds endanger the lives and health of the workers and the community – and even where Apple knows that the supplier repeatedly lies to Apple about these fraudulent and lethal practices. Second, it appears unlikely in the extreme that Apple makes criminal referrals on its suppliers even when they commit anti-employee control frauds as a routine practice, even when the frauds endanger the worker’s and the public’s health, and even when the supplier repeatedly lies to Apple about the frauds. Apple’s report, therefore, understates substantially the actual incidence of fraud by the 156 suppliers (accounting for 97% of its payments to suppliers).

As Black wrote, "Apple knows that the supplier repeatedly lies to Apple about these fraudulent and lethal practices" and "...it appears unlikely in the extreme that Apple makes criminal referrals on its suppliers" Apple doesn't stop these violations. They get too much of a competitive advantage out of it.

This Is Fraud

When you buy a product you assume that it is on the shelf at the cost you are asked to pay because laws and regulations were followed and standards were met. So you buy the one that has the right quality at the right price. But what if a product has a low cost as the result of cheating, exploitation and violations of environmental, labor and trade laws? What if there is a lie at the root of the transaction you are engaged in?

China's massive investment in capturing entire industries -- a violation of trade laws -- means that many of the components of the high-tech manufacturing supply chain have migrated out of the US to that country. And China's non-democracy political system means that workers have few, if any rights, and often the rights they have are not enforced. Black says American companies taking advantage of this are engaging in "a form of control fraud (fraud in which the head of a company subverts it for personal gain)."

Anti-employee control frauds most commonly fall into four broad, but not mutually exclusive, categories – illegal work conditions due to violation of safety rules, violation of child labor laws, failure to pay employees’ wages and benefits, and frauds based on goods and loans provided by the employer to the employee that lock the employee into quasi-slavery.

Allowing Fraud Drives Legitimate Businesses Out Of Existence

The key point Black makes is that allowing cheating, fraud and exploitation to continue brings them advantages that drive legitimate businesses out,

George Akerlof, in his famous article on markets for “lemons” (largely describing anti-customer control fraud), explained the perverse “Gresham’s” dynamic in 1970: "[D]ishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.”

A Criminogenic Environment

Specifically, what this means to companies that try to compete with companies like Apple,

Anti-employee control fraud creates real economic profits for the firm and can massively increase the controlling officers’ wealth. Honest firm normally cannot compete with anti-employee control frauds, so bad ethics drives good ethics out of the markets. Companies like Apple and its counterparts create this criminogenic environment by selecting least-cost – criminal – suppliers who offer components at prices that honest firms cannot match. Effectively, they hang out a sign – only the fraudulent need apply to be suppliers

When we let companies get away with building products in places that violate trade rules, allow environmental degradation, exploit workers, cut corners on safety, use cheap components and ingredients, these companies get cost advantages that force honest companies out of business. This is the story of our economy. This is why our middle class is engaged in a race to the bottom.

Should Companies Like This Exist In The US?

Robwert Cruickshank puts two and two together, in a must-read post, Thinking Differently About Apple and 21st Century Society. He writes,

In the last year or two, it’s become increasingly clear that the way Apple makes its products is deeply flawed. Working conditions at the factory which makes most of their products – Foxconn in Shenzhen, China – are so appalling that workers engaged in a rash of suicides in 2010 to ameliorate their own suffering. Earlier this year workers threatened mass suicide over pay and working conditions. And of course, there’s the fact that Apple makes these products overseas rather than in the United States, where unemployment remains at some of the highest levels we’ve seen since the Great Depression.

Cruickshank asks if companies with this attitude should be allowed to continue to do business? He writes that Apple has,

...a narrow focus on their products and their profits, and disdain wider concerns for the good of society. When an unnamed Apple executive was asked about their role in addressing America’s economic problems, their response was revealing:

They say Apple’s success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job.

“We sell iPhones in over a hundred countries,” a current Apple executive said. “We don’t have an obligation to solve America’s problems. Our only obligation is making the best product possible.”

That quote is perhaps the best encapsulation of the pathologies of the modern American corporation. In fact, Apple does have an obligation to solve America’s problems. Everyone who lives in this country has that obligation. And corporations have that obligation too. If they don’t want to help make things better, then they shouldn’t exist.

Then he gets to the wider point,

The notion that companies exist only to generate profit or build a specific few set of products is corrosive. Those profits and products serve the rest of society. And as a part of that society, companies and their executives exist to make that society a better place. If they are engaged in a set of practices that make society worse off, then those actions are indefensible and need to be changed.

For the last 30 years, American businesses have been devoted to a single-minded pursuit of maximizing short-term profits. Unsurprisingly, this has had profound ripple effects throughout the rest of society. The economy became focused on those profits, and so with it followed politics, culture, and our values as a civilization.

By now it should be clear to everybody that while this works well for the small elite that has hoarded all these profits – the so-called “1%” – it has utterly failed to provide a happy and fulfilled life for everyone else.

Here I quote Cruickshank quoting Black, who is looking at Apple's report of its suppliers, with "overwork and other forms of employment fraud being rampant."

As William K. Black explains at Alternet, this is a good example of what may be a widespread tolerance for fraud in the global economy:

These frauds take place abroad, but they harm employees at home. Mitt Romney explains that Bain had to slash wages and pensions to save firms located in the U.S. who had to meet competition from foreign anti-employee control frauds. The damage from foreign anti-employee control frauds drives the domestic attack on U.S. manufacturing wages. Bad ethics increasingly drive good ethics out of the markets and manufacturing jobs out of the U.S. and into more fraud-friendly nations.

"These Frauds Take Place Abroad But They Harm Employees At Home"

Once again, for emphasis, "these frauds take place abroad, but they harm employees at home."

If we want the downward slide to stop we have to decide to hold the cheaters, exploiters and fraudsters accountable for their actions. At home the efforts by the giant corporations to keep the National Labor Relations Board (NLRB) and the Consumer Financial Protection Bureau (CFPB) from doing their jobs, enforcing the rules and holding them accountable further show how this is affecting us all. Abroad we have to demand enforcement of labor and trade rules so companies like Apple can not gain advantages that put more ethical and honest companies out of business. We certainly should not be letting products made there have cost advantages here and stiff tariffs can fix that. Letting companies get away with this makes democracy a competitive disadvantage.

We have to get mad and hold the cheaters, fraudsters and exploiters accountable.

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 2:43 PM | Comments (0) | Link Cosmos

January 11, 2012

Use State 'Buy American' Rules To Promote Insourcing

President Obama is hosting a forum on "insourcing" today. We need to bring jobs back to America, and restore our "industrial commons." One way to help move this along is for states to require "Buy American" in their procurement rules. This is legal and here's the big thing -- it saves states money.

In December Steelworkers President Leo Gerard wrote a strong post, Antidote For Stupidity Of Shipping Tax-Dollar-Financed Jobs Overseas, writing,

Amid prolonged, painfully high unemployment, ABC News Anchor Diane Sawyer for the past year tirelessly advocated a simple solution – buy American-made products. She clearly explained the reasoning: every American dollar spent on an American-made product helps create an American job.

Repeat and amplify: Every dollar spent on an American-made product helps create an American job.

Buy American Legislation

Gerard wrote,

Now there’s an antidote for California’s stupidity. It is legislation called the Invest in American Jobs Act. Championed by U.S. Rep. Nick J. Rahall, (D-W.Va.) and Senators Sherrod Brown, (D-Ohio), Bob Casey, (D-Pa.), and Debbie Stabenow (D-Mich.), it would strengthen existing requirements for buying American products when federal tax dollars pay for construction of highway, bridge, public transit, rail, water systems and aviation infrastructure equipment.

California Example

California decided to "save money" by purchasing Chinese steel to build the new Bay Bridge. Gerard writes about the disaster that brought to California. Never mind all the problems with the quality, the welds, the delays, and the problems overseeing the work that he described... Gerard also gets into the hidden costs to the state and country from the loss of business and the loss of jobs this caused:

Also, Schwarzenegger’s estimate that $400 million would be saved failed to account for the wages American workers lost, the taxes they would have paid, or the multiplier effect on the economy when workers spend their wages in their hometowns. In addition, Schwarzenegger’s estimate failed to account for the downside of hiring Chinese workers with American tax dollars, or in this case, bridge toll receipts. That includes unemployment compensation, Medicare fees and other costs borne by governments for joblessness.

The Investigative Reporting Workshop at the American University School of Communication included a story about the Bay Bridge project by two-time Pulitzer Prize winning investigative reporters Donald L. Bartlett and James B. Steele in a series called What Went Wrong: the Betrayal of the American Dream.

In their report about California sending the bridge work to China, Bartlett and Steel quote Tom Hickman, vice president of Oregon Iron Works in Clackamas, Ore., one of the American companies that tried to form a consortium to perform the Bay Bridge work. Here’s what Hickman said about the jobs California denied American workers and the work California denied his America company:

“These jobs are living-wage jobs and family-wage jobs. They provide health and welfare benefits, 401(k)s and pensions. Our facilities meet all of the environmental requirements, and it just is a very, very difficult thing to compete with the Chinese when you are really competing with the Chinese government (which subsidizes Chinese industry).”

Caltrans argued that no American company had the facilities to perform the work. Hickman said the consortium could have done it. But if government agencies like Caltrans continue to ignore the real costs of shipping work to China, American factories will continue to close. America lost 55,000 manufacturers over the past decade. If that doesn’t stop, at some point, America will forfeit the capacity to perform this kind of work.

Buying steel from another country proved to be a disaster for California every way you look at it.

Buy American Costs LESS

California "saved money" by purchasing Chinese steel to build the new Bay Bridge. In fact, the one government agency that built the bridge may have "saved money." But what about the other costs to government and the rest of us because of the jobs lost from not making that steel here? What about the lost taxes from the unemployed workers and the American steel companies that would have provided the steel -- and their suppliers ? What about the unemployment, food stamps, Medicaid, and all the other "safety net" costs that resulted? What about the loss of business to grocery stores and gas stations near the steel plants, and near all the suppliers that had to lay people off, and the lost sales taxes, etc?

When you add in the cost of losing jobs, factories, companies, industries and communities that result from decisions like this, you start to see that it really doesn't make sense to "save money" by buying things made elsewhere.

BART Buys American

The Bay Area Rapid Transit district learned a lesson from the Chinese steel debacle and last year introduced a Buy American policy. BART Adopts "Buy America" – First in U.S., Agency Says,

The Bay Area Rapid Transit district has become the nation's first transit agency to approve a "Buy America" policy, BART said.

The new Buy America Bid Preference policy, adopted unanimously by the BART board Thursday, "gives preferences to rail car manufacturers who create jobs in the U.S.A.," according to a BART news release Friday.

BART is preparing to award $3 billion in contracts for its new fleet of train cars, which the agency calls the "Fleet of the Future."

Buy American Policies

If we really want to start insourcing American jobs, then we should put our policies where our mouths are. "Buy American" provisions should be a mandate on federal, state and local government purchases, consistent with our trade laws. There is no reason our own government should be undermining American manufacturers. To accomplish this, our bottom line for federal procurement should be:

• All federal spending should have "buy America" provisions giving American workers and businesses the first shot at procurement contracts.
  
• New federal loan guarantees for energy projects should require the utilization of domestic supply chains for construction.
  
• Our military equipment, technology and supply purchases should have increased domestic content requirements.
  
• Renewable and traditional energy projects should use American materials in construction.
  

State-level spending should have similar requirements, and this panel will discuss these, and strategies to getting them in place.

Today many state-level procurement laws are very weak. As a result, a lot of tax dollars go to purchase goods made overseas instead of goods made in the USA. The impact of this often includes delays or cost overruns such as what happened with the San Francisco to Oakland California Bay Bridge, as well as the loss of jobs and revenue in the US.

The idea that national and state governments should "Buy American" isn't in any way a partisan issue. If you look at polling you find that Republicans as well as Democrats believe that at least now while we are in economic distress, and trading "partners" are selling to us but not buying from us, our tax dollars should be supporting American companies and jobs.

There is a reason countries like China are working so hard to get this business.

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 11:31 AM | Comments (0) | Link Cosmos

January 6, 2012

Santorum's Make It In America Plan Shows Republicans Can Read Polls

One after another, the Republican Presidential candidates have come out with strong statements that appear to show support for making things in America and revitalizing American manufacturing. This is because they can read polls and polls show that Americans overwhelmingly want American manufacturing revitalized, are tired of offshoring, understand the importance of fixing trade deficits and want to see things made here again. Donald Trump gained a lot of traction from the appearance of taking on China. Mitt Romney also talks about how we need to take on China. Rick Santorum has his own "Made In America" plan. But do their actual proposals match up with their rhetoric?

Romney

Mitt Romney has strong words about China. For example, last week Romney visited Competitive Edge, an Iowa company that sells promotional campaign items that you can put your own brand or message on. ("We've got items for convention give-a-ways, business gifts, direct mail campaign items, fund raising, political campaigns, special events, company promotions, and more!") At this campaign stop Romney said,

“I’ll clamp down on China that’s been cheating,” Romney said. “They’ve been stealing our intellectual property, our designs, our patents, our know-how, our brands, they’ve been hacking into our computers. That has got to stop.”

“I will stop it if I’m President of the United States,” Romney said.

However, in spite of Romney's words, many wonder if he is only saying this to get votes. For example, the website for Competitive Edge, the site of his Iowa appearance, says, "Competitive Edge is a major importer of Specialty Products from Asia and Europe." According to TPM, the president of Competitive Edge "said he doesn’t think Romney’s being completely serious when it comes to his tough China talk." He explained,

“I think the rhetoric of a campaign is different than the actual application,” he said. “[Romney] will sit down and he will get the right people in, he will take the advice of maybe a Huntsman who will say, ‘this is how to handle China.’” ... When it comes to actually governing, Greenspon said he expects Romney will take a much softer approach to China at the urging of his supporters in the business community.

So much for Romney. As with so many of his campaign positions, surrogates explain behind the scenes that he is just saying what he needs to say to get votes, what he will do if he is elected might or might be completely different, there is no way to know.

Santorum

Rick "not-Romney" Santorum is now the official #2 in the GOP race. Santorum can also read polls, and is offering a "Made In America" plan. The plan begins the way Santorum always begins, "Rick Santorum believes that to have a strong national economy, we must have strong families."

Much of Santorum's plan is the usual Big Lobbyist and Wall Street-backed Republican stuff about cutting taxes on the rich and getting rid of any restraints on the wealthy and powerful as "pro-growth" policies. Items 1,2,3,4,5,6,7,8 and 9 are actually all the same item: cut taxes on the rich and their big corporations.

And then Santorum diversifies. Item 13 is get rid of President Obama's health care reform, with no explanation of how this will help manufacturing. Item 15 includes, "eliminate funding for Planned Parenthood and support adoption" and "eliminate funding for United Nations organizations that undermine America’s interests." Again, there is no explanation of how these will help manufacturing. These points are apparently included in a manufacturing plan to reassure the Republican base that he is certifiably nuts, to attract Michelle Bachmann voters.

Some of the items appear to be the result of selling advertising space to lobbyists from various industries.

• The oil industry purchased Item 20: Tap into America’s vast domestic energy resources...
  
• The big Telco giants purchased Item 21: Unleash innovation in telecommunications and Internet consumer options by getting government out of the way...
  
• Pete Peterson shelled out for Item 22: Reform Social Security and Medicare...
  
• The big Wall Street firms that are investing in privatizing education purchased Item 26: Reclaim the role of parents as the decision makers in their children’s education and incentivize the states to promote parental choice...
  
• Canadian oil companies that want to sell to China purchased Item 28: Approve the Keystone Pipeline...
  
• Wall Street and promoters of "The Big Lie" purchased Item 30: Phase out Fannie Mae and Freddie Mac’s government backed role in mortgages...
  

The plan is not all bad. Santorum accidentally comes up with a few things that would actually help American manufacturing. Of course, they are mostly just more about cutting taxes, but these cut specific taxes on manufacturers, which might help bring some manufacturing back. These are:

• Item 10: Eliminate the corporate income tax for manufacturers – from 35% to 0% - which will spur middle income job creation in the United States and will create a job multiplier effect for workers
• Item 11: Spur innovation in America by increasing the Research & Development Tax Credit from 14% to 20% and make it permanent

Santorum's Item 32 is important, and I'm singling it out for attention: Strengthen our national security and national defense so that we are not dependent upon our foes or competitors for critical manufacturing, technology, energy and other security needs

So Santorum's plan has a few good points but only barely matches the promise of its title. In reality it only offers more of the same policies that boost the 1% at the expense of everything else, even harming smaller manufacturers trying to compete with the multi-national giants. The plan even offers a number of items that have ravaged our manufacturing base, pushing even more disastrous "free-trade" agreements. And, the plan has the added bonus of a series of unrelated proposals apparently included only as filler and the necessary proof of insanity to qualify him in a Republican primary.

President Obama's Office of Manufacturing Policy

As one component of a set of policy initiatives to improve manufacturing President Obama recently set up a new Office of Manufacturing Policy that will have cabinet-level status, reflecting the importance of the manufacturing sector to our economy. The office will coordinate the efforts of different government agencies, such as the Small Business Administration, the Department of Commerce and the Transportation Department.

Congressional Democrats' Make In In America Plan

In May Democrats in the Congress brought out a "Make In In America" package of specific legislative proposals to revitalize American manufacturing. In Democrats' Plan Makes Jobs In America I described the plan:

Congressional Democrats yesterday unveiled the Make It In America plan for the 112th congress. This is a set of specific, detailed, targeted bills that clearly create jobs and restore our economic competitiveness, beginning with a national strategy for manufacturing. This is very different from the vague, sloganeering, lobbyist-written plan offered by Senate Republicans.

Yesterday House Democratic Whip Steny Hoyer and Minority Leader Nancy Pelosi unveiled their Make It In America plan “to support job creation today and in the future by encouraging businesses to make products and innovate in the US and sell it to the world through strengthening our infrastructure and supporting investments in key areas like education and energy innovation.”

This Make It In America initiative involves a series of bills that have been introduced for consideration by the 112th Congress. This initiative will create jobs here, grow the economy and reduce the trade deficit, all of which help reduce our budget deficits. Creating jobs and growing the economy reduces deficits by increasing tax revenues and decreasing spending on unemployment benefits, food stamps, etc.

Click through for details of the plan.

A Warning

There is a warning here for President Obama and all other candidates of either party running for office in 2012: the public wants to see plans to bring back American manufacturing. The public understands what the NAFTA-style trade deals have done to our wages, jobs, factories, industries, trade deficit and economy. They hate Wall Street's quick-buck outsourcing schemes and the trade deals that enabled them, and want American manufacturing revitalized. Supporting Wall Street and trade deals and the quick-buck, offshoring economy harms the country and for that reason is political suicide

The public wants to go into stores and see "Made In America" again.

Frank Sobatka explains:

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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October 17, 2010

Wheeling Town Hall -- BIG Turnout -- Focus: Tax Breaks For Offshoring

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.

Driving across Ohio toward Wheeling you pass one small manufacturing company after another - but not too many with lots of cars in the employee parking lot. I stopped in a coffee shop in a small township. They offered me a cookie, and when I declined, the owner said, “We’re giving them away, it’s our last day.” After 14 years the shop and the restaurant next door are closing because the landlord is giving up, auctioning off the building, and they don’t see how they can reopen somewhere else and make it. Too many manufacturers in the area have had to close.

Every manufacturing job supports four or five other jobs in the economy. This is seven or eight more gone. The Cut Nail plant dominates a section of Wheeling. It closed last week, after 152 years in business. That's a lot more gone.

The Town Hall

Friday night I attended the Wheeling, WV "Keep It Made In America" Town Hall meeting. This was a BIG event – 600 attendees big . (Note - All pictures by Ike Gittlen, USW, click any pic for enlargement, see the entire collection here.

Many elected officials, starting with Governor Joe Manchi (now running for Senate) attended and spoke. Quite a few candidates for Congress attended and spoke as well. And there was a panel. The Intelligencer / Wheeling News-Register has a great writeup of the event.

The meeting began with a flag entrance presented by an honor guard of Young Marines:

This was a big event with a lot of speakers, so I'll only put up snippets of what was said. But the entire town hall was webcast live: see the recording of it here.

Alliance for American Manufacturing Executive Direct Scott Paul gave "manufacturing facts" between each speaker.

"Why should people care about manufacturing if they don’t work in a factory?
* Manufacturing provides 70 of all r&d, 90% of all patents, so if you care about innovation, next best thing…
* Manufacturing largest purchasers of technology, so if you care about…
* Manufacturing still employs 12 million, sizable portion.
* Also manufacturing has a multiplier effect, each job supports 4 or 5 others in your community. More than any other.
* Finally manufacturing jobs pay 22% better."

Vice President of the United Steelworkers Tom Conway spoke first,

"Thanks for coming, having a discussion, about what we think is a crucial issue, and one that America has been struggling with for a while. We’ve lost 50-60,000 factories over the last few years and millions of jobs. Labor and management do not have the luxury of not being together on this. We need to be together on this. Doing it jointly, telling a common story.

Trade is good but trade needs to be balanced, but now for 30 years we have had an imbalance that has gone on and one, and you can’t do that and expect to have a thriving economy, and think the country is going to exist off the growth in the financial services sector. Now 40% of our GDP comes from the financial services sector and you've all seen what’s happened.

You’ve got to have an economy that is based on something. You can’t keep having your best and brightest go to wall street.

It used to be there were two tickets into the middle class, get a union card or get a college degree.

Governor, Senate candidate Joe Mansion:

First question is will you support buy America policies? Made in America, even better.

There is not one thing in free trade that talks about fair trade. We can compete with any workforce in the world as long as it is on a level playing field.

Currency manipulation 40%, no rules or regulations on environment, and then we give tat incentives to companies to move jobs offshore.

Charlie Wilson OH-6, which borders on Wheeling:

We all have common interest, returing to economic security, returning our neighbors back to work and returning our communities to prosperity is a priority for all of us.

We shouldn’t be looking to advance new trade deals if the ones we have aren’t working. I’m proud to be a co-sponsor of Repeal NAFTA. Trade is important but it has to be fair trade and we have not had fair trade.
We have been outsourcing jobs, crippling thing in our economy, voted 2 times in last few weeks to close tax loopholes that encourage companies to outsource. How can we possibly justify rewarding people with tax breaks who send our jobs to other countries. Come here I’ll show you what has happened to our economy from jobs lost to trade deals.

The Conservative Tax Pledge

One speaker said something I want to hilight: Mike Oliverio, Congressional Candidate, WV-1, said something about the "Norquist No New Taxes Pledge" that I think was significant. Oliverio called it a pledge to keep those tax incentives for closing factories and outsourcing jobs.

I support legislation that prevent outsourcing of jobs, these tax giveaways have to stop, my opponent signed a tax pledge to continue these giveaways to corporations. I just can’t imagine how you can sign that kind of pledge in today’s world.

His opponent David McKinley:

The stimulus failed, only added debt to the government. We’re driving business away by overtaxing and overregulating. National Association of Manufacturers, Chamber of Congress, Tea Party backs me, Right to Life back me.

I want to freeze tax rates where they are now to remove uncertainty. Create confidence what our tax structure is going to look like they will start hiring again. Eliminate overregulation of business.

Nancy Pelosi is toxic to our political environment.

About 3-400 other candidates spoke. The Libertarian Party, the Mountain Party, the Constitution Party, others.

The Panel

After approx 28,245 more candidates spoke there was an excellent panel discussion, moderated by Scott Paul, with
* Tom Conway, VP USW
* Kenny Perdue, AFL-CIO West VA
* Beri Fox, CEO of the Marble King Company

Note: About Marble King. Wheeling and WV have been hit hard by imported glass. Glass used to be a very big industry in West Virginia. There were 240 glass manufacturing companies in WV 30 years ago. Marble King is one of only 6 remaining companies.

Berri – Marble King is a 75-year-old company. We want to help keep the American dream alive,. Glass business in WV second only to coal, 240 companies 30 years ago, today 6. The obstacles are substantial. Something has to be done.

We did kids’ toys, supplied game companies. All moved to China, NONE manufactured in US now. This created huge stresses on what was our market share, so we bagan to diversify our product into other areas, creative innovative. Now, you buy spray paint, aerosol, shake it, that sound is our marbles.

Question from audience: Tax Breaks for offshoring?

Conway - companies getting tax breaks are also the companies that have taken control of our government, big multinational companies, they leave American workers and communities behind and we can’t tolerate it any longer.

I think that is the best line to close with. If you need a reason to vote, there it is.

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October 15, 2010

Lorain, OH Keep It Made In America Town Hall Meeting

Thursday evening I attended the "Keep It Made In America" Town Hall in the John Spitzer Conference Center at Lorain County Community College, an impressive, large campus. Lorain, Ohio is another town with closed factories, boarded-up houses, high unemployment, and ringed by the national big-box vulture chains whose business model is to suck the remaining funds away to Wall Street.

Driving into Lorain

As you drive from town to town in Michigan and Ohio you see one after another a ring of the "big box" stores and national chain stores around each city. You also see the "brownfields" of rusted-out, closed factories, empty, falling-down buildings. Then you go to the downtown and you see boarded up houses, empty storefronts, deteriorating and deteriorated communities, idle people standing on corners. As you drive into these towns you can just see what is happening in a nutshell.

You used to hear about how Wal-Mart was predatory, how it would show up in an area and after a while the downtowns would dry up, local business-owners would go broke, local business employees would be laid off, and the local people would have to work for low wages at Wal-Mart, while the region's spending money would go off to the wealthy few who run these things.

Well a juicy story of devastation like that one gets around, and there are those who hear it and say, "Hey, that's a great idea, I wanna get me some of that." So the Wal-Mart business model has taken off and now there are any number of these vultures, ringing the cities and towns around the country, so often private-equity owned. They are draining away the lifeblood of the downtowns, fighting off the unions to keep wages down, even demanding tax breaks to move in and "create jobs." You see all the same stores circling every town now, running all of the local and regional businesses unto the ground.

Here are some pictures from the inner Lorain area but you see it all around: (click for large)

The Lorain Town Hall Meeting

As I said, the meeting was at Lorain County Community College. The turnout was good, a number of candidates, local officials, and people from the community.

The opening speaker was Congresswoman Betty Sutton. “Manufacturing is the backbone of our economy. It’s the backbone of our nation. We’re aware here in Northeast Ohio that it created and promises to support the idea of a middle class.”

Sutton talked about the bill passed recently by the house that confronts Chinese currency manipulation. She hopes the Senate will also pass this, but we all know how difficult it is to get anything through the Senate. She also said that unlike Wall Street shuffling paper money around, what creates real value is the manufacturing of goods, which supports four surrounding jobs in the economy for every manufacturing job.

Following the opening remarks Scott Paul of the Alliance for Ameican Manufacturing presented a number of facts about manufacturing in Ohio and the country. 624,700 people work in manufacturing in Ohio, down from 1,021,000 in 2000. 39% of Ohio's manufacturing jobs were lost in the last decade. For the country the last decade was the worst ever, worse than great depression. We lost 1/3 of all manufacturing jobs with 50,000 manufacturing facilities closed.

“When I grow up will there be jobs in America?”

Next came a panel, moderated by Scott Paul, with

• Larry Taylor, Plant Manager, US Steel Corp’s works in Lorain


• Dave MaCall, Director of District 1 for the United Steelworkers, USW in Ohio


• Kelly Zelesnik, Dean of engineering technologies at LCCC Elyria

A video of a question from a young person in Lorain: “When I grow up will there be jobs in America?” was asked of the panel.

MaCall: there will be jobs, because we have to take action, have to level the playing field. Things we need to do. Not be protectionists, have fair and balanced trade. But we need net exports. That’s how we grow. Every other country has a value-added tax so when someone makes a product that country writes a value-added check, so it is a subsidy on them and a tariff for us. America’s Visa card has run out.

We have 100 million tons of demand for steel in the US, has been for decades, last year demand was 60 million tons. Huge numbers of people laid off, from lack of demand, lack of consumption, and illegal trade.

Kelly, LCCC is partnering with manufacturing. LCCC invested in needs of community, 2 of 4 cornerstones of the college are education and economic development. LCCC is helping grow local economy with a new sensor center to develop and commercialize sensor technology. Industry and educational partners and entrepreneurs to access the center to develop and test prototypes and shorten the time to send products to the market as well as train employees. The center is an attractant to new businesses.

MaCall: We need national policies like every other country has. Businesses need to know there is a policy in America that will make sure there is access to capital, etc. For green startups, it is hard for companies to make investment when other countries helping their industry and we are not. Wall Street gets refinanced, now they’re holding it back, won’t let small businesses have access at reasonable rates.

Paul Q: What is the role in trade laws to keep steel competitive and on level playing field?

Taylor – We need strong trade policies that are strictly enforced. If they are not enforced they do no good, if we have this there will be jobs in future, level playing field. We stopped China on the steel tubes, but now other countries are producing subsidized product, we don’t get government subsidies, they do, we must have strong policies that we enforce.

Concluding

Over and over I am hearing these themes emerge: trade is good but stop illegal trade practices, level the playing field to enable us to compete, put together a national policy, improve trade education and training, invest in our future.

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.

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The last three photos by Ike GITTLEN: USW

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Tonite's Wheeling WV Town Hall Will Be Webcast 5:15 EST

I have just learned that tonite's "Keep It Made In America" Town Hall in Wheeling, West Virginia will be webcast live starting at 5:15PM EST.

Visit the Wheeling Town Hall - Live page for the webcast.

From their page:

With the election less than three weeks away, West Virginia Senate candidates will address the issue of creating jobs and reinvigorating manufacturing at a “Keep it Made in America” Town Hall Meeting in Wheeling, WV. More than 700 voters are expected at the Town Hall Meeting, which is part of a 10-state tour sponsored by the Alliance for American Manufacturing (AAM). The voters will have a chance to directly question candidates and elected officials - from West Virginia and Ohio - on such key issues as rebuilding U.S. manufacturing for the global economy and balancing trade with China.

You can watch the town hall here live starting at 5:15pm ET today (Friday, Oct. 15th).

On Twitter? Follow us @KeepItMadeinUSA and use the Town Hall hashtag: #aamtht10

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October 7, 2010

I'll Be On The “Keep It Made In America” Town Hall Tour Next Week

I will be joining and writing about the "Keep It Made In America" Town Hall tour. (Click through for more info and a map.) The tour is from October 12-29 and I will be joining from October 12-19.

The official tour announcement:

Creating Jobs Takes Center Stage at "Keep it Made in America" Fall Tour Town Hall Meetings in 10 States Ask Political Candidates, "How Will You Create Manufacturing Jobs?" October 12th-29th WASHINGTON, DC. Oct. 4, 2010 - With the midterm election less than five weeks away and all polls showing the economy and jobs topping the list of voter concerns, the Alliance for American Manufacturing (AAM) has announced its 2010 "Keep it Made in America" Tour. The non-partisan group will hold Town Hall meetings in 10 states to help voters directly question their candidates and elected officials on such key issues as unbalanced trade with China and rebuilding U.S. manufacturing for the global economy.

"A majority of likely voters say the U.S. no longer has the world's strongest economy and that Washington isn't doing enough to rebuild manufacturing," said AAM Executive Director Scott Paul. "People are greatly concerned about our lost standing. They know China is overtaking us, and they want the United States to be number one again.

"We are providing voters with a chance to ask their candidates directly, 'What are you going to do about restoring manufacturing and the millions of jobs we've lost to China,'" Paul said. "We've invited the candidates. Let's see if they'll face the voters."

The Town Hall meetings, which will include a panel of local business, labor, and civic leaders, as well as remarks by various federal and statewide elected officials and candidates, will focus on:
· The need to create good jobs for the 21st Century;
· The importance of fighting for manufacturing as the key to any economic recovery; and
· Leveling the playing field for American workers and businesses in the global marketplace."The voters get it," said Paul. "Will the candidates?"

Here is a Business News Daily story about the tour, Advocates of U.S. Manufacturing Prepare Pre-Election Tour,

Preparing for the elections, the Alliance for American Manufacturing, a nonpartisan, nonprofit trade group, is launching its “Keep it Made in America” tour, a series of town hall meetings in 10 states where local business, labor and civic leaders will help voters question candidates on issues, particularly the state of manufacturing jobs in the United States.

... In each of the 12 cities, the group has scheduled a panel of local leaders and invited federal and statewide elected officials and candidates to discuss job creation, manufacturing’s importance in economic recovery and “leveling the playing field for American workers and businesses in the global marketplace.”

Here is the tour schedule. I will be joining from Jackson, Michigan on October 13, through Canton, Ohio on October 19.

- Oct. 12: Hartford, Conn., 6 p.m.
- Oct. 13: Jackson, Mich., 5:30 p.m.
- Oct. 14: Lorain, Ohio, 5 p.m.
- Oct. 15: Wheeling, W.Va., 5 p.m.
- Oct. 18: Erie, Pa., 5:30 p.m.
- Oct. 19: Canton, Ohio, 5 p.m.
- Oct. 20: Wayne, Pa., 6 p.m.
- Oct. 20: Merrillville, Ind., 5 p.m.
- Oct. 21: Asheville, N.C., 5 p.m.
- Oct. 27: St. Louis, 5 p.m.
- Oct. 28: Concord, N.H., 6 p.m.
- Oct. 29: Wausau, Wis., 5 p.m.

If you are going to be in one of those towns please come to the Town Hall. Please RSVP here.

Posted by Dave Johnson at 11:12 AM | Comments (0) | Link Cosmos

September 23, 2010

China Currency Bill Moves -- Why Some Corporate Interests Oppose

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 President Obama meets with Chinese Premier Wen, the House Ways and Means Committee announces it will vote tomorrow on a bill to take action if China does not bring its currency to market rates. This sends a loud and clear signal to China that action is coming, one way or another, and they are going to have to make adjustments. This has every appearance of a smart, coordinated strategy between the administration and the leadership of the Congress.

WaPo: Bill combating China currency to advance,

House leaders are moving forward with legislation to combat China's currency policies, adding to pressure from the Obama administration and giving lawmakers an election-year chance to vote on a sensitive trade matter.

The House Ways and Means Committee plans to vote Friday on a bill that would expand the Commerce Department's power to impose duties on Chinese imports in response to that country's currency being undervalued on world markets.

But there is opposition from inside our own country.

Some business groups oppose the bill, arguing that it could backfire if it raises trade tensions with China and prompts the Chinese government to use the many tools at its disposal to interfere with American companies. China is a major destination for U.S. exports - about $70 billion a year - although the United States runs a trade deficit of about $200 billion a year with that country. Duties on Chinese imports might also raise prices for U.S. consumers.

There are competing interests at work. Robert Reich wrote about this a week ago in The Two Categories of American Corporation — And Their Politics and Harold Meyerson picks up the theme today in The real un-Americans.

Reich points out that some giant companies sell to Americans, and therefore want us strong and prosperous, and want policies that stimulate our economy, provide jobs with good pay and generally boost the middle class. Others, not so much.

The first group includes national telecoms like Verizon and AT&T that need a prosperous America because most of their sales are here. Same with finance companies like Bank of America and Travelers Insurance whose business strategy has been built around U.S. consumers. Ditto certain giant chains like Home Depot. Naturally, all these companies were especially hard hit by the Great Depression and its devastating impact on American consumers.

The second group includes companies like Coca Cola, Exxon-Mobil, Hewlett-Packard, Intel, and McDonalds, that get substantial revenues from their overseas operations. Increasingly this means China, India, and Brazil. Ford and GM are still largely dependent on US sales but becoming less so. ...

What does this mean for Main Street? Reich says,

Large American corporations are going global as fast as they can. That’s good for their shareholders. But in a Washington ever more susceptible to their money and influence, that’s not necessarily good for most Americans.

Meyerson picks up on this today,

Consider the debate in Congress about whether to impose tariffs on Chinese imports if China continues to depress the value of its currency. ... Unions and some domestic manufacturers support the bill. But a large number of American businesses, in a campaign coordinated by the U.S.-China Business Council, oppose it.

... The question here is whether the 220 corporations that belong to the council ... are already so deeply invested in China as manufacturers, marketers or retailers that buy goods there to sell them here that their interests are more closely aligned with China's than with America's. [emphasis added]

It is important to understand that some of the country's most powerful entrenched, wealthy interests no longer depend on the success of America's economy and the prosperity of our people. They have a lot of power and money, and use it to influence our country's politics to increase their own wealth and power. But their interests are not our interests. They want low taxes and don't care whether we have good jobs, good schools, modern infrastructure and an economy that works for We, the People. They just don't care about that. And they are willing to say and spend what it takes to set us against each other, poison our politics, and anything else they need to do to get us to act in their interests not ours. "Globalization" and "free trade' policies work for them, because they enable them to evade the protections that our democracy gives us. But allowing them to just move factories and jobs out of the country and then bring the goods back here with no penalty does not work for the rest of us.

Keep this in mind when you hear the different arguments over taxes, infrastructure, education and government in general.

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September 3, 2010

Labor Day: Labor Got It Right -- Who Could Have Known?

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.

"Who could have known?" That's the cry from the big-corporate and DC elite as the economy and the environment and so many imporant things crash around us. (Around us, not them, they're doing just fine and taking good care of each other.)

Who could have known that 25%-per-year house price increases was a bubble?
Who could have known that a housing bubble could burst?
Who could have known that deregulating the financial industry could lead to a financial meltdown?
Who could have known that concentration of wealth could cause consumer demand to dry up?
Who could have known that huge tax cuts for the rich combined with huge military spending increases could cause massive budget deficits?
Who could have known that the Social Security trust fund needed a "lockbox" so it wouldn't be given away as tax cuts?
Who could have known a deregulated deep-water well could cause a massive, destructive, uncontrolled underwater gusher?
Who could have known that continuing to put carbon into the air would cause problems for the climate?
Who could have known that moving our factories out of the country would lead to high unemployment and structural trade deficits?
Who could have known that invading Iraq was wrong and a deadly, disastrous, costly, long-term mistake?
Who could have known that a too-small stimulus that focused on tax cuts wouldn't turn the economy completely around and then conservatives would claim that the stimulus "killed the recovery?"

(List continues into infinity...)

Add organized labor to the list of those who got it right, time after time.

Organized labor was right about the 40-hour workweek.
They were right about the middle class.
They were right about the weekend.
They were right about paid vacations.
They were right about paid holidays.
They were right about paid sick leave.
They were right about providing good, secure retirement plans for everyone.
They were right about providing unemployment benefits to tide people over.
They were right about providing maternity leave, child care and family leave for families.
They were right that trade agreements like NAFTA and letting China into the WTO would lead to massive trade deficits and job losses.
They were right about workplace and consumer safety.
They were right about keeping manufacturing in America.
They were right about fighting discrimination in the workplace.
They were right about raising the minimum wage and the effect that low-wage policies would have on the economy.
They were right about the effect of excessive CEO pay on the economy.
They were right about the devastating effect of the Bush tax cuts.
They were right about the need to maintain and modernize our country's infrastructure.
They were right about going green.
They were right ab out the dangers of Wall Street's financialization of the economy.
They were right about providing good health care to everyone.
They were right about strengthening, not cutting Social Security.
They were right about democratizing corporate governance.
They were right about fighting privatization.
They were right about fighting deregulation.
They were right about providing good education opportunities to everyone.
They were and are right that we need a national jobs agenda
Labor was right about people joining together instead of being on our own.

(List continues into infinity...) They were right and they continue to be right.

And unions have been fighting for these things for all of us, not just for their members.

Please add to these lists in the comments! What other things could nobody have known, and what other things did labor get right?

Enjoy Labor Day. In fact, for those of you that still have jobs after the decades of conservative policies, enjoy having weekends off, the 40-hour week, paid vacations, sick pay, health care, etc. And if you have a job but don't have those things ... JOIN A UNION!

P.S. Here's an example of being right:

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April 2, 2010

"Re-shoring," "On-shoring" and "Insourcing" - The Coming New Era Of American Manufacturing

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.

What will it mean to American businesses if - I should say when - Chinese imports cost as much as they should cost?

A currency and trade rebalancing is going to happen sooner or later because it has to. We can't run a trade deficit forever. If something is unsustainable it can't be sustained. Eventually we have to earn the money to pay off what we are borrowing and the only way to do that is with exports. The first step to that is to stop importing so much and at least make things to sell to ourselves.

This rebalancing could happen because China lets its currency approach market levels. Or, if China refuses to stop unfairly subsidizing their exports (their currency manipulation is just one piece of that) our government will have to impose tariffs on imports from China. There are other things that could change the current trade imbalance. The only thing that is for sure is that the current situation can't just continue. We can't just keep sending factories, supply chains, jobs, and dollars away. It's a bubble that has to pop. And it will. American business should be planning for this approaching new era of American manufacturing.

Once the Chinese import bubble pops new phrases will enter the lexicon, so start getting used to them. "Re-shoring," "on-shoring" and "insourcing" will replace "offshoring" and "outsourcing."

A week ago I wrote about a CNBC segment on this,

For many years we've been hearing about outsourcing and offshoring. President Obama has started taking steps to rebalance world trade and the pendulum is about to start swinging the other way. More and more often you'll be hearing new words: "insourcing," "on-shoring" and "re-shoring."

Watch this CNBC segment from Friday, Made in America Making a Comeback.

American businesses -- are you ready? It's coming.

P.S. Here's a stock tip: machine tools.

Update and P.S. --

Re-Shore at the NTMA/PMA Contract Manufacturing Purchasing Fair

Help bring manufacturing back to the U.S.!
At last somebody is doing something: the May 12, 2010 NTMA/PMA Purchasing Fair focuses on re-shoring. The $ is down vs. many currencies. JIT and R&D are best supported, and carbon footprint minimized, by local sourcing. The time is right for this effort to succeed.
Customers bring your off-shored work! Vendors bring your best technical ideas and sharp pencils! Learn More

Click through!

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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 1, 2010

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

February 19, 2010

Whirlpool Bites Hands Of American Taxpayers That Feed It

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.

Whirlpool, recipient of federal stimulus "smart grid" dollars, is closing an Evansville, Indiana freezer-topped refrigerator and icemaker production plant and moving the 1,100 jobs to Mexico.

Whirlpool knows that taxpayers will shoulder the unemployment and other costs. Closing a plant like this also means all the supplier, transportation and other third-party jobs go away. For example, 100+ Disabled Workers Could Lose Jobs

Whirlpool employees aren't the only ones losing their jobs when the plant closes. More than 100 blind or disabled individuals could also be left jobless. The Evansville Association for the Blind has issued a public plea, asking businesses to consider using their employees.

There will be more home foreclosures, and local businesses are stressed or have to go out of business. Whirlpool is profiting from making all this someone else's problem.

Whirlpool is even playing nearby Iowa against Indiana, shaking the state down for millions to move just 60 of the 1,100 jobs there.

So, of course, Wall Street celebrates the move, the setting states against each other, the cost-shifting and the resulting "increase in margins."

The workers are still trying to do something about this. Inside Indiana Business writes about a rally on February 26,

Organizers have invited guests including AFL/CIO President Richard Trumka and Jim Clark, president of the IUE-CWA union with which Local 808 is affiliated.

Employees with the least seniority are expected to lose their jobs first, March 26. The remaining workers will be let go until production ceases in early summer.

Richard Trumka, AFL-CIO President, writes:

The Whirlpool Corp. is closing a refrigerator manufacturing plant in Evansville, Ind., putting more than 1,100 people out of work. Even worse, Whirlpool will continue to produce these refrigerators, but not in Evansville and not anywhere else in America. They are planning to manufacture them in Mexico, where weaker labor and environmental laws make them “cheaper” for Whirlpool to produce.

This is outrageous and unacceptable, especially in light of Whirlpool’s profitability and the $19 million dollars in economic recovery money Whirlpool recently received from the federal government as a part of the American Recovery and Reinvestment Act. Those are OUR economic recovery funds, not Mexico’s.

You can sign their Whirlpool: Keep It Made in America petition here.

Will Congress listen?

Posted by Dave Johnson at 11:32 AM | Comments (3) | Link Cosmos

February 18, 2010

Yes, Nuclear

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 believe that global warming is the most serious threat humanity faces. So we need to use every possible technology we can to replace energy sources that put greenhouse gases into the air. This includes nuclear energy.

One big problem with nuclear is figuring out what to do with the dangerous radioactive waste. But here's the thing, when we burn coal and oil we're just putting the dangerous waste product into the air and it is destroying the planet. So we can't make the perfect the enemy of the good -- nuclear waste is not destroying the planet and fossil-fuel waste is. We simply have to replace coal and oil as our energy source.

Climate change is an emergency. We need to do everything we can. This means we need to put up every windmill we can, every solar panel we can, every solar power plant, biofuel and geothermal facility that we can. We need to retrofit every building to be energy efficient, switch to electric cars, stop eating meat that is not grass-fed. We need to do research into finding ways to sequester carbon from coal. And we need to build nuclear power plants. What part of "everything we can" did I miss?

Please, let's make this a discussion. Please join the discussion and leave a comment with your thoughts on this.

BUT

As we proceed with this, we need to learn some lessons from the past. As we build a new generation of reactors there are some things that need to be clear from the outset.

Make them safe. This means a highly regulated effort, not a free-for-all for profits. Tax dollars are involved, and even if they were not public safety must be the primary focus. Newer reactor designs eliminate Chernobyl-style "meltdown" fears but we need close supervision by government. We need the government "meddling" and "interfering" and "snooping" every step of the way. We, the People need to be sure that every best practice is followed and no corners are cut to make a buck.

Buy American. If we are building nuclear power plants we should regulate that they create American jobs, not offshore in China or anywhere else. There are federal funds guaranteeing loans for these projects and they should specify that we Buy American. Use American –made components, right down to the steel. China's and other country's governments are helping their own economies, let's us help our own economy this time.

There are also safety concerns for Buy American. We need very close inspection of every component and material that is used in these plants. How would we monitor the manufacturing of the components and the quality of the steel if it is done outside the US? Do you remember the faulty welds in the Chinese components that shut down San Francisco's Bay Bridge last year?

Protect the environment. There is also the environmental impact of making steel in China and then shipping it versus making it here -- in our highly productive steel industry. China creates three times the greenhouse emissions when they make steel that our own steel plants create. This is one reason their steel costs less. What is the point of building nuclear to lower greenhouse gas emissions and using greenhouse gas-creating processes?

So I say Yes, Nuclear, and make sure that we use Big Government oversight to keep it safe, create American jobs and mostly to protect the environment.

Posted by Dave Johnson at 1:06 PM | Comments (2) | Link Cosmos

February 15, 2010

News Flash: Nations Compete

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 have a regular spot on the radio show, The Fairness Doctrine, currently in Massachusetts but going national. The show has a liberal and a conservative host and they present and discuss differing viewpoints -- without shouting.

On the show today we talked about my post from last week, With Washington Stalled, China and Others Race Past Us. In that post I wrote,

One party in Washington is following a strategy of obstructing everything, believing that the public will blame the other party for nothing getting done. The other party refuses to use the powers it has to act on the nation's agenda, fearing that the public will thing they're being mean or something. So we're stuck, standing still, getting nothing done. And the rest of the world moves forward with the green manufacturing revolution, taking the jobs, taking the industries, taking the momentum, taking the future.

Here is my point: We're standing still, and other nations are moving ahead. Literally. High-speed rail is an example of this difference. Compare China's investment in public infrastructure like high-speed rail with our own.

At Open Left Saturday, Paul Rosenberg wrote a post about China's wonderful new high-speed rail system, Whose near future is our far future: Europe, China or California?, saying,

"It's really amazing how much rail they're going to have built within the next two years, 42 lines including connections between China's most important cities. ... The US, in contrast, will have one line built in four years, connecting Tampa and Orlando. Tampa and Orlando? That's not so much a high-speed rail line, more an overgrown Disney ride."

China has a national strategy of massive investment in public infrastructure to create jobs and stimulate manufacturing. This investment then leaves behind a modernized manufacturing infrastructure as well as a much more efficient transportation system. This is part of a larger strategy to develop an economy that is much more energy efficient than their competitors, which means they will be better able as a nation to compete economically.

President Obama has been trying to get our own country to invest strategic projects like this. If we can invest in a more efficient economy then WE will be more competitive in the future than we are today. This means more jobs and a higher standard of living in the future, as these investments pay off. But his efforts meet resistance every step of the way. Just one example of this is how the entrenched oil and coal interests take advantage of the corruption of Washington, especially the Senate, to block these efforts. They also invest heavily in poisoning the information that reaches the public, like funding "climate skeptics" and think tanks that pump out "ideology" that isn't really ideas but is propaganda that serves their own financial interests. They and others are doing everything they can to block us from investing in the green manufacturing revolution while the rest of the world is moving ahead.

America is stuck in this weird ideology that says government is bad, and it is wrong for government to help the people by planning and investing in our future. There is a "market fundamentalism" that says that markets must decide things, not democracy. They say our people through our government will make bad decisions, that companies are much more efficient at making decisions, so we should instead let the people who run the largest companies decide how to use our country's resources, labor force, and capital. They say this is much more "efficient" than letting democracy make decisions.

Here is a fact: nations compete. You might believe this is an outmoded concept. It might not fit with the business model of multinational corporations. But we still have countries that see themselves as unified nations with a shared identity, and these nations compete. They compete with US. China is competing with US and the rest of the world, to bring manufacturing to itself, and using national strategies. We are not responding as a nation.

When someone is in a fight with you, you have a much better chance of winning if you at least understand that you are in a fight and get yourself organized to do something about it! How hard is that to understand? China and other countries are in a fight with us for economic dominance. Manufacturing is the key to economic power, and they are fighting to win manufacturing business away from us.

I don't say this to particularly criticize China. The Chinese don't owe me a job. China is just taking care of its own. It should. That is what nations are supposed to do. So to the extent that we still see ourselves as a NATION, we need to take care of OUR own. We need a national economic/industrial strategy, where we say THIS is how WE are going to compete.

If America is still a nation with a democracy we're going to have to step up to the plate and compete as a country and as a people.

Posted by Dave Johnson at 4:58 PM | Comments (0) | Link Cosmos

February 1, 2010

SOTU - A List Not a Vision

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 last week’s State of the Union speech President Obama talked about jobs. It was a great speech. It was SO satisfying to see him scold the Supreme Court for enabling monopoly corporatocracy to replace democracy, scold the Republicans for obstructing every single bill, and scold Democrats for being chickens**ts and running for the hills. But in the end he presented a laundry list – a good list, but a list – instead of a vision for a new economic structure.

First, he summarized the effects of the “stimulus,”

“Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders.”

Then the jobs list:

• “I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat.”

• “I'm also proposing a new small business tax credit-– one that will go to over one million small businesses who hire new workers or raise wages.”
• “let's also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment.”

• “put Americans to work today building the infrastructure of tomorrow . ... There's no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.”

• “put more Americans to work building clean energy facilities…”

• “and give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs.”

• “it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America.”
  

On Exports - Also A List

• “we need to export more of our goods”

• “a new goal: We will double our exports over the next five years, an increase that will support two million jobs in America.”

• “launching a National Export Initiative that will help farmers and small businesses increase their exports”

• “seek new markets aggressively, just as our competitors are”

• “enforcing those agreements so our trading partners play by the rules”
  

What’s missing?

The most important jobs item missing from the President's speech was aid to states. The problem is that the states are cutting their budgets, which means layoffs and cutbacks from maintaining their infrastructure and investing in new infrastructure. With this happening in many of the 50 states, the scale threatens to undo the positive effect of the stimulus.

But President Obama faces two problems when considering aid to the states. First, helping the states would mean even more borrowing, on top of the borrowing forced on us by the years of conservative policies. Second, many of the troubled states are in their predicament because of their own conservative anti-tax policies. California, for example, is cutting jobs because the conservative minority is able to block any revenue-raising measures, and last year was even able to force even more corporate tax cuts in exchange for letting the state pass any budget at all.

But maybe Oregon is showing other states the way out of this trap. Last week voters raised taxes on corporations and the wealthy. Oregon voters pass tax increasing measures by big margin,

Oregon voters bucked decades of anti-tax and anti-[government] sentiment Tuesday, raising taxes on corporations and the wealthy to prevent further erosion of public schools and other state services.

If the people in the states rise up and start demanding that the wealthy and corporations pay their fair share, they can dig themselves out of this mess.

Buy American

Another path out of the jobs mess is to include Buy American procurement clauses in stimulus, infrastructure and jobs bills. A report by Alliance for American Manufacturing, titled, Buy America Works: Longstanding United States Policy Enhances the Job Creating Effect of Government Spending argues for a strong “Buy American” clause in the new jobs bill.

“Including domestic sourcing requirements in job creating legislation would be the most effective way to ensure taxpayer dollars are used to create and maintain jobs and manufacturing capacity to the maximum extent possible, thereby vastly improving the stimulative effect of government spending.

[. . .] Given the dire problems the economy has experienced and continues to experience, the inclusion of domestic sourcing requirements in an upcoming job creation bill is the smart thing to do.”

Reinforcing this, a recent Gallup poll finds that Americans think the “best way to address the problem of growing unemployment in the United States [is] … to keep manufacturing jobs in the U.S.”

Keep Jobs Here

Bloggers have pointed out that the job-creation tax credit doesn’t prohibit offshore outsourcing of the jobs that receive the tax credit! Come on people, this is pretty basic.

Finally, Tell The Senate: JOBS NOW!

Campaign for America's Future is reaching out the 27 million Americans who have lost their jobs and are scrambling to get by – and the rest of us who know them and stand with them – to contact their Senators and say: Tell the Senate: We need action on jobs NOW! Click here to take action.

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

January 29, 2010

America's Competitors Will Use Supreme Court Ruling To Block Our Green Jobs Effort And Close Our Factories

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.

It's not personal, it's business.

The Supreme Court recently ruled 5-4 that George Bush will be President corporations can spend unlimited amounts to support or oppose candidates. Corporations! Since there are no restrictions on the citizenship of the owners of corporations foreign companies and governments now have a direct way to manipulate our laws and regulations.

Outside interests have been influencing American opinion for decades, but have not before this been able to directly support or oppose candidates. The Washington Times, Fox News, and other corporations with significant foreign ownership already work full-time to turn American public opinion against our own government. "Free trade" advocacy groups with funding from outside our borders work to get us to open our markets to imports that close our factories, outsource our jobs, lower our standard of living and drive us into ever-increasing debt. We have seen this with "grassroots" lobbying on important issues like climate change, trying to make people think that the science is a "hoax": see Grassroots’ Opposition to Clean Energy Reform Bankrolled by Foreign Oil, Petro-Governments.

But this new ability to directly support or oppose candidates offers a vastly more effective and immediate way for America's competitors to achieve their goals. What will they go after first? Of course a top goal of our competitors is to take down our manufacturing capacity -- the foundation of a country's economic power.

And, of course, this is exactly what is happening. Oil countries are already planning strategies to use this ruling to block our alternative energy and green jobs efforts. According to Think Progress:

For instance, Saudi Arabia has already signaled that the progressive effort to build a clean energy American economy is its “biggest threat”:

Saudi Arabia’s economy depends on oil exports so stands to be one of the biggest losers in any pact that curbs oil demand by penalizing carbon emissions. “It’s one of the biggest threats that we are facing,” said Muhammed al-Sabban, head of the Saudi delegation to U.N. talks on climate change and a senior economic adviser to the Saudi oil ministry. [...] Climate talks posed a bigger threat, Sabban said, and subsidies for the development of renewable energy were distorting market economics in the sector, he said."

Presumably because of the Citizens United ruling, Saudi Arabian-owned subsidiaries operating in the United States can now spend unlimited amounts advocating the defeat of candidates who support clean energy legislation. According to a ThinkProgress investigation, foreign-oil backed lobbyists in America are already instigating efforts to kill clean energy legislation.

What are we doing about it? What is our plan? Every other country has economic/industrial policies, but for one reason or another the American public has been persuaded that America should not have an economic/industrial policy of our own. We're bombarded with propaganda that says having a plan would be government - that We, the People thing - "interfering" with "the market." This ideology is like an anchor on our country, holding us back from progress.

We must rally and take back control of our democracy and our future. This Supreme Court decision must be countered with immediate legislation or it means the loss of so many things that we value. And we must develop an economic/manufacturing policy for our country's future. This time it's personal.

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

January 12, 2010

Right Wing Catches On That Conservative Trade Policies Hurt Us

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.

Be afraid. Over at The Drudge Report, under a photo of a Chinese soldier (but no siren), are three headlines:

CHINA ENDS AMERICA'S REIGN AS LARGEST AUTO MARKET...

Becomes biggest exporter, edging out Germany...

China banks eclipse American rivals...

So OK, conservatives seem to be FINALLY starting to notice that their so-called "free trade" policies caused a problem!

When Ronald Reagan took office we had a trade surplus with China - we exported to China more than we imported from China. But the conservative "free market" ideologues said that "the market" must determine everything instead of the people in our democracy, that government is bad, that "free trade" lifts all boats, etc. -- even though there is no such thing as "free" trade or "free" markets... They negotiated trade agreements guaranteed to give away our strong trade position, stopped enforcing old or new trade laws, and got rid of any idea of having a national industrial policy.

By the time Bill Clinton took office instead of a trade surplus we had a trade deficit with China of almost $23 billion - importing from China much, much more than we exported to them. Under President Clinton, influenced by conservative "free trade" arguments, this trade deficit grew to $83 billion.

Then, under George W. Bush this trade deficit grew to $268 billion in a single year! Time after time Bush refused to enforce trade agreements and the imbalance just got worse and worse.

(WSJ)

By last year the trade imbalance with China was 69% of our entire trade deficit.

(EPI)

So NOW the conservatives are looking at what they have done, and they are very afraid. They borrowed from China year after year, and now they are afraid that China will use all that borrowed money to collapse the dollar. If you are on any right-wing mail lists half of the emails you receive are saying that dollar could collapse any minute.

So a big headline at Drudge! I guess even they are ready to admit that their policies were bad for the country.

Posted by Dave Johnson at 7:29 PM | Comments (0) | Link Cosmos

January 7, 2010

Why Is Moving A Factory Called "Trade"?

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 have a simple question: Why is moving a factory across a border called "trade"?

The process of building up a country is long and difficult. People over time unite and engage in a long, hard struggle to form a democratic government for themselves and build strong public structures -- a system of laws, environmental protections, wage and hour rules, worker protections, product safety standards, etc. -- all of which work to raise the standard of living for everyone. These strong public structures enable economic growth and empower the people and companies to prosper while protecting the investment that built it all. So people return a portion of the resulting prosperity as taxes to invest in building and maintaining this infrastructure.

That is how good, solid self-government should work. The people build the public structures that enable each other to prosper and that protect the investment. And it worked for us.

But then, along come the quick-buck artists, looking to grab what they can for themselves, as fast as they can, without doing their part or sharing their gains or leaving anything but a mess behind. And they found a way to accomplish this. They found places outside of our borders where the people had not yet built up the solid, democratic governmental institutions that protect people and the environment as ours do. They fired the workers who had built up the companies and communities, packed up the machines that made the products, closed the factories, and opened factories on the other side of those borders.

Moving factories across borders is just a way of evading our laws and our protections, that we have fought so hard to get in place. So why do we let them bring the same products that we used to make here, back across those borders to sell in the prosperous market that our hard-won public structures enabled?

People fought and died so we could maintain our own strong government that protected us and enabled our prosperity. We built up our prosperity over time and with many hard fights, and that is what has made our county the market that everyone wants access to. We should use that market power to set the terms of what can be brought in to this country. We should help the people in countries that have not yet build up the kind of strong, democratic governments that can protect them from the quick-buck artists and exploiters instead of letting those manipulative consters wipe out our jobs and tear down our own government and rules. We should say that before products get access into our market the workers that make them should be paid well, and the environment they are made in is protected. Maybe we shouldn't allow goods from undemocratic countries in at all. What do you think?

We worked hard to build what we have, and we are letting that be taken away from us. It is time to stop allowing our factories to be closed and moved across borders as a way to get around the rules and standards we fought so hard to put in place.

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

November 25, 2009

Jobs In America

Manufacturing infrastructure:

Posted by Dave Johnson at 10:48 AM | Comments (0) | Link Cosmos

November 16, 2009

Washington Times Against Protectionism Before They Were For It

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.

President Obama is visiting Asia, and is blasted over and over about America's supposedly "protectionist" policies.

"China on Monday accused the United States of increasing protectionism..."

Think about it, the country with the massive trade surplus accuses the country with the massive trade deficit of being "protectionist." Call it The Audacity Of Projection.

Our trade opponents have learned that all they have to do is shout the word “protectionist” and their American enablers will quickly run from doing anything that might help American companies and workers. But what happens later, when the consequences start hitting home? Do the "free trade" shouting, foreign-competition enablers take the blame and accept responsibility when Amercan dollars are spent overseas and American workers lose jobs and American factories close? Who could have known that they would point the finger at the President instead of themselves?

Here is what I am talking about:

On February 8, 2009, during the debate over the stimulus package, the conservative Washington Times joined the "free trade" chorus, denouncing the package's proposed "Buy American" requirements as the same kind of "protectionism" that conservative mythology says caused the Great Depression: EDITORIAL: How to cause a depression,

...Tucked within the economic stimulus bill the House passed last week was a clause requiring state and local public works agencies to buy American iron and steel for their reconstruction projects, and the Senate expanded it to all manufactured goods.

[. . .] The stimulus bill has a way to go before it reaches Mr. Obama's desk, but if strong "buy American" mandates are present at that time, he will have no choice but to veto the bill. Otherwise, he will be forever known as Barack H. (Hoover or Hawley) Obama.

Conservative free-traders got what they demanded. In response to these and other cries of “protectionism!” the Senate backed away from the Buy American clause, changing it to vague language requiring that the money be spent in ways consistent with existing treaties.

Since this wording gives the President some discretion in how the money is spent conservatives started demanding the President spend it ... outside of the country. For example, a Washington Times editorial on March 24, EDITORIAL: The Mexican-American War of 2009, ended by blasting President Obama for wanting American stimulus dollars to stimulate America's economy:

"Wasn't Mr. Obama going to be the "international" president who was going to get the rest of the world to love us? The path to improving relations does not involve destroying jobs in other countries as well as in our own."

So now it turns out that many stimulus dollars are being spent according to the wishes of the "free trade" conservatives, with money to purchase wind turbines creating jobs in Europe and China, and who could have known, the very same free-trade conservatives are JUST OUTRAGED that President Obama is sending American stimulus dollars out of the country! For example, a Washington Times editorial on November 13, EDITORIAL: Stimulus creates jobs in China, begins,

Of the $1 billion in clean-energy stimulus money spent since the beginning of September, $850 million has gone to foreign wind companies. It doesn't take a bunch of experts at a hastily planned "jobs summit" to discover this isn't the way to bolster employment in America.

Indeed, the 11 U.S. wind farms that received stimulus money from the Treasury have imported 695 of the 982 wind turbines to be installed, creating 4,500 jobs overseas. That's far more overseas work than the stimulus money has created in the United States.

Yes, how DARE they not require that American stimulus dollars be spent in America! This from the very same Washington Times editors who earlier in the year demanded exactly that.

Who could have known that conservatives would attack President Obama for the consequences of giving in to conservative demands??!! The Washington Times was against protectionism before they were for it. Call it The Audacity Of Hypocrisy.

The lesson to be learned here is to stop listening to these conservative, "free trade" clowns. They are only interested in making the rich richer at the expense of the rest of us and will say whatever advances that goal. We should start just doing what is right for the country, our workers, our factories, our companies and our jobs.

Posted by Dave Johnson at 3:30 PM | Comments (3) | Link Cosmos

October 29, 2009

Building The New Economy

I am in DC at the Building The New Economy conference. There is a Listen Live button at that site, so you can attend as well. My computer clock says 5:40am as I type this so California readers are discovering this half way through the conference. :-0

Yesterday I attended a blogger roundtable with Rich Trumka, President of the AFL-CIO. I'll write about this later.

Speakers:

Gov. Ed Rendell, Commonwealth of Pennsylvania
Sen. Sherrod Brown, D-Ohio
Rep. Rosa DeLauro, D-Conn.
Rich Trumka, President, AFL-CIO
Leo Gerard, President, United Steelworkers
Prof. Suzanne Berger, director of the MIT International Science and Technology Initiatives
Jeff Madrick, author, "The Case For Big Government"
Robert Kuttner, author, "The Squandering Of America"
Kate Gordon, Apollo Alliance

Conference agenda (times are EST):
LESSONS OF THE FALL

9:30 a.m. There Is No Way Back: A New Strategy is Essential

BUILDING THE NEW ECONOMY

10:10 a.m. A New Foundation: Strategic Public Investment
11 a.m. Making It In America: Manufacturing in a Global Economy
12:05 p.m. Luncheon Keynote: Towards a New Economic Strategy
1:30 p.m. Global Challenge: A Sustainable Balance for Growth
2:30 p.m. Getting There: The Next Steps

Posted by Dave Johnson at 5:37 AM | Comments (0) | Link Cosmos

October 25, 2009

Building The New Economy

Bill Scher interviews me on Building The New Economy:

Building The New Economy: The Interview | OurFuture.org

Posted by Dave Johnson at 7:52 PM | Comments (2) | Link Cosmos

October 23, 2009

Palin vs Krugman On The Dollar -- Who Is 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.

The other day I wrote about how the dollar is falling - but not against the Chinese Yuan. A falling, or "weak" dollar is great for American manufacturers, and therefore American jobs, because it makes American goods cost less everywhere else. This means our exports should rise, reducing our trade deficit and helping us pay off the huge amounts decades of conservative budget policies forced us to borrow from other countries.

Conservatives, though, are trying to use the complexities of the relative value of the dollar in currency markets as an anti-Obama political issue. They must have polling that shows people reacting to way the words "strong" and "weak" are used. This misunderstanding of "strong" and "weak" reminds me of how I used to be confused by "debit" and "credit" when I learned double-entry accounting. (Sorry, I probably shouldn't mix corporate finance humor with blog posts.)

For example, earlier this month Sarah Palin (or someone) wrote on her Facebook page that a falling dollar makes us "vulnerable." This is a brilliant play on the "weak" theme, and is used to further scare people. (Republicans like to scare people - remember how Iraq was going to spread smallpox?) She earns her Exxon check, writing that we need to "Drill, baby, drill" for energy independence to solve this. She writes nothing about conservation, alternative energy sources like wind or solar, or about smart grids, or developing a 21st century economy -- Exxon wouldn't like that.

Palin's ghostwriter confuses several issues at the same time. This is brilliant agitprop but terrible, terrible policy.

Paul Krugman, America's other master economist, writes in the NY Times today that the problem is China, not Obama. China "pegs" their currency to the dollar so when the dollar drops the Yuan drops along with it. This keeps goods made in China at a nice, low price relative to everyone else, reducing any advantage we might gain from market forces. Krugman writes,

If supply and demand had been allowed to prevail, the value of China’s currency would have risen sharply. But Chinese authorities didn’t let it rise. They kept it down by selling vast quantities of the currency, acquiring in return an enormous hoard of foreign assets, mostly in dollars, currently worth about $2.1 trillion.

Many economists, myself included, believe that China’s asset-buying spree helped inflate the housing bubble, setting the stage for the global financial crisis. But China’s insistence on keeping the yuan/dollar rate fixed, even when the dollar declines, may be doing even more harm now.

Krugman says it is no time to be timid. We have to confront China on this manipulation.

The thing is, right now this caution makes little sense. Suppose the Chinese were to do what Wall Street and Washington seem to fear and start selling some of their dollar hoard. Under current conditions, this would actually help the U.S. economy by making our exports more competitive.

A a Bloomberg today story demonstrates why we need to bring the dollar down relative to the Yuan,

“The stable yuan helped us increase sales by about 20 percent this year,” Cody Hu, a sales manager at the Yongkang- based company, said at the China Sourcing Fair in Hong Kong.

. . . “Competitors in China are doing good,” said Suresh Sranavasan, a distribution manager at the company. “They have pricing advantages from the government’s stable yuan policy.”

I'm with Paul, not Palin. A lower dollar means JOBS.

---

Take a look at the agenda for the Building the New Economy conference, Thursday, October 29, 2009 -- 9:30 a.m.-3:30 p.m. at the Washington Court Hotel in Washington, D.C.
This conference sounds the call for the new economy we must build out of the ruins of the old. It focuses on the need for a new agenda to revive manufacturing in America. It's free. But you have to RSVP.

Posted by Dave Johnson at 9:09 AM | Comments (0) | Link Cosmos

October 21, 2009

Dollar Weak? Not Against Yuan!

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.

Conservatives are blasting President Obama, saying he is causing a "weak" dollar. The Drudge Report has a headline or a story pretty much every day blasting this message out. Republican e-mails warn that the dollar is "collapsing" under Obama. Blogs and talk show hosts declare that civilization will cease, urging listeners to buy as much gold as they can.

But conservatives should know that the dollar is steady where it counts - against the Chinese Yuan. Yesterday, October 20, the exchange rate was 6.82653. On May 6 it reached a low of 6.82157 and on June 17 a high of 6.83743.

Conservatives react intensely to words like "strong" and "weak" without understanding the meaning. Here is what it means: Things made in America cost less when the dollar is lower, or "weak." A lower dollar creates an incentive for others to purchase things made in America, which means factories are busy, new factories can open, and jobs are created.

But while the dollar drops against every other currency the Chinese Yuan remains the same, and Chinese goods don't get more expensive - at least here. So our factories are not busier, the import/export imbalance stays the same and American jobs are not created.

One might ask, "How is this possible in a free market?" Indeed.

-----

Take a look at the agenda for the Building the New Economy conference, Thursday, October 29, 2009 — 9:30 a.m.-3:30 p.m. at the Washington Court Hotel in Washington, D.C.
This conference sounds the call for the new economy we must build out of the ruins of the old. It focuses on the need for a new agenda to revive manufacturing in America.
-- Oh, it's free. But you have to RSVP.

Posted by Dave Johnson at 10:04 AM | Comments (0) | Link Cosmos

October 11, 2009

Manufacturing And Outsourcing -- What Were We Thinking?

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'm reading a a review of"€œCapitalism: A Love Story" at naked capitalism, and came across this,

"I grew up in small towns dominated by manufacturing plants, and I remember that they were prosperous, optimistic, and stable. People who had good jobs at the local mill were not the top of the social order; that was reserved for businessmen and successful professionals, like doctors and lawyers. But they could afford decent homes, creature comforts, vacations, and send their kids to college (not the fanciest, often a state school unless they got a scholarship, but their children could nevertheless hope to do better than their parents). But that had started fading by the 1970s as America’s economic dominance started to slip. Moore clearly is pained at the loss of the America that was (while pointing out it depended on the special circumstances of our post World War II political and manufacturing dominance) and our naivete in trusting in an economic model that has been been turned against the common man."

Remind me, why did we think it was a good idea to stop manufacturing things in America? Why did we outsource the jobs? Why doesn't our government have an industrial policy -- a plan to keep us economically strong?

Looking back at the past few decades I'm not really clear on this. I feel like we are waking up from that scene in Moore's movie where the hypnotists are mesmerizing their victims, looking around at the economic devastation that is the aftermath of decades of conservative economic rule and wondering, What were we thinking?

Posted by Dave Johnson at 10:19 AM | Comments (0) | Link Cosmos

October 9, 2009

Here We Go Again - American Glass Industry Losing Jobs And Factories To Chinese Subsidies

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.

Short-term gains for a few. Long-term harm to the rest of us.

Again and again we have seen American industries exported, the plants closed, the jobs lost, and government officials just letting it happen. The workers in the other countries are almost always paid less than workers here, sometimes dramatically less, which means they can't afford to buy things made in America. They often suffer from dangerous working conditions and the factories they work in often spread pollution that that harms people there and even affects us here.

Our country let this happen because a wealthy few benefited in the short term from policies that harmed the rest of us over the long term. The wealthy few used some of the $$ gained to buy off lobby and contribute to campaigns of politicians who let them get away with it. Often the very politicians and their staffs were soon bribed hired by these wealthy few, for very high amounts. (Look at the sources of money raised by the Bush presidential campaigns, and the places where administration trade officials are employed since Bush left office for examples of what I am talking about.)

The result of these trade policies has been a huge and ever-increasing balance-of-trade deficit, year after year, which means America has to borrow more and more money to buy things we used to make here, or to buy things that we could have traded for if we still made things here. Yes, a wealthy few benefited greatly, many becoming billionaires many times over. Vast amounts of wealth have concentrated at the top in recent years. Short-term gains for a few. Many of the rest of us suffered dramatic pay cuts or lost jobs, lost houses, lost our health insurance, lost our pensions, etc. Long-term harms for the rest of us.

The short-term benefits-to-a-few that were exchanged for long-term harm to the rest of us are now harming the rest of us here in the long term. We owe the rest of the world huge amounts of money. The economy has fallen apart because so many of us can't afford anything - like paying back the debts we had to take on to get by. Now the government can't do anything important because We, the People don't have the funds.

So here is just the latest outrage. The Economic Policy Institute released a report yesterday, Through China’s looking glass—Subsidies to the Chinese glass industry from 2004-08,

Data and calculations in this report reveal that China’s glass industry received total subsidies approximating at least $30.3 billion from 2004 to 2008.

The accompanying press release tells us about the effect of this on American jobs,

The rapid growth of the Chinese glass industry, despite ongoing product quality issues, has already been felt keenly in the U.S. industry, which has contracted by about 30 percent (nearly 40,000 jobs) since 2001. States such as Arkansas, California, Florida, Illinois, Indiana, Massachusetts, Michigan, North Carolina, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Virginia, and West Virginia have lost at least one out of four – or many more – of their glass industry jobs since 2001.

President Obama made the right decision when he enforced the trade laws in the case of Chinese tires by imposing a tariff on imports. In this case he can let China know that America is determined to keep our factories and jobs and will trade on a fair, even-handed basis from now on.

It is time to get angry about these policies that benefit a few in the short term but harm the rest of us in the long term. We need to reform our trade and manufacturing policies. We need to insist on two-way trade and a strong American manufacturing base.

Posted by Dave Johnson at 7:00 PM | Comments (0) | Link Cosmos

October 5, 2009

We Need A Jobs Program And Leadership That Will DO It This Time

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.

Friday’s jobs report said 263,000 jobs were lost in September.

BUT that is after 571,000 people gave up actively looking for work. The number of jobs lost last month was 263,000 plus 571,000 = 834,000.

The "stimulus plan" is currently creating (and/or saving) between 200,000 and 250,000 jobs a month. Yes, that means the real job loss would have been at least 1,034,000 without the assistance of the stimulus plan.

On top of that the "birth/death" model -- the government's assumption that a number of small businesses are starting up that they are not tracking -- is overestimating job creation, leaving policymakers without needed warning signals. The job loss numbers for the last year are expected to be revised upward by 824,000 early next year as a result.

This is bad. Really bad. We need a real jobs program, and we need it bad.

There is something else we need: we need progressive leadership that understands how important this is to people.

Here is what I mean. I came across a news story from the fight over the stimulus plan earlier this year, that now in light of Friday’s terrible jobs report says a lot more than it said at the time. House Dems Strip Stimulus of $200 Million Provision to Refurbish National Mall,

“The move was made amidst a torrent of GOP criticism about wasteful or non-stimulative spending in the bill, including those two projects, as the president attempts to woo House GOPers.”

Yes, the House gave up this project that would have brought jobs to DC - and fixed up the the National Mall - to try to get Republican votes. How did that work out? How many House GOP votes did they get?

How many people in DC could be employed fixing up the mall and other buildings? The Democrats took out $200 million that was originally in the stimulus without gaining a single vote for the bill for doing it!

Meanwhile, the terrible jobs report showed that state and local governments are shedding jobs,

"Government employment fell by 53,000, with the largest drop—24,000 jobs—in the noneducation component of local governments."

With that in mind, let me remind you of this brilliant negotiating tactic: Senate Stimulus Compromise Deals a Blow to Cash-Strapped States,

... "state stabilization funds" ... were cut back by $40 billion this weekend in the deal cut by Senate centrists.

That's right. The original stimulus plan provided funds to help keep states from laying people off. These funds were cut -- and now states are laying off.

The compromises in the stimulus plan have consequences, and those consequences are people's jobs. The compromises were an experiment in "bipartisanship" that failed. The stimulus package gave up several important things, but how many Republican votes were won over? And as a result real people are losing real jobs.

Making matters worse, unemployment compensation is starting to run out for many people who were laid off when this mess started. AND the COBRA health insurance subsidies are running out soon as well! On top of that, contractors - employees who are not called employees because companies can get away with not paying benefits, stock options, unemployment insurance, etc. - a huge component of the labor force, don't even get unemployment or COBRA in the first place.

We Need Jobs Programs NOW

So here is an idea from outside of Washington: How about our government help our people by putting together some real jobs programs? Put people to work while we figure out how to fix the economic mess that conservative policies created.

It is time to use the power of government to start doing something that helps people, and that is not blocked by a misplaced need to get "centrists" (read: politicians trolling for payments/future jobs from big corporations) to like you or a fear that Rush Limbaugh is going to say something bad about you if you go ahead and do what we elected you to do. Here is a news flash: The market-fundamentalist corporatists are not going to like you, and Rush Limbaugh IS going to say bad things about you. Get a clue, they are not responding to the carrots so start using sticks.

Friday's jobs report says this mess is not going away any time soon. Friday’s jobs report shows that things are too serious and too many Americans are suffering for the administration and congressional leadership to continue playing nice guy and give-in strategies. This is important to too many people. People need to be able to eat and have shelter – never mind the health care fiasco – and they need this now.

And it would be politically popular. Think about this: giving people jobs would be politically popular.

Here are some job ideas:

Why don’t we pay people to start retrofitting homes and buildings today to be energy efficient, for free?

Why don’t we pay people to do thousands of projects in the national and state parks?

Why don't we add a teaching assistant to every classroom> And why don't we hire enough teachers to cut class sizes in half?

Why don't we fix all the roads and bridges that haven't been repaired for decades?

What about direct aid to manufacturers who still cannot get credit?

Here's a big one: why don't we cut the workweek to 30 hours? How many people will that put to work? Do you think people are going to object to having to work 30 hours instead of 40?

Oh, and why don't we fix up the National Mall in Washington DC? It needs it and people in DC need jobs. There is simply no excuse not to do this.

Posted by Dave Johnson at 8:34 AM | Comments (1) | Link Cosmos

September 25, 2009

G20 - Getting Down To Business

I am posting from Pittsburgh on the G20 Summit, over at Campaign for America's Future's
Blog for OutFuture| Here is my first post today -- go over there for the rest.

Today the world leaders attending the G20 Summit get down to business. The main issues are economic restructuring to prevent another collapse, addressing trade imbalances, and discussions of climate change solutions. But the overriding issue for all of us boils down to jobs.

The G20 countries see GDP growth as the holy grail. But we have seen that GDP growth alone does not by itself improve living standards - or even create jobs. Instead, as we have seen, in fact it can even be destructive to job growth as well as the environment. As the articles I linked to yesterday discussed, the GDP growth measure is not a measure of people's well-being, or of "life liberty and the pursuit of happiness." This focus on GDP might make a few already-rich people even richer but it does not lead to the kind of restructuring of income and wealth distribution that benefits the rest of us around the world.

It's funny that I find myself writing "as we have seen" again and again, because in defiance of the conventional wisdom what we have actually experienced keeps turning out to be different from what the experts tell us will result from the actions of those making the decisions for the world. Bloggers joke "who could have known" because over and over the bloggers are writing about the things that the experts later declare no one could have known about... Bloggers are really just the voice of democracy -- the voice of regular people across the country and world writing about what they are seeing, bypassing the "expert" media gatekeepers. Some things you can just see in front of your face, and the bloggers see these things, while the experts just keep missing them. One of those things is that the regular people out here in the rest of the world are having a harder and harder time, while a few rich people are getting vastly richer, and that just can't continue.

Outside

The streets of Pittsburgh are quiet ... too quiet. (Just kidding.) Outside the streets are largely deserted - even more so than yesterday. But late yesterday and into the night there were several hundred anarchists outside of town breaking windows and trying to break through police lines to get into the city.

Today large demonstrations are expected, but they are certainly expected to be peaceful. The problem is that there is no chance that they will be seen by the world leaders gathered for the Summit. The nearest place they can reach is the street below the windows at the Media Center where I am working, and this is nowhere in sight of the convention center. Well, that isn't exactly accurate, I can get a glimpse of the roof of the convention center, which is two blocks away (see picture).

So this is the limit of where demonstrators can go. On the one hand, there are obvious security concerns. But it also leads to an environment that isolates the leaders from the concerns of the rest of us.

The main concern of the rest of us is jobs.

Posted by Dave Johnson at 7:14 AM | Comments (0) | Link Cosmos

August 4, 2009

Misuse Of The Words Protectionism And Trade Is Making Us Poorer

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.

Can one be called “protectionist” just for pointing out when other countries are being smart? Maybe so. I’ll get to that in a minute, but first…

Language has tremendous power. People like George Lakoff and Drew Westin, who study the use of language in political discussion, say that our choice of words has the power to actually affect the “wiring” or neuron circuits that our brains use to think.

The corporate marketers and political persuaders have certainly learned the power of language to influence us. It has even gotten to the point where “neuromarketing” uses MRI and EEG to study how our brains react to certain stimuli so they can be used to market and persuade.

In politics I think that we have even reached a point where we give words more power and importance even than the ideas the words represent. In the Bush years we learned that the persuaders believed they could “create their own reality.”

"That's not the way the world really works anymore," he [Bush administration official] continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."

The influencers have become adept at scaring up the public into stampedes that can have sudden and dramatic effects on politicians. So lawmakers have gotten into the habit of basing their decisions on what they think (fear) the public believes (according to what Drudge and Fox are claiming they believe) rather than what is the best policy. And in fact, it is often the case that the public was behind the right policy all along. (Like with a health care public option -- the manipulators had the politicians convinced it was "centrist" to oppose that.) Consequently, words are used as weapons by professionals who wish to distract us from things that are in front of our own faces.

I was conscious of this the other day in the post, How Should We Talk About Industrial And Manufacturing Policy? I wrote,

“The phrase “industrial policy” sounds so Walter Mondale, 1970s, smokestacks and brick factory old-fashioned. I suspect the subject turns people off, eyes glaze over, hands reach under the table for iPhones and Blackberries…”

Making things in America is crucially important to our future economy. But today as we join the discussion of how to restore America’s economy the manipulators have been busy, so it matters as much that we use the right words as that we explore the right ideas and policies.

The Words “Protectionism” and “Trade”

Two words that have significant power today are “protectionism” and “trade.” In current usage anything that can be labeled as “trade” in any way shape or form is in all cases considered by most to be a good thing. And anything that can be labeled as “protectionism” in any way shape or form is in all cased a bad thing. Simple as that. If you want to engage in some practice that people might oppose you try to label it as “trade” to shut down discussion. It you want to block a policy that people might favor you try to label it as “protectionism” to shut down discussion.

I am thinking about this because of the post, American Protectionism Is A Myth, by Leo Gerard and Scott Paul. They wrote about the “shrill warnings against protectionist measures have been issued by editorial pages and foreign officials.”

But what is this “protectionism?” They write,

“This is the untold story of protectionism: the barriers that other governments erect to block American goods and the mercantilist measures they utilize to gain market share in the U.S. These practices range from China's currency misalignment and massive industrial subsidies to non-tariff barriers in Korea and Japan. All these impediments have been well documented by U.S. trade officials, but the mere act of identifying these practices is now viewed as protectionism, even though taking action to eliminate them would expand world trade, reduce global imbalances and preserve the free market.”

Yes, just talking about what other countries are doing to protect and promote their own manufacturing can be labeled as being “protectionist.” This is because once these practices are pointed out the natural next thought is that America should be just as smart about encouraging our own domestic manufacturing.

The op-ed, Falling Behind On Green Tech, by John Doerr and Jeff Immelt in yesterday’s Washington Post, reflects this fear of being branded with the word “protectionism.” They write,

“. . . Do we want to win the race to lead the next great global industry, clean energy? That is the choice before us.

We are clearly not in the lead today. That position is held by China, which understands the importance of controlling its energy future. China's commitment to developing clean energy technologies and markets is breathtaking.

[. . .] How can we catch up? Not through protectionism or massive government intervention but through the power of good old home-grown innovation.”

This statement is an example of how people react to the fear of the negative associations that the manipulators have placed on the word “protectionism.” (They also show a bit of fear of being branded with the word “government.”) They try to escape from any such notion by using the “good” words, “home-grown innovation.” But of course you can’t have “home grown” without protecting your home, which involves government. And you aren’t going to have innovation without the protection and enabling that government brings through schools to educate the innovators and courts to protect their intellectual property. But never mind, that's another post.

So it is “protectionist” to say that other countries have smart planning policies that are increasing their wealth because it naturally makes people realize that we ought to do the same.

For example, if I tell you that China requires that 70% of the content of wind turbines used in China be manufactured in China, where does that take your thinking about our own country’s efforts to stimulate green manufacturing jobs? It is inevitable that your thinking turns to, “then why don’t we do that?” And there you inevitably are: protectionism.

Or if I tell you that GE won't buy wind turbines from American companies, even at the same prices, it is inevitable that your thinking turns to, “why don’t we do something about that?” And there you inevitably are: protectionism.

You see, being smart and supporting our own country’s manufacturing is labeled “protectionist,” which is bad. China is smart to do this but we are “protectionist” if we suggest we should, too.

It can even be called “protectionist” just to point out that a country’s wealth comes from making things. Because making things here inevitably brings the thinking back to having the government protect our jobs. If we say we should make things here we are undercutting the profits to be made by using exploited labor there.

“Trade” is another word that the manipulators have managed to take control of. “Free trade” is now hardwired as the ultimate good. :Free trade" is trade involving no interference from government. (“Government” is another word that has “bad” attachments.) So I guess “free trade” means no police protection from thieves at the ports, no courts to enforce the purchase agreements, no protection of the ships that carry the traded goods or rules for the sea lanes they follow, no roads for trucks to carry the goods from the ports… (I can’t figure this anti-government stuff out, really. But that’s another post.)

The reason I bring up if because misuse of the word “trade” is something I keep coming back to. When a company closes a factory here and opens it in a country where workers are exploited with low wages, or the environment is not protected, making the same thing, using the same machines, and the same raw materials, and selling it in the same stores, how is that “trade?” That isn’t trade, that is closing a factory here and moving it there so you can take advantage of exploited workers or dump toxins into the environment.

But by attaching the word “trade” to a scam like this, they get away with it, because “trade” is considered to be good. You can't be against "trade," so you can't be against using exploited workers to make the same stuff you were already making here. And you certainly can't call for protecting our jobs from being undercut by the use of workers who are exploited and have no recourse. That would be "protectionism." And that is bad.

The result of this obstruction-by-words is that debt increases as we make less with which to trade, our jobs are sent elsewhere, workers elsewhere are exploited, our government is weakened and we get poorer and poorer.

So as we try to work out new policies that will get our country past the current economic crisis and move toward a new economic paradigm where we all share the benefits of the country we have built, powerful words are in our way.

When we overcome the power of these words to brand us, and our fear of that, we can begin to be smart ourselves. When we cease being afraid of being branded as "protectionist" or "against trade" then we can be as smart as the countries with which we compete.

Posted by Dave Johnson at 12:34 PM | Comments (0) | Link Cosmos