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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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 29, 2012

On Manufacturing in China

"You can drink from the firehouse of statist dictatorship, and use it to declare that the burdens of democracy are too great to be tolerated."

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January 27, 2012

Democracy V. Plutocracy, Unions V. Servitude

Servitude: "a condition in which one lacks liberty especially to determine one's course of action or way of life"

Democracy: "a government in which the supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodically held free elections"

Plutocracy: government by the wealthy

Labor union: an organization of workers formed for the purpose of advancing its members' interests in respect to wages, benefits, and working conditions

You may have seen the recent flurry of stories about how hi-tech products are made in China. The stories focus on Apple, but it isn't just Apple. These stories of exploited Chinese workers are also the story of how and why we -- 99% of us, anyway -- are all feeling such a squeeze here, because we are suffering the disappearance of our middle class. Our choice is democracy or servitude.

Working In China

A collection of excerpts from the Charles Duhigg and David Barboza story, Human Costs Are Built Into an iPad and the Charles Duhigg and Keith Bradsher story, How the U.S. Lost Out on iPhone Work both from the NY Times:

Rousted from dorms at midnight, told to work:

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.

“Work hard on the job today or work hard to find a job tomorrow.”

Banners on the walls warned the 120,000 employees: “Work hard on the job today or work hard to find a job tomorrow.”

(How close is that to the very definition of servitude?)

Long shifts, legs swollen from standing:

Shifts ran 24 hours a day, and the factory was always bright. At any moment, there were thousands of workers standing on assembly lines or sitting in backless chairs, crouching next to large machinery, or jogging between loading bays. Some workers’ legs swelled so much they waddled. “It’s hard to stand all day,” said Zhao Sheng, a plant worker.

Write confessions if late:

Mr. Lai was soon spending 12 hours a day, six days a week inside the factory, according to his paychecks. Employees who arrived late were sometimes required to write confession letters and copy quotations. There were “continuous shifts,” when workers were told to work two stretches in a row, according to interviews.

Injuries from speed-up toxics:

Investigations by news organizations revealed that over a hundred employees had been injured by n-hexane, a toxic chemical that can cause nerve damage and paralysis.

Employees said they had been ordered to use n-hexane to clean iPhone screens because it evaporated almost three times as fast as rubbing alcohol. Faster evaporation meant workers could clean more screens each minute.

American companies forcing Asian suppliers to squeeze workers:

“You can set all the rules you want, but they’re meaningless if you don’t give suppliers enough profit to treat workers well,” said one former Apple executive with firsthand knowledge of the supplier responsibility group. “If you squeeze margins, you’re forcing them to cut safety.”

The Results For The 1%

A series of recent newspaper headlines tells the story of how China's working conditions benefit the 1% here.

NYT: Apple's Profit Soars‎

CBS Moneywatch: Apple shares close at record high

SF Chronicle: Apple CEO's Stock Awards Lift Compensation to $378 Million

ZDNet: Apple: made in China, untaxed profits kept offshore. We don't even get to tax the profits from moving our jobs to China, to use for schools, roads, police, etc.

The Results For The 99%

Headlines like these show how things are going better and better for the 1%. But what happened to our middle-class prosperity? We allowed companies to move jobs and factories across the borders of democracy to places where workers are exploited, calling that "trade." This enabled the breaking of unions and the weakening of our democracy.

The threat is in the air: "Shut up and take the wage cuts or we will move your job to China." How is that threat used on us? Here is an example: We have heard the stories of Mitt Romney's company Bain Capital, and how it "earned" its millions. According to the Christian Science Monitor, this is the story of what happened when a Bain-owned company "came to town":

The new owner, American Pad & Paper, owned in turn by Bain Capital, told all 258 union workers they were fired, in a cost-cutting move. Security guards hustled them out of the building. They would be able to reapply for their jobs, at lesser wages and benefits, but not all would be rehired.

Workers in countries like China where people have no say have low wages, terrible working conditions, long hours, and are told to shut up and take it or they won[t have any job at all. They are given no choice.

Increasingly workers here have their wages, hours, benefits, dignity cut and are told to shut up and take it or their jobs will be moved to China. Because we are pitted against exploited workers in countries where people have no say, we have no choice.

The unions are weakened, the government doesn't enforce or weakly enforces labor laws and regulations, age, gender or race discrimination laws, worker safety laws, so workers are placed in a terrible squeeze. Workers who try to organize unions are isolated, moved, smeared, fired, humiliated, whatever it takes.

This quote by Steve Jobs is from How the U.S. Lost Out on iPhone Work,

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can’t that work come home? Mr. Obama asked.

Mr. Jobs’s reply was unambiguous. “Those jobs aren’t coming back,” he said, according to another dinner guest.

Democracy Brought Us Prosperity

We used to be a democracy, where everyone used to have a say in things. Because we had a say we built up a country with good schools, good infrastructure, good courts, and we made rules that said workers had to be safe, get a minimum wage, overtime, weekends… we protected the environment, we set up Social Security. We took care of each other. This made us prosperous. A share of the prosperity for the 99% was the fruit of democracy.

China, on the other hand, is not a democracy, and workers in China don't really have a say. So they don't make much money, they don't have good working conditions, the environment isn't protected, etc.

We Used To Protect Democracy

We used to protect our democracy. We used to put a tariff on goods coming in if they were made by people who didn’t have the ability to speak up and better their condition. We’d let the goods in but we would use a tariff to strengthen our country, our infrastructure, our schools – our democracy. This brought us prosperity.

For some reason, we started letting our companies move our factories over there, forcing our workers to compete with workers who have no say. We got tricked, by people who call that "trade," and said it would be good for us. (Like cutting taxes for the wealthy "job creators" is good for us.)

We opened the borders and let the big companies move the jobs, factories and industries over the border of our democracy, to places where workers don't have a say, so they are exploited. And the result was the big corporations were able to come back and cut our pay, and get rid of our pensions, and tell us, "take it, shut up, or we will move your job, too." We made the wages and working and conditions and environmental protections prosperity that democracy brings into a cost. We turned ourselves into a cost. We made democracy a competitive disadvantage.

Plutocrats Say Shed Benefits Of Democracy

Plutocrats say we need to shed the benefits of democracy and become more like China if we want to compete. They say get rid of regulations, employee protections, environmental protections, good wages, benefits like pensions and time off, etc... They say that We, the People (government) "get in the way of doing business." They say the taxes that pay for good infrastructure and schools and police and courts and services like Social Security and care for the disabled and health care for children "take money out of the economy" but they mean these take some of the money that they have been taking from the economy.

Democracy Is The Best Economics

Look at the primary target of the corporate/conservatives: unions. That should tell you something. This is a power confrontation. This is the power of the 1% overcoming the power of the 99%.

Democracy is the power of the 99% to make the decisions, and to build structures that protect us from exploitation by the wealthy and powerful. This confrontation is the story of the origin of our country -- how We, the People confronted the power and corruption of the British aristocracy, overcame that power, and built a country of, by and for the people.

Democracy and the taxes it enabled us to ask from the wealthiest is what enabled us to build the infrastructure and schools and everything that enabled our prosperity. The regulations of democracy are what enable our smaller businesses to compete with the giants. The shared prosperity -- redistribution of wealth -- is what enabled the middle class to grow, and turned us into the most prosperous country and largest market in the world.

Unions

Unions are about building up the power of groups of people, to confront and overcome the advantages of wealth and the power wealth brings to a few. When a union is strong enough to be able to confront the power of big corporations the result is that the 99% get a share of the pie. When unions are strong we all get better wages and better working conditions and a say in how we are treated, whether we are in unions or not. The benefits flow to the rest of the economy.

It would be nice if our system worked well enough that we didn't need to organize unions on top of the structure of laws and regulations, but it is just the fact of life that the wealthy and powerful and their corporations have throughout our history been able to exert tremendous influence over legislative bodies, again and again. So to fight that working people organize and build these organized unions of people, and leverage that power of the group to demand wages and benefits and weekends and a share of the prosperity. The story of the power confrontation between unions of working people (99%) and the large corporations (1%) is the story of how we built a middle class that brought us the prosperity we enjoyed.

It is not just a coincidence that the weakening of the unions coincides with the decline of the middle class. It is not just a coincidence that the current rise of the plutocrats brings in a swarm of anti-union legislation. It is not just a coincidence that the times when our democracy is strongest we all do so much better. And now, when our demcoracy has been weakened by the money and power of the 1% and their corporations, the rest of us are so much worse off.

Not US v. China

This is not about US workers and markets vs China. Working people in all countries are at risk when their countries trade with countries where workers are exploited. China's huge trade imbalance is threatening the world's economy. The loss of manufacturing to countries that exploit workers is threatening workers in many countries.

The US market is still large, and the US can still demand that imported goods be made according to better standards for workers. The rest of the world can also demand that China's workers be brought up to international standards. And we can certainly hold companies like Apple accountable, and demand that they only buy from suppliers that treat and pay workers according to international standards, because allowing companies to cheat, exploit workers and commit fraud drives the good companies out of business.

This is not about taking jobs back from Chinese workers! This is about demanding they be paid fairly and given a say in their workplaces! This is about not exploiting people there or here!

Trade can be an upward spiral, rather than a lever for exploitation of the 99% by the 1%. If Chinese workers are given a say and paid fairly then they can buy things we make and we can keep buying things they make.

Unions = Democracy = Middle Class = Shared Prosperity

Jon Stewart 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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Posted by Dave Johnson at 8:42 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 19, 2012

Did The President's Jobs Council Go All Corporate?

President Obama's Council on Jobs and Competitiveness ("Jobs Council") issued a report calling for fewer regulations and lower corporate tax rates. This doesn't have to be a bad idea.

The Report

The Jobs Council report, Road Map to Renewal makes a number of recommendations. Here are the main points - please click through for the details:

• Prepare the American Workforce to Compete in the Global Economy

• Foster a Climate that Lets Innovation Thrive

• Adopt an “All-In” Strategy on Energy

• Revitalize the American Manufacturing Sector

• Enhance American Competitiveness through Smart Regulatory Reforms

• Reform the Outdated Tax System to Enhance American Competitiveness
  

Council Heavily Weighted Toward 1%

The Jobs Council is heavily, heavily, heavily weighted to tilt toward the 1%. The list of members reads "Chair and CEO" with a smattering of ultra-wealthy finance types thrown in, and then a couple of token union leaders.

The Objections

United Food and Commercial Workers president Joseph Hansen abstained from voting. AFL-CIO President Richard Trumka released a 1635-word dissent. In the dissent Trumka writes, (emphasis added)

I agree with the overall spirit and a number of the specific recommendations in today’s report ... I absolutely agree ... that the United States is falling behind our international counterparts in investing in modern infrastructure, education, and skills; supporting a vibrant manufacturing sector; developing cost-effective and globally responsible energy practices; and supporting innovation. ...

Unfortunately, I believe the report downplays the need for a proactive role for the U.S. government in many of these areas; fails to address the significant additional revenues needed to address the challenges identified on an appropriate scale; and in many cases erroneously identifies the root causes of the underlying structural problems.

... the report addresses regulatory issues as if we were not in the midst of a prolonged economic crisis whose proximate causes clearly included inadequate regulation of business, and in particular financial markets and institutions.

With respect to corporate tax reform, I believe that corporations as a group pay too low a share of taxes to support the kind of infrastructure investment and education/skills upgrades that are so urgently needed at this time... The report places way too much emphasis on statutory tax rates, mentioning only as an aside that the effective rates paid by corporations are much lower, and that overall corporate tax revenues as a percent of GDP are the fourth lowest in the OECD.

Yes, We Can Cut Corporate Taxes ... If

Actually, we can cut corporate taxes, increasing our international competitiveness, while We, the People still fund our democracy and get paid back for our investment that enabled the prosperity of the corporations. Here's how: Cut corporate taxes, but raise taxes on the 1%er owners of the corporations. Stop the nonsense of lower capital gains tax rates, and restore pre-Reagan top tax rates. Also, require corporations to either use their cash or pay it out to shareholders instead of just sitting on it as many do now.

Capital gains are taxes at a lower rate because most of the income of the 1% is from capital gains, and most of the income of the 1% is from capital gains because the tax rate is lower. The "incentive to invest" should be a good investment, period.

What does cutting corporate tax rates accomplish? First, by cutting corporate tax rates the right ways our companies could become more competitive with companies in other countries. This can be an incentive to locate companies here. But we don't have to just sacrifice this revenue by any means. Instead we can tax it when it becomes personal income. But cutting corporate tax rates without increasing personal income tax rates to make up for it -- which happens to be the DC elite consensus as voiced by Simpson-Bowles -- is complete folly, nothing more than another scam by the 1% to rob We, the People. It is essential that a cut in corporate tax rates happen at the same time as taxes on the resulting personal income are increased, along with requirements that corporate money is either used inside the company or paid out to shareholders.

Look at this chart, which tells you everything you need to know about the who what when where and why of corporations. Corporate wealth is also personal wealth. When you hear about corporations doing well, think about this chart:

Yes, the top 1% also own 50.9% of all stocks, bonds, and mutual fund assets. The top 10% own 90.3%. And it's most likely only gotten worse since these figures were gathered.

Cut The Right Regulations

When the elite DC consensus calls for cutting regulations, they mean regulations that hamper the 1%'s ability to fleece us even more. But there are regulations that actually do impede competitiveness.

Here is what usually happens in DC. After Congress passes laws the regulatory bodies translate the laws into a regulatory framework. This is where the giant companies and their lobbyists get to work. The work they do is influencing these agencies to write regulations that help them, the 1%er corporations that can afford to swarm the agencies with lobbyists -- and that obstruct their competition. So we end up with a situation where small businesses and startups don't have a chance making it through the regulatory maze. They either have to hire specialized, $1000-an-hour DC law firms to help them out, or give up. This is by 1%er design, not because of "big government."

So yes, there are regulatory impediments to competition, but I don't think this form of "cutting regulations" means what the 1%ers on the Jobs Council and the big corporate-elites think it means.

Education

On education, the Jobs Council recommends,

In order to stay competitive in a global age, we must invest in our future by ensuring Americans have the right education and skills to realize their full potential and drive our nation’s economic success. ... These measures will create a purposeful educational system that produces work-ready graduates, satisfied employers with access to a talented labor pool, and a vibrant economy poised for growth and success.

Trumka writes,

With respect to the education section of the report, I believe that the Jobs Council’s education recommendations begin and end in the wrong place: focusing on providing businesses with an endless supply of workers -- as opposed to supporting, improving and sustaining a strong public education system.

So the report calls on government to reconfigure our education system to provide companies with trained worker-bees, which means companies don't have to cough up the dough themselves to train their own workers. The report actually goes even further, basically calling for government to replace think-for-yourself education with do-what-we-say job training. There's a difference. And they ask for this after already asking for tax cuts, too. Sheesh.

The Rest

On energy the 1%ers of course mean "drill, baby, drill." But the council is correct, we do need to go "all-in" on energy, with massive Green Energy investment, freeing us from the damage Big Oil and King Coal do to our environment, our economy, our politics and our democracy.

On manufacturing the council notes that since 1980 manufacturing has slipped from 20% to only 9% of total employment,. The report calls for adding "three to four percentage points of global value added market share—an ambitious but achievable goal." They say we should :take share from our global competitors." There are wonky but great suggestions like "cluster development" and important ideas like going after in promising new manufacturing sectors. The President has formed an Office of Manufacturing Policy that is taking up many of the kinds of recommendations in this report.

In fact, we also need to rewrite our trade agreements so they provide a win-win for the working people here and across our borders, and incentives to manufacture here rather than move jobs, factories, companies and industries out of the country.

And So In Conclusion

Trumka sums things up nicely at the end of his dissent:

Perhaps most profoundly, the report does not ask the critical question: why is our country suffering a manufacturing crisis, complete with massive job loss and a structural trade deficit, when countries with higher overall taxes, higher wages, and more robust health, safety and environmental regulations are enjoying trade surpluses?

The answer lies in the view that we share with so many of our fellow Americans: that our country has become dominated by the interests of the wealthiest 1% at the expense of the remaining 99%. It turns out that a country run in the interests of the wealthiest 1% systematically underinvests in public goods;systematically silences, disempowers, and underinvests in its workers; and in the end is less competitive and creates fewer jobs than a country that focuses on the interests of the 99%.

Echo and amplify what Trumka said: Perhaps most profoundly, the report does not ask the critical question: why is our country suffering a manufacturing crisis, complete with massive job loss and a structural trade deficit, when countries with higher overall taxes, higher wages, and more robust health, safety and environmental regulations are enjoying trade surpluses?

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 9:33 AM | Comments (0) | Link Cosmos

January 12, 2012

MUST Watch: When Mitt Romney Came To Town

This is the story of what has happened to America since the 80s:

Outsourcing jobs to places where people don't have a say so they can't demand good wages, firing people and making them reapply for their jobs but at half the pay, gutting people's benefits, stripping companies, treating employees like throwaway Kleenex, closing factories, stealing pensions, borrowing and pocketing... Locust capitalism. Chop shops.

MUST WATCH!!

And keep this in mind if people try to tell you that doing what it take to increase the stock price helps everyone:

Also see post above, When Mitt Romney Came To Town -- Who Benefits?

Posted by Dave Johnson at 12:26 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

India And Philippines Declare War On Call Center Bill

Last month I wrote about a bill before Congress that would both help fight the offshoring of call-center jobs and protect consumers. Now the countries where we have been sending those jobs are organizing a lobbying campaign to fight the bill.

The Bill

There is a bipartisan bill before Congress, The U.S. Call Center Worker and Consumer Protection Act, that would let the public know which companies are engaging in sending jobs out of the country, let customers ask to use an American call center instead, and ban federal grants or guaranteed loans to American companies that move call center jobs out of the US. In Call-Center Bill Would Let Customers Ask To Talk To Americans, I wrote about some of the specifics and the reason the bill is needed,

Today many call-center jobs are being moved out of the country to India and the Philippines. This costs American jobs, and can be very frustrating to consumers who have to speak to people who they cannot understand because of language problems or cultural differences. The The U.S. Call Center Worker and Consumer Protection Act gives consumers the right to ask where the person they are speaking with is based, and ask for an American-based representative instead. Among the things this bill would accomplish:

• Require the Department of Labor to publicly list firms that move call center jobs overseas.
• Make these firms ineligible for any direct or indirect federal loans or loan guarantees for five years.
• Require 120 day advance notification of a proposed move off-shore.
• Require call center employees to tell U.S. consumers where they are located, if asked.
• Require that call centers transfer calls to a U.S. call center if asked.

Lobbying Campaign

India and the Philippines are organizing a lobbying campaign here -- yes, foreign countries lobby Congress to take our jobs -- to keep this bill from even being considered. An article in The Hindu explains,

India's ambassador to the United States Nirupama Rao said that India would work to protect its business interests in the context of a proposed U.S. legislation against outsourcing call centre works to countries, including India.

The Manila Bulletin gets specific,

President Benigno “Noynoy” Aquino III was urged to create and send a strong contingent of Filipinos that would persuade lawmakers in the US Congress to stop the passage of a bill that could kill the US$9-billion business processing outsourcing (BPO) in the country.

Eastern Samar Rep. Ben Evardone, chairman of the House Committee on Public Information, lamented that US House Bill No. 3596 or the Call Center and Consumers Protection Bill will discourage American companies from outsourcing services in other countries like the Philippines.

“We have to act immediately by sending a strong lobby team in the US. I believe this will kill the BPO industry in the country,” Evardone said.

In, Anti-Outsourcing Bill Stirs Fears In India, Philippines at the Huffington Post, Dave Jamieson quotes Rep. Tim Bishop's (D-N.Y.) reaction to this effort by India and the Philippines,

When asked about such reactions, Bishop said that the fears in India and the Philippines reinforce the argument for the legislation.

"Frankly, the fact that both the Indian government and the Filipino government are reacting like this says that our bill is very badly needed," he said. Most of the call center jobs lost in the U.S. are "sent primarily to India and the Philippines. So I hope [the bill] does have an impact."

... While discussing the call center legislation last month, Bishop said that "outsourcing is one of the scourges of our economy and one of the reasons we are struggling to knock down the unemployment rate and reduce the number of Americans who are out of work ... We can't prohibit it, but we can certainly discourage it."

Consumer Protection

This is not just an offshoring issue, it is also a consumer-protection issue. In Who Protects Info You Give To Offshored Call Centers?, I wrote about a study showing that offshoring of call centers causes us to lose protections on our privacy and financial information,

Not JUST Jobs Lost -- Data Privacy Is Lost, Too

A new study by the Communication Workers of America backs up the need for that bill. The report is called, Why Shipping Call Center Jobs Overseas Hurts Us Back Home. The study found that offshoring call-centers undoes protection of Americans’ private information. Personal data can be available to people who could use it for criminal purposes. Also, once information is sent across borders governments do not need warrants to collect this info.

The full text of the bill is available here:

H.R.3596 - To require a publicly available a list of all employers that relocate a call center overseas and to make such companies ineligible for Federal grants or guaranteed loans and to require disclosure of the physical location of business agents engaging in customer service communications.

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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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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Posted by Dave Johnson at 12:02 PM | Comments (0) | Link Cosmos

Questions For 2012

There are so many unanswered questions and contradictions all around us. But like the families of alcoholics in denial we stay quiet and try not to rock the boat. Here are some questions that need to be asked, and maybe 2012 can be the year we start demanding answers.

1) Who is our economy for, anyway?
2) Why did we invade Iraq?
3) Why haven’t we broken up those too-big banks yet? Instead they just get bigger and more powerful.
3a) How long will we continue to let the banks "extend and pretend?"
4) Why do we still let tobacco companies kill more than 400,000 Americans every year?
4a) Why don't we make tobacco companies pay to clean up all those cigarette butts everywhere?
5) Wouldn't lowering the Social Security age fix a lot of unemployment and help a lot of people?
6) Is moving a factory to a low-wage country really "trade?" Seriously?
7) If our government is supposed to be of, by and for "We, the People," what do conservatives mean by demanding "less government?"
8) How come we never, ever see someone from a union on the big TV networks talking about the benefits of being in a union or how and why to organize one?
9) Since we didn't have big deficits before the Reagan tax cuts, and since the Bush tax cuts didn't create any jobs ... ???
10) Why haven't there been any criminal prosecutions of Wall Street banksters? (OK, some people are starting to ask that one a lot.)

So Many More

There are so many more questions like those. I guess that's enough for now. We as a country have to start asking questions again and demanding answers. Hey, that reminds me:

11) When will our mainstream "journalists" start asking questions and demanding answers again, instead of just saying things like "both sides do it" and "if one side says the earth is flat and the other side says it is round, that means that the earth must be oval-shaped"?

Wall Street got bailouts, the rich got tax cuts, people got job loss and wage cuts and longer hours, protests got crackdowns and it's getting too obvious to ignore. It's time to stop ignoring things and do something about them.

Please, ask your questions in the comments, and then take them out in public and ask them and keep asking them until you get answers. It's your right to ask, and your right to demand answers.

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 7:19 AM | Comments (0) | Link Cosmos

December 21, 2011

For 2012 Let's Restore Our "Industrial Commons"

David Brancaccio's Marketplace story Tuesday, Decline of Kodak offers lessons for U.S. business traced the decline of Kodak and the loss of Rochester, NY's good, middle-class jobs to Kodak's failure to tend its "industrial commons." This is a national problem. For 2012 let's resolve to restore our industrial commons and bring manufacturing back to the U.S.

Kodak on Marketplace

Listen to Tuesday's Marketplace story, Decline of Kodak offers lessons for U.S. business.

Click to listen.

Story summary: Kodak didn't tend its "industrial commons," the local concentration of expertise in making the things that go into a camera.

You make your money by selling cameras. And you now needed to make components. You needed to make lenses; you needed to make shutters -- all kinds of things that the skills for which no longer existed in Rochester.

This is what we have done in our country, too. We have been dismantling our "industrial commons." By sending manufacturing out of the country we have been taking apart the supply chains and abandoning the expertise and skills and culture that go with it.

Other Warnings

Last year former Intel CEO Andy Grove sounded a warning about this problem. In How to Make an American Job Before It's Too Late. Grove wrote that we are not just losing jobs to China, we are losing the "chain of experience" that enables new companies and industries to form and to create new jobs and argues for a national economic strategy to preserve our manufacturing and technology base. He lays out a plan: "rebuild our industrial commons,"

The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshored labor. (If the result is a trade war, treat it like other wars—fight to win.) Keep that money separate. Deposit it in the coffers of what we might call the Scaling Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability—and stability—we may have taken for granted.

We Gave It Away

Many American manufacturers made a deal with China to lower their manufacturing costs. Here is how it worked: Americans (used to) have a say in how this country was run, and said they want good wages, benefits, job safety, clean air, etc. These are the fruits of democracy, but to some they are an impediment to quick profits. So executives at the big multinational companies wanted a way around the borders of democracy and its demands, and pushed for "trade" deals that would let them move manufacturing to places where people had no say, in order to force American unions to make concessions. They got their deals and packed up our factories, moved them to places like China and then brought the manufactured goods back here to sell.

We lost 50,000 factories to China just in the 'W' Bush years, and our trade deficit soared, and now we as a country are paying the price. Making (and growing) things is how a country earns its living. It is how we bring in the income with which to buy things others make and grow. Leo Gerard of the United Steelworkers said it clearly,

"You don’t create real wealth by flipping coupons or hamburgers, you create it by taking real things and turning them into things of value. And those things of value are turned into other things of value and all of a sudden you have a wind turbine with thousands of parts made here. You can’t have a clean economy without good jobs and can’t have good jobs without a clean economy."

We just gave it away, and justified the loss by saying that better things will replace it. The result has been ever-increasing trade deficits that brought us a huge debt that makes us poorer. Our debt is not because of government spending, it is because we have given away our ability to make a loving!

An Ideology To Justify

In the process the 1%'ers who did this to us developed an ideology around hating America and democracy. To justify outsourcing our jobs and factories they said Americans had grown lazy and wanted handouts. They said that the huge profits reaped by a few from selling off our manufacturing infrastructure meant they were "producers" and that democracy was "statism" and "collectivism" that enabled the "parasites" to "steal" from them. They declared that "taxes are theft" that "punish" the "successful" and the "job creators." They stopped funding infrastructure and education and law enforcement, denegrating these as "government spending," and declared that the wealthy few have a "right to rise" and saying the rest of us are "imbeciles."

They moved our "industrial commons" out of the country, closing the factories and thereby dismantling the supply chains and the "chain of experience" that enable us to innovate and compete. They let China capture the lead in emerging green manufacturing technologies that will bring millions of jobs and trillions of dollars. They even let China extort proprietary technologies, in exchange for short-term profits.

They rode the tiger and now the tiger is coming back to bite us.

Riding The Tiger

Richard Eskow reminded me of an old Chinese saying, "He who rides the tiger cannot dismount." American manufacturers rode the Chinese tiger to short-term profits, and now they cannot dismount. They "partnered" with China to get around the borders of democracy and the good wages and benefits democracy demands. But now the tiger wants more. The tiger wants to eat them up.

Riding the tiger: Forbes: Currency Manipulation is NOT the Biggest Chinese Threat,

China’s hidden threats are a multi-headed info-tech “Hydra,” the parts of which are interrelated:

• Intellectual property rights violations (or lack of enforcement in China) allowing open theft of proprietary designs, etc.
• Theft of private-sector technology (which has been going on for years) accelerating Chinese development cycles
• Growing number of cyber-attacks, accessing highly confidential US government information, costing the US private sector billions of dollars in IT disruption.
• Growing military/technology stolen secrets (e.g., stealth fighter plane designs, acquisition of downed stealth-helicopter parts from the bin Laden attack, electronic technology & software from US companies in China, etc.)

Riding the tiger: NYT: Chinese Rules Said to Threaten Proprietary Information,

China is expected to issue regulations on Saturday requiring technology companies to disclose proprietary information like data-encryption keys and underlying software code to sell a range of security-related digital technology products to government agencies, American industry officials said on Friday.

Riding the tiger: Fiscal Times: Stealing America: China’s Busy Cyber-Spies,

Economic and industrial spying by China appears to be more pervasive and egregious than ever, costing America billions of dollars each year, according to a new report by a U.S. government agency. And the report raises an important question: If stolen trade and technology secrets help fuel China’s breakneck growth, then is more espionage required to feed the growing beast?

The Chamber of Commerce rides the tiger: WSJ today: China Hackers Hit U.S. Chamber: Attacks Breached Computer System of Business-Lobbying Group; Emails Stolen,

A group of hackers in China breached the computer defenses of America's top business-lobbying group and gained access to everything stored on its systems, including information about its three million members, according to several people familiar with the matter.

The break-in at the U.S. Chamber of Commerce is one of the boldest known infiltrations in what has become a regular confrontation between U.S. companies and Chinese hackers.

They rode the tiger. But now the tiger wants more. The tiger wants to eat them up.

Let's Resolve To Rebuild American Manufacturing

Let's resolve to rebuild American manufacturing, starting in 2012. Manufacturing is the backbone of a prosperous economy. Let's resolve to bring back good jobs that pay good wages and unpin a middle-class lifestyle. Let's resolve to balance trade with the rest of the world so we can fight our debt problems. Let's resolve to start fighting to win the lead in the Green manufacturing revolution.

Don't let the "free traders" exploit workers in countries where they do not have a say to force concessions from Americans in unions. Don't let the oil and coal companies create false "scandals" like Solyndra to block government from investing in green alternatives. Don't let the 1% make democracy a competitive disadvantage -- democracy is the only economics that works!

Last week President Obama appointed Commerce Secretary John Bryson and National Economic Council Director Gene Sperling to co-chair a new White House Office of Manufacturing Policy. The new Office of Manufacturing Policy will have cabinet-level status, reflecting the importance of the manufacturing sector to our economy. It will coordinate the efforts of different government agencies, such as the Small Business Administration, the Department of Commerce and the Transportation Department.

This is a positive step if there ever was one. Let's resolve to develop and execute a national manufacturing strategy. (please click through)

It is time to restore our national "industrial commons."

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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December 16, 2011

Who Protects Info You Give To Offshored Call Centers?

Companies are always looking for ways to reduce the number of people they employ, and for ways to reduce the pay and benefits for the ones they keep. One way they have been doing this is to send jobs out of the country to places where the people don't have the protections of democracy. Then they come back here and threaten the rest of us with losing our jobs, too, if we don't give in. We have to find ways to restore the protections of democracy.

We are all familiar with "offshoring." This is the process of packing up a factory or office, and moving what it does outside of the US to places where people are paid less -- usually because they don't have any say in how their country is run (a.k.a. democracy). Then the company brings the same products or services back to the US and calls that "trade." Allowing this to happen makes democracy a competitive disadvantage.

One (more) job that has been offshored is call centers. We call to place an order or to get customer service, etc., and the person we talk to is in another country and we can't understand them. This is frustrating, but it is even more frustrating when you think that this is one more job that someone here used to do.

Earlier this week I wrote about a new bill called The U.S. Call Center Worker and Consumer Protection Act that would help bring call-center jobs back to the US. In Call-Center Bill Would Let Customers Ask To Talk To Americans, I explained,

Today many call-center jobs are being moved out of the country to India and the Philippines. This costs American jobs, and can be very frustrating to consumers who have to speak to people who they cannot understand because of language problems or cultural differences. The The U.S. Call Center Worker and Consumer Protection Act gives consumers the right to ask where the person they are speaking with is based, and ask for an American-based representative instead.

Not JUST Jobs Lost -- Data Privacy Is Lost, Too

A new study by the Communication Workers of America backs up the need for that bill. The report is called, Why Shipping Call Center Jobs Overseas Hurts Us Back Home. The study found that offshoring call-centers undoes protection of Americans’ private information. Personal data can be available to people who could use it for criminal purposes. Also, once information is sent across borders governments do not need warrants to collect this info.

From the press release, CWA Study Exposes Overseas Call Center Issues That Threaten American Consumers’ Personal Information,

The Communications Workers of America today released a sobering report detailing the linkage between the off-shoring of call center jobs and a range of serious negative effects on U.S. consumers and job seekers, including placing consumers’ personal information at risk.

… Key findings of the report include:

When a U.S. customer’s financial information is sent overseas, it loses the protections of the 4th Amendment to the Constitution. As long as an individual’s data is not specifically “targeted,” the data can be collected and analyzed by U.S. federal agencies without a warrant.

The documented security hazards are in addition to the damage caused to individuals and communities in the United States by the movement of local call center jobs overseas, off-shoring that often comes after taxpayer-funded dollars and other incentives are heaped upon the corporation.

As of this year, the Philippines surpassed India as the top destination for U.S. companies off-shoring call center jobs. American companies also have opened call centers in countries including Egypt, Saudi Arabia, China and Mexico.

Americans’ personal data also is at risk in foreign call centers in the relative difficulty in providing background checks on employees. Many foreign nations do not maintain central criminal databases and do not have standard identifiers such as the U.S. Social Security number. As a result, proper background checks are expensive, with one estimate putting the cost at up to $1,000 per employee.

This is one more way that offshoring is hurting us. By sending call-center jobs out of the country we are sending the data we give to those call centers out of the country and outside of the protection of our laws. So this call-center bill, named The U.S. Call Center Worker and Consumer Protection Act (H.R.3596) is important to us. It is bipartisan, introduced by Rep. Tim Bishop (D-N.Y.) and Rep. David McKinley (R-W.Va.). Call your own member of Congress and let them know that you support this.

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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November 9, 2011

It's The Trade Deficit!

A huge part of the reason we can't get out of this unemployment slump is the trade deficit. We don't buy American and neither do our "trade partners." We buy from them, they sell to us -- that's not "trade." Stimulus means we buy from them. Cutting taxes means the extra cash buys from them. Nothing we try brings jobs here because we don't buy enough here that's made here and they don't either. If we want to fix employment we have to fix trade.

The current unemployment crisis results, at least in large part, from the trade deficit. This has been masked by bubbles like the tech bubble and the housing bubble. Economist Paul Krugman explains, in a blog post, The Return Of Secular Stagnation,

But then the question is, why do we find it so hard to achieve full employment even with saving somewhat low by historical standards. And the answer seems clear: it’s the trade deficit. America in the 70s and 80s could have high savings, not hugely strong investment, but still have full employment because trade deficits weren’t as large compared with the economy as they are now.

And this in turn means that the savings glut possibly making the natural real rate negative is actually originating abroad, not at home.

Krugman is taking issue with the economist argument that we have a problem of too much savings without investment, using a chart showing savings declining. (Note that the inflection point is right as Reagan's policies start to hit.) He explains how this demonstrates that the problem is really our trade deficit.

Easier to understand: We have to fix trade if we are going to fix the economy.

China has accumulated more than a trillion dollars by selling to us and not buying from us. Think about what would happen to our economy if China used that money to place orders for US-made goods. Factories would be opening up, people would be hired, stores would be humming... When you think about how much good that would do, you are understanding the harm their sell-only trade policy has done. They were supposed to buy from us, too, because that is what trade is. But they didn't, and here we are.

Now, think about how much good it would do for China's economy, if our economy was humming from all those orders for our goods! When you think about that, and realize that China is not doing that, you might start to think that this is not an economic game China is playing. If it was about economics, they would use that money to place those orders, to revive our economy, which would mean we would be placing even more orders from them.

But they aren't. Why is that?

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 25, 2011

Tax Holiday Generates Holiday Gifts For Big Multinationals

Have you heard about the "tax holiday" idea? The idea is to let corporations bring overseas profits back to the United States at a very low tax rate. These overseas profits were made in various ways, including schemes to move factories and jobs out of the country in order to avoid paying taxes here. With a "tax holiday" they would ... well ... get to bring that money back and pay even less in taxes, rewarding them for the offshoring and tax dodging. We did this in 2004 and it cost the country a lot of jobs but made the rich even richer. So of course they want to do it again.

This is a test of our Congress. Will they continue to do the bidding of the top 1% and reward offshoring and tax dodging, even as more and more people are in the streets demanding they instead start doing the bidding of the 99%.

What Is A Tax Holiday?

Companies that report profits outside of the US don't have to pay taxes on that money unless they bring it into the US. This encourages some companies to engage in various schemes that close factories and lay off workers here in order to report profits outside of the country. They use shell companies, foreign subsidiaries, post office boxes in tax havens as "headquarters," etc. Other companies make a lot of money by making great stuff and selling it or providing great services. This money builds up and naturally owners want to bring it back here so they can live it up even more than they do. They could just bring it back and pay taxes (some do) but some are asking Congress to give them a "repatriation tax holiday," letting them bring the money back ("repatriate" it) at a much, much lower tax rate than they would usually have to pay.

Of course, we are in a jobs emergency so they claim that giving even more money to those top 1% "job creators" is a good thing because it will "create jobs." If we were in a green cheese emergency they, of course, would call them selves the "green cheese creators" and say that giving them this huge holiday gift would "create green cheese."

They Tried It Before -- FAIL

In 2004 Congress passed a tax holiday bill named the "American Job Creation Act of 2004." The big multinationals promised that they wiould use the money to "create jobs." (Have we heard that somewhere before?)

The Institute for Policy Studies looked at the results of the 2004 tax holiday and found that "their holiday didn't just fail to create the promised jobs. Their holiday enriched corporations that actually destroyed jobs in the months right after they received their tax windfall." IPS found that 58 multinationals who used the "American Job Creation Act of 2004" tax holiday not only immediately laid off tens of thousands, they continued laying off, and laid off close to 600,000 workers between 2004 and now. From the IPS summary of the study,

One government study looking at the first two years after the repatriation windfall found that 12 of the top recipients laid off more than 67,000 American workers. These firms collectively brought back home more than $100 billion ...

The companies that gained the most from the tax holiday actually cut jobs, on top of that they used the tax gift money to buy back their own stock, increasing its value, and pay out dividends, both thereby enriching executives and shareholders.

Why Is This Even Being Discussed?

Why is such a bad idea even being discussed today, not to mention in a bill entertained by Congress? Well, why else? Nation of Change reprints iWatch's definitive tax-holiday post by Aaron Mehta and John Aloysius Farrell, Wealthy Corporations With a Trillion Dollars Stashed Offshore Lobby For a 'Holiday' From U.S. Taxes, and in it we find the (usual) answer,

A number of trade groups and corporations that would benefit have joined in a coalition called WIN America . New lobbying disclosure reports show that the group and its member firms have spent millions of dollars, and employed dozens of lobbyists, to press for the tax break, according to an analysis.

[. . .] WIN spent the first 9 months of this year actively lobbying for a repatriation bill in Congress. It spent $380,000 to hire two firms (Cauthen Forbes & Williams and Capitol Counsel LLC) and target lawmakers with a total of eight lobbyists. Among the lobbyists hired directly by WIN are several people with strong ties to Congress:

Jim McCrery, a former Congressman who represented Louisiana’s 4 th district until 2009.

Drew Goesl, who served as chief of staff for Rep. Mike Ross and communications director for Sen. Blanche Lincoln; Ross is a co-sponsor of the House bill.

Tucker Shumack, a former legislative assistant for Sen. John Isakson, a co-sponsor of the Senate bill.

Dena Battle, a former legislative director for Rep. Dave Camp, who as head of the powerful Ways and Means Committee has sway over tax policy in the U.S.

Jeff Forbes, a former staff director on the Senate Finance Committee.

Libby Greer, a former chief of staff for former Rep. Allen Boyd.

Millions of dollars lobbying... says it all.

Where Are We Now?

There is plenty of opposition being voiced. A strong New York Times editorial, No Holiday, make the case against this holiday gift,

Big business has clearly decided that the economic crisis is too important to waste. While Washington debates how to create jobs and cut the budget deficit, major corporations — read major campaign contributors — are pushing Congress for an enormous tax cut on corporate profits. Lawmakers seem all too eager to grant their wish.

[. . .] These days, corporations are flush with $2 trillion in cash that is not being used for hiring. As long as the economy is weak and consumers aren’t spending, tax cuts will add to the cash pile, not create jobs. A tax holiday also would add to the deficit, in part because companies rush to bring money home, rather than repatriating the earnings over time at the usual rate.

At the Center on Budget and Policy Priorities blog, Chuck Marr writes in, Corporate Tax Holiday Would Be a Costly Mistake,

A well-funded corporate lobbying campaign is pushing Congress to allow multinational corporations to bring profits held overseas back to the United States at a temporary, bargain-basement tax rate.

...Congress tried this in 2004 and it proved an embarrassing failure. Firms not only failed to use the “repatriated” funds to boost their U.S. investment and hiring, many of them actually laid off thousands of U.S. workers.

Marr also writes that this tax holiday, following the 2004 holiday, would make tax holidays an expectation, and that,

... large revenue losses in later years would more than wipe out those gains as corporations shift more investments, profits, and jobs overseas in anticipation of yet another temporary holiday.

Yes, anticipation of the next tax holiday. And the one after that.

Even .. Heritage???

In a shocker of shockers, Heritage Foundation agrees. (The check from the multinationals mush have gotten lost in the mail!) WSJ: Heritage: Repatriation Tax Holiday Wouldn’t Create Jobs,

Giving U.S. companies a tax break for bringing home profits held overseas likely won’t create more jobs or spur domestic investment, an influential conservative think tank will argue in a report to be released Tuesday.

In a break from many Republican lawmakers and a host of major U.S. companies including Google Inc., Apple Inc., Pfizer Inc. and Microsoft Corp., the Heritage Foundation said in a new study that a repatriation tax holiday would not motivate companies to hire new workers.

Here are Jared Bernstein and Chuck Marr discussing whether Congress should give this holiday gift to the top 1% and their giant multinationals:

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 7:28 AM | Comments (0) | Link Cosmos

October 19, 2011

61 House Republicans Co-Sponsored China Currency Bill, Now Side With China

Last week, in These Are The House Republicans Blocking The Crackdown On China Currency Manipulation. Call Them. I named 61 House Republicans who had co-sponsored the China currency bill, but who now side with China by refusing to help force a vote on the bill. The bill has passed the Senate and Republican leaders are refusing to allow a vote in the House. This bill means jobs. This bill means confronting China over their trade cheating. Call these members of Congress and demand that they side with American workers instead of China.

From last week's post,

We buy a lot from China, and they don't buy much from us. Some call that "trade." The result is that our jobs, factories, companies, industries and wealth are moving to China. One very big thing we can do about this right now is to confront China over their currency manipulation and the Senate passed a bill to do just that. The House leadership, under the control of lobbyists siding with China, refuses to allow the bill to come up for a vote. You can contact co-sponsors of the bill and ask them to sign a "discharge petition" that will make that vote happen.

Why Is This Important?

From Trade Deals Pass Congress -- China Currency Bill More Important Than Ever,

Congress just passed three more NAFTA-like trade deals, so our country's trade deficit is going to get even worse. And pressure on working people to accept pay and benefit cuts and longer and harder working hours is going to get even worse. And the rewards to the top 1%, at the expense of the rest of us, are going to get even greater. But we can still win the fight over China's manipulation of its currency. If we win this it lessens the difference between prices of goods made there and goods made here and can bring some jobs, factories, countries, industries and wealth back to the 99% of our country that doesn't benefit from these trade deals.

... China manipulates its currency to keep it "weak" (low) compared to the "strong" dollar. This means that goods made in China cost much less - up to 40% less - than goods made here, even before any wage differentials, exploitation of the environment, trade cheating, special subsidies and other trade violations are taken into account. China does this in order to capture the jobs, factories, companies and industries that make a country strong. We have let them do this for many years, leading to the economic situation we find ourselves in today.

One reason this continues is that big companies can threaten workers here with moving a job or factory there if they don't go along with big cuts in wages and benefits and working standards -- or just move the factory or company to take advantage of the differential. This benefits a wealthy few in the short term, and China in the long term after those wealthy few have sold the rest of out and cashed out for themselves.

This trade situation with China, while greatly enriching the top 1% here (and there), has hurt the rest of us so much, and drained so much wealth from the country, that even some Republicans are willing to support doing something about it. There are 61 Republican cosponsors of the bill to confront China over their currency manipulation!

The Club For Growth, a Wall Street front-group that backs China's positions on these issues, has demanded that Republicans side with China on this, and has called it a "litmus test." One Republican who actually did sign the discharge petition to force the House to vote, Harold Rogers, was forced by House leadership to remove his name!

What You Can Do

There are 61 Republican members of the House of Representatives who co-sponsored legislation to confront China over their currency manipulation: Currency Reform for Fair Trade Act (HR639). Contact them and ask them to sign the "discharge petition." They are:

Tim Murphy (PA)
Todd Aiken (MO)
Steve Austria (OH)
Lou Barletta (PA)
Brian Bilbray (CA)
Rob Bishop (UT)
Mo Brooks (AL)
Dan Burton (IN)
Shelley Moore Capito (WV)
Howard Coble (NC)
Chip Cravaack (MN)
Rick Crawford (AR)
Charles Dent (PA)
Jo Ann Emerson (MO)
Michael Fitzpatrick (PA)
Randy Forbes (VA)
Jeff Fortenberry (NE)
Jim Gerlach (PA)
Chris Gibson (NY)
Sam Graves (MO)
Morgan Griffith (VA)
Gregg Harper (MS)
Duncan Hunter (CA)
Bill Johnson (OH)
Tim Johnson (IL)
Walter Jones (NC)
Mike Kelly (PA)
Blaine Luetkemeyer (MO)
Steven LaTourette (OH)
Frank LoBiondo (NJ)
Donald Manzullo (IL)
Tom Marino (PA)
Thaddeus McCotter (MI)
Patrick McHenry (NC)
David McKinley (WV)
Patrick Meehan (PA)
Candice Miller (MI)
Sue Myrick (NC)
Tom Petri (WI)
Joe Pitts (PA)
Todd Platts (PA)
Jim Renacci (OH)
Scott Rigell (VA)
Dana Rohrabacher (CA)
Harold Rogers (KY)
Mike Rogers (AL)
Mike Rogers (MI)
Dennis Ross (FL)
John Runyan (NJ)
James Sensenbrenner (WI)
John Shimkus (IL)
Bill Shuster (PA)
Marlin Stutzman (IN)
Glenn Thompson (PA)
Michael Turner (OH)
Lynn Westmoreland (GA)
Ed Whitfield (KY)
Joe Wilson (SC)
Rob Wittman (VA)
Frank Wolf (VA)

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 7:51 AM | Comments (0) | Link Cosmos

October 13, 2011

Trade Deals Pass Congress -- China Currency Bill More Important Than Ever

Congress just passed three more NAFTA-like trade deals, so our country's trade deficit is going to get even worse. And pressure on working people to accept pay and benefit cuts and longer and harder working hours is going to get even worse. And the rewards to the top 1%, at the expense of the rest of us, are going to get even greater. But we can still win the fight over China's manipulation of its currency. If we win this it lessens the difference between prices of goods made there and goods made here and can bring some jobs, factories, countries, industries and wealth back to the 99% of our country that doesn't benefit from these trade deals.

Message Of Trade Deals -- Loud And Clear

The message of these trade deals is loud and clear: shut up and accept pay and benefit cuts and longer and harder working hours. And if you don't like it we will move your job to a country where working people can't complain. In fact, labor leaders are regularly murdered in Columbia, one of the countries that Congress just approved a trade deal with. If approving a trade deal with a country in which labor leaders are killed for trying to make things better for working people doesn't send a loud and clear message to working people here, I don't know what does.

China Currency

China manipulates its currency to keep it "weak" (low) compared to the "strong" dollar. This means that goods made in China cost much less - up to 40% less - than goods made here, even before any wage differentials, exploitation of the environment, trade cheating, special subsidies and other trade violations are taken into account. China does this in order to capture the jobs, factories, companies and industries that make a country strong. We have let them do this for many years, leading to the economic situation we find ourselves in today.

One reason this continues is that big companies can threaten workers here with moving a job or factory there if they don't go along with big cuts in wages and benefits and working standards -- or just move the factory or company to take advantage of the differential. This benefits a wealthy few in the short term, and China in the long term after those wealthy few have sold the rest of out and cashed out for themselves.

This trade situation with China, while greatly enriching the top 1% here (and there), has hurt the rest of us so much, and drained so much wealth from the country, that even some Republicans are willing to support doing something about it. There are 61 Republican cosponsors of the bill to confront China over their currency manipulation!

Wall Street Sides With China

The Club For Growth, a Wall Street front group, has made the China currency bill a "litmus test." They have said they will oppose any Republicans who vote for it, siding with America against China. From Politico recently, Club for Growth warns GOP on China currency bill,

The influential Club for Growth is pressuring Republican presidential candidates and lawmakers to oppose bipartisan legislation cracking down on China’s currency policies.

... The Club for Growth has urged lawmakers to vote no on the bill, warning that the vote will be included in the group’s 2011 Congressional Scorecard, used to measure how fiscally conservative they are.

The Wall Street group says we should instead pass tax cuts, deregulate controls over how businesses behave toward the environment, workers, customers and their communities, and get rid of unions so the United States can be more like China, which they say would bring companies back.

What To Do

We need to get the bill voted on in the House of Representatives. Speaker Boehner is siding with China and refusing to let this bill come up for a vote. But there is a "discharge petition" circulating, that can force the bill to the floor for a vote. Click here for a list of 61 Republicans who cosponsored this bill but have not signed the petition to bring it up for a vote. Call these 61 Representatives and tell them you want them to help bring the bill to the House floor for a vote.

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

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Posted by Dave Johnson at 6:55 PM | Comments (0) | Link Cosmos

October 12, 2011

Here Are Reps To Contact On China Currency Manipulation

We buy a lot from China, and they don't buy much from us. Some call that "trade." The result is that our jobs, factories, companies, industries and wealth are moving to China. One very big thing we can do about this right now is to confront China over their currency manipulation and the Senate passed a bill to do just that. The House leadership, under the control of lobbyists siding with China, refuses to allow the bill to come up for a vote. You can contact co-sponsors of the bill and ask them to sign a "discharge petition" that will make that vote happen.

As Steven Capozzola explained yesterday in Why Should Congress Pass China Currency Legislation?,

What few seem to understand is that we are already in a trade war with China. It’s not one that we launched, nor one that we wanted. But China’s undervaluation of its currency, which violates world trade rules, is part of a deliberate, well-coordinated strategy to undercut U.S. manufacturers.

Currency manipulation has helped fuel China’s massive rise as a manufacturing powerhouse. And it’s also helped drive our massive trade deficit with Beijing, which reached a record $273 billion in 2010. This huge trade gap has cost 2.8 million U.S. jobs over the past decade—jobs in every state and congressional district, jobs in manufacturing, jobs in high-tech sectors… It’s a terribly one-sided trade relationship.

How did this happen? China intervenes in the currency market to buy dollars and set its own currency at an artificially low exchange rate. This makes Chinese goods 40% cheaper when entering the U.S. market while making our goods significantly more costly when exported to China.

... This is a bipartisan issue, one that marks a clear chance for Congress to stand up to a very protectionist, predatory campaign. China can purchase dollars, which are freely traded, in order to set its currency peg. But conversely, it is illegal to buy China’s closely held currency.

I wrote yesterday, in Will The U.S. House Side With China On Currency?

If we want to bring jobs and wealth back to the United States for the 99% of us who have been under extreme pressure we're going to have to do something about trade. The huge trade imbalances -- especially with China -- are sucking our jobs and factories and companies and industries and money out of the country. The biggest thing that can be done right now is to take action on China's currency manipulation.

...Speaker of the House Boehner is siding with China and is refusing to allow it to come before the House for a vote. (Reminder to self: do some research into the Citizens United Supreme Court decision enabling foreign money to influence our elections.)

The bill can be forced onto the House floor using a "discharge petition." You can take action to help get Republicans to sign the discharge petition so it comes to the floor. Click here to contact members of Congress and ask them to sign this discharge petition and end Chinese currency manipulation now.

What You Can Do

There are 61 Republican members of the House of Representatives who co-sponsored legislation to confront China over their currency manipulation: Currency Reform for Fair Trade Act (HR639). Contact them and ask them to sign the "discharge petition." They are:

Tim Murphy (PA)
Todd Aiken (MO)
Steve Austria (OH)
Lou Barletta (PA)
Brian Bilbray (CA)
Rob Bishop (UT)
Mo Brooks (AL)
Dan Burton (IN)
Shelley Moore Capito (WV)
Howard Coble (NC)
Chip Cravaack (MN)
Rick Crawford (AR)
Charles Dent (PA)
Jo Ann Emerson (MO)
Michael Fitzpatrick (PA)
Randy Forbes (VA)
Jeff Fortenberry (NE)
Jim Gerlach (PA)
Chris Gibson (NY)
Sam Graves (MO)
Morgan Griffith (VA)
Gregg Harper (MS)
Duncan Hunter (CA)
Bill Johnson (OH)
Tim Johnson (IL)
Walter Jones (NC)
Mike Kelly (PA)
Blaine Luetkemeyer (MO)
Steven LaTourette (OH)
Frank LoBiondo (NJ)
Donald Manzullo (IL)
Tom Marino (PA)
Thaddeus McCotter (MI)
Patrick McHenry (NC)
David McKinley (WV)
Patrick Meehan (PA)
Candice Miller (MI)
Sue Myrick (NC)
Tom Petri (WI)
Joe Pitts (PA)
Todd Platts (PA)
Jim Renacci (OH)
Scott Rigell (VA)
Dana Rohrabacher (CA)
Harold Rogers (KY)
Mike Rogers (AL)
Mike Rogers (MI)
Dennis Ross (FL)
John Runyan (NJ)
James Sensenbrenner (WI)
John Shimkus (IL)
Bill Shuster (PA)
Marlin Stutzman (IN)
Glenn Thompson (PA)
Michael Turner (OH)
Lynn Westmoreland (GA)
Ed Whitfield (KY)
Joe Wilson (SC)
Rob Wittman (VA)
Frank Wolf (VA)
Don Young (AK)

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 11, 2011

Will The U.S. House Side With China On Currency?

If we want to bring jobs and wealth back to the United States for the 99% of us who have been under extreme pressure we're going to have to do something about trade. The huge trade imbalances -- especially with China -- are sucking our jobs and factories and companies and industries and money out of the country. The biggest thing that can be done right now is to take action on China's currency manipulation. Here are two things you can do today.

The Senate votes today on a bill to push back against China's (and a few other countries') currency manipulation, and the bill is expected to pass. The bill also has to pass the House and be signed by the President before it can take effect. CNN explains, in Senate targets China's currency,

For years, U.S. officials have been pressuring China to allow its renminbi -- or yuan -- to appreciate more rapidly. Between 2008 and 2010, China had pegged the yuan to the dollar, keeping its value artificially low and Chinese exports comparatively cheap.

Besides hiking tariffs on Chinese goods, the bill also takes aim at the administration, which already has some ability to point out nations that purposefully manipulate their currency but has avoided doing so.

The bill would:
-- Force the administration to officially red-flag nations whose currencies are undervalued for long periods with the term "fundamentally misaligned currency."
-- Make it tougher for the Commerce Department to ignore calls to investigate accusations of undervalued currencies.
-- Force the administration to give Congress a list of nations with "misaligned" currencies.
And if a nation is accused of having an undervalued currency and makes no effort to rebalance the currency for three months or more, that's when the tariffs kick in.

Jobs And Wealth

It's complicated, but by manipulating its currency instead of letting it "float" to world market value, China can sell goods to other countries at a much lower price than they would cost without the manipulation. In effect China puts its own money into the currency markets, which works out the same as subsidizing the products directly so they have a lower price, in order to get the orders. While this might seem like a dumb thing to do the long-term result is that China is buying themselves a very big chunk of the world's manufacturing business. In the long term this pays off for them in jobs, industries, wealth and power.

And as we now know, the result for us is a big loss of jobs and wealth and factories and companies and industries -- in other words, our ability to make a living in the world.

The House

Even as the bill likely passes the Senate today, Speaker of the House Boehner is siding with China and is refusing to allow it to come before the House for a vote. (Reminder to self: do some research into the Citizens United Supreme Court decision enabling foreign money to influence our elections.)

The bill can be forced onto the House floor using a "discharge petition." You can take action to help get Republicans to sign the discharge petition so it comes to the floor. Click here to contact members of Congress and ask them to sign this discharge petition and end Chinese currency manipulation now.

Tell Congress to stop China's cheating on currency manipulation, which stands in the way of free and fair trade, job creation, and a higher standard of living for millions of Americans.

Click here to see the actual discharge petition.

The President

In his news conference last week President Obama said that China is manipulating their currency but that he doesn't want a law that is just "symbolic." He was not clear about whether he would sign this bill or not, should it pass. He said,

"...China has been very aggressive in gaming the trading system to its advantage and to the disadvantage of other countries, particularly the United States. And I have said that publicly, but I've also said it privately to Chinese leaders. And currency manipulation is one example of it. [. . .] My main concern -- and I've expressed this to Senator Schumer -- is whatever tools we put in place, let's make sure that these are tools that can actually work, that they're consistent with our international treaties and obligations. I don't want a situation where we're just passing laws that are symbolic knowing that they're probably not going to be upheld by the World Trade Organization, for example, and then suddenly U.S. companies are subject to a whole bunch of sanctions. We've got a -- I think we've got a strong case to make, but we've just got to make sure that we do it in a way that's going to be effective."

So it is not clear if he intends to sign this legislation. You can sign a petition encouraging him to sign it, should it pass, and take other steps to push China to stop their trade violations. Click the following: WE PETITION THE OBAMA ADMINISTRATION TO: Take Action to Stop China’s Job-Killing Currency Manipulation.

Please take the time to urge members of Congress to sign the discharge petition, and to urge President Obama to sign the bill if&when it passes.

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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September 1, 2011

Remember Roger & Me?

EVERYbody should see Roger & Me again. What Moore saw in Flint 22 years ago has spread across the country since.

Posted by Dave Johnson at 3:09 PM | Comments (0) | Link Cosmos

July 28, 2011

New, Major Poll Shows Again That Voters Want JOBS Not Deficit Reduction -- Will DC Listen To The Public?

In the middle of the DC frenzy over a contrived "debt crisis" a new, major poll shows what other polls have shown: voters want Washington to act on jobs (and jobs fix deficits), especially in manufacturing, but don't think that our elected officials are paying attention. By more than two-to-one, voters want Washington to focus on job creation rather than deficit reduction.

From a press release describing this poll,

The study which included eight focus groups nationwide, along with a random national survey of 1,202 likely voters, finds that across the partisan spectrum, Democratic and Republican voters ranked job creation and rebuilding the nation’s manufacturing base at the top of their list of priorities. In fact, when asked to select the most important task for Congress and the President, “creating new manufacturing jobs,” which ranked just below creating jobs more generally, saw a bigger gain from 2010 (up 9%) than any other option, including deficit reduction, lower government spending, immigration reform, or addressing healthcare. Indeed, by a more than two-to-one margin (67% to 29%), voters prefer that Washington focus on job creation rather than deficit reduction.

Key Findings

Here are some of the key findings from this poll:

• When given an “either/or” choice, just 29% want Washington to focus on deficit reduction while 67% want job creation.


• “Creating manufacturing jobs in the U.S.” and “strengthening manufacturing in this country” are the top voter priorities for the President.


• Only 50% of voters believe that the President is working to create manufacturing jobs – an 11% drop from 2010.


• Congress fares even worse – 41% say Democrats in Congress are working to create jobs, and 32% see the GOP working to create jobs.


• 90% have a favorable view of American manufacturing companies – up 22 points from 2010.


• 97% have a favorable view of U.S.-made goods – up 5 points from 2010.


• 94% of voters say creating manufacturing jobs is either “one of the most important” things government can do or “very important.”


• 90% support Buy American policies “to ensure that taxpayer funded government projects use only U.S.-made goods and supplies wherever possible.”


• 95% favor keeping “America’s trade laws strong and strictly enforced to provide a level playing field for our workers and businesses.”

The entire poll is available as a PDF here: Findings From A National Survey And Focus Groups Of Likely 2012 Voters.

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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June 24, 2011

How Free Trade Made Democracy A Disadvantage

This is my presentation from last week's Netroots Nation panel session: Revitalizing Manufacturing: The Road to Renewed Job Growth. Click through for panel details and other panelists, here for a pdf of slides, including Jared Bernstein's. See below for video -- and be sure to watch Beri Fox!!!

Four Stories

I want to share four quick stories:

1. Democracy

The story of America

We fought a wealthy powerful few who had all the say and didn’t let us have a say, and made a country where We, the People made the decisions and share the benefits.

So because we had a say we built up a country with good schools, good infrastructure, good courts, and we made rules that said workers had to be safe, get a minimum wage… we protect the environment, we give out social security. We take care of each other.

And we used to protect that. We used to put a tariff on goods coming in if they were made by people who didn’t have the ability to speak up and better their condition. It was called the American System. Look it up. We’d let the goods in but we would use a tariff to strengthen our country, our infrastructure, our schools – our democracy.

But that changed. Superman left and we stopped protecting the American Way. We started letting goods in made by people who had no say, so the goods were cheap and they undercut us.

We have made democracy a disadvantage. We made it a disadvantage instead of an advantage.

Make no mistake, people who say they want things more “business friendly” they mean they want America to be less of a democracy, with fewer of the protections we fought to build for ourselves.

2. Trade

Once upon a time some areas made some things well, and other areas made other things well, and they would trade, and both areas could have the things they made AND the things made somewhere else, and everyone benefitted. And both areas increased the customers they had.

And so to most people “trade” means we buy things made somewhere else, and they buy things we make. In what world does “trade” mean closing a factory that is located here, moving it there where they don’t already make something, laying off all the people, and then bringing back here the same things that used to be made here and selling them in the same stores?

And the result is a lot of people have lost jobs, devastating our communities.

And then they tell workers who still have jobs that the same can happen to them, we can just close this factory, so shut up and don’t expect raises or benefits or safety or dignity.

What we see happening when a company moves production out of the country is not trade, it is getting around the borders of the democracy we built, and the things we fought and sacrificed to build.

Letting companies move factories away was giving up our ability to make a living. Sure a few people might get really rich from it, but look around you the rest of us, and our communities, and our economy have been sent sliding down a hill into the sewer.

3. The Deal

There once was a company. The company made a deal with a company in the next county, they make something you don’t, and you make something they don’t. So the deal is you’ll buy things from them if they buy from you. And you start buying from them, but they aren’t buying from you. And this goes on, and they still aren’t buying from you, but you are starting to owe them a lot of money. And they you’re borrowing from them to buy from them, and they still aren’t buying. And then they show up in your county selling the things you already made and sold, buy they used the money they got selling to you to set up to make what you made.

And by the way they say you have to pay them what you owe them.

That is how our deal with China is working out. We bought from them, they didn’t buy form us, and now they have accumulated $1.5 trillion which they were supposed to have been buying American-made goods with.

And they cheated. Or I would say they were smart and watched out for their own interests excessively, and we didn’t at all.

$1.5 trillion! So imagine what would happen if we said we're going to default on the debt but these bonds are redeemable in the next 3 months for American made good. Can you imagine what $1.5 trillion of orders would do for our economy right now? $1.5 trillion in orders? Factories humming...

Well the picture of what that would do FOR our economy is a way of understanding what that has done TO our economy.

4. The Cost

I like to tell you a story about the cost of our free-trade deals and tax policies.

I took a road trip last fall, through four industrial states, MI, OH, WV, PA to visit some of the Manufacturing Town Hall meetings that Scott’s group put on. [Note - see posts about this tour here.]

They call it the "rust belt" because so many factories are closed and rusting.

From town to town you see downtowns devastated, because the way you make a living is gone and the cheap imported goods at wal mart competing with local businesses. Michael Moore wrote about Flint after the auto plants closed. That kept happening, town after town, year after year, and got worse.

You have to see to first hand. [Note - there are pics in this post.]

But I’ll tell you, we’re even seeing it now in Silicon Valley, seeing downtowns with lots of empty storefronts. Empty office and manufacturing buildings everywhere. That wave that hit the Midwest has reached the tech areas now.

So the moral of the four stories is that We the People have to protect the things we fought for and won. And we have to remember that We, the People have to take care of and watch out for each other because the wealthy and powerful won’t do that for us. And markets aren’t about that, either.

When we relax our eternal vigilance they will come back with a vengeance.

Progressive Solutions

a. Industrial Policy

We don’t believe in having the government help. We think the markets will fix everything. But other countries don’t see it that way.
We are pitting our companies on their own against the national resources of governments. We can live in an ideological dream world and say we shouldn’t, but our competitors in the rest of the world DO.

b. Protect Democracy

Tariffs. Call it a democracy tariff. Or a thugocracy tax. Use this to help lift others out of their exploitation. By making democracy a disadvantage we are only encouraging the worst, and encouraging it here, too. “Business friendly” is a code word that means get rid of all the protections We, the People have built for ourselves.

They can protect the environment, etc, or charge a tariff to bring those goods in.

c. Renegotiate Trade Deals

Trade can mean something different. We still have a huge market. We can require goods to either be made by people who are not exploited and who have a say so

d. Enforce Trade Laws

China cheats in so many ways, and we all know it. Currency rates. Indigenous innovation . Forcing companies to turn over proprietary IP…

We can do these things. Because of the strong prosperity that democracy brought us others really want to sell into our markets.

And my own favorite:

e. Top tax rates

With high top rates it takes time to build a fortune. You have to have long-term plans, sustainable businesses that are surrounded by healthy communities, good schools, good infrastructure.

Lower rates, you can make a fortune in a few days. Business models changed, became short term, cash in, quick-buck schemes. Harvest infrastructure, close factories, no need for healthy communities, etc.

Video Of The Panel

Scott Paul opens
Jared Bernstein at 6:02
Rep. Jim McGovern at 17:00
Beri Fox at 31:29
Dave Johnson at 48:13

IF the video below doesn't show up, click to see it here.

Sobotka

As always, Frank Sobotka explains what's wrong:

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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June 23, 2011

Manufacturing Hearing: Republicans, Corps Say Taxes, Regulations, Government, Democracy Bad

I watched a Congressional hearing yesterday (webcast), examining why we need a national industrial strategy. There were a few pro-manufacturing voices. But in a surprise move, Republicans and representatives of Wall Street & giant multinationals opposed such a policy and repeatedly called for more tax cuts for the rich and corporations, more "free" trade agreements, getting rid of regulations and stopping government from holding corporations accountable to our laws. And at the end of the hearing the top committee Republican said we should not blame China's trade-cheating for our trade deficits, we should instead blame our "home-grown" regulations, citizen access to courts, taxes, good wages, benefits, worker-safety protections, environmental protections, etc. [aka democracy] that China lacks.

Yesterday's hearing was before the Joint Economic Committee, which is a committee of members of the House and Senate, created by Congress to review economic conditions and to analyze the effectiveness of economic policy. The hearing was named: Manufacturing in the USA: Why We Need a National Manufacturing Strategy? Click through for details and an archived video of the hearing.

The format was remarks by the committee heads, brief remarks from a panel of two members of Congress and a panel of four "experts" in the subject, followed by a question/answer session.

Rep. Kevin Brady's introductory remarks set the stage for the coordinated Republican/Wall Street/multi-national corporate position. Opposing the idea of a national industrial policy, Brady summed up the reasoning:

The concern is that policy can "morph" into "central planning" that interferes with "the invisible hand." He said industrial strategies have failed everywhere. [note- of course they haven't, just look at China, Germany, Brazil, India...] It comes at the expense of the consumer and leads to protectionism. Instead we should adopt “pro-growth” economic policies: (see if you can guess what is in the following list)

Reduce government spending, reform entitlements, cut taxes, give more tax breaks to big companies, give a tax "holiday" to repatriate "stranded" American profits, do even more trade agreements, repeal regulations and health care, enact tort reform.

Panelists

Alex Brill of the American Enterprise Institute testified that we should "rely on market forces," and government should make no specific policies. We should not expect an increase in employment in manufacturing because of productivity growth, which increases our standard of living.

The downward employment trend prompts some to conclude need government assistance, but that can harm "other sectors," with resources misallocated. Manufacturing is only one sector of economy. Rely on market forces, government should stay out of it. [Note - by "other sectors" see if you can guess which "other sectors" he means. Hint: the answer is Wall Street.]

Instead we should should Improve US business environment as a whole. Encouraging growth across the economy [i.e. Wall Street].

Having government involved in manufacturing policy is an oxymoron in a free market economy [i.e. Wall Street].

To reduce the harmful distortions: (get ready, here it comes)

Reduce the corporate tax rate. We need a significant reduction, to level the playing field, improve general competitiveness. This is one step toward "neutral" fiscal policy.

Jay Timmons of the National Association of Manufacturers offered a contrasting opinion, saying that we need tax cuts, deregulation, etc.

We must have policies to compete successfully in international marketplace. Pro-growth policies: (get ready, here it comes)

Reduce the corporate tax rate. Reduce the regulatory burden, and "onerous" regulations that put the weight on "job creators." [Note - see: Actually, "The Rich" Don't "Create Jobs," We Do.]

Get rid of barriers to trade and growth. We need more trade agreements. We are ceding market share to competitors. Our policies are turning clock back. There are excessive new regulations, like ozone standards. They "hamstring" the economy and "job-creators."

A Different Perspective

Scott Paul from the Alliance for American Manufacturing offered a pro-manufacturing perspective.

Robust strategy has been at the core of American policy from the country's beginnings. Today’s dearth of policy is the exception, not the rule. Hamilton’s manufacturing policy was in place until WWII.

Having a manufacturing strategy is not partisan, Reagan had one, the Plaza Accord. His administration made key investments, including semiconductors, and had "Buy America" requirements.

We saved the auto industry, which stabilized part of the support structure for domestic manufacturing.

There are many problems that can’t be solved on their own by companies, like R&D investment.

No single firm can coordinate national projects. We need a robust manufacturing strategy because fate of this sector is too important. The decline of manufacturing is not inevitable or desirable.

Paul's solutions
1) Address Chinese currency manipulation
2) Counter China’s other cheating – when we act and enforce we get results.
3) Retool our export initiative to focus on zero trade deficit.
4) Tax changes – but don’t offset corporate tax reduction with reductions in manufacturing – this is just a windfall for Wall Street
5) Winning a race to the bottom -- don’t engage in this.
6) Infrastructure bank
7) Skills and training infrastructure

The Q&A

Currency manipulation.

Chairman Casey asked Scott Paul about Chinese currency manipulation.

Chairman Casey and Mr. Scott Paul on International Currency Manipulation:

Paul: We need legislation to allow workers and firms relief from currency manipulation. Currency manipulation is one of most harmful policies out there, contributes to global imbalances, viscious cycle, hard to get out of. A year ago China took off the "peg," and the currency appreciated but arguably not enough, still grossly undervalued between 30-40%.

Rep. Brady Brady: "If we blame china we will be sorely mistaken." Our challenges are home-grown. Fiscal stimulus is one cause of our problems, we have fewer workers because of it, unemployment higher, etc.

A Unified, Coordinated Front: Government, Taxes, Regulation, Democracy -- All Bad

Question – to Timmons (NAM), don’t your manufacturing members want tax cuts instead of jobs programs?
Timmons – Enact legislation that reduces costs and barriers. 18% higher cost here because of taxes, tort, regulatory and energy costs. We can reduce those costs, not blame other countries.

Then most of the Republicans and panelists got going about why government and taxes and regulations are bad. They were a unified, coordinated front, dismissing any consideration of government involvement...

Someone talked about uncertainty which is caused by government. This is why businesses are slow to hire. Businesses don't know what We, the People might demand next.

Mark Zandi of Moody’s Analytics argues that government itself creates uncertainty because it has the power to tax and regulate. This makes companies question whether to do business in the US. Need to provide certainty and stability [like China?]

Someone said, “Pull back and eliminate as much as we can.”

Finally someone said we need to get rid of the National Labor Relations Board "to lower labor costs.

Sobotka

As always, Frank Sobotka explains what's wrong:

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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June 3, 2011

Trade Agreements Kill Jobs, Wages, Democracy

Our trade agreements have pitted working people in countries that do not protect rights or people against the working people here who fought to win the protections of democracy. The result has been devastating to our communities, our economy and our democracy.

America is (was, anyway) a democracy governed by We, the People. As Monday’s Memorial Day ceremonies remind us Americans fought and sacrificed to build and keep the protections and benefits that democracy offers. Those include good jobs with good wages, worker safety laws, rules preventing companies from polluting, and so many other things that companies complain make us less “business-friendly.” But we got involved in “trade” deals that let countries get around democracy’s protections, pitting employees here against people who have no voice, no power and no money. You can see the results all around us.

Korea, Panama, Columbia ... and China

Now we're looking at new trade agreements with Korea, Panama and Columbia. The President is holding out for assistance for all the workers who will be displaced while Republicans say, "Why bother?" Neither side is holding out for agreements that lift workers on both sides of the border.

But these agreements will hurt American workers and communities by lowering wages and killing jobs. For example, the National Council of Textile Organizations, American Manufacturing Trade Action Coalition, National Textile Association, American Fiber Manufacturers Association, U.S. Industrial Fabrics Institute got together to warn that,

We have analyzed the agreement carefully and come to the unfortunate conclusion that the textile portions of the KORUS agreement are seriously flawed. If passed in its current form, the agreement will open the U.S. market to a massive one-way flow of sensitive textile products from South Korea, as well as illegal Chinese imports, while providing no new export business to our textile manufactures and workers.

And more clearly, there are ...uh ... labor rights "problems" in Columbia, too: Colombian Labor Rights Lawyer in Critical Condition after Assassination Attempt,

On May 13, 2011, armed men on motorcycles fired five bullets into labor rights lawyer Hernán Darío in the heart of downtown Cali, Colombia. Mr. Darío is the lead attorney in a high-profile case defending the leaders of a group of sugarcane workers who led a labor strike in 2008 from criminal charges. While no one has taken responsibility for this shooting, it is widely believed to be connected with the sugar strike and Mr. Dario’s defense of the sugar workers.

The shooting comes only weeks after the Colombian government agreed to implement a “U.S.-Colombia Labor Action Plan,” a plan to make improvements in labor rights conditions in Colombia, in connection with U.S. Congressional consideration of a Free Trade Agreement (FTA) between the U.S. and Colombia. The shooting underscores the continuing and serious labor rights problems in Colombia. It also calls into question whether there has been real progress on the labor rights situation in Colombia.

Of course, arguments over these are really proxies for our trade relationship with China, which is the real problem because it is the biggest problem. Our trade deficit with China is in the hundreds of billions - meaning they sell to us and don't buy from us, costing jobs, lowering American wages and increasing our debt. And China not only cheats, they really cheat. This is from Another Reason CEOs Should Rethink Outsourcing and Offshoring,

Fellowes Inc., one of the world's largest makers of office and personal paper shredders, is witnessing the destruction of its business, as its large Chinese manufacturing plant has been shut down by its joint venture manufacturing partner.

The company's Chinese joint venture firm has barred 1,600 employees from entering the plant, stolen all of its proprietary manufacturing production equipment and forced the venture into bankruptcy. The contracts Fellowes signed with its Chinese production company meant nothing. For Fellowes, there is no such thing as rule of law in China.

The Itasca, Ill.-based company has lost $168 million worth of business and is no longer able to produce personal shredders for the world market. It has taken its case to Chinese courts, to no avail. It has pleaded with members of Congress and federal agencies, with no results.

Wrong Turn On Trade

"Trade" is when you ... uh ... trade with others. A country might be able to grow bananas, and need machine tools, so you set up a deal to trade with them. And you both benefit!

But "trade" is not supposed to mean you just let a company just close their factories here because they don't want to pay reasonable wages or protect worker safety or the environment, or pay taxes to support the communities that provide workers and services and customers. You don't just let them send those jobs across a border to a "business-friendly" country that will let them pollute at will or treat employees like slaves and then think they can just bring the same products they used to make here back here to sell.

Somewhere along the way we made a wrong turn that has taken down a road toward ruin. Somewhere along the way we made a deal with the devil to let a very few people here get extremely wealthy at the expense of the rest of us.

The Cost To Communities

These trade agreements have had a terrible effect on our manufacturing communities, particularly in the midwest. From last year's post, Lorain, OH Keep It Made In America Town Hall Meeting,

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.

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

The Cost To Sovereignty

Our trade treaties prevent us from governing our own country with the laws We, the People want to pass, even when we can get them passed around the money of the corporate gatekeepers.

The World Trade Organization (WTO) says says we cannot require Country Of Origin Labeling (COOL)
WTO rules against U.S. COOL program

A World Trade Organization panel has issued a preliminary ruling on the case that Canada and Mexico filed against the U.S. country-of-origin-labeling law, charging that the mandatory rule violates WTO trade standards. Specifically, the WTO ruling upholds that requirements tied to U.S. mandatory COOL violate provisions of WTO's agreement on Technical Barriers to Trade or TBT. The WTO panel also ruled that the mandatory COOL requirements to not meet the United States' stated objective that the labeling law informs and helps U.S. consumers make purchasing decisions regarding the origin of meat, produce and other products covered by the labeling law.

Just over a week ago the WTO ruled that we can’t even make companies tell consumers whether tuna they buy is “dolphin-safe.” David Sirota writes about this in Salon, When "free" trade trumps U.S. law

... so-called free trade agreements (i.e., NAFTA, bilateral NAFTA replicas, the WTO regime, etc.) are free only of protections for human beings -- that is, free of provisions that preserve, say, labor rights, human rights and the environment. But those deals' "hundreds of pages" are chock-full of protectionist provisions for multinational companies -- provisions that, for example, allow foreign firms to sue governments for lost profits and empower international panels to unilaterally override a nation's domestic laws if those laws reduce corporate revenues.

According to Public Citizen's Eyes On Trade,

For the second time in a week, reports have surfaced about the WTO clobbering a U.S. consumer labeling policy. Last week, the U.S. voluntary dolphin-safe tuna label was deemed a WTO violation. This week, Reuters is reporting that the WTO has ruled that U.S. beef labels are a WTO no-no.

Corporate meatpackers are rejoicing...

. . . Consumers, ranchers, farmers and legislators worked hard to pass the labeling rules after seeing ground beef horror stories in Schlosser's movie and book Fast Food Nation.

Heck, even free marketeers will be upset with the WTO ruling, since labeling transparency allows the consumer to make the free choice as to what kind of product they want to buy without the government dictating the outcome.

[. . . ] Unlike the U.S. Constitution and legal system, the WTO puts maximization of trade volumes first - ahead of consumer safety or the environment. As if corporations needed any more incentive to destroy local food production.

The Cost To Democracy

People watch these trade agreements take away our jobs and lower our standard of living. The see China cheating, taking everything and know that they can’t buy things in stores that are made in the USA. People clearly see this smashing the middle class and don’t understand why our political leaders don’t step in to defend the country. They don’t understand why government is not addressing these things that are costing jobs, and then see government making even more trade deals when it is obvious that trade with China is costing us jobs.

People understand this is big-company corruption buying politicians and making economic change impossible. They watch the big corporations take over the government, telling the Congress and administration what to do while they are unable to do anything about it. They come to believe the game is rigged. The result of all of this is that many people feel powerless and tune out.

The frustration over this is being channeled into a belief that it is government and democracy that are responsible, and that government spending is why they have no money. This loss of faith is dangerous to our society and our political system.

To Fix The Economy And Budget , Fix Trade

We have to fix our trade relationships if we hope to fix our economy and out budget problems. Ian Fletcher explains, in Why the Budget Is the Wrong Thing to Fight About,

So... what is the solution? What do we have to fix?

The number one thing is trade. Free trade collapsed a very long time ago. What we have today is not free trade at all, it's ruthlessly manipulated trade -- manipulated by America's big trading partners, starting with China but including many others. And we're doing nothing to stop them.

America's titanic ($497 billion last year) trade deficit is ripping the guts out of industry after industry, but we have no answer. And you can't gut industry after industry and expect not to reduce your GDP.

If we didn't have this horrendous trade deficit, we simply wouldn't be fighting many of these budget battles. Why? because we'd have a larger GDP, so tax revenues would be higher. Spending on public benefits would be lower, and painlessly so, because fewer people would be poor and middle-class people would have more money to take care of themselves.

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 8:47 AM | Comments (0) | Link Cosmos

May 31, 2011

Dems Should Vote For Clean Debt Limit Bill

The House is voting on a “clean” debt ceiling bill today -- a bill to raise the debt ceiling without any "hostage-taking" conditions. This is the right thing to do for the country and every Democrat should vote for this. Voting for a clean bill will draw the contrast for the public between those who are doing the right thing, and those willing to hold the world's economy hostage to a make-the-rich-richer plutocracy agenda. Democrats who do not vote for a clean bill should lose committee assignments, parking places, even bathroom keys.

The Debt Ceiling

The country's "debt ceiling" has been reached. This means that the government's authority to borrow money has reached its limit. The Treasury Department is engaging in gimmicks and schemes to keep the country going but time is running out. The Congress must extend this limit, or the government will default on its bonds.

If our government defaults on its bonds it would initiate a worldwide financial crisis that dwarfs the Wall Street meltdown of a few years ago.

WHY We Have This Debt

In 1981 the Reagan administration dramatically changed the course of the country. They defunded government by passing huge tax cuts for the rich and massively increasing military spending, and began cutting back on the things We, the People (government) do for each other. The country cut back on maintaining -- never mind modernizing -- our infrastructure, our schools, colleges and universities, scientific research and other things that make us competitive in world markets. We began cashing in our factories and moving the jobs out of the country. As a result of Reagan-era changes our trade deficits soared, wages stagnated, pensions disappeared, and a few extremely wealthy started getting much, much richer.

One major result of these changes, of course, was the huge budget deficits that accumulated into today's massive debt. This was the plan from the start, to "starve the beast" by defunding government and forcing the debt to reach a level where there was no choice but to cut back on democratic government's protections for the people, unleashing plutocracy.

Hostage-Taking Enabled: The Tax Cut Extension

This debate over the debt ceiling and hostage-taking follows the recent extension of the Bush tax cuts -- another product of hostage-taking. At the end of the last Congress unemployment benefits for the millions of unemployed were running out. Republicans -- having filibustered much of the legislation of the prior two years -- held the extension of benefits "hostage" saying they would not let it pass unless the deficit-creating Bush tax cuts were extended.

Enough Democrats caved and passed an extension of the Bush tax cuts. This validated hostage-taking as a successful tactic while making the deficit much worse, setting the stage for today's debt-ceiling fight.

The Vote Is A Trick

Today's vote has been scheduled by the Republican leadership as a trap, trying to get some Democrats to vote with Republicans to support their hostage-taking agenda and create the appearance of bipartisan support for plutocracy. If the Republican position gets the support of enough Democratic members, Republicans can then demand deep cuts in Medicare and other programs that help people and hold corporate power in check, in exchange for their votes to allow the world's economy to continue to operate.

From TPM: First Debt Limit Vote Today As GOP Looks To Divide Dems,

The vote is intended to expose fault lines within the Democratic caucus, with Republicans counting on sizable number of Democrats to side with them and bolster their case that Democrats need to agree to deep spending cuts as a condition to raising the debt limit.

Vote For A Clean Debt-Ceiling Bill

Voting for a clean bill stops government-by-hostage-in its tracks. Voting for a clean bill saves the world's economy. Voting for a clean bill fights the plutocracy agenda. Voting for a clean bill saves Medicare, Social Security and the things We, the People do for each other. Voting for a clean bill is the right thing to do and doing the right thing is the right thing politically.

Call your member of Congress NOW and demand a vote for a clean debt-ceiling bill.

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 9:27 AM | Comments (0) | Link Cosmos

May 24, 2011

NLRB V Boeing – Corporations Fear Law Itself

The National Labor Relations Board is attempting to enforce our country's laws and the corporate conservatives are going nuts - literally. They are challenging the concept of law itself, while making wild claims of conspiracies by government against business itself. Yikes!

The National Labor Relations Board has filed a complaint against Boeing for retaliating against employees for legitimate union activities. Boeing opened a 787 assembly line in "right-to-work" South Carolina that they had previously stated would go to Washington State, after repeatedly having to grant concessions to union workers in Washington State. Opening an assembly line is not illegal, of course, but doing so in retaliation for union activities or for the purpose of threatening a union is illegal.

The key to the NLRB action is that Boeing executives said repeatedly they were opening the South Carolina plant because of union activities. They boasted they were breaking the law, and finally someone has dared to enforce the law.

The International Associaltion of Machinists and Aerospace Workers complaint states that a Boeing executive stated Boeing was "diversifying Boeing's labor pool" to South Carolina due to "strikes happening every three to four years." The complaint cites several other instances of Boeing officials stating the reason for opening the South Carolina assembly line was because of union activities, as well as threatening the union with losing work in Washington state because of union activities.

The idea of the NLRB enforcing the nation's laws again, after decades of Reagan/Bush/Bush non-enforcement, has caused corporate heads to explode. The corporate right says the NLRB complaint is an example of "the federal government dictating private business decisions."

Yes, exactly. That is what law is: government dictating private business decisions.

What Is Law?

Law is "government dictating private business decisions." That's pretty much the definition of what law is. Telling a company they can't dump toxic waste into rivers, can't steal from customers, etc. are all examples of "government dictating private business decisions."

Law is government -- We, the People -- telling people and companies what they can and cannot do. So by complaining about "government dictating private business decisions" it appears the Boeing and the corporate right have a problem with law and government itself. "Being told what they can and cannot do" is what government and law enforcement are for.

The right to form a union and engage in legitimate union activities without fear of retaliation or intimidation is the law in the US, and in every state.

This is now about integrity of the law enforcement process. Boeing and the corporate right are attacking law enforcement itself. And so we are treated with the spectacle of the lawbreakers getting headlines attacking the law-enforcement agency.

This crowd has gotten used to telling government what to do, and now here comes government actually daring to try to enforce a law -- telling them what to do instead of the other way around -- and they just can't f&%king believe it! They clearly do not accept it.

What The Law Is

Congress enacted the National Labor Relations Act (“NLRA”) in 1935. It’s the law.

Take a look at Section 1 of the NLRA. In summary, it says that lack of bargaining power by workers against corporations leads to Depressions (we call them recessions now) because of depressed purchasing power. And it leads to strikes, which disrupt commerce. Therefore, it is the policy of the United States to encourage collective bargaining.

According to NLRB :

The NLRA protects the rights of employees to:

Form or join a union

Bargain collectively for a contract that sets wages, benefits, hours, and other working conditions

Discuss wages, working conditions or union organizing with co-workers or a union

Act with co-workers to improve working conditions by raising complaints with an employer or a government agency

Strike and picket their employer, depending on the purpose or means of the action

Choose not to join a union or engage in union activities

Organize coworkers to decertify a union
If employees choose a union as their bargaining representative, the union and employer must bargain in good faith in a genuine effort to reach a binding agreement setting out terms and conditions of employment. The union is required to fairly represent employees in bargaining and enforcing the agreement.

Employers may not:

Prohibit employees from discussing a union during non-work time, or from distributing union literature during non-work time in non-work areas, such as parking lots or break rooms

Question employees about their union support or activities in a manner that discourages them from engaging in that activity

Fire, demote, transfer, reduce hours or take other adverse action against employees who join or support a union or act with co-workers for mutual aid and protection, or who refuse to engage in such activity

Threaten to close their workplace if employees form or join a union

Promise or grant promotions, pay raises, or other benefits to discourage or encourage union support

Prohibit employees from wearing union hats, buttons, t-shirts, and pins in the workplace except under special circumstances

Spy on or videotape peaceful union activities and gatherings

Companies can not threated employees for trying to form a union, and companies cannot retaliate against employees for having a union. That. Is. The. Law.

Corporate Right Going Nuts

The big corporations have gotten used to having things their way. In response to having their unquestioned authority over government and law itself challenged by this NLRB action the corporate right is apoplectic.

Not only is the corporate right challenging the very idea of law itself, complaining about "government dictating private business decisions," but they are doubling down on the nutty stuff. The Heritage Foundation, in NLRB Comes to Big Labor’s Defense, for example, goes off the deep end, into Glenn Beck territory, claiming that the NLRB is engaged in a conspiracy to make companies "even harder to manage."

The Washington Examiner reports that a leaked NLRB memo “makes clear that President Obama and the radical labor advocates he put on it are embarked on a calculated campaign to make unionized firms even harder to manage.” The memo, which was obtained by the Heritage Foundation’s Hans von Spakovsky and James Sherk, “shows that the board seeks to elevate union officials to equal partners with executives in corporate boardrooms of all unionized firms.” The Examiner continues:

The memo instructs NLRB regional operatives to flag all cases in which unionized firms made relocation decisions without submitting detailed economic justifications to their unions. The board plans “case-by-case” reviews, followed by prosecutions of selected cases. The intended consequence is that all major business decisions will become subject to approval by unions.

Nutty, indeed, claiming that there is a conspiracy by government that has "embarked on a calculated campaign to make unionized firms even harder to manage.” That's Glenn Beck territory.

Who Is In Charge?

This comes down to a simple question: who is in charge here? Is it We, the People, or the giant corporations who consider themselves above the law, and in control of the government?

See also:

Palin and Boeing CEO Tell Government Who The Boss Is

Actual Enforcement Of Actual Laws? Is It Possible?

Corporate/Conservative Heads Explode As NLRB Actually Enforces Law

Does Government Know Who The Boss Is?

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 4:37 PM | Comments (1) | Link Cosmos

May 12, 2011

Palin And Boeing CEO Tell Government Who The Boss Is

What can a democracy like ours do when giant companies say, "Rules? We don’t need no stinkin’ rules! We don’t got to pay you no taxes!" and "We will just move out of your puny country if you try to tell us what to do."

Government is beginning to enforce labor laws again, with the National Labor Relations Board (NLRB) filing a complaint against Boeing for retaliating against employees for legitimate union activities. In response Boeing's CEO questions government's "authority" to tell big businesses like Boeing what to do, saying companies like his can just move "overseas." Sarah Palin echoes the complaint, saying businesses can just move to "more business-friendly countries." These are direct challenges to the democracy we fought to build.

Boeing Threatens "Overseas Flight"

Boeing chairman, president and CEO Jim McNerney has an op-ed in the Wall Street Journal in which he challenges the “authority” of our democracy to regulate giant multinational corporations.

“The NLRB is wrong and has far overreached its authority. Its action is a fundamental assault on the capitalist principles that have sustained America's competitiveness since it became the world's largest economy nearly 140 years ago. We've made a rational, legal business decision about the allocation of our capital and the placement of new work within the U.S.”

McNerney essentialy confirms that it was union activity that led Boeing to decide to open a plant in anti-union South Carolina,

“Among the considerations we sought were a long-term "no-strike clause" that would ensure production stability for our customers, and a wage and benefit growth trajectory that would help in our cost battle against Airbus and other state-sponsored competitors. … Union leaders couldn't meet expectations on our key issues, and we couldn't accept their demands that we remain neutral in all union-organizing campaigns…”

Like the movie stereotype, poking his finger in your chest, "You got a problem with that?"

McNerney goes on to call the NLRB enforcement “brazen regulatory activism” that “could accelerate the overseas flight of good, middle-class American jobs.”

There it is, the threat, basically, "We will just move out of your puny country if you try to tell us what to do, and we will take your jobs with us."

Boots On Necks

Sarah Palin, in her Facebook post, Removing the Boot from the Throat of American Businesses, blasts President Obama's "appointees at the National Labor Relations Board (NLRB) who have their boots on The Boeing Company’s neck."

Palin explains that business is the boss now, not We-the-People democracy, writing,

Does the President realize the real concern here is not that businesses will choose to locate in one state over another? It’s that businesses will choose to locate in other countries because thanks to the Obama administration’s job killing policies and over-reaching regulatory boards the business climate in the United States is growing toxic.

Basically, she says government ought to just get out of the way of the plutocrats, because big, multinational businesses have so much power over democracy that,

... eventually every state will suffer when businesses declare “enough is enough” with these tactics and decide to relocate in more business-friendly countries.

Once again, the threat: Mess with us and we will leave and take your jobs with us.

Whose Boot Is On Whose Neck?

To be clear, Palin does not mean this as a call to strengthen democracy and get these companies and their threats under control. She is not complaining that these companies do not want to follow our rules and pay decent wages, offer benefits, protect worker safety and protect the environment. She is saying the United States should change and become more "business-friendly" -- like the non-democracies that suppress labor rights, pay low wages, and lock you up if you complain.

"Free Trade" has allowed businesses to cross borders to "business friendly" non-democracies to escape the protections democracy offers us. It pits exploited workers in these "business-friendly" countries against our own democracy-protected workers, forcing a race to the bottom in wages, working standards and living standards. And it lets them avoid taxation, defunding our democracy's ability to enforce regulations and laws

If we don't do what these giant, powerful companies tell us to do, and abandon the protections of democracy that we fought so hard to achieve, they will just pack up and leave and take our jobs with them. Just whose boot is on whose neck?

The question is why do we let them do this, and what can we do about it?

The following is adapted from April's post on the NLRB actions, Does Government Know Who The Boss Is?

Who Is Boss?

Do We, the People have the ability to enforce our laws? Do we have the power to tax corporations and the wealthy?

Do we have the power to keep the protections and opportunities our democracy had provided?

Democracy provides us with safety protections and fair wages. We fought so hard to build and maintain this democratic society so that We, the People could share the benefits. We passed laws allowing union organizing, as a balance to the immense power of corporations and wealth. We passed laws prohibiting companies from telling workers, "Work for what we give you or don't eat."

And for a time this built our prosperity. But we let the protections slip, and allowed companies to cross borders to escape the protections democracy offers -- to non-democratic countries like China where workers have few rights, where pay is low, environmental protections practically non-existent. Companies locating manufacturing in places like have huge cost advantages over companies located in democracies that respect and protect the rights of citizens.

The Threat Against Us

Won't companies just move out of the state/country if we try to enforce labor laws or tax them? Won't China just stop selling to us or dump our bonds if we apply a tariff to protect democracy, or try to enforce trade laws? Won't the rich just pack up and move or stop working if we don't just give them everything they want? Won't they move even more factories out of the city/state/country if We, the People try to demand our rights?

We Still Have The Power

Here's the thing. We, the People still have some power left in our hands. For one thing we still offer a huge, prosperous market to sell into. We still have the power to make demands on those who would like to sell things to us. We can apply a "democracy tariff" to goods made by exploited workers so these goods do not have a price advantage over goods made here. And we can choose to enforce tax laws, and wage laws, and tariffs, and labor laws, and trade laws to protect and strengthen what remains of our democracy.

But we can only do this if we decide to stand up for ourselves and do something about what is happening. We have to put our foot down, and demand that our politicians listen to We, the People and do what we say. It is time to get organized, to talk to neighbors and relatives, to show up at town hall meetings and protests. We can demand that news media begin to cover more than just the corporate/conservative viewpoint. We can go out and register others to vote, and get them to the polls, and demand that votes be counted accurately. We can take back our democracy and put We, the People back in charge.

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 4:51 PM | Comments (2) | Link Cosmos

May 9, 2011

US - China Summit: If Trade Was Trade...

Today the US-China Strategic and Economic Dialogue begins in Washington. This is the third such meeting, and it's time for the Obama administration to get it right. China has not been engaging in "trade" with us, they have been engaging in something else entirely.

The Washington Post sets the stage, with an editorial, The U.S. must push back against China’s investment controls

...It is still holding the renminbi at about 25 or 30 percent below its probable market value. ... Beijing has increasingly used government procurement rules, technical standards and tax laws to force foreign companies to transfer their technology to state-owned Chinese firms in return for access to the Chinese market. ... Beijing’s objective is the mercantilist one of building up state-owned “national champion” firms that can then capture global markets from Japanese, European and U.S. competitors. No matter that the state-owned sector already receives massive official support, direct and indirect — while more efficient private-sector job- creators must scramble for resources.

Last week's Let Trade Be Trade, explains,

Since China’s admission into the World Trade Organization we have been packing up our factories and sending them over there. We have been buying so many things made in China, but they have not been buying very many things made here, and the resulting “trade deficit” has gotten worse year after year. Everyone is afraid of what China might do with all those trillion$ in US Bonds they have accumulated. ... There is a better way to solve the problem: let trade BE trade.

Time To Buy From Us

There is a simple solution: tell them to start actually trading with us,

When the meeting begins Secretaries Clinton (State) and Geithner (Treasury) and Locke (Commerce) should slide a big stack of order forms across the table and say, "Your turn. Let us take your orders now, please."

China has been selling but not buying and it's time for them to to start buying. That way we might be able use the word "trade" without wincing. It would also help fix our economy, our budget deficit, our unemployment rate and many other pressing problems.

China Holds $1.5 Trillion Of Our Debt

Trade by definition is a two-way street, buying from and selling to others. But China has accumulated $1.5 trillion by selling to us and not buying from us. This one-sided “trade” relationship has hurt or killed industries, companies, factories and jobs here in the United States, while forcing wages and living standards to drop. It has also placed China in an unhealthy position of power over us.

It is understandable that some American interests have benefited from this arrangement, becoming fabulously wealthy while at the same time strengthening their whip-hand by pitting China's low-wage rights-suppressed workers against American employees who have enjoyed all the protections and benefits of democracy. But it is not clear why our own government has gone along. It is obvious now to all that the one-way arrangement with China has hurt us, closed our factories, devastated our "rust-belt" communities, created vast income disparities and created terrible imbalances in the world's economy.

Placing Orders Here Fixes Both Economies

If China were to place orders tomorrow for $1.5 trillion in American-made goods, the effect on our economy, unemployment level, manufacturing base, budget deficit, state budget shortfalls, public-employee pensions, and a host of other problems would be immediate and dramatic.

And with our economy and wages restored, our own orders of goods from China would increase, boosting their economy, too. Their trade manipulations are costing them. Workers, facing labor-rights suppression and import restrictions from joining the world's economy, are increasingly restless. They face inflation and a pending financial crisis. And that huge cash reserve is increasingly at risk from the worldwide imbalances it causes. If China repositioned its policies from mercantilism to trade it would fix so many problems. So why don't they?

If Not Trade, What?

If China were using trade to build their economy they would use that $1.5 trillion dollar reserve to place orders here for American-made goods, boosting our economy, and boosting our ability to trade further with them. But they are not. They are sacrificing their own economic position to instead build their power position.

China is cleverly using the greed and power of our Chamber of Commerce, huge multinationals, Wall Street, etc, to manipulate our government into letting them to sell China the rope to hang us with. The more China continues these manipulations even at its own expense, the more we should perhaps be understanding these imbalances as a national security problem instead of a trade problem.

China isn't trading, it is seizing the means of production. It is using manipulations of trade to gather wealth and power to itself at the expense of the rest of the world. It is vitally important for US opinion leaders and policymakers to address this. We have been hypnotized by the word "trade" and the result is we are ignoring our national security. We are not minding our business.

It is time to tell them to start trading fair or we'll start minding our business with a big, fat tariff on imports so we can start paying down our deficits and rebuilding our manufacturing and jobs base.

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 11:28 AM | Comments (0) | Link Cosmos

May 6, 2011

China Tells US To Mind Our Own Business – And We Should

China's Vice Finance Minister lectured US administration officials about our debt and told us to mind our own business when it comes to China's currency manipulation. It is about time the United States started minding our own business by taking steps to protect our business and bring manufacturing and jobs back home.

Leading up to next week’s US-China Strategic And Economic Dialogue, China's Vice Finance Minister Zhu Guangyao butted into our business and told the US we should reduce our debt. He also told us to keep out of their business and not bother them about their currency manipulation. In the story China Paying ‘Close Attention’ to U.S. Debate on Increasing Debt Ceiling, Bloomberg News reports,

“We are paying close attention to the domestic discussion in the U.S. on debt and deficits,” Zhu told reporters in Beijing today. “We hope the U.S. can take effective measures toward fiscal reorganization just as President Obama suggested.”

[. . .] Zhu also said that currency policy is the “sovereign right” of every country.

China says currency manipulation is their "sovereign right." They say we should mind our own business. But they insist that "free trade" means America does not have a right to mind our own business and protect our own workers, companies and jobs.

It's Time To Mind Our Own Business

It is time to finally mind our business and take action. For decades the United States has refused to mind our business by pursuing "free trade" policies that allow other countries to engage in all kinds of trade schemes, while we just sit back and let them. Our leaders have not protected American workers, companies and jobs, instead sending them out of the country. We are told that the resulting "low prices" at Wal-Mart justify letting manufacturing move out of the country,

It is time for us to mind our business, and engage in our own sovereign duty to protect American companies, workers and jobs from the trade manipulations and schemes others engage in. It is time to hold countries like China and Germany accountable for the damage done to our businesses by their mercantilist trade policies. Trade barriers, currency manipulation, even outright extortion - demanding that our companies transfer proprietary technologies and processes if they want to do business selling into other countries - has cost us factory after factory, job after job and company after company.

As an example of how this has worked, in 2008 George Bush made the following argument for a trade treaty with Columbia,

In other words, the current situation is one-sided. Our markets are open to Colombia products, but barriers exist to make it harder to sell American products in Colombia.

I think it makes sense to remedy this situation.

President Bush wasn't saying he was going to do something about the one-sided arrangement and hold Columbia accountable, he was saying that since we just let Columbia do this to us, therefore we need to reward them with a free-trade treaty that gus American jobs even more! But why not just mind our business and stop it? All we really have to do is tell Columbia we are going to do what they do, until they stop doing that, start paying workers a decent wage and protecting their safety and rights.

Why China Really Cares

The fearmeisters say China is concerned that we might not meet our debt obligations. This is not at all what China is concerned about. China holds $1.15 trillion in Treasuries, accumulated as they sell goods to us, and don't let us sell goods to them. What they are concerned about is that our currency might drop, which will help bring factories and jobs back to America. From the Bloomberg story,

“Reduced U.S. fiscal spending may lead to a higher possibility of the U.S. dollar appreciation, therefore it helps China to maintain the value of the U.S. debt it holds,” said Li Jun, a Shanghai-based strategist at Central China Securities Holdings.

Their concern about our debt is really just about keeping their currency low, which gives goods made in China a huge price advantage in world markets.

Let Trade Be Trade

It is time to mind our business and mind our businesses. It is time to take action on mercantilism and currency manipulation. It is time to stop China and others from flooding our markets with goods made without the wage, safety and environmental protections that democracy provides.

Let trade be trade. Trade is supposed to be about trading. It is not supposed to just be a scheme to drive wages and living standards down by packing up factories and moving them across borders. It is not supposed to be "take a pay cut and a cut in benefits or we'll move your job." It is not supposed to be "well, we have something called globalization now so everyone should expect to be poorer and poorer every year."

Trade is supposed to be we buy what they make and they use the money we pay them to buy things we make. And then we use the money they paid us to buy things made there. And then they use the money we paid them to buy things made here. It is supposed to go on like that, and everyone does better and better. Better and better, not poorer and poorer.

It really is time to mind our own business and tell countries that can't sell to us until they meet our conditions. Which is just what they do to us.

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

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Posted by Dave Johnson at 6:27 PM | Comments (0) | Link Cosmos

May 5, 2011

China Summit: Let Trade BE Trade

Since China’s admission into the World Trade Organization we have been packing up our factories and sending them over there. We have been buying so many things made in China, but they have not been buying very many things made here, and the resulting “trade deficit” has gotten worse year after year. Everyone is afraid of what China might do with all those trillion$ in US Bonds they have accumulated. We are told to be afraid, that we need to cut Medicare and Social Security and unemployment benefits and all the other things We, the People do for each other, and learn to be poor. There is a better way to solve the problem: let trade BE trade.

Trade Should BE Trade

Trade is supposed to be about trading. It is not supposed to just be a scheme to drive wages and living standards down by packing up factories and moving them across borders. It is not supposed to be "take a pay cut and a cut in benefits or we'll move your job." It is not supposed to be "well, we have something called globalization now so everyone should expect to be poorer and poorer every year."

Trade is supposed to be we buy what they make and they use the money we pay them to buy things we make. And then we use the money they paid us to buy things made there. And then they use the money we paid them to buy things made here. It is supposed to go on like that, and everyone does better and better. Better and better, not poorer and poorer.

Let Me Take Your Order, Please

So here is an idea for next week’s US-China Strategic And Economic Dialogue. Last year we "raised issues" and signed various memorandums of understanding but nothing changed. This time we have to stop putting off what has to be done. This time, let’s tell China that from now on trade will be trade.

Here is what I mean:

When the meeting begins Secretaries Clinton (State) and Geithner (Treasury) and Locke (Commerce) should slide a big stack of order forms across the table and say, "Your turn. Let us take your orders now, please."

That is what China can do with all of those US Bonds they have been accumulating. They can start trading, which means buying things from us. And we should say that those things should be things, not companies or farms or real estate or more factories. Our government should make it clear that it is their turn. It is time for trade to BE trade. And if not, we will put a big tariff on goods made in China until it is.

Conditions

We need to put a few conditions on the deal. Just like they do. They have not been trading with us, they have been seizing the means of production. There is a long list of schemes and manipulations and conditions China uses to rig the game, and it is time to stop this nonsense.

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

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

Do What They Do

In our scenario our administration has handed a stack of order forms to the Chinese delegation, and said, "We're ready to take your order now." Tell them the deal for cashing in those bonds -- and continuing to sell to us without big tariffs -- is that China has to actually trade with us, and spend all of those accumulated bonds on goods made here. (I guess if they can tell Social Security recipients that their bonds have been spent they can set conditions on China cashing in theirs... right?)

We don't make that here anymore, you say? Well, here is a solution to that, too. We can just do what they do. We can say, you have to build a plant here that does that. And you have to "partner" with an American company before you can even do that. And you have to transfer your technology to that company. And after a few years your company goes away and the factory and the technology and the market will be ours.

Believe it or not, that is what they say to our companies, and for far too long our government has let them get away with that. So along with the stack of order forms, they can tell China that we are going to start doing what they do. Go down the above list, point by point, and just do what they do. Leave out the labor-suppression and environmental degradation parts.

We Can't Just Go Back To The Old Way

There are huge interests here and in China who have done very well because of the "trade" policies of recent years. With the economic crisis heading into the past they are pushing very hard to just go back to the way things were. Of course they are. And they are very, very powerful. The Chamber of Commerce runs hundreds of millions of dollars of campaign ads urging us to just go back to doing the things that brought them so much wealth and power. In China those who accumulated great wealth and power from these schemes are fighting hard to just keep it going. The imbalances have been just great for them, and they use the resulting wealth and power to push for more.

But the resulting imbalances have been terrible for everyone else in the world. The imbalances have drained wealth and power from everyone else in the world. Can everyone else in the world overcome this or are we all helpless against the onslaught?

Or do we have to wait for the next crisis to completely destroy everything and rebuild from there?

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 5:51 PM | Comments (1) | Link Cosmos

Democrats' Plan Makes Jobs In America

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.

Some of the Make It In America bills are:

Currency Reform for Fair Trade Act (Reps. Levin and Tim Ryan, H.R. 639):Levels the trade playing field by holding accountable countries that create an unfair trade advantage by manipulating their currency.

National Manufacturing Strategy Act (Rep. Lipinski, H.R. 1366): Directs the president to work with industry, labor leaders, and other stakeholders to develop a national strategy to increase manufacturing.

Build American Jobs Act (Rep. Levin, H.R. 922): Build America Bonds to Create Jobs Now Act (Rep. Connolly, H.R. 11): Extends the Build America Bonds program, provides additional funding for the Recovery Zone bonds program, and makes improvements to existing bond and credit programs to help states and local governments leverage private capital to create jobs today and build the infrastructure that is the backbone of future economic growth.

National Infrastructure Development Bank Act (Rep. DeLauro, H.R. 402): Establishes a wholly-owned government corporation to facilitate efficient investments in and financing of infrastructure projects—from leading-edge broadband networks and energy delivery systems to modern ports—that foster economic development and keep America competitive.

Innovative Technologies Investment Incentives Act (Rep. Van Hollen): Accelerates innovation by providing a 25% tax credit for qualified equity investments in eligible high technology and biotechnology small businesses.

Build a 21st Century Surface Transportation System: Enact a Surface Transportation Authorization bill to create a modern and efficient transportation system that facilitates trade and industry.

Workforce Investment Act: Our economy is only as strong as the people who work to grow it. The American workforce investment system is supported by a partnership of educators, workforce development professionals and the business community who work together to ensure the vitality of local economies. A robust reauthorization of WIA will ensure that workers who seek opportunities in a new field or new opportunities within their own field have the support they need.

The Keep American Jobs from Going Down the Drain Act (Rep. Sutton, H.R. 1684): Gives preference to U.S.-made goods and materials for use in the installation, replacement, and improvement of drinking water and wastewater infrastructure projects.

There are clean energy manufacturing, energy efficiency and alternative energy bills, as well.

Specifics, Plans, Details

This is not a vague set of platitudes and lobbyist-written slogans (see below). These are several specific, targeted bills that create jobs and fix problems that have hindered and are hindering job grown and competitiveness.

Whip Hoyer appeared on on CNBC to discuss the Make It In America plan.

And today in a formal unveiling of the plan for the 112th Congress, Hoyer said,

"The Make It In America agenda is about investing in this country’s proud tradition of making things. Make It In America means creating the conditions for companies to make products here, innovate here, and hire workers here—and the conditions for America to have the best-trained workforce in the world. This agenda is founded on the conviction that when we make more products in America, more families will be able to Make It In America, as well.

The Republican Plan

Senate Republicans Tuesday released their own plan. Apparently transcribed from a Chamber of Commerce lobbyist memo of slogan suggestions, they say their plan will boost the economy. See if you can guess what their plan is. Hint: the same plan that "boosted the economy" from 2001-2009: tax cuts for the rich, get rid of unions, get rid of consumer and employee protections and other points that led to a decade of no job growth, low economic growth, wage decline, corruption, concentration of income at the very top and culminated in a financial collapse that brought the world's economy down and left us with extreme unemployment and trillion-plus deficits. They have a Seven-Point-Plan to do all that again, but more.

Here is the Seven-Point-Plan, translated from lobbyist wording to regular English:

Cut taxes for the rich

Cut regulations that protect consumers, employees and the environment

Cut spending on the things We, the People (government) do for each other, including spending on infrastructure and education

Get rid of unions

More trade agreements to increase offshoring

Unleash oil companies to do whatever they want, including more unregulated drilling in the Gulf of Mexico

Block citizen access to courts for redress when corporations harm them

Unleash big insurance companies and block states from regulating them

Compare the specific detailed set of bills offered in the Make It In America plan with the Seven-Point-Plan offered by Senate Republicans. Seriously, click through and read the Republican "plan." And check the link to see for yourself that it really isn't another parody put out by the Onion.

Make It A Movement

The Hill's Brent Budowsky, in Made in 
the USA, says we need a Make It In America movement,

Let’s begin a national wave movement for Americans to buy American products, sold by American companies, made by American workers, to create American jobs and lift the American economy.

Tired of high unemployment, exported jobs, big deficits and low wages? Here is the answer. Let’s kick some butt, take some names, wave some flag and rise as a nation to buy some products made by red, white and blue American workers!

Throughout the land there is a fervent patriotism waiting to be tapped and a patriotic capitalism waiting to be born to lift the nation and mobilize Americans, from Tea Party voters to union workers, from the inner-city poor to rural America, from small businesses to American women and our veteran heroes.

Click through to read the rest -- some of the comments are great, too.

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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April 28, 2011

Royal Wedding Of Austerity And Trade Deficits Is Killing Our Economy

Sometimes you can just see glimmers of something through the DC brain fog, other times it becomes so clear that you can't ignore it. The current DC brain-fog motto is, "if it doesn't work, do it more." Today's GDP-growth report shows that austerity isn't working, so the geniuses in DC want to do it more. And they say, "government just gets in the way of business" so we send our businesses out on their own to compete with governments, and the resulting trade deficits eat our jobs.

Cutbacks Cut Growth

How long ago was it that DC was all about cutting taxes for the rich even more? And how many minutes after that was DC all about cutting budgets - "austerity" - because of the resulting budget deficits? So instead of the jobs that will fix the deficits the government gives us cutbacks -- cutbacks in taxes on the rich, cutbacks in construction projects, cutbacks in teachers and police and other government functions, cutbacks in the things We, the People do for each other.

We watch as England, Greece, Ireland and other countries try cutbacks - austerity - to get out of slow growth and their growth gets slower as a result. The US tries it, too, and our growth gets slower, too.

The first quarter growth figures are out: 1.8% for the first three months of the year,

Total output grew at an annual pace of 1.8 percent from January through March, the Commerce Department said Thursday, after having expanded at an annual rate of 3.1 percent in the fourth quarter of 2010.

But the DC fog machine blames the weather, not austerity.

Higher commodity prices and winter blizzards that shuttered businesses and delayed construction were among the main causes of the slowdown.

Our growth slows because of austerity. So they blame the weather and insist on more austerity. Because austerity "gets government out of the way" of the wealthy few and their accumulation of the rest.

Trade Deficit

As the economy recovered a bit and people started to buy a few more things , the things came from elsewhere, and the money and jobs just left the economy. Without government policies to deal with it, our trade deficit will continue to get even worse, costing us even more jobs and growth and draining even more money out of the country.

Germany runs a trade surplus, so German unemployment is at its lowest level in 19 years. Headline: German Unemployment Declines to 19-Year Low as Export Boom Drives Demand,

German companies are hiring as they increase production to meet booming export orders, fueling domestic demand. ... German factory orders and industrial production rose more than economists predicted in February. ... More than a third of Germany’s medium-sized companies plan to take on staff in the second quarter ...

Germany also pays workers more than we do, gives them lots and lots of vacation time, health care, pensions, rights on the job -- all the things that our leaders say hurt our businesses.

Our leadership is making every effort to return to the old economy that caused the crisis. This is because those who benefited from that economy are still in control of the system, still using their great wealth to get what they want, damn the consequences for the rest of us. (Hint, the first link is to a post titled, Nine Pictures Of The Extreme Income/Wealth Gap, and the second is a post titled, Corporate Propaganda Response To Town Hall Medicare Anger.)

Contractionary Policies Cause Contraction

Conservatives say so many silly things that are proven wrong by the simplest fact-checking -- cutting taxes increases revenue, taxes take money out of the economy, tax cuts grow the economy -- and the silly thing they say that is hitting us now: cutting back causes expansion.

Huh?

Here is what really happens in the real world. Following are a few charts showing the effect of the "stimulus" and what has happened since the stimulus ran out.

First, manufacturing. See the plunge through 2008? That's the collapse. See the sharp change to an upward direction through 209? That's the stimulus. See the leveling off since? That's the end of the stimulus.

Now look at the following chart of job growth. See the downward slope, when we were losing more and more jobs every month? That's the collapse. See the upward slope, when we were losing fewer jobs every month, up to where we were actually gaining a bit? That's the stimulus. See the leveling off, standing still through 2010, going into 2011. That's the end of the stimulus.

You can see in front of your face what works and what doesn't. We should be doing what works, not what doesn't. Why did I even have to write that sentence?

Solutions

As I wrote the other day, we have to invest in rebuilding our infrastructure if we want to continue to be competitive in the world, so right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.

We need to retrofit our economy to be energy efficient, so right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.

We need more teachers, more police, more firefighters, more judges, more scientists, more social workers, more park rangers, more noise abatement and met and safety and environmental and other kinds of inspectors and so many other things that We, the People do for each other -- so right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.

So right there are millions of jobs that need doing. And the payoff from doing that pays for doing that.

But wait, there's more:

National Manufacturing Strategy

The idea of a manufacturing strategy or industrial policy is hardly a radical concept. Alexander Hamilton constructed America’s first industrial policy in 1791. Setbacks during the War of 1812 due to a lack of domestic capacity to build naval vessels and military equipment cemented the determination of the federal government to grow manufacturing, a policy that continued until the end of World War II.

To solve the trade deficit and create millions of good-paying jobs (like in Germany) we need a national manufacturing strategy -- a government-sanctioned plan to ensure that U.S. manufacturers remain competitive in the global marketplace. Click this link for a few examples of countries that have national manufacturing strategies.

Following is the Alliance for American Manufacturing's plan:

Expand American Production, Hiring, and Capital Expenditures

Establish a manufacturing investment facility to leverage private capital for domestic manufacturing

Expand and make permanent clean energy manufacturing tax credits and industrial energy efficiency grants to allow America to lead on green job creation

Link federal loan guarantees for new energy infrastructure projects, including nuclear, wind, solar, other renewable energy sources, as well as the smart grid, with expanding domestic supply chains

Adopt immediate, up-front expensing rules for plant and equipment to spur capital expenditures

Enforce our trade-legal Buy America and other domestic procurement requirements to prevent leakage of tax dollars overseas

Invest in America’s Infrastructure

Create a National Infrastructure Bank to finance high-value, long-term infrastructure projects, such as roads, bridges, high-speed rail, and other needs

Enact a robust, multi-year surface transportation infrastructure program of at least $500 billion financed exclusively by fuel taxes

Enhance Our Workforce

Refocus on technical and vocational education, providing a seamless program that bridges high school and post-secondary education to produce the next generation of highly skilled manufacturing workers

Reward companies that are investing in effective skills and training programs for their workers

Make Trade Work for America

Keep America’s trade laws strong and strictly enforced to provide a level playing field for our workers and businesses

Penalize and deter mercantilist nations such as China that manipulate their exchange rates and implement non-tariff barriers to gain an unfair trade advantage

As the Administration works to double exports, expand the goal to include balancing our trade account so that gains in exports are not overwhelmed by increased imports

Rebuild America’s Innovation Base

Make permanent the research and development tax credit and enhance it to incentivize commercialization and production in America

Focus federal investments in new technology and workforce training on promoting regional clusters of innovation, learning and production

And finally,

It Never Hurts To Quote The Boss

Press release

WASHINGTON’S FIXATION WITH AUSTERITY IS HURTING THE ECONOMY Campaign for America’s Future Urges Lawmakers to Put Job Creation First

Washington, DC – Campaign for America’s Future’s co-director Robert Borosage commented on today’s economic indicators. Borosage said:

“The first quarter growth figures -- 1.8% for the first three months of the year -- are an ominous reminder of the reality that Washington has forgotten.

“This economy is in trouble. For most Americans, the recession has not ended. Growth is painfully slow. Unemployment remains high. Home values are dropping; gas prices are rising; wages are not keeping up.

“Despite this -- and despite the warnings of economists -- Washington, driven by the new House Republican majority, has turned prematurely to austerity. Contractionary policies cause contraction. They will impede any recovery, and slow an economy that is barely moving.

“Washington offers no answer because it is fixated on the wrong question. The question is how do we get the economy going and put people back to work -- not simply how do we balance our books? Every deficit reduction plan -- from the President's to the House Republican's to the Congressional Budget Office projections -- assumes faster growth than we saw in the first quarter.

“The most powerful deficit reduction measure is to put people to work, turning them into consumers and taxpayers. If growth and unemployment stay at this level, deficits will rise, not fall. The White House and the Congress should turn to measures to put people to work, to stave off debilitating layoffs of teachers and police at the state and local level, instead of ignoring the reality that Americans are struggling with every day.”

Sobotka, from The Wire:

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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April 14, 2011

The Deficit America Has Forgotten -- And Is Eviscerating The Middle Class

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

We can service each other till the cows come home but if we don't start making more things here and selling them there more and more jobs will be lost, more and more communities devastated and our standard of living will continue to drop. Everyone is focused on the budget deficit. But here's the thing: the trade deficit is the jobs deficit and the jobs deficit is the budget deficit.

The Trade Deficit

Before "The Reagan Revolution" America made things and sold them to the rest of the world. Since Reagan America borrows money to buy things made somewhere else. And since Reagan we've seen the whole game play out: wages stagnate, savings plunge, debt soars, growth slows all while wealth concentrates at the very top.

And it just goes on. The trade deficit last month was above forecasts, and a big jump from last year:

The U.S. trade deficit with China widened to $18.8 billion in compared with $16.5 billion in the same month last year. The government also revised the deficit in January to $47 billion from $46.3 billion.

The February monthly trade deficit fell, but only because the decline in exports was less than the decline in imports.

The Big Change

In the early 80's conservative trade policies designed to pit American workers against low-paid, exploited workers in non-democratic countries transformed the United States from the largest creditor nation to the largest debtor nation in just a few years, and it has only gotten worse since then:

Democracy vs Thugocracy

America is supposed to be a democracy of We, the People. Democracies set up protections for their people that protect wages, rights, safety, dignity and the environment. Conservative "free trade" agreement allow companies to get around the borders of our democracy, pitting their employees against the exploited people living under thugocracies with few or no protections at all. This has created a "race to the bottom" for our wages and benefits. Of course our workers cannot compete against workers who are not able to fight for better pay and benefits. This is the reason we fought to build and preserve our democracy.

China

Instead of fixing our trade problems, we have gone back to the same old same old. Especially vis-a-vis China.

Alliance for American Manufacturing Statement on Latest Monthly Trade Figures

The monthly U.S. international trade deficit in goods and services was $45.8 billion in February. The goods trade deficit with China was $18.8 billion.

--Year over year, the 2011 trade deficit is running far higher than 2010. January-February 2010 clocked in at $74.3 billion, while the first two months of 2011 have already reached $92.7 billion.

--Year over year, the goods trade deficit with China is also running ahead of 2010. January-February 2010 totaled $34.8 billion, while the first two months of 2011 have already reached $42.1 billion.

--Of particular note is that China ($18.8 billion) now accounts for 70% of our overall monthly non-oil goods deficit ($27.0 billion).

Said Scott Paul, Executive Director of the Alliance for American Manufacturing (AAM):
“Washington has focused a lot on budget deficits this year, but scant attention has been paid to the trade deficit. That must change. The trade deficit serves as a drag on GDP growth and requires financing, just like any other debt. While only 9.5% of our national debt is financed by China, that nation is responsible for fully 70% of our trade deficit in non-oil goods.”

China, China, China

Over and over our trade relationship with China demonstrates so many things we are doing wrong in the world competition. Among so many other problems:

- We let them manipulate their currency rate which means their goods have a cost advantage of as much as 40% going out the gate, before other factors come into account.

- Their government subsidizes and promotes key industries. We don't have an industrial policy.

- Their workers are not free to organize and push for better wages, benefits and working conditions. (Ours aren't either, but are more able than theirs.)

- They restrict and otherwise discourage imports

- They follow "Buy China" policies, we do not have "Buy America" policies

- Etc., etc., etc.

The Trade Deficit Is The Jobs Deficit

Our trade deficit is our jobs deficit. When you close the factory we can't make a living. When you move the jobs over there the jobs aren't here. And the people who could have those jobs are collecting unemployment instead of paying taxes and buying cars, houses, food, clothes, saving etc.

American Prospect, The Plight of American Manufacturing,

Since 2001, the country has lost 42,400 factories, including 36 percent of factories that employ more than 1,000 workers (which declined from 1,479 to 947), and 38 percent of factories that employ between 500 and 999 employees (from 3,198 to 1,972). An additional 90,000 manufacturing companies are now at risk of going out of business.

Giant Sucking Sound

So we closed our factories (trade deficit) and shipped the jobs to other countries (jobs deficit) where they pay less and don't protect the environment. Again, from The Plight of American Manufacturing,

Long before the banking collapse of 2008, such important U.S. industries as machine tools, consumer electronics, auto parts, appliances, furniture, telecommunications equipment, and many others that had once dominated the global marketplace suffered their own economic collapse. Manufacturing employment dropped to 11.7 million in October 2009, a loss of 5.5 million or 32 percent of all manufacturing jobs since October 2000. The last time fewer than 12 million people worked in the manufacturing sector was in 1941. In October 2009, more people were officially unemployed (15.7 million) than were working in manufacturing.

Millions and millions of good-paying jobs. Gone.

The Jobs Deficit IS The Budget Deficit

People with jobs pay taxes. People with jobs don't collect unemployment benefits. A huge component of our budget deficit is the result of unemployment, much of it caused by the trade deficit.

Of course there is the core component of the budget deficit that was caused by tax cuts for the wealthy, the huge increase in the military budget and the interest on the borrow for these. But the big increase since the financial crisis is due to the recession and restoring our manufacturing base addresses much of this. People with good manufacturing jobs pay mortgages and buy houses and cars and shop at stores and make the economy work. And when thrry buy things made in America the money stays in America.

What We Can Do

This is from a year ago -- yes, a year, with nothing done: It Is Time To Put Our Foot Down: Ten Steps We Can Take To Stop Closing Factories And Eliminating Jobs,

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

Those are just a few things we can do.

And, to close, Frank Sobotka:

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March 25, 2011

Lobbyists Admit Corporate Tax "Holiday" Didn't Work, But Demand It Again

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

The usual suspects are trying to sell us on yet another scheme to keep from paying their taxes. This one is called a repatriation tax holiday—a huge cut in the tax rate on money companies are holding outside of the country. We did this before and it didn't work out so well for us, so of course they want to do it again.

Multinational corporations hide profits in offshore shell companies to avoid taxes. Here is how the scheme works:

One shell company manufactures in China or another low-cost country, sells the products to a shell company "based" in a tax-haven like the Cayman Islands at a low price so the manufacturer doesn't show much profit. The tax-haven company immediately sells it to their U.S. company at a very high price, so the tax-haven shell company gets most of the profits.

Then the products are sold here for not much above what was paid, so very little profit is made by the U.S. company. The tax-haven shell company reports all the profits as a result of selling TO but not IN the United States. Low profits here equals low taxes here.

As long as the actual money isn't brought into the U.S., they don't pay U.S. taxes on it. So after years of this scheme a ton of cash is sitting in these tax-haven countries, and the wealthy few want to be able to use it to buy even more jets, houses, Maybachs, etc. And, of course, they don't want to pay their taxes.

So of course, the inevitable "business groups" are trying to get Congress to pass a "repatriation tax holiday" on the profits they are holding outside of the country.

From The Hill, Business groups press Treasury to shift on corporate tax holiday:

The U.S. Chamber of Commerce and the WIN America Campaign, the business coalition ... flatly state that U.S. multinationals have little incentive now to bring what they say is roughly $1 trillion in revenues back home and that allowing them to do so at a reduced rate would help stimulate the American economy.

They Always Say It Creates Jobs

The "business groups" argue that bringing the money back would "stimulate the economy" and create jobs. They say everything that helps the rich get richer creates jobs. But then it doesn’t create jobs. Then they say the next thing will create jobs so we go fo it, and then that doesn’t either. Meanwhile they get richer and richer, and we get poorer and poorer and need even more jobs.

Been There, Done That

Here's the thing, we tried this in 2004. "Business groups" argued that bringing the money back would cause them to invest in the United States—and they got what they wanted. We allowed corporations to bring profits back to the U.S. at a tax rate of 5.25 percent, instead of the top corporate rate of 35 percent.

How did that work out for the economy and jobs? Not so well. Alain Sherter, in Sure, a “Tax Holiday” on Overseas Profits Is a Great Idea — If You Hate America, looked into this and writes,

The nonpartisan Congressional Research Service found that the companies that got the biggest tax breaks following the 2004 rate cut went on to eliminate jobs over the next two years. Instead of hiring, they mostly used the repatriated funds to repurchase stock or pay dividends — and to expand outside the U.S.

But it did provide a huge incentive to do even more offshoring of profits and jobs, because this scheme worked and the money came back in a tax holiday. So of course they are proposing to do it all over again. Bring the profits back untaxed, and then start the cycle again.

Sherter points out this really does benefit a very few at the expense of the rest of us, including other companies,

Repatriation holidays also favor a handful of huge corporations at the expense of other companies, especially businesses without operations around the globe. In 2004, a total of five companies reaped more than one-quarter of the benefits from the tax holiday, while 15 firms got more than 50 percent. To pay for such a cut without raising the deficit, meanwhile, the U.S. would have to increase taxes on other U.S. businesses or make even deeper cuts in already tight federal spending.

Tom Sullivan posted his own review of repatriation on OurFuture.org in 2009:

Washington Post business columnist Allan Sloan reacted to the [American Jobs Creation Act] in 2006, saying, “Companies don't add jobs based on one-time chances to repatriate money from overseas.”

And they didn’t, according to Finance Committee Chairman, Sen. Max Baucus (D-MT), who argued against renewing the tax holiday. “The data shows that the last time we enacted something like this there were virtually no new jobs created in the United States. None.” Baucus continued, “Companies used this money for other purposes.”

North Dakota Democrat, Sen. Byron Dorgan rebranded the proposal: “There’s another phrase for repatriation; it’s called rewarding the outsourcing of jobs.”

The Cost

U.S. PIRG, in Tax Shell Game: The Taxpayer Cost of Offshore Corporate Havens says,

Key Findings

• The cost to taxpayers due to the use of offshore tax havens is as high as $100 billion per year - $1 trillion over 10 years. U.S.-based individuals and corporations who pay taxes on their revenues must shoulder this burden for those who do not.

• Taxpayers must shoulder the burden – U.S. PIRG Education Fund calculated each state’s taxpayer contribution proportional to their yearly federal contribution to make up for the $100 billion lost. [For California taxpayers, that figure was $11,679,735,788; for Texas, $8,653,820,2590; for New York, $8,432,456,612; for Florida, $4,932,770,661.]

• Our allies in other nations are also calling for decisive action to reign in these abusive tax havens. The Group of 20 (G-20), which provides a forum for world financial leaders to promote global economic stability, recently issued a communique providing for sanctions against tax haven countries.

Business Groups - Or People?

Corporate wealth is really just personal wealth, held at arms length from the person to mask what is going on. The wealthiest 1% own 50.9% of all stocks, bonds, and mutual fund assets. The wealthiest 10 percent own more than 90 percent. The bulk of us own less than 1 percent. When you hear about "corporate" holdings, think about this chart from the Working Group on Extreme Inequality:

So with this tax holiday proposal we're once again talking about benefits that go to the top few percent, at the expense of the rest of us. At the expense of schools, roads, police, firefighters, nurses, roads, rail, health care and all the things We, the People try to do for each other.

These days we seem to always be talking about benefit to the top few percent, at the expense of the rest of us. Funny how that works.

• Cut back on the things We, the People (government) do for each other, so the top few can have even more.
• Cut Social Security -- the money employees have set aside all their lives -- to preserve the tax cuts that went to the top few.
• Get rid of the retirement plans of state government employees so the top few don't have to pay state taxes.
• Get rid of unions so the top few don't have to pay good salaries or provide benefits.
• Cut back on etc. so the top few get more ...
• Cut back on etc. so the top few get more ...
• Cut back on etc. so the top few get more ...
• Cut back on etc. so the top few get more ...

Solutions

Citizens For Tax Justice has a report on this problem, Congress Should End "Deferral" Rather than Adopt a "Territorial" Tax System, and they offer a simple solution: tax it.

Some corporate leaders are pushing Congress to adopt a "territorial" tax system, which would exempt the offshore profits of U.S. corporations. Congress should move in the opposite direction and adopt a "pure worldwide" tax system, which taxes all profits of U.S. corporations the same while providing a credit to avoid double-taxation.

Believe Them

The other day I had a conversation with Bill Parks, who has written here about The Buffett Balanced-Trade Idea. He offered a practical modification of this idea. He proposed that we should just believe companies when they file their accounting reports that list where the sales are, then taxing the percentage of their profits according to that ratio of percentage of sales.

Here is how that would work in the tax -avoidance scheme described above. Remember, they are reporting that the tax-haven country pays a low price and the U.S. pays a high price. The result is high profit sales TO the U.S. but not IN the U.S. So fine, sales to the tax-haven country is a low-percentage of their profits, to the US a high percentage so the US then collects the same dollar ratio of taxes.

Tax-avoidance case: 90% of profits are reported to be made by selling from Cayman Islands shell company TO the U.S.

Tax-collection result: Therefore 90% of taxes on profits have to be paid to the U.S.

Putting American companies to work for us is a better solution than giving them a holiday.

Other resources:

Bloomberg: Tax Holiday for $1 Trillion May Lure Back Profits Without Growth

Center for American Progress: Tax Expenditure of the Week: Offshore Tax Deferral

Chuck Collins, Senior scholar, Institute for Policy Studies, Pay Up, Corporate Tax Dodgers

Phineas Baxandall and Nicole Tichon, PIRG & Tax Justice Network USA, In The Public Interest: A (Non)Taxing Issue

Nicholas Shaxson: Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens

US PIRG: Who Slows the Pace of Tax Reforms?

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Posted by Dave Johnson at 7:56 AM | Comments (0) | Link Cosmos

Why Move Jobs From Democracies To Thugocracies?

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

"Free trade" treaties like NAFTA have wiped out entire regions of our country and left entire segments of our population without good-paying jobs -- or in so many cases with no jobs at all. And they have had similar results with our trade "partners." We can see that now. So why are we even talking about doing more of these treaties?

Democracy vs Thugocracy

Democracies set up protections for their people. Democracies protect wages, rights, safety, dignity and the environment. The so-called "free trade" agreements we have been getting into allow companies to get around the borders of our democracy, pitting their employees against the exploited people living under thugocracies with few or no protections at all.

But these treaties have brought vast wealth to a very few, and maybe that was the point all along. Now with the NAFTA and China trade record clear, the DC/corporate elite and Wall Street/Chamber of Commerce multinationals are pushing new trade treaties with South Korea, Columbia, Oman and Panama. Their goal seems to be to make the rich even richer while making things even worse for the rest of us.

NAFTA - "Case Study In Failure"

Ian Fletcher writing at Huffington Post in, More Free Trade Agreements? When NAFTA Failed?,

How have our past trade agreements worked out? Above all, how's the grand-daddy of them all, NAFTA, doing?

Unfortunately, NAFTA is a veritable case study in failure.

How is NAFTA working out for us?

For the four years prior to NAFTA's implementation in 1994, America's annual deficit with Canada averaged a modest $8.1 billion. Twelve years later, it was up to $71 billion.

Our trade with Mexico showed a $1.6 billion surplus in 1993 but by 2010, our deficit had reached $61.6 billion.

Fletcher cites the Economic Policy Institute to detail the dramatic loss of jobs we have suffered. But not just jobs, also wages.

NAFTA has eliminated some 766,000 job opportunities--primarily for non-college-educated workers in manufacturing. Contrary to what the American promoters of NAFTA promised U.S. workers, the agreement did not result in an increased trade surplus with Mexico, but the reverse. As manufacturing jobs disappeared, workers were down-scaled to lower-paying, less-secure services jobs. Within manufacturing, the threat of employers to move production to Mexico proved a powerful weapon for undercutting workers' bargaining power.

And how is NAFTA working out for Mexican workers? It turned low-wage workers into even-lower-wage workers.

In reality, the income gap between the United States and Mexico grew (by over 10 percent) in the first decade of the agreement. This doesn't mean America boomed; we didn't. But Mexico slumped terribly.

In NAFTA's first decade, the Mexican economy averaged 1.8 percent real growth per capita. By contrast, under the protectionist economic policies of 1948-73, Mexico had averaged 3.2 percent growth.

... Mexican workers can often be hired for less than the taxes on American workers; the average maquiladora wage is $1.82/hr. The maquiladora sector is deliberately isolated from the rest of the Mexican economy and contributes little to it. Workers' rights, wages, and benefits are deliberately suppressed. Environmental laws are frequently just ignored.

Mexican agriculture hasn't benefited either: NAFTA turned Mexico from a food exporter to a food importer overnight and over a million farm jobs were wiped out by cheap American food exports, massively subsidized by our various farm programs.

[. . .] Between 1990 and 1999, Mexican manufacturing wages fell 21 percent.

How have our other free-trade agreements worked out? Fletcher again, (please go read his entire post, and take a look at his book, Free Trade Doesn't Work: What Should Replace it and Why, as well)

FTA is not America's only free trade agreement, of course. But our other agreements tell similar tales. We have signed 11 since 2000: with Australia, Bahrain, Chile, Colombia, Jordan, Korea, Oman, Morocco, Singapore, Panama, and Peru. (El Salvador, Nicaragua, Honduras, Guatemala, and the Dominican Republic were lumped together in the Central America Free Trade Agreement or CAFTA.) Every agreement but one has coincided with greater American deficits.

Not such a great record. Let's not do more of this.

A Better Way

Trade doesn't have to be used to pit people against each other. It can be used to lift each other up. We can instead negotiate treaties to demand that the thugocracies offer better wages and protections, or they can't sell to us. Or if they do sell to us as add a tariff that undoes any advantage they get from mistreating their people, and use the money to strengthen our infrastructure and competitiveness in world markets. We can use trade to lift the world for the benefit of all instead of to exploit the world for the benefit of a few.

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Posted by Dave Johnson at 7:53 AM | Comments (0) | Link Cosmos

March 18, 2011

Cutting Government Creates Jobs Like Cutting Taxes Increases Revenue

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

A "report" from Republican staff of the Joint Economic Committee says that the path to job creation is cutting ... the very things that create jobs. This is like saying that cutting taxes increases revenue. We know how that worked out, and the job-consequences of budget cuts are going to be just as disastrous.

Sometimes you can cut through ideology by looking at what actually happens in the real world. Reagan cut taxes: huge deficits resulted. Clinton raised taxes, the deficits went away. Bush cut taxes, we went back to huge deficits. And you can see the same thing when you look at government spending and jobs. England and Greece are trying austerity, and their economies are sinking as a result. In 1937 the United States learned this lesson, succumbing to deficit cutting which choked off the recovery from the depression. On the other hand, the "stimulus" boosted the economy, held off a depression and created millions of jobs -- but not enough jobs to overcome the Bush years. Here is the chart -- note the obvious effect of the stimulus and of the end of the stimulus on the jobs picture:

Cut Cut Cut To Grow Grow Grow?

Republicans say that cut cut cut leads to grow grow grow. Their prescription is to cut taxes to "reduce uncertainty" which they say will result in job creation. Never mind that Clinton raised taxes and then the economy boomed. Then Bush cut taxes and then gave us the worst job-creation record in decades, even before the recession started! From The Hill, GOP study backs 'cut and grow' but says new jobs could take time,

House Republican leaders on Tuesday released a study that they said shows their "cut and grow" strategy will boost the economy.


The study argues that reducing uncertainty about future taxes will increase household spending and business investment, spurring growth and hiring.

House Majority Leader Eric Cantor (R-Va.) said the report shows "less government spending means more private sector jobs."

Just how will "certainty" about tax cuts create jobs?

The study argues that “non-Keynesian effects” result from government budget cuts. It says households expecting future taxes to pay for government spending will purchase more homes and durable consumer goods once uncertainty about future taxes is erased.

Right, knowing that taxes will be lower, people will go out an "purchase more homes." The people funding the Republicans will just go buy an 8th house with their tax savings. And maybe a Maybach or two. Plutonomy in action!

No Path To Jobs

Laying off teachers and firefighters is not the path to jobs. Cutting government cuts the very things that nurture the soil in which business can thrive. We need a modern infrastructure to compete in world markets, but they are cutting back on infrastructure spending. We need a well-educated population to grow the economy, but they are cutting back on education.

Cutting is clearly not the path to more people having better-paying jobs: Congress takes aim at jobs program,

Becky Thompson of Sioux Falls turns 72 next month, and she is quietly grateful that she has a job working in the computer lab at Experience Works, an agency that helps older workers find employment.

. . . But now she and other older workers are worried that all this - the training, the support, the camaraderie - will disappear in the next round of budget cuts.

That's because more than 60 percent of Experience Works' budget comes from the Senior Community Service Employment Program, the only federally funded job training program for low-income seniors - and one of many programs targeted for reduction in the Republican spending bill that passed the House last month.

Economists, Analysts, Everyone Says Budget Cuts Will Kill Growth

Isaiah Poole summed it up in, More Than 300 Economists Repudiate Right-Wing "So Be It" Economics,

Today the Economic Policy Institute and the Center for American Progress jointly released a statement signed by nearly 320 economists from around the country, including Nobel Prize winners Kenneth Arrow and Eric Maskin, former Vice Chairman of the Board of Governors of the Federal Reserve System Alan Blinder, and former Chair of the President's Council of Economic Advisers and Director of the National Economic Council Laura Tyson.

That comes a day after Mark Zandi of Moody's Analytics released a report that estimated the House budget cuts would result in a loss of 700,000 jobs by 2012. That finding evoked a "so what?" from House Majority Leader Eric Cantor that was remarkably in line with the dismissive "so be it" comment that House Speaker John Boehner made earlier in February in response to concerns that budget cuts would result in job losses.

If people had good jobs that paid well the deficit would be a heck of a lot lower than it is. People would be paying taxes instead of collecting unemployment. Cutting the things that create jobs is certainly not a path to creating jobs. England is learning this, our Congress is not.

No Job Creation Programs At All

Republicans have held the Congress for months but have not introduced a single job-creation program. In GOP Bait And Switch On Jobs, Anne Thompson lays it out,

,

The House Republicans have developed a track record of bait and switch when it comes to their approach to job creation. Last week, House Republican leadership released a PowerPoint by Congressman Paul Ryan that they are using to educate the Republican Caucus on their top policy priorities. Ryan laid out the “Jobs Deficit” as the number one challenge facing America in his very first slide. Yet he failed to focus on jobs until the very last slide, which reads: “Keep taxes low; spur job creation and growth.” Not quite the robust plan we need to put millions of Americans back to work.

Is There At Least A Secret Plan?

Is appears -- and this kook "study" confirms -- there is no real plan for jobs. But is there at least a secret plan in operation?

Secret plan? When they said that cutting taxes increases revenue they knew it wouldn't -- they had a hidden agenda. They knew better than to actually believe that cutting taxes would actually increase revenue to fund the government. They said so. The resulting deficits were the agenda. The plan was to "cut their allowance" and "starve the beast" to create a debt crisis, then demand that government cut back the things it does to protect and empower We, the People.

What is the agenda behind this job-destruction agenda? If there is a secret agenda behind destroying so many American jobs -- and the ability to create new jobs that pay well -- then what is it? They can't be crazy enough to destroy the economy just to increase their 2012 electoral odds, can they? On the other hand, no one has ever finished the sentence, "Republicans aren't crazy enough to ..." without being proven wrong.

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Posted by Dave Johnson at 7:25 AM | Comments (0) | Link Cosmos

March 15, 2011

What "Free Trade" Has Cost The World

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

If you take a job away from someone who is paid a reasonable wage because they enjoy the protections and prosperity of democratic government, move it across a border, and give it to someone living under a thugocracy, forced to work for pennies with no protections whatsoever, it should be just plain obvious that the worker on our side of the border and the worker on the other side of the border are not going to be better off. And when you do this on a massive scale it just stands to reason that most people on both sides of the border are going to be worse off.

But propaganda being what it is we were somehow convinced to try a worldwide experiment in taking good jobs from democracies and turning them into bad jobs in thugocracies. Now, of course, the experiment has run its course and we can see the results.

Worker Against Worker

Setting worker against worker enabled a few people to get really, really really wealthy and powerful and use that wealth to become even more wealthy and powerful. Our country is in decline, burdened by massive trade deficits because the ones with vested interests in cheap labor won't let us won't take on the mercantilists, burdened by budget deficits because those vested interests have bought low taxes and government subsidies, our infrastructure crumbles because multinational business leaders refuse to invest here, with no more need of us as workers, and the resulting hollowed-out middle class can't consume anymore. Other countries also suffer from similar stresses.

Out of this situation a new global elite has emerged, contemptuous of democracy and government and any power but the power of their own money. In country after country, these top few won't share the proceeds with their own, either, while they keep the world from approaching solutions.

In January's post, Establishment Realizing: When You Close The Factory We Can’t Make A Living, I wrote about how "the establishment," or as bloggers call it, "The Village" or "Versailles," are starting to realize that our trade policies just might not be working for us. Of course, they come to this realization only after our trade deficits approach the trillion mark, after we have lost millions of manufacturing jobs, after we have closed tens of thousands of factories, after we have lost the tech manufacturing industry, and after we have abandoned hopes of leading in green manufacturing as well...

(We're still waiting for them to realize that tax cuts do not increase revenue, that spending more on military than all other countries combined might contribute to deficits, that our too-big-to-fail financial sector is capable of causing problems, that the climate really is changing, that allowing corporations to pump money into politics means the end of democracy... but hey, a dollar spent by a vested interest on a politician apparently is a dollar very, very well spent.)

In the Washington Post, Steven Pearlstein recently reviewed Dani Rodrik’s “The Globalization Paradox,”

It is dogma among economists and right-thinking members of the political and business elite that globalization is good and more of it is even better. That is why they invariably view anyone who dissents from this orthodoxy as either ignorant of the logic of comparative advantage or selfishly protectionist.

But what if it turns out that globalization is more of a boon to the members of the global elite than it is to the average Jose?

Right, what if?

In “The Globalization Paradox,” Dani Rodrik demonstrates that those questions are more than hypothetical — that they describe the world as it really is rather than as it exists in economic theory or in the imagination of free trade fundamentalists.

. . . The starting point of Rodrik’s argument is that open markets succeed only when embedded within social, legal and political institutions that provide them legitimacy by ensuring that the benefits of capitalism are broadly shared.

And a unicorn. And a rainbow.

The paradox, as Rodrik sees it, is that globalization will work for everyone only if all countries abide by the same set of rules, hammered out and enforced by some form of technocratic global government. The reality is, however, that most countries are unwilling to give up their sovereignty, their distinctive institutions and their freedom to manage their economies in their own best interests. Not China. Not India. Not the members of the European Union, as they are now discovering. Not even the United States.

In the real world, argues Rodrik, there is a fundamental incompatibility between hyper-globalization on the one hand, and democracy and national sovereignty on the other.

Clyde Prestowitz threw a one-two punch at free trade after Senator John McCain claimed that the iPhone and iPad are Made in America. In Why isn't the iPhone made in America? at Foreign Policy magazine, Prestowitz wrote,

John McCain provided some good laughs and made himself look stupid on a recent ABC news interview by telling Diane Sawyer that the iPhone and iPad are great examples of products that are made in America.

They're not. And given the amount of high technology production in his state, McCain should certainly have known better. The fact that he didn't does make you wonder about what, if anything, they know in the U.S. Senate.

Prestowitz goes on to explain that while the iPhone is manufactured in China, parts, software, design and other components are made all around the world, not necessarily for low wages. He concludes,

So if America actually did produce the stuff it says it is good at producing, it wouldn't have a trade deficit with Asia for which China is the proxy at all. It would have a trade surplus and 20-40,000 more jobs than it has.

Prestowitz looks at a smaller picture here of the back-and-forth of trade with the US and China. Design, software and other capital and technology intensive components are not made in China. But the bulk of the jobs are in China. This could work for everyone if people there were paid enough -- and allowed by their government -- to buy things made here. That would be trade and everyone would be better off. But trade isn't really the point of "free trade."

Then, in It's not just the iPhone that America doesn't make, Prestowitz conitinues,

Okay, so yesterday I explained not only that John McCain was wrong to say the iPhone is made in America (as you already knew), but also that most of you were wrong to think it is made in China. I went on to show that the phone is only assembled in China from high-tech parts that are mostly made in Japan, South Korea, and Taiwan. I further explained that production of these parts is not labor intensive, but capital and technology intensive.

In other words, these parts are just the kinds of products American economists, Silicon Valley venture capitalists and entrepreneurs, and Washington political leaders always say America is the best in the world at making. ... Then I left you with the question of why, if America is so good at making this stuff, it doesn't.

[. . .] it was believed that unilateral free trade (keeping one's markets open, even in the face of protectionism by one's trading partners) was a winning proposition. Thus, there was no need to be concerned about things like subsidization of key foreign industries or loss of capability in these fields, and hence no need for trade measures that might upset delicate geopolitical relationships.

This economic doctrine has been based upon the assumption of Anglo/American economics that economies of scale either don't exist in most traded products and industries or are relatively unimportant. That this assumption is dramatically and demonstrably wrong and not accepted by most of the non-Anglo world has not deterred its application to the making of much American and global trade policy.

In other words, it doesn't work. But we already knew that. We can see it all around us. And it is us who have to live with the results.

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Posted by Dave Johnson at 10:52 AM | Comments (0) | Link Cosmos

February 16, 2011

It's A Really Bad Time to Be Middle Class

It’s a really bad time to even be middle class in this country, and forget about being poor. The only way to be protected is to be very wealthy: then you are guaranteed that your house is safe, your medical care is covered, and your children will have a future. It’s that bad, and not one bit of this is subtle.

There is a class war underway in this country. The rich, or those that represent their interests, and corporations want control. Dave Johnson, blogger for the Campaign for America’s Future, nailed it when he wrote that: “This budget fight is about a stark choice: jobs and growth for We, the People, or going down the road of plutocracy -- rule by the super-rich and big corporations -- with little or nothing left over for the rest of us.”

This is the power grab of our generation playing out in Obama’s budget. It reflects true entitlement for the super wealthy. The government revitalization of the “too big to fail” banks was only the tipping point. Of course, the bankers deserved their bonuses. Remember that you heard it here. The battleground is not about the so-called entitlement programs espoused by the Democrats. Social Security, and other such programs are not the culprits; they are the scapegoat for the real agenda.

Obama is being forced to rip open the social fabric of this country to reduce the Bush generated debts. In the President’s proposed budget, most social programs will be ravaged left and right (no pun intended). Yes admittedly, this budget is a massive jobs creation machine. But watch out – don’t get sick folks or have an on-the-job accident because there will little if any safety net. Certainly, we all know about health care reform, yet if Speaker Boehner and his boys have their way -- that too will be reduced to a hill of beans and severely compromised. The fight for survival of the middle class and the poor has been ratcheted up a notch. Strap in folks, this is class warfare.

Note, this will also appear in the Huffington Post.

Posted by Michelle at 12:07 PM | Comments (0) | Link Cosmos

February 14, 2011

China Trade Gap Breaks Record, Destroys Jobs

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

Did you see the Chrysler Super Bowl ad? Advertisers understand that Americans are hungry to be able to buy American-made goods again. And economists understand that the only way to truly recover from the economic doldrums is to expand our manufacturing base.

Compare that with today's news: US trade deficit widened by 33% in 2010, and especially: Record 2010 trade deficit with China,

The 2010 annual trade figures for the U.S. were released today. They show a $497 billion trade deficit in goods and services, including a new record $273 billion goods deficit with China.

Instead of getting the message and seeing the warning it's back to the same old same old as fast as we can.

Scott Paul, of Alliance for American Manufacturing, has this to say about that:

"A record trade deficit with China does not put us on a path to win the future. It will be hard to get our unemployment rate down if our trade deficit keeps going up. And while I am all in favor of doubling exports, it is a meaningless benchmark unless we also bring down our trade deficit. Instead, our global trade deficit is growing at an alarming and unsustainable rate.

"China now accounts for 75% of our overall non-petroleum goods deficit, yet I have seen little attention paid to it from this Administration, and even less from the new majority in the House of Representatives.

Washington talks about this but doesn't seem to be able to actually do anything about it. Last week: Treasury gives China a pass on currency manipulation.

The AFL-CIO blog says it plainly and clearly: Stopping Currency Manipulation Would Create U.S. Jobs,

Economists from across the spectrum agree that currency manipulation distorts trade and exacerbates our unsustainable trade deficits. Putting an end to currency manipulation is an issue that unites business and labor, farmers and ranchers and Republicans and Democrats. Action by our government to put an end to this destructive illegal activity is long overdue.

Once again, some in the Congress will try to do something about this: US lawmakers try again for China yuan bill,

A bipartisan group of 101 U.S. lawmakers in the House of Representatives launched a new bid on Thursday to pass legislation aimed at pressuring China to let its yuan currency rise in value.

The same proposals cleared the House last year but died in the Senate. If approved this time, they would clear the way for the Commerce Department to treat currencies deemed to be undervalued as an illegal subsidy under U.S. trade law.

That would allow companies, on a case-by-case basis, to seek higher countervailing duties against imports from China that compete with U.S. production.

U.S. congressional anger at China over what lawmakers see as deliberate undervaluation of the yuan, also called the renminbi, was fanned anew last Friday by a Treasury Department decision not to declare China a currency manipulator.

Here is the Chrysler ad:

"This is the Motor City and this is what we do." "A know-how that runs generations deep in every last one of us."

OK I am from the Detroit area, and even worked at Ford for a while. My grandfather worked in the first GM offices in Flint. This ad made me tear up. Seriously. And I know that people all over Michigan feel that way. It's a stupid, manipulative commercial, but it taps into something that is very deep. People are saying, "finally corporate America (the America that counts) is talking about us instead of them."

Here is Toyota, trying to say the same thing:

People are hungry for a change. Washington needs to hear that.

March 10 Summit on Jobs and America's Future

On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.

Free. $15 with lunch. Register here.

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Posted by Dave Johnson at 8:18 AM | Comments (1) | Link Cosmos

January 25, 2011

State Of The Union—Infrastructure And Jobs: Two Problems, One Solution

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

Tonight, when President Obama gives his State of the Union address, he will be facing a nation that has millions of infrastructure jobs that need doing and millions of people out of work.

The President is planning to address these two problems with a proposal to modernize our infrastructure to bring our economy back to world-class competitiveness. Two problems, one solution. And, for good measure, we are hearing that he plans to throw in investment in education.

Last weekend, President Obama gave a preview of his State of the Union speech to Organizing For America:

A New Course

The idea of investing in our people is a new course after 30-plus years of cutbacks and lowered expectations. Since the Reagan tax cuts for the rich we have been told that there just isn't the money for government to involve itself in big projects, that we are on our own, government won't be there for us. So people fear that our economy in a long-term decline. All around us we see crumbling infrastructure, people out of work, people who work but had their pay cut or have not seen a raise in a long time.

A new course turns us away from the conservative on-our-own model and sees us as a nation again, concerned about protecting and empowering and investing in our people.

Investing in Our People -- Dividends For Decades

Investing in our people is an idea that got lost sometime back during the Reagan Revolution, and now this lack of investment has come home to roost. As a result of tax cuts and cutbacks we have fallen behind China and Germany and many others. The first-class competitiveness that we used to take for granted has fallen behind too much of the world. Fallen behind, fallen behind — we hear this again and again.

Investing in our people will pay dividends for decades. Investing in modernizing our infrastructure will pay for itself by restoring competitiveness.

Infrastructure work—the rail, bridges, roads, schools, courts, power systems and everything else that makes our way of life better and makes our economy stronger by providing the soil in which business thrives—needs to be maintained and modernized. We have fallen behind and have to do it anyway one of these days. Modernizing our infrastructure will put millions back to work and help our businesses in the world.

More To Do

But modernizing our infrastructure is just catching up. We need to go beyond that. Investment is great but is not enough. It is not just our fallen-behind infrastructure that is hampering competitiveness. There are other things that have to change. Our trade policies are also holding us back. We need to develop and follow a national economic/industrial strategy. We have to take on mercantilist nations, and move toward more balanced trade that actually trades rather than big-corporate schemes to pit workers against each other to destroy unions and drive down wages. We need to make China bring its currency up to market rates. We need to renegotiate all the NAFTA-style anti-worker "free trade" scams.

When you close the factory we can't make a living! Will we take the steps necessary to revive American manufacturing, and revive American wages? To lift the economy, lift wages. If we can bring back good jobs with good benefits and start to rebuild our middle class, we can start to have a good standard of living again, for all of us, not just a wealthy few.

Here are Scott Paul and Richard Florida discussing manufacturing and innovation on the Dylan Ratigan show today:

Conservative Austerity -- The Wrong Approach

On the other side of the aisle there are calls to cut back, to reduce investment in our people, to reduce education, to send even more to the wealthy few. This austerity is premature and unjust. It is just weeks since another round of huge tax cuts for the rich, and now they are arguing for slashing programs vital to the survival of the middle class and poor. The way to get out of the debt is to invest and grow out of the debt!

The President is taking us in the right direction tonight, and should be thanked and congratulated.

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

January 20, 2011

When You Close The Factory We Can’t Make A Living

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

In a signal of change in elite attitudes, Steven Pearlstein wrote a Washington Post op-ed, Chinese follow same old script (and they get the punch line), describing the cost-to-us of the business-as-usual game we have been playing with China. Pearlstein has seen the light: China has an industrial policy and it is working for them as a nation. We do not. We have a lassez-faire ideology that enables a few at the top of "Multinational Corp." to get really rich moving manufacturing infrastructure to China, leaving the rest of us with no way to make a living. Next week President Obama can announce that he is changing that.

"Enough!"

Pearlstein writes about China’s bullying mercantilism, how it benefits China, the cost to us, and says “Enough!” He makes a startling suggestion to address the problem: do unto them as they are doing unto us. He writes,

“The right response to these challenges would be for the president this week to laud China for the success of its economic policies and announce that the administration will begin forthwith to apply each and every one of them to Chinese exports into the United States. Subsidies and directed credit for local companies, buy-American provisions for government agencies and government contractors, currency manipulation, the rules on "conditional market access" and "indigenous innovation" - surely China could hardly complain if we were to pay them the highest compliment by embracing their economic model.”

Read that paragraph again.

Pearlstein goes on to describe how a national industrial policy brings advantages to China, while our everyone-in-it-for-themselves ideology hampers us,

“…China can strike deals that may provide short-term profits to one company and its shareholders but in the long run undermine the competitiveness of [our] economy. What's good for GE or Honeywell or Rockwell is, in this case, almost certainly not good for America and American workers."

The Establishment

This column is significant because Pearlstein is part of what you might call "the establishment," a DC opinion leader, not part of the labor movement or a social-justice non-profit or, worse yet, an advocate for the unemployed. But here he is joining with us on the “far left” to say that we can't keep going down this road -- that it is time to see ourselves as a country of people who are in this together, with common interests. He actually makes the far-left argument that, “What's good for GE or Honeywell or Rockwell is, in this case, almost certainly not good for America and American workers.”

Will he keep his job? Or will others join him and begin to see that this is all of a piece. Our trade deficit is part and parcel of our budget deficit and our terrible unemployment problem and our bank bailouts and our deteriorating infrastructure and our deregulation and our tax-cuts-for-the-rich and our on-your-own ideology and our corporate-financed elections and our slow economic growth.

Evergreen Solar

To illustrate the difference a national industrial policy makes Pearlstein uses the instructive example of Evergreen Solar, a solar panel manufacturer that made waves this month announcing it is closing down its US manufacturing and moving it to China. Solar panel prices are plunging because of Chinese-subsidized manufacturing, and "Evergreen can still make money in China because of the lower costs and considerable government subsidies offered by the government there." But not here.

The NY Times covered the Evergreen Solar story last week, in Solar Panel Maker Moves Work to China. These snippets tall the story,

... But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.

. . . Chinese manufacturers, Mr. El-Hillow said in the statement, have been able to push prices down sharply because they receive considerable help from the Chinese government and state-owned banks, and because manufacturing costs are generally lower in China.

. . . In addition to solar energy, China just passed the United States as the world’s largest builder and installer of wind turbines.

The article includes a reminder that we are, after all, talking about China,

… Evergreen’s joint-venture factory in Wuhan occupies a long, warehouselike concrete building in an industrial park located in an inauspicious neighborhood. A local employee said the municipal police had used the site for mass executions into the 1980s.

Business As Usual

China cheats. We don't stop them. They manipulate currency. They restrict imports. They subsidize exports. They subsidize companies. They steal intellectual property. They coerce companies to give up proprietary technology. They do what it takes to win key strategic industries, regardless of treaties and laws. And why should they if we won't stand up to this cheating and stop them? They watch out for themselves, and we do not.

Yesterday, describing China's currency manipulation as part of an industrial policy, I wrote that China looks at the overall, longer-term picture, seeing themselves as a country of people with a common interest. We do not. They understand that attracting industries to China is good for China and its people in the long term. We do not.

We follow a corporate/conservative greed-is-good ideology that says that the interests of individual companies and a few wealthy people are the interests of the country-at-large, and if companies can make larger profits in the short term and a few people can get wealthy closing factories and moving them to China that's just fine, even if it means a loss of jobs and of the country's overall ability to make a living in the long term. This just doesn't work for us as a nation. Or, as Pearlstein put it, "What's good for GE or Honeywell or Rockwell is, in this case, almost certainly not good for America and American workers."

Obama's State Of The Union Opportunity

Next week the President delivers his State Of The Union speech. This is an opportunity to announce a new direction. He can lead us in a transition back to a nation that sees itself in this together as a people watching out and taking care of each other. He can reject the conservative vision of each of us on our own, following a greed-is-good ideology that enriches a few but just doesn't work for We, the People. He can announce the formation of a bold national industrial/economic policy where we again lead the world toward greater prosperity. And he can announce that we are going to, as Pearlstein writes, "pay [China] the highest compliment by embracing their economic model" -- meaning do unto China as China is doing unto us. Enough!

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Posted by Dave Johnson at 8:19 AM | Comments (0) | Link Cosmos

January 3, 2011

America Needs An Industrial Policy

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

Over the weekend Daily Kos ran a front-page story, America needs an industrial policy, making the point that Germany is doing well because their government understands that a national policy of promoting manufacturing drives the economy and jobs.

There is a simple reason why Germany manufactures so many high-end goods, from the best watches to the finest grand pianos, all the way up to Porsches and highly complicated precision instruments: it is the policy of the German government.

Well, it isn't exactly a policy. It is more of a framework. Germany's method of creating wealth is straightforward: 1. Produce a highly educated workforce. 2. Have that workforce create and make advanced, precision things for high wages. 3. Export the things at a high price and then re-invest that money back into item 1. This is why Germany is the Number 2 exporter in the world despite having only 27 percent of America's population and only 6 percent of Number 1 exporter China. The Germans realize they cannot beat either China or India based on cost. Advanced nations can't compete on cost. America could bust all the unions, get rid of the minimum wage, eliminate all social benefits and taxation and we would still lose jobs to low-wage nations. Germany decided to avoid going down the same path of downward spiral among its middle class that we are in. Instead, they invest in their people and in research.

Investing In People And Research Pays Off

As the Daily Kos story points out, Germany invests in their people and research. "America could bust all the unions, get rid of the minimum wage, eliminate all social benefits and taxation and we would still lose jobs to low-wage nations." And the results are there for all to see. Germany is recovering faster from the economic downturn with jobs returning. Manufacturing and exports lead the way.

Over the last 30 years, and the last 10 years in particular, America has conducted an experiment in letting "the markets" decide. Markets are a one-dollar-one-vote system, and of course those with the most dollars to begin with ended up deciding that they should be the primary beneficiaries from this experiment. Namely, them. Wall Street's share of profits jumped from around 16% to around 40% of all profits in the economy.

The "markets" experiment has failed for the rest of us. It is time for We, the People to realize that our government is us, and we need it to make decisions for us. Markets mean one-dollar-one-vote. When dollars decide those with the most dollars will decide to do things that benefit them. Democracy means one-person-one-vote, and that means making decisions that benefit We, the People. Our government - We, the People - must start deciding things that work for We, the People and not those who already have the most of everything. That means developing an industrial policy that invests in We, the People to pull us out of the mess that one-dollar-one-vote has put us in.

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Posted by Dave Johnson at 4:59 PM | Comments (0) | Link Cosmos

December 20, 2010

Investing

Everyone should read Terrance Heath's post An Investment Agenda for America | OurFuture.org,

"By failing to invest in direct job creation, our leaders are taking a 'do nothing' approach to shaping the new economy. Doing nothing — and yes, tax cuts amount to doing nothing, given their track record — will yield an economy in which the 'new normal' is a permanently lower standard of living for millions of Americans ... An infrastructure bank may be an idea whose time is has come ... Where an infrastructure bank leaves off, investment in preserving and creating local jobs can make a difference for millions of Americans ... An investment agenda for America must include incentives for corporations to invest again in an America that has been a long-term investor in their success — perhaps even asking them to be American corporations again ... President Obama recently hinted that reforming the tax code may next on his agenda. He would do well to consider that the tax code currently favors wealth over work."

Posted by Dave Johnson at 7:42 AM | Comments (0) | Link Cosmos

December 15, 2010

Germany's Economy Shows Government "Interference" Works

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 we compete with China's wages? Does government interference and regulation hold us back? Are our unions keeping us from being competitive? Do we need to lower our standard of living in a race to the bottom? You might be surprised to learn that Germany pays higher wages, has strong unions, has much more government involvement and is doing better as a result. Conclusion: our wages, unions and government are not the problem, they are the solution.

In July I wrote about something Harold Meyerson wrote about Germany and China and manufacturing and recession.

Germany is NOT a low-wage country. But they weathered the recession. They value manufacturing and have national policies to bolster their manufacturers.

Today I want to write about something Harold Meyerson wrote about Germany and manufacturing and the recession. In Save the economy by keeping jobs at home, Meyerson writes,

Hourly manufacturing compensation (wages plus benefits) was $48 in Germany in 2008 - the most recent year surveyed by the Bureau of Labor Statistics - while it was $32 in the United States. Yet Germany is an export giant, while we are the colossus of imports.

Please go read Meyerson's entire piece.

In Germany, workers also get six weeks vacation - by law, federally mandated, a right. They get health care, university, child care and pensions and as a result they have higher productivity. In Germany, the government requires worker representatives to hold seats on the boards of directors of companies, depending on the number of workers. Government-funded research and vocational training, and policies to retain skilled workers bring another competitive advantage. Germany values manufacturing and the government has an industrial policy. The government is currently helping promote green manufacturing, for example.

The result of all this government interference is that Germany's export-oriented manufacturing economy recovered from the recession and is doing OK, and their workers are paid well and have great benefits.

Socialism?

Our government is supposed to be of, by and for the people. But today in the U.S. it is considered "socialistic" to talk about these things because it violates the dominant conservative "free market" ideology that is designed to enrich a few at the expense of the rest of us. If we try to talk about a national industrial/economic policy, it is derided with such slogans as "government interference" or "picking winners and losers." If the discussion is allowed it very quickly will move to the dominance of fossil fuels and the other industries that are holding us back but have a lock on influence over the government. If we talk about taking the burden of health care off of the people and businesses, the giant insurance companies beat it back, calling it "socialized medicine," to keep us from doing something about how their profits are draining the rest of the economy. And imagine the furor that would result if anyone even suggested mandating worker representatives on boards of directors so the companies take the interests of workers and communities into account!

Our adherence to conservative free-market ideology is clearly holding our country back. The ideology is designed to transfer wealth from the public to a very few, and hold the lead of the already-dominant. This is killing market innovation and it is destroying our competitiveness and standard of living. We should be looking at what works for the country instead of what keeps the few at the top at the top.

Just Who Is Interfering With Our System?

We need to develop a national economic/industrial policy to help us with our competitive position relative to the rest of the world. We need Medicare-For-All to lower the burden on our people and companies. We need to reorient our labor policies to bring better wages and benefits to our people. We need to restore a level playing field on which innovative smaller companies can complete with the giants—who are interfering with the system while complaining that the attempts by We, the People to stop them are interfering with our system.

Later we can talk about whether China's government interferes with its businesses, and how their economic growth is doing compared to ours.

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Posted by Dave Johnson at 5:27 PM | Comments (0) | Link Cosmos

December 3, 2010

9.8%: The Number That The Deficit Commission Left Out

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.

9.8%! It’s still all about jobs. It's still an emergency. And the DC elite still don’t get it -- or don't care. They give us a "deficit commission" not a jobs commission. They've got it nice while the rest of us have it not-so-nice. Maybe we should move the Congress out of DC so they can see for themselves what is happening to America.

If you visit DC (and don’t go to the “wrong” areas) you see nice buildings, nice stores, nice houses, nice hotels, nice trains, nice cars and lots and lots of nice and very expensive restaurants. You see lots of nice nicely-dressed people walking in a hurry to their nice jobs. Lots of nice jobs. Nice, very expensive houses. Nice cars. Nice life. Nice fantasy.

But if you leave DC you see something very, very different. Congress clearly doesn't see what the rest of us see. If they did, how could they possibly do the things they are doing? There is an absolute emergency going on in the country and Congress refuses to even see it. With 9.8% of us jobless -- that is the official rate, not counting the people who have given up or are "under"employed or took pay cuts or whatever -- Congress is debating tax cuts for the rich and cutting back on programs for the rest of us.

Congress actually did act on jobs last week: with unemployment near 10% they killed unemployment benefits for people out of work more than 26 weeks!

What You See Outside Of DC

This fall I spent some time driving around Michigan, Ohio, Pennsylvania and West Virginia. I was covering some of the events on the Keep It Made In America Tour. I am from Silicon Valley, and it's still pretty nice right here, so the extent and breadth of the decline of our cities and towns was somewhat of a surprise to me. Of course I know what is going on, but when you actually come from somewhere that is still pretty nice and see it firsthand - and everywhere - the abrupt transition makes its point.

Here is what you see in town after town. As you approach the town the first thing you encounter is the vulture circle that surrounds it. This is the circle of Wall Street-owned chains emulating the Wal-Mart model of sucking cash out of the area, and sending it to the wealthy elites who own ... almost everything now. Nice stores near highway exits. National chains, all the same...

Next is the circle of home equity extraction, the newer houses with the big first and second Wall Street mortgages. These houses mostly look OK -- except the foreclosures with the brown lawns and grass growing in the cracks in the driveway. This area has the car dealers and strip malls that used to sell the nice cars or nice goods that feasted on those "take money out of your house" refinancings or second mortgages. Now they have nail and hair salons or are just "for lease."

Then you get to the areas of older houses, more of them boarded up than you want to see, boarded up stores on a few of the corners of the larger streets. Lots of the still-occupied houses have bars on the windows.

Then you get to the old, crumbling downtown where there are many empty storefronts, some boarded, a few government buildings here and there.

And somewhere is "the old plant." One or more closed-up, fenced-off, rusting old factories or mills with broken windows, maybe part of it falling down, where the people used to work, the jobs moved to Mexico or China.

Much of the country is like this now. So many of the older small towns, crumbling, the money sucked out by the Wall Street elite. The factories sold off, closed. The people can't make a living, the towns can't make a living, the country can't make a living, the Wall Street elite making a killing.

As I said, I am from Silicon Valley, and it's still pretty nice here, but you can see it starting here, too. One of every four or five office or light-industrial buildings has an "Available" sign. The region has the same number of manufacturing jobs as it had when the "tech revolution" began - the rest moved to China. Even exclusive Palo Alto has empty storefronts on the main drag. It is even happening here. It will get worse.

But it is not happening yet in the parts of New York and DC where the well-to-do elite spend their time. So they don't see or feel or care what is happening to the country. And these plutocrats control all of the levers of power, making it impossible for the rest of us to participate in the system to fix the situation. Which means that people are starting to talk about moving outside of the system. Tea Party, for example. Militias, for example. Nonvoting, for example.

Deficit Commission Instead of Jobs Commission?

The priorities of the plutocratic DC elite do not reflect America's problems. DC gives us a deficit commission instead of a jobs commission. Their deficit commission proposes to cut the lifeline of retirement. There is nothing about investing in our crumbling infrastructure or education or the new green industries that move us away from the oil/coal economy that is draining us and threatening our climate and coastlines. There is nothing about an economic/industrial policy to restore our competitiveness in the world economy.

Perhaps moving the Congress would help, so they can see the gap that has formed between the DC elite and the rest of us. I suggest Lorain, Ohio. Then after a month, Wheeling, West Virginia. Month after that, Canton, Ohio. Next, Erie, Pennsylvania. Then move it permanently to Flint, Michigan.

About the video.

And, of course, the chart that no one in DC is able to understand:

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Posted by Dave Johnson at 5:08 PM | Comments (0) | Link Cosmos

November 23, 2010

Does It Matter What The Public Wants Or Needs?

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.

Does it even matter what the public wants anymore?

I guess that's a rhetorical question these days because more and more obviously the answer is no. It matters what the plutocrats want, and they know how to get what they want. Public opinion is "engineered" or at least "managed." When it can't be managed it is ignored and the effort shifts to our elected officials, who are led to believe the public wants what the plutocrats want using elite opinion leaders, astroturf, front groups or flat out cash.

According to polls (and most of these by overwhelming margins):

Things the public doesn’t want:

Tax cuts for the rich. For example, this morning’s Progressive Breakfast hilited:

Another poll shows support for ending Bush tax cuts for the wealthy. McClatchy:"...51 percent want to extend the tax cuts only for households making less than $250,000 a year, and 45 percent want to extend the tax cuts for all ... Those who want to extend all of the tax cuts, including for the wealthy, include Republicans, tea party supporters, conservatives, Southerners and Westerners, Independents were closely divided, with 49 percent for extending only the 'middle class' tax cuts, and 48 percent for extending all of them."

P.S. Campaign for America's Future and CREDO Action have a petition, Tell Congress: Don't extend the Bush tax cuts for the wealthy. Click the link, and add your voice.

Cuts in social security. Isaiah Poole wrote last week, Nobody's Buying The Cut-Social-Security Line,

A whopping 82% of respondents in the poll oppose Social Security cuts for the purpose of deficit reduction, while only 15% support cuts. What's particularly telling is the striking uniformity of opinion across the political spectrum: 83% of Democrats, 82% of Republicans, 78% of independents and 74% of Tea Party supporters.

P.S. Campaign for America's Future has a petition, Tell President Obama to Reject Social Security Cuts. Click the link and add your voice.

P.S. Strengthen Social Security is holding a National Call Congress Day on November 30. Click for details.

Cuts in Medicare. Republicans figured this out, and ran ad after ad after ad (after ad after ad) telling voters that Democrats should be thrown out of office because they cut $500 billion from Medicare. You saw the ads. (and saw them and saw them and saw them.)

Cuts in anything. (Actually, polls show that the public wants cuts in foreign aid.)

Corporate-written "free trade" schemes. As Leo Gerard points out in Corporate Rewards: Controlling U.S. Trade Policy,

In a September poll by NBC News and the Wall Street Journal, 53 percent of Americans said so-called free trade agreements have injured the country. Only 17 percent said those trade schemes benefited the United States. Disgust with these deals spans party lines, including Tea Partiers, 61 percent of whom said they’re bad for America.

Things the public wants:

Jobs. The official unemployment rate is 9.6%. The total including "underemployed" is 15.9%.

Unemployment benefits extended. Poll: Majority of voters support another extension of unemployment benefits,

In a poll released Monday, 73 percent of voters say it's too early to cut back benefits for those who are struggling to find work as unemployment rate hovers at 9.6 percent....

A plan to revive American manufacturing. Election Day Poll: Voters Weren't Backing Extreme Right Agenda,

Eighty-nine percent of those surveyed agreed with the statement that "America is falling behind" in the global economy and that "we need a clear strategy to make things in America, make our economy competitive, and revive America's middle class."

Rebuild America's Infrastructure. From the poll cited above,

Significant majorities in the poll also supported new investments in infrastructure through a national infrastructure bank, and a five-year strategy for reviving manufacturing in America

So there are things the public clearly wants and doesn't want. These things are significantly at odds with the things the plutocrats want. If we are still a democracy we will get the things the public wants. If we have completed the transformation to a plutocracy we will get the things the plutocrats want. That's the definition of the terms.

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Posted by Dave Johnson at 2:30 PM | Comments (0) | Link Cosmos

November 17, 2010

"Free Trade" By Any Other Name...

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.

"Free trade" by any other name ... is still just a scam to pit workers against each other and evade the protections of democracy.

We, the People fought to build this democracy with its laws and institutions and protections. This fight brought us a middle class with weekends off, good wages, worker protections and some degree of protection of our environment. "Free trade" deals let companies move factories across a border to escape those protections and pit exploited workers with few rights and no means of improving their condition against us and the protections we fought for. This scam enriches a few while putting the rest of us in a race to the bottom.

Americans have come to realize just how much this scam is hurting us. Pollsters have found that the public hates what "free trade" treaties like NAFTA and letting China into the World Trade Organization have done to our economy and our jobs. So business and administration bigwigs are "re-branding" the hated words "free trade" into "rules-based trade." So expect to be hearing less and less about "free trade" and more and more about "rules-based trade." Don't be fooled.

This morning's Progressive Breakfast has the story, (by the way, you can get Progressive Breakfast sent to you every morning. Click the link and sign up at the bottom. It's free.)

Free Trade R.I.P.

"Corporate leaders bury "free trade" label," The Wall Street Journal: "They declared support for free trade—rebranded 'rules-based trade' after pollsters Peter Hart and Bill McInturff warned that the phrase 'free trade' had become toxic with voters."

As I said, don't be fooled. If trade agreements do not protect the rights that We, the People fought for, and allow companies to evade the protections brought by democracy -- good jobs, good wages, safe and fair working conditions, the right to organize workers, environmental protections and other "costly" things -- then our government has no businesses agreeing to them. We can negotiate treaties that open up trade without shooting ourselves in the foot, and giving up our good jobs and wages, in order to enrich an already-wealthy few.

Here is what has been going on. In a classic "playing the ref" move, the Chamber of Commerce has been pitching the idea that the Obama administration is "anti-business" because they don't give the big, monopolist, multi-national corporations everything they want. "Playing the ref" is a sports term, the idea being that if you complain enough about the calls a referee makes the referee will feel the need to give your team a few breaks in order to appear to be making fair calls.

So the Chamber, by complaining that Obama is "anti-business," is really trying to get Obama to be even more pro-business. (The same strategy is at work when you hear complaints about the "liberal media." After so may years of this accusation by right-wingers, newsroom editors are terrified of appearing to be left-leaning, resulting in so many right-leaning news stories.)

The WSJ story, Obama's Overture to Business Gets Wary Reception From CEOs, shows how well the Chamber is doing at getting the desired results from playing the administration like a fiddle,

A parade of administration officials—including Treasury Secretary Timothy Geithner, National Economic Council head Larry Summers, Education Secretary Arne Duncan and White House economic adviser Austan Goolsbee—sought to reassure about 100 corporate leaders gathered at The Wall Street Journal CEO Council in Washington that they were eager for business leaders' ideas to revive the economy.

The administration officials continued, in various ways, the overture to business leaders that President Barack Obama launched himself after the bruising midterm election, in which Democrats criticized U.S. multinationals for failing to hire more Americans. They said business tax rates should be lowered. They declared support for free trade—rebranded "rules-based trade" after pollsters Peter Hart and Bill McInturff warned that the phrase "free trade" had become toxic with voters.

The CEOs, in a vote, said the government's top priority should be to foster global trade and create a more business-friendly environment. But CEOs also said uncertainty about government policy on taxes and regulation remained a barrier to unlocking $2 trillion in capital sitting in the treasuries of U.S. non-financial businesses.

The best part of the story is that even though the administration is going all out to be more and more and more and more and more "business-friendly," the CEO crowd wasn't satisfied at all, and wanted more (and more and more and more).

Let's see if this sounds familiar. A conservative-aligned group complains that the Obama administration isn't being fair to them, is asking for too much, is being too partisan, whatever. The Obama administration responds by giving them more of what they want. The conservative-aligned group complains that it isn't enough. The Obama administration gives more, saying, "No, you're wrong about me!" The complaints continue, even increase, and eventually the conservatives all blame Obama for the resulting failures of policy.

Hey, they're going to call you names. Get used to it. It's what they do.

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Posted by Dave Johnson at 1:36 PM | Comments (0) | Link Cosmos

November 12, 2010

Businesses Do Not Create 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.

Businesses do not create jobs. In fact, the way our economy is structured the incentive is for businesses to get rid of as many jobs as they can.

Demand Creates Jobs

A job is created when demand for goods or services is greater than the existing ability to provide them. When there is a demand, people will see the need and fill it. Either someone will start filling the demand alone, or form a new business to fill it or an existing provider of the good or service will add employees as needed. (Actually a job can be created by a business, a government, a non-profit organization or just a person doing the job, depending on the nature of the good or service that is required.)

So a demand creates a job. A person who sees that houses on a block need their lawns mowed might go door to door and say they will mow the lawn for $10. When houses start saying "Yes, I need my lawn mowed" a job has been created!

Demand also creates businesses. The person who is filling demand by mowing lawns for people might after a while have a regular circuit of houses that want their lawns mowed every week, and will buy a truck and a new mower and hire someone to help. A business is born!

Businesses Want To Kill Jobs, Not Create Them

Many people wrongly think that businesses create jobs. They see that a job is usually at a business, so they think that therefore the business "created" the job. This thinking leads to wrongheaded ideas like the current one that giving tax cuts to businesses will create jobs, because the businesses will have more money. But an efficiently-run business will already have the right number of employees. When a business sees that more people are coming in the door (demand) than there are employees to serve them, they hire people to serve the customers. When a business sees that not enough people are coming in the door and employees are sitting around reading the newspaper, they lay people off. Businesses want customers, not tax cuts.

Businesses have more incentives to eliminate jobs than to create them. Businesses in our economy exist to create profits, not jobs. This means the incentive is for a business to create as few jobs as possible at the lowest possible cost. They also constantly strive to reduce the number of people they employ by bringing in machines, outsourcing or finding other ways to reduce the payroll. This is called "cutting costs" which leads to higher profits. The same incentive also pushes the business to pay as little as possible when they do hire. (It also pushes businesses to cut worker safety protections, cut product quality, cut customer service, "externalize" costs by polluting, etc.)

This obviously works against the interests of the larger society, which wants lots of good jobs with good pay. And businesses, while working to cut jobs and pay less, need other businesses to hire lots of people and pay well, because that is what creates the demand that makes all the businesses work.

Government To The Rescue

This is where government comes in. Government is We, the People, working for that larger societal interest. In our current system -- when it works -- we use government to come up with ways to balance the effects of the profit motive -- which pushes for fewer jobs at lower pay -- with our larger need for more jobs at higher pay for us, and for the good of all the businesses. We, through our government, create and regulate the "playing field" on which businesses operate. We set minimum wages, limits on working hours, worker safety rules and other rules designed to keep that balance between profit incentive and demand, and that playing field level. (We also provide the infrastructure of roads, schools, courts, etc. that is what makes our businesses competetive with businesses in other countries. The individual interest in paying less taxes for this has to be balanced with the larger interest that we all pay more for this, but that is another post, titled, "Tax Cuts Are Theft.")

Corrupted

Obviously businesses in our system must be kept from having any ability whatsoever to influence government decision-making in any way, or the system breaks down. When businesses are able to influence government, they will influence government in ways that provide themselves - and only themselves - with more profits, meaning lower costs, meaning fewer jobs at worse pay and not protecting workers, the environment or other businesses. And, they will fight to keep their ability to influence government, using the resulting wealth gains to increase their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government which increases their wealth which increases their power over the government ...

Unfortunately this is the system as it is today.

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Posted by Dave Johnson at 7:29 AM | Comments (1) | Link Cosmos

November 10, 2010

What's Next, Impeachment from the Republicans?

So much for making nice Mr. President, the gloves are off as the Republican leadership comes out swinging. These folks don’t want to work with you, or your minions or any of us. Just tune into FOX News at any random moment, and the disdain is visceral. And to be blunt, what’s to keep them from starting impeachment proceedings as a tactic to erode your precious time and focus? Not much, if you listen closely to the Senate Republican leadership, the soon to be Speaker of the House, and all the other hooligans over the last few days, and even on the Sunday morning talk shows. Senator Mitch McConnell’s words sure don’t sound like a lullaby to me. Do not be fooled, it may be more than making sure that Obama is a one-term President. These are fighting words: “The only way to do all these things is to put someone in the White House who won't veto...”

And if that’s not bad enough, there’s dissent and discontent (as usual) among our fellow Democrats. The so-called Blue Dog Democrats are acting out by attempting to distance themselves from the prevailing incumbent-rage by attacking now Speaker Pelosi. Have they no shame? This is self-serving hypocrisy at its worst. Not now kids. Go back to your corner and sing “Kumbaya” to keep from shooting off your big mouths at this fragile time. Enough of your ranks have been lost in this recent election. Stop with the posturing, and the “Anti-Pelosi Caucus.” These types of shenanigans only fuel the fires, and distract us from our goals. Please realize that we are under an unprecedented assault from the rabid Republican leadership. They will attempt to sink the Obama ship at any cost.

Democrats (Blue Dogs, Moderates, and Progressives) hunker down. Put a stop to the malarkey from the newly anointed Republicans. This “lame duck” session is vital. We have barely two months to protect Social Security for the elders, unwind Don’t Ask Don’t Tell, and fund many, many programs. Consider that the Congress may be deadlocked for two years with very little emerging from gridlock, and Pelosi's steam rolling machine has taken heavy artillery hits. If you feel compelled to beat up on someone or something, go after the bad guys. And pray that all attempts to bring impeachment proceedings against Obama are quashed. This would be a travesty filled with hate and racism from which this country might never recover. Don't let them take our President away.

Note: A version of this article was published earlier today in the Huffington Post.

Posted by Michelle at 8:46 AM | Comments (1) | Link Cosmos

November 5, 2010

Jobs: It's BOLD PLAN 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.

Today's jobs report showed that the economy added 151,000 jobs in October, the biggest rise since May. The 159,000 increase in private sector employment was the second-largest monthly rise of the "recovery." The official unemployment rate stayed at 9.6 percent. NY Times: U.S. Added Jobs Last Month for First Time Since May,

On many levels, the October report was much stronger than expected. Forecasters had been expecting a gain of only 60,000 jobs. The report also revised the numbers for August and September, showing 110,000 fewer jobs losses than previously estimated. Hourly wages were slightly higher, too.

... A broader measure of unemployment, which includes people who are working part-time because they cannot find full-time jobs and people who have given up looking for work, ticked down slightly to 17 percent from 17.1 percent in September.

This might seem like good news -- until you think about it. We are so used to really bad news that new that just sort of OK sounds great. Dean Baker, writing at the Center for Economic and Policy Research,

At this rate it would take more than 15 years to make up the job shortfall from the downturn, but at least the economy is moving in the right direction.

Meanwhile, the Federal Reserve this week announced "quantitative easing," through which they will pump another $600 billion into the economy by purchasing US treasury bills, also known as "printing money." I guess the idea is to top off and overflow the coffers of the already-wealthy, thereby forcing up the price of stocks and other assets held by the already-wealthy, while keeping interest rates low on the savings of working and retired people. At the same time conservatives in Congress are demanding further extensions of tax cuts for the rich, which did so well stimulating jobs up to now. The thinking seems to be that at some point the really, really wealthy will have so astonishingly much extra cash on hand that they will hire a few more servants, which will then stimulate purchasing of necessities by said servants, which will then drive the economy.

It's time to call out this nonsense for what it is.

We Need A Bold Plan

It is time for the President to announce a BOLD PLAN for a job-creation agenda. (Actually, it was time for him to do this a year or two ago...) Here are three badly-needed 5-year plans:
* A 5-year plan to revive American manufacturing. This is how our country and our people can make a living again.
* A 5-year plan to bring America's infrastructure into the 21st century, making our economy competitive again.
* A 5-year plan to make our homes, buildings and electric grid energy efficient to lower our energy costs and reduce our imports of oil.

These are things that we have to do anyway. We have a lot of unemployed people, and any one of these three plans will put a huge dent in unemployment. Any one of these three revives our economy. Any one of these three restores American competitiveness. ALL THREE restore us as the economy leader in the world.

And, the politics will be good because it is what is needed and good for the country and everyone knows it.

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November 4, 2010

Tea Party Test: Korea Free Trade Agreement

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 "Tea Party" will face many tests when the new Congress convenes next year. Everyone is asking, how long will it take before the Tea Party officeholders are co-opted by the big money insiders? "Free Trade" is one of those tests.

Tea Party members absolutely despise "free trade" agreements that have forced companies to close factories and ship jobs out of the country. They want to see "Made In America" in stores again. But the D.C. insiders, backed by big money from the big, monopolist, multinational corporations, insist on even more of these agreements. Which way will the Tea Party officeholders go?

Next up: the US-Korea Free Trade Agreement. The D.C. insiders want this one bad. Tea Party supporters do not want any more of these job-sucking one-sided agreements. Who will win? Negotiated by Bush, this is another one-sided agreement, letting Korea export like crazy to the U.S., but not addressing non-tariff barriers that Korea places on bringing U.S.-made goods into their country. (Korea places regulatory and tax barriers to limit imports along with tariff barriers that the trade agreement addresses. So in effect we would be removing our tariff barriers on Korean imports, while they keep their other barriers to our exports.)

The Ford Motor Company placed an ad in Washington news outlets today, opposing the Korea agreement:

Click to go to the ad, as well as to information from Ford.

Ford's concern is autos, but there are many other concerns as well. Take a look at what American beef producers say about this agreement.

This is one more one-sided trade agreement designed to let Wall Street-dominated firms outsource manufacturing and jobs, so they can further squeeze American workers and make short-term profits and bonuses from selling off American capacities and technologies. They are selling off our country's and our people's ability to make a living, to put a few quick bucks in their own pockets.

Trade is good. Honest, free and fair trade brings prosperity to everyone involved. Unfortunately, the kind of one-sided, exploitative trade deals that have been negotiated in the past might have made a few elites very rich in the short term but are impoverishing everyone else. The trick is negotiating better "We, the People" outcomes rather than the "shut up and take it or we'll move your job out of the country" outcomes that have allowed the wealthy elite to set working people here against working people there.

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Posted by Dave Johnson at 11:43 AM | Comments (0) | Link Cosmos

November 1, 2010

China's Goverment Helps Manufacturers, Economy Booms. Ours, Not So Much.

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 an election strategy conservatives blocked or watered down everything they could that might help the economy, hoping voters would blame the President's party for job losses. Tomorrow we will learn if this strategy succeeded. But Wednesday can we start doing things to help the economy and the country again? Please?

Candidates on both sides are running ads asking for fixes to trade with China. Chinese manufacturers are starting to fight, claiming that (now jobless) Americans will have to pay more for goods if they have to adjust their currency toward market rates. But Chinese manufacturers are doing just fine, according to recent surveys, because their government is doing everything it can to stimulate their economy, their manufacturing and their jobs.

Where's our government?

Today’s Progressive Breakfast hilites two stories:

Chinese manufacturers, complaining that their government has adjusted currency too much, tell Americans Christmas will be more expensive. W. Post: "'If the renminbi keeps appreciating, our prices have no more room to drop,' said Cai Qin Liang, 38, who has been in the business making Christmas ornaments and handicrafts for more than a decade. 'We can just stop making these Christmas accessories, but foreigners still celebrate the Christmas holiday and need these things.' It is small manufacturers such as these that the Chinese government says it is worried about as it resists calls for a larger and more rapid appreciation of the currency."

Yet Chinese manufacturing doing just fine, buoyed by stimulus. AP: "Chinese manufacturing accelerated in October with spending on infrastructure projects spurring a jump in new equipment orders even as export demand remained subdued, surveys showed Monday."

What kinds of things is the Chinese government doing to help its manufacturers? Earlier this year I wrote, in Lessons From China's Stimulus

China's stimulus brought them through the economic crisis, even as they lost some exports because of the slowdown. They made the leap into alternative energy technology, spent $100 billion just for high-speed rail, and showed the world how fiscal stimulus works. Their growth rate is currently 13%. Ours is currently ... nowhere near 13%.

. . . So their stimulus totaled about 14% of their GDP. Our own stimulus was $862 billion in a $14 trillion economy, or about 6%. The differences between the priorities of the two plans are clear when seen on charts.

From a year ago: China's Stimulus Package: A Breakdown of Spending: (please click through for more)

. . . China focused on investment in public infrastructure, which leads to future economic growth. We are mired in conservative ideology so we focused on tax cuts, which do little more than increase our debt.

. . . Quick lessons:

- China spent serious money, quickly. It worked.
- China focused on infrastructure. It worked.
- China has a national economic/man manufacturing strategy and invests in R&D and developing strategically important industries. We don't.
- Don't cut taxes, it only causes massive yearly deficits and accumulated debt.

Frank Sobatka describes one of the main reasons for the problem:

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October 27, 2010

Winning The Race To The Bottom

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

Visit the "I'm Voting For..." campaign

Conservative policies have propelled us into a global raced to the bottom. Conservatives can take pride: we're winning!

"Free trade" -- moving factories across borders to evade the protections of democracy that generations of Americans fought for -- pits exploited workers with few rights and no means of improving their condition against Americans who once had environmental and wage protections. But ideas like protecting the gains of democracy are out of favor. That is labeled "protectionism" and is thought for some reason to be a bad thing. Conservatives were able to break the unions and wages for working people have stagnated, while the amount going to the top few has soared.

Here is the future of American wages: From today's Washington Post: In its biggest foreign market, BMW gets skilled workers for less,

Among the applicants: a former manager of a major distribution center for Target; a consultant who oversaw construction projects in four Western states; a supervisor at a plastics recycling firm. Some held college degrees and resumes in other fields where they made more money.

But they're all in the factory now making $15 an hour - about half of what the typical German autoworker makes.

. . . the price of having a more globally competitive workforce means more in the United States could fall well short of the middle-class living standards that manufacturing workers once could expect. Wages adjusted for inflation have declined for these workers since 2003.

That's right, German workers are now paid almost twice what American's can make. (And they get health care and an average of 35 paid vacation days, we get 13.)

Tea Party Wants To End Minimum Wage

The Tea Party has its sights set on the minimum wage. They say it is "unconstitutional" and want it "abolished."

Your Wages Are Next

If you still have a job, your wages are next. You can bet that executives in every company are wondering why they are paying their employees so much when there are so many hungry, unemployed people out there looking for work. Every dollar they can save on paying you goes into their pockets.

Isaiah Poole pointed out the other day, in Latest Reagan Revolution Price Tag: A $313 Billion Wage Cut, (Please click through an dread his whole post!)

New data compiled by the Social Security Administration reveals that the total wages earned by American workers fell by a total of $313 billion from 2007 to 2009, Johnston writes. That's a 5 percent cut, and is measured in 2009 dollars.

In one year alone, from 2008 to 2009, wage income declined $215 billion.

What can you do about this? Terrance Heath writes in, Minimal Wages For All, (Please click through an dread his whole post, too!)

Here's another reason to vote in the mid-term elections this November: Conservatives think you need a pay cut. As I've said once or twice before, conservatives' bottom line message is simple: America has economic problems because too many people have had it good for too long; and when they're worse off again, the nation and its economy will be better off. The people they think had it too good for too long are you and me, and almost anyone who punches a clock to pull a paycheck.

The Answer

The answer is to insist that goods brought into this country are made by people who are paid a decent wage. That way they could make enough to buy things we make, too. That really could be called trade. And the other answer is to pay people here enough to have a decent standard of living, even if it means hedge fund manager could only make maybe $100-200 million a year instead of billions. That way we would all benefit from our economy, instead of everything going to the top at the expense of the rest of us.

Vote as if your standard f living depended on it.

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October 19, 2010

Canton, Ohio Town Hall: We Can Make It, Build It, Grow It Here

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 Canton, Ohio "Keep It Made In America" Town Hall meeting was at the Kent State University Stark Campus this evening. Lieutenant Governor and Senate candidate Lee Fisher spoke. His opponent, Rob Portman, (U. S. Trade Representative under George W. Bush) was also invited to speak to this meeting discussing how to recover the 2.4 million manufacturing jobs that were lost to China in the Bush years, but had other commitments and was unable to attend.

The crowd was welcomed by Stark County Commissioner Steven Meeks, who let us know that "Stark State College is creating curriculum that addresses needs of unemployed, and is growing 30% every year. Just announced a $2.1 million grant plus $8 million from Stark State, creating a Wind Energy Research and Development Center to test wind turbines." This partnership will train employees but will also bring wind energy business to the area.

After Scott Paul of the Alliance for American Manufacturing introduced the organization and explained the town hall, Congressman John Boccieri, OH-16 spoke, saying, "We can make it, build it, grow it here." Later, "I thought the Chamber of commerce was supposed to protect jobs in the US not in Beijing. I fail to see how they believe that this is good policy for our country."

Next up was Senate candidate, Lt. Gov Lee Fisher. (Summarized from notes):

"Do we go back to the same people who gave tax breaks to large companies to send our jobs out of the country? To treaties that allowed these countries to dump cheap, unsafe unhealthy products, endanger our health and our economic health, put people out of work and companies out of business and industries vanished?

People think it’s OK the steel workers are upset, the auto workers are upset. It isn't. The key is to build alliances that go beyond steel, let’s talk about technology. The guy who founded Intel, Andy Grove, wrote recently that he no longer believes that free trade is the right way to go. In 1975 when first personal computer was invented, 125,000 people employed in the US. Today 125,000 are employed. This is the same but in Asia 1.5 million are employed in this business.

This is not just steel, glass auto, textiles, electronics, this is about solar panels, advanced batteries, wind turbines. We need to wake up the rest of America, you already get it that’s why you’re here, but the key to our victory is waking up the rest of American before it’s too late."

Interestingly, Fisher is running against Rob Portman, U. S. Trade Representative under George W. Bush. Portman was also invited to speak to this town hall discussing how to start recovering the 2.4 million manufacturing jobs that were lost to China in the Bush years but had other commitments and was unable to attend.

The Panel

Canton's town hall panel of local experts was Scott Paul of AAM moderating, with,

* Dave McCall District 1 Director for the United Steelworkers
* Athony Denoi, Plant Manager ATI Alegheny Ludlum (Stainless steel, other specialty steels)
* Max Blachman - Office of Ohio Senator Sherrod Brown

From notes:

Blachman – Sen Brown elected 92 to Congress, fighting for American manufacturing and workers ever since. Ran for Senate said let's make Ohio the Silicon Valley of manufacturing. Sen Brown had an op-ed in yesterday’s NY Times. (Note - a good read , it starts out, "TEN years ago this fall the Senate sold out American manufacturing.")

Steps to take – enforce trade laws, China created tremendous and unfair imbalance

McCall – We need a manufacturing policy. Level playing field. China currency. VAT – every country has a VAT except us. A company that makes something in India pays 20% tax, but when you ship the government gives the tax back, so companies in other countries get as much as a 20% break and China gets that break on top of currency manipulation and other schemes so that's now 60%. … Just try to get 1 pound of steel into China, you can’t. You can’t sell there, they are exporting their unemployment to us. … Why has this been going on for a decade, decade and a half? Because a whole lot of people have very short term thinking, don’t care, want to make their dollars now, want to get out. ... It’s time to give some protections to our American companies. They need to be profitable, so it is fair and balanced for companies and steelworkers as well.

DeNoi – We are in business because of specialty steel that goes into special places like nuke reactors, transformers. To make good steel you need: Good equipment good people know how to make it. China doesn’t have #3, intellectual property, if we lose that China can make it. Silicon Steel, best grade, now China says they can do. It's part of their energy strategy, for China to make their own. Titanium, we know how to make and others do not. Give us a level playing field we can compete globally. I keep on hearing industrial policy, it is a strategy, they are looking 5 10 20 years down the line. Has to be more than policy, has to be a serious strategy for long term/

McCall – on IP rights, I remember a guy testified before the China commission some years ago, who produced roof tiles for all KFC places in US. KFC got a contact from Chinese government to build 100 KFC stores in China. This guy, family business, invested in new technology, 40 employees. Business was good. KFC got this contract, the first load of shingles he sent got locked up on the dock and the government wouldn’t release it to be built on those restaurants until he gave them the formula and processes, KFC said we got to have these shingles, so he had to give up property rights. Now a company in China produces all those shingles, he is out of business.

Q from audience: “How do we get consumers to understand and support Buy American?”

McCall – Look what happens when we fight back. Cooper Tire built a plant in China, China said for 5 years you must export. So they have a price advantage, dump the tires here. So we filed a trade case and won, they put on a tariff, now they are dumping in Europe but not in US, so in Ohio now Cooper plant hires, 100 new jobs.

Q: “What is the government and manufacturers going to do to help put people 55 and older forced into retirement, back to work?”

Blachman – Sen Brown SECTOR act, labor grants to communities, allow labor an business and Community College or other anchor institution to come together with workforce investment board to fashion a curriculum to train for available jobs in new industries, fuel cells, advanced batteries, like what is happening at Stark Research Center on this campus. One-stop services often do not provide those specific skills needed to succeed in these industries.
This passed the House, Senate filibustered

DeNoi – challenge is to get a good educated workforce out there, we try to hire, give them tests, it is hard to get the skill set needed to work in steel. They have to have computer skills, math skills, problem-solving skills, we are having a difficult time finding it so we hire mature workers in this area because of that.

Paul – if you see a factory on TV it’s an action setting, abandoned factory, rusted chains coming from the ceiling, fire coming out of the floor and a dead bodies is thrown from the second floor, that’s what people see when they see factories. Now is clean, highly technological, exciting, and you have an opportunity

Q: "What three things if you could talk to the President."
DeNoi:
1) Level playing field
2) Long term strategy
3) Buy American
Silverware, it is not made here anymore. Gas grills.

So this was the last Town Hall I will be attending. There are more on the schedule and they are GREAT, and you learn a lot. Take a look at the schedule and see if you can make it to one. And I am sure there will be another round coming.

I will be thinking for a while and then writing a wrap-up post that take a bigger-picture look at what I learned this last week. So check back.

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Erie, PA Town Hall: "No Country Ever Went Broke Investing In Its Own People"

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 night's "Keep It Made In America" Town Hall meeting was at the Bayfront Convention Center in Erie, Pennsylvania. Kyle Foust, Chairman of the Erie County Council welcomed the attendees and led off the Town Hall meeting, quoting Hubert Humphrey: "No country ever went broke by investing in its own people."

I recently spoke with a Tea Party member who did not know that it is government that builds the roads, airports, sewer systems, etc. that make up the infrastructure that is the foundation of our country's ability to have companies at all. He actually thought that private companies do this, and that "government spending" just "takes money out of the economy." Maybe this is why so many candidates in this election say that "government spending" is bad but will not say, no matter how hard they are pressed, what spending they plan to cut in their quest for "smaller government."

The Town Hall

Following a Unitarian invocation by Rev Steve Aschmann, Scott Paul of the Alliance for American Manufacturing (AAM) -- the organization that is putting on these "Keep It Made In America" Town Hall events -- explained what AAM is about, strengthening manufacturing in this country. Scott gave the audience several facts about manufacturing:

• 74% of Tea Party supporters support more manufacturing, as do 82% of union members.


• 563,500 in Pennsylvania work in the manufacturing sector


• This is down from 864,000 in 2000


• And represents a 35% cut in manufacturing jobs.

Candidates Speak

Two local House candidates spoke at this meeting. Mike Kelley, Republican candidate for Congress spoke first.

"We can’t control unfair competition. Just make it fair, that’s all, make it fair. Enforce the rules. We play by the rules, other people don’t. Chinese currency."

Q: "Will you support buy American policies?" A: Who would not? Especially in taxpayer-funded projects.
Q: "Hold China accountable?" A: The world has been waiting for America to take the lead. China has to be held accountable when they break the rules.
Q: "Policies?" Competition, we never back away from competition. We need to get a national strategy in place. Taxes – need a VAT. Others all do it. (Note, Kelley's answer is good for manufacturing. Short explanation: Other countries use a VAT to boost their manufacturing sector. Their manufacturers get a VAT rebate, but goods imported from the US do not, so in effect a VAT is a either a subsidy of their companies or a tariff on imports from us.)

Next up was his opponent in the race, Congresswoman Kathy Dahlkemper:

We need to get back to a manufacturing economy, to provide that good family-sustaining wage.

How to keep it made in America, three points:
1) Close the loopholes, Republicans’s did not vote with us on this. My opponent has pledged, signed a pledge no to remove the tax advantages given to companies for moving factories out of the country and outsourcing American jobs. (Note see my post on this today.)
2) Stop China’s cheating. Everyone knows China cheats. The currency bill, voted for it, the Chamber of Commerce - that's the national Chamber which is a very different thing from the local Chambers -- is against it. We also have to stop China's illegal trade practices and dumping (selling below cost to capture markets).
3) Invest in our domestic manufacturing base. The COMPETES act has passed the House, but Senate… Education.

Raw materials – rare earth elements, China is saying they can get these IF they bring manufacturing t their country.
We can produce them here, but don’t. Because China subsidizes, it is not profitable to start production here.

The Panel

This Town Hall's panel of local experts:
• Kenneth Boothe Jr., General Manager, Donjon Ship Builders
• Reverend Jeffery Priscaro, St. Ann's church
• Ron Oliver, Community Labor Leader
• Tim Ryan President, Apex Offshore Wind.
• David J. Rosenberg, Head of Marketing, North America Gamesa Energy
• Hillary Bright, Blue/Green Alliance Field Organizer.

Priscaro – When people make things It create sjobsm, revenue, they buy houses, participate in economy.

Ryan – Windmills, local wind turbines on old steel mill site, made in the US. Sun Ray project in Texas used GE wind turbines, GE Transport made the gearboxes. Gemasa, of Sain, has set up manufacturing near here. The Export/Import bank financing requires high local content. We need a national Renewable Energy Standard, then there is a tremendous opportunity for American manufacturing in wind energy.

Oliver – the effect on people of losing job, moving, move in with mom, manufacturing is the heartbeat of America.

Boothe – Donjon has recently gone from 13 employees, in 10 months have 118. 125 by end of year, 150 then up to 250.

Bright – Labor and environmentalists share common goals Hadn’t recognized how intertwined manufacturing is with a healthy community, environment, wages, families, healthy communities. And healthy environment. The way we see America in future generations, manufacturing is key to recognizing that.

Q: "Where are we going to get jobs? We need the infrastructure rebuilt, everything reconstructed. How?"

Bright – AAM, others have recognized that one of the largest opportunities is in clean energy. The stimulus was a down payment. Opportunity at federal policy level like Renewable Energy Standard to create the market and the demand to get it going, otherwise we lose the race to countries like China.

Oliver – We need to create the jobs here, the stimulus was using money to buy windmills made in China.

Ryan – We need new power plants as well as wind energy power plants. National policy has been up and down up and down, industry can’t survive on federal programs that last 6 months or a year, we need national policy that looks at the next 20 years or so.

Priest, we lost jobs because of legislation, we can gina jobs by legislation.

Q: "What can we do to stop the leak of jobs from US?"

Scott Paul: Stop tax breaks to ship jobs overseas.

(Note - All pictures by Ike Gittlen, USW, with permission. Click any pic for enlargement, see the entire collection here.)

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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

Posted by Dave Johnson at 8:24 PM | Comments (0) | Link Cosmos

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

Posted by Dave Johnson at 2:05 PM | Comments (0) | Link Cosmos

October 14, 2010

Jackson Mich Keep It Made In America Town Hall -- An Energized Event

Yesterday I was in Jackson Michigan to attend the 2010 "Keep it Made in America" Town Hall Tour meeting. It was a very well-attended event, and everyone I spoke with seemed energized because someone is out there talking about what they consider an important issue, and thought that manufacturing is vitally important to the country, for jobs, and so we can pay our bills.

Jackson

Jackson, for your information, makes a claim to be the city where the Republican Party was founded in 1854. One thing is for sure, it was a very, very, very different party then.

I last visited Jackson three years ago. The downtown was dreary, and I remember walking around trying to find a place to buy a sandwich, giving up and ending up at a dreary fast-food place outside of town. Like Flint, things appear to be changing. In Flint is has been public/private government/business partnerships that has helped revive the downtown and the area. The University of Michigan has opened a Flint campus right downtown and you can feel the difference. I'm moving fast on this road trip so I didn't have time to investigate what is behind the different feeling in Jackson. But I had trouble getting to flint because I kept passing all these highway construction zones with ARRA (stimulus) signs. The official U-3 unemployment rate is down to 12.8% from 15.2 earlier this year.

The Town Hall

The meeting was in the Commonwealth Community Center, downtown. The large room was full, approx 275-300 attendees. I asked around and things were getting started and people were getting seated and it was a diverse audience politically, including some Tea Party supporters. Everyone I spoke with seemed energized because someone is out there talking about what they consider an important issue, and thought that manufacturing is vitally important to the country, for jobs, and so we can pay our bills. A recent poll found that 74% of tea party supporters want government strategy for manufacturing

The format was speakers, a brief PowerPoint presentation, buffet dinner and a panel on manufacturing featuring local business, labor and others. Following is a brief summary trying to catch the essence of what some of the speakers said.

Jackson's Mayor Karen Dunigan gave a very short welcoming talk, saying “Every day politicians speak about jobs, and yet we are still losing jobs.”

Next, Lansing Michigan's Mayor and candidate for Governor Virg Bernero spoke, saying that when they say we are done with manufacturing, that it is a thing of the past, they are saying we are done with America being a great country. You can’t just have consumption, you have to make things. It isn’t gross domestic consumption, it is gross domestic product, with "product" being a key word.

Congressman Mark Schauer, MI-7, “Cash for Clunkers invested in auto industry, got our steel plant to reopen, 3 shifts of workers now here in Jackson, we need to do more of that, fight for jobs in Michigan,” and he had a debate in an hour gotta go. "We need to make decisions about educating our workforce, trade, make sure our dollars are not stimulating jobs in China… We were the arsenal of democracy, and China is spending twice what we are spending on renewable energy technology."

The Panel

Sharon Collins, local restaurant owner: The Pickle Barrel Deli

Mark Gaffney, President Michigan AFL-CIO

Amanda Proctor, Exec Director, Shop Rat Foundation

Bill Rayl, Jackson Area Manufacturers Association, also on the Council of the National Association of Manufacturers

Moderator: Scott Paul, Alliance for American Manufacturing

From notes:

The Shop Rat Foundation offers hands-on skilled trade education to kids, creating the next generation of proud skilled workers and citizens (shop rats).

Rayl: The federal government needs to step up in this country and realize that the gloves are off on the global playing field, it’s not a playing field it’s a war field, they’re cleaning up, free trade is one thing fair trade is another. We need government to help us out, to fight these trade practices.

We need to be able to go out there and compete. We want ot do it. China has a big market for us when we can play fair but they hamstring us, one hand tied behind our back, Chinese government is fighting us all the time.

Scott: There may be difference between business and labor on a lot of issues but on American manufacturing there is very little disagreement, especially on holding China actable, R&D tax credit, there is a lot of support for doing all of it.

Rayl: Manufacturing is not a Democrat or Republican issue, it’s an American issue, we can make anything you throw at us, we have great skilled workers out there, companies that want to keep those people in good paying jobs, give health care and all that stuff, but we can’t do it if we can’t compete on an even playing field.

Gaffney: A trade agreement that lets a company just pack up a factory and move it to another country just because wages are lower, leaving behind a devastated community and unemployment, is just bad policy.
As the country tries to get out of bad economic times hopefully the people in Washington figure out that manufacturing is the way to help. IF there aren’t good-paying jobs for people to go back to, what are we going to do?

Amanda:
Q) Filling a need, do you think what we have now with our high schools and Community Colleges is enough?
A) Definitely some great programs out there. Lot of great but definitely not enough, we’re trying to push, we need to focus on education more than we are. A lot of people don’t think it’s not worth the time to train a 6th grader, don’t think that far back, but I want to stress you've got to get them young, get them interested, without middle and high school programs going on anymore kids don’t know about trade skills, they’re afraid of tools, but get them doing that, they are more confident, they will go out get a job or go on to vocational schools.

Manufacturing In Michigan

I guess I don't have to tell you that Michigan is known for automobiles. But manufacturing in Michigan was wiped out in the 2000-2008 period. There were 897,100 people working in manufacturing in Michigan in 2000. There are 466,400 people working in manufacturing in Michigan now.

Other Jackson Town Hall Resources

MLive.com covered Virg Bernero speaking at the rally.

Steve Capozolla was live-blogging Jackson's town hall event last night.

A local radio station has posted some audio from the event here.

Details of the Keep It Made In America Town Hall Tour

And this: American Made Shopper had a display at the meeting. They only sell items that are Made In America.

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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Posted by Dave Johnson at 8:07 PM | Comments (0) | Link Cosmos

October 13, 2010

Flint, Michigan: A City Ahead Of The Rest Of 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.

I am in Flint, Michigan today, getting ready to drive down to Jackson for this evening's "Keep It Made In America" Town Hall. Flint has been through it and has come out the other end. Now the rest of us are going through what Flint has been going through.

Many people know about Flint from the 1989 movie Roger & Me. In the documentary General Motors had closed factories in its home town, outsourced the jobs, and left the community behind. This sort of corporate behavior was becoming common by 1989 but it was still shocking that an American company would do this to Americans and America. The movie focused on the effect this had on Flint and its people. You might remember seeing block after block of boarded-up homes and people talking about how the try to get by.

This has now been a familiar story for decades, companies closing factories, outsourcing the jobs, abandoning the communities, a few at the top pocketing the money and leaving absolute devastation in their wake.

I was last in Flint three years ago, visiting relatives. Twenty years after the movie Flint was still struggling, in depression, its downtown full of closed stores and many of the blocks of boarded-up homes were worse, if anything. There were "For Sale" signs everywhere, and this was before the national housing bust. But there were many signs of people learning to cope. The Farmer's Market was going strong. The University of Michigan was working on a new campus, the Mott Foundation and others were working on various approaches to try to help the community...

So here I am again. You can see three years worth of progress here. Revival is clearly occurring. The new U of M Campus is open and clearly making a difference. Part of the downtown is clearly revived, including the Durant Hotel restoration, while other parts are under construction. The Farmer's Market was named one of the best in the nation. There are fewer "For Sales" signs around. All around there is a better mood. Crime is still bad, there are still abandoned buildings, but a corner is turned.

Flint Farmer's Market:

Flint Ahead Of Nation

So Flint has been through it and has come out the other end. Now the rest of us are going through what Flint has been going through. And the rest of the country has a ways to go before we will see the other end of this. Roger & Me was 1989 and now it is 2010. The same crap is still going on, and more so. As I said, in 1989 it was still shocking that American corporations would treat Americans and America the way they did. But now we have been through another two decades of the few at the top closing factories, outsourcing the jobs, devastating the communities, pocketing the money and then using their financial power to demand tax breaks to further defund government. The difference is that now we all live with the effects, not just Flint.

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October 12, 2010

Reminder: I'm On The “Keep It Made In America” Town Hall Tour

I am 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 13-19, starting tomorrow in Jackson, Michigan.

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 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.

Please come if you can! 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 2:33 PM | Comments (0) | Link Cosmos

October 8, 2010

Conservative Policy = Bad Jobs Report

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 September jobs report is out and conservatives got exactly what they wanted: less government, less stimulus, less aid to states, less help for small businesses, less infrastructure investment, less help for the unemployed and ... a bad jobs report. Conservatives successfully watered down the first stimulus, defeated further stimulus, fought aid to state governments, fought unemployment benefits, defeated help for small businesses, etc., etc. Here are the results, just in time for the election.

NY Times, Employment Picture Dims as Government Cuts Back:

... over all, the economy shed 95,000 nonfarm jobs in September, the result of a 159,000 decline in government jobs at all levels. Local governments in particular cut jobs at the fastest rate in almost 30 years.

“We need to wake up to the fact that the end of the stimulus has really hit hard on local governments,” said Andrew Stettner, deputy director of the National Employment Law Project.

Conclusion: conservative policies kill jobs. They got what they wanted, and most of all they wanted bad job news, right now. Now, some if this was strategic, using obstruction to intentionally cause a bad jobs report in time for the election in order to turn voters against the governing party. But this jobs report clearly demonstrates what the results will be if conservatives get what they want: less government = fewer jobs. Less state government = fewer jobs. Less stimulus = fewer jobs. Fewer jobs = more people fighting for what jobs there are = lower wages. Lower wages = more stress on workers = angry electorate. Angry electorate = people divided, set against each other, not thinking long term, not thinking about the greater good, not seeing the bigger picture = conservative paradise.

Less government: Government payrolls shrank by 159,000.

Less help for the states: Local governments reduced payrolls by 76,000, 50,000 of those in education.

Less stimulus: The stimulus obviously turned things around, halting the freefall of job losses, but is running out. The chart below shows this Conservative have blocked more stimulus. Keep in mind, conservatives want to go back to the policies of the left side of this chart, the part that is in red. They want to stop government from stimulating demand in the economy.

Lower labor costs for businesses: "Flat hourly wages, now at $22.67, also threaten what fragile confidence American families may have in their household budgets."

Less help for the unemployed: Conservatives say helping the unemployed makes people lazy. They follow a dehumanizing "If you feed them they will breed" philosophy. There are nearly 15 million unemployed, 42% of them out of work longer than half a year. At the end of November help for those unemployed more than 26 weeks runs out.

Desperate workers: "In September, the typical unemployed worker had been searching for a job for 33.3 weeks."

Chad Stone, Chief Economist at the Economic Policy Institute, on the jobs report,

Today’s jobs report shows that the economy still faces a long and difficult climb out of the jobs hole created by the recent recession. The private sector has created, on average, fewer than 100,000 jobs a month this year — not enough to keep up with population growth and not nearly enough to reduce the unemployment rate. Worse, the pace of job creation is slowing as the economy slows, with only 64,000 private-sector jobs created in September.

Speaker Pelosi,

Today’s jobs report shows our private sector continues to lead our economic recovery. We lost more than 800,000 private sector jobs the last month of the Bush Administration, but America’s business owners and entrepreneurs have added more jobs this year than the Bush Administration and its Republican allies did in eight years. Democrats are moving our country forward, and we will and we must do more to strengthen our economy and put people back to work.

The American people face a clear choice: Democrats fighting for the middle class or Republicans standing up for special interests. They know Democrats want to ‘Make It in America,’ cut taxes for small business, and create good-paying jobs here at home. Republicans want to protect Wall Street and corporations that ship jobs overseas. Democrats want to cut taxes for the middle class, and Republicans want to give a break to millionaires and billionaires, and blow an even larger hole in our deficit. Democrats will preserve Social Security and Medicare; Republicans promise to privatize and cut benefits.

Americans can’t afford a return to the ‘exact same’ failed policies that produced the worst recession in generations. We will keep moving forward to create more jobs, growth, and prosperity for our workers and our families.

The "underemployed" - people who can only find part-time jobs, or have had hours cut, is up to 17.1%. See this chart:

And, finally, here is Calculated Risk's "scariest jobs chart," updated:

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Infrastructure Jobs, Repeat And Amplify

This post origina