January 10, 2013

Why DC Ignores Real Problems And What You Can Do About It

How many real and serious national problems can you list? And how many obvious solutions can you come up with literally off the top of your head? Now an experiment: list how many of them are being worked on by our DC elites or even discussed my our elite media? The answer is none. Why is this? And what can you do about it?

Real And Serious Problems

Start with climate change, clearly the most serious problem facing the world. If you think this is something that won't do serious damage until way off in the future, consider what could happen this year if our country's terrible drought continues, and then other climate-related disasters hit other agricultural regions around the world. Oh, right, mass starvation. Never mind the storms and storm surges, huge wildfires, heat waves, etc. that we are already experiencing.

Jobs. We have an absolute and continuing jobs emergency and people are suffering. And it is the reason we have a big budget deficit. Is there an economic problem that is more serious than jobs? Imagine if we had full employment, and companies had to actually pay well to get the employees they need, and provide training, etc. Imagine how LOW the budget deficit would be. The high budget deficit is a flip side of all the benefits businesses are getting from the low wages, long hours, etc. that come from high unemployment. The budget deficit is literally the government subsidizing WalMart's low wages.

Our huge, huge trade deficit - the actual deficit that is actually draining our economy and killing jobs and factories and industries and our ability to make a living in the future. The budget deficit is money spent on each other, things that make our lives better. The trade deficit is money that just bleeds out, making us all poorer and less able to take care of each other.

Infrastructure - our country's infrastructure is seriously in disrepair. Never mind that we don't have modern things that could be seriously boosting our economy, like high-speed rail and fiber-internet to every business and home -- things are falling apart.

Education, the cost of universities and resulting student-loan debt, the need for more community colleges, etc. They are pretending to talk about this but all the solutions being discussed take money away from our schools and universities and only benefit the Wall Street types...

You can name dozens of other serious, major national problems that are not even on the DC-elite agenda!

OK, they appear to be talking about guns. That's good. But not if they are talking about even more guns.

Many Problems Have Obvious Solutions

We can start attacking the climate problem with a big carbon tax. People will start using alternatives, which will cost less than using carbon-based energy sources. (PS the revenue also helps fix the budget problem.) Refund some of the money collected to those who are hit hardest by the tax, like low-income people who have to drive to work.

Infrastructure and jobs are two of our most serious problems. But obviously if we start fixing the infrastructure problem we are also fixing a lot of the jobs problem. (Especially if we have strict "Buy American" requirements for the materials, steel,etc.) (PS this also helps fix the budget problem because people with jobs are paying taxes, not using the safety net, and the economy becomes more competitive in the long run.)

Etc, with the obvious solutions. I don't have to put them here, they're obvious.

So why do they ignore the real problems and the obvious solutions that help We, the People?

Why Do They Ignore The Real Problems?

So WHY do our DC-elite geniuses ignore our real problems? We all know the answer: the influence of big money. Big money dominates. Big money steers the discussion. Big money buys the politicians. Big money lobbies the rule-makers. Big money uses the "revolving door" to reward the officeholders and staffers and regulators with high-paying jobs after they leave government -- if they play ball while in government.

And big money rigs the game so only the really big money -- those who already have it -- can win.

But the problem extends so far past the direct bribery, especially in the way it dominates the country's information channels. This means the major media (all of it dominated by only 6 companies), and all of the ways that our national discussion gets shaped.

Using the climate problem as an example, we all understand that big money from the fossil-fuel industry is being used to keep us from attacking this problem. But how?

Looking at how the information channels are influenced illustrates how far big money reaches. They don't just bribe politicians, and hire them and staffers later, etc. They also use their big money to influence how we talk and even think about this. Aside from the huge money spent on lobbyists, there are the dozens and dozens of so-called "think tanks" and "institutes" and other organizations that get money from these companies to pay people to go on TV and radio and write articles and op-eds, etc, to influence the nation's discussion of this. They also have their "studies" and "reports" etc. that get in the news. If you want a major-media career you had best not get on the wrong side of these companies. They totally dominate and intimidate and do what it takes to get their way.

(A few - just a few - resources on this: Frontline: Climate of Doubt, Meet The Climate Denial Machine, Koch Industries: Secretly Funding the Climate Denial Machine, Climate Skeptic's Debunked Report Exposes How the Denial Industry Works, How climate change denial lets the fuel industry run politics, in one handy chart)

The information sources of our democracy are controlled by the big money. Another example (of so many) of how the corporate money machine influences what we as a country talk and even what we think about: How often do you see a labor leader on your TV talking about the benefits of unions?

Then there are the other information channels. Did you hear about FreedomWorks paying Glenn Beck and Rush Limbaugh huge money to promote the Tea Party? Or the other stories about how they get and use their money? (FreedomWorks is one of the organizations that bused in thugs to disrupt Congressional town hall meetings a few years back.) This is just one of the dozens and dozens of well-funded outfits that is getting huge money to influence our national political climate.

How about that huge fight over taxes on billionaires? Do you know about the huge influence of Grover Norquist and his organization? Look at this: Grover Norquist's Budget Is Largely Financed by Just Two Billionaire-Backed Nonprofits.

This flood of corporate and billionaire money goes well beyond just paying politicians. And it is the reason it seems like we are helpless to do anything about the real and serious problems our country faces.

What You Can And MUST Do

We have to counter this money, and that takes money. We have to get money to use to fight back. We can't just all be doing what we can in our spare times, and signing online petitions, or quitting our jobs and living in poverty so we can work on these problems.

There are millions of us and if we all give even a small amount of money to help out, we can get things done!

The most important and effective thing you can do, even before you get active online and then on the streets is to contribute money to progressive organizations, and make it a habit. Seriously, they have corporate funding and all We, the People have is We, the People. There are a lot of us and if everyone who agrees with progressive values started to actually put some money where our values are, we could make up for that corporate money.

If you have to start small, that is fine. 20 million people starting small can make a huge difference.

Try it, click here and give $3 to the organization I work for, Campaign for America's Future.

Click these links and give $3 to Progressive Congress, or Media Matters.

How about giving $3 to help Netroots Nation or Crooks and Liars or Daily Kos, or Blue America or Firedoglake, or AMERICAblog.

You can also give a donation to Center for American Progress here, or to the National Council of La Raza here, or to Demos here, or to the Economic Policy Institute here, to the Center for Community Change here, the Leadership Conference on Civil and Human Rights here, to People For the American Way here, and there are so many other organizations that are working in their own way to help. (I'll add them as they read this and write to yell at me for leaving them out.)

Go through the ActBlue directory, and give $3 here and $3 there.

We really need for progressives to understand this need, and the difference between this and election campaign contributions. Think about it, and help spread the word. Help fund it, and help others understand this need. We can beat back the conservative machine by building a machine of our own that is strong enough to do the job. This takes money.

And to keep that machine answerable to US, we have to fund it democratically, with each of us stepping up and contributing what we can. It has to be lots of people giving small and medium amounts, not depending on a few large donors. ANY organization or candidate is going to dance with the ones that brung ‘em, so WE have to bring them to the dance together. Go give $3 or $10 or $100 to any of those organizations now, and keep doing it, and get others to do it.

If you want to help be part of the SOLUTION this is a great way to start. This is the most important thing you can do. AND you should be online and on the streets. But the most important thing is to give some money to help counter the huge flood of corporate money.

PS See also Republicans Again Use Race, And It’s OUR Fault That It Still Works

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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 8:21 AM | Comments (0) | Link Cosmos

December 5, 2012

Jobs First Because Jobs Fix Deficits


What happened to jobs? The pubic wants government to do something about jobs and getting the economy moving, and in DC the only thing is this weird argument about ... anything but jobs and getting the economy moving! "Fiscal cliff?" What about jobs? Fixing the economy will fix the debt, not the other way around.

Economic Storm Clouds

The economy is slowing, with signs of trouble on the horizon. Recent economic indicators are not so good. Trade deficits are huge, a bad manufacturing number this week, Europe still stagnant and slipping (because of austerity), China slowing. NY Times says, "Recent economic data "surprisingly weak," and "recovery sputtering." From Republicans Balk at Short-Term Stimulus in Obama Plan,

“As the debate rages in Washington, data has shown the recovery once again sputtering, with the underlying rate of growth too slow to bring down the unemployment rate by much and some of the economic momentum gained in the fall dissipating in the winter.”

It's Demand Stupid

This slowing is not happening because people are "worried about the fiscal cliff." It is because there are not enough jobs, and the wages of the people who do have jobs are stagnant with all the gains in the economy going to a very few at the very top of the economic ladder. Europe is slowing because they attacked deficits instead of hiring people to do jobs. We are slowing because the government stopped stimulus and started cutting.

The slowdown is because the jobs are not coming back fast enough, wages are stagnant and falling, and the government is not doing anything about it. And that means that there is not enough "demand" in the economy to cause investment and hiring.

Businesses want customers, not tax cuts -- and certainly not cutbacks. In fact most of what DC is focused on -- austerity -- will make the situation worse, possibly even much worse, as it has done in Europe.

Small Stimulus In President's Proposal

To his credit the President's "fiscal cliff" proposal does contain a limited stimulus to help keep the economy moving, at least at its current slow pace. But we really need a massive investment in jobs. The President's offer of $50 billion in stimulus for one year is insufficient, but at least it is something. The Republicans offer less than nothing, they want government efforts cut.

Jobs Fix Problems: The DC elite, major media and lobbying apparatus is focused like a laser beam on how much to cut, so the wealthy can have even more. But the public isn't stupid, they get that there is a disconnect because they know that jobs fix problems, jobs fix deficits and lots of jobs fixes wage stagnation. Strong employment = wage growth. Strong wages = strong economic growth.

The People Spoke -- The Election Was Supposed To Have Decided This

The election made it obvious, the public wants jobs, wants government services like Medicare and Social Security protected and even expanded, and more than anything wants taxes raised on the ultra-wealthy.

The election made the public’s wishes clear. But Washington continues to simply ignore what the public wants, and is focused like a laser beam on what a few billionaires want.

It was like there was an intense focus on the election, the public spoke, and then the very next day all attention shifted back away from what the public wanted and onto this austerity agenda that helps the billionaires at the expense of the rest of us.

A Government Of, By and For We, the People

I recently watched the PBS series The Dust Bowl. One thing that stood out was how the government actually cared about what was going on with the people, was trying to solve the problems, and how the people got it that the government was on their side.

Today it is a very different story, with the government isolated and largely under the control of wealthy and powerful interests. The current "fiscal cliff" absorption being only the most recent example.

The public doesn't get what is going on in DC. They want JOBS first, they want the meager government services they do get preserved and even expanded. And they want a fix to the problem of the last few decades of wage stagnation, corporate domination, outsourcing manufacturing, deferring infrastructure maintenance, unionbusting, age discrimination, and cancelling TV shows everyone likes. (Just seeing if you are still reading.)

Economy Has Lots Of Jobs That Need Doing

Jobs solve problems. Right now the country has lots of problems, so the country needs lots of jobs, which solve problems. And by great coincidence right now the country needs lots of things done. The country needs to repair and modernize its infrastructure. The country needs to update its electrical grid. The country needs to make its buildings and homes more energy efficient. All of these are things that improve the economy in the long run. And the remarkable thing is that all of these are things that will have to get done sooner or later.

So the country could just hire people to do those jobs that need doing -- like FDR did. How hard is it to understand that?

1) Hire people to modernize the infrastructure and make buildings and homes energy efficient.
2) All those people are participating in the economy again: paying taxes, buying things, not getting food stamps and unemployment.
3) The economy is much more efficient because of the work that got done on the infrastructure and energy efficiency.
4) The newly efficient economy is more than able to pay off the cost of all the work that was done -- that had to be done eventually.

Republicans Obstructing Everything

The current Republican view is that government itself hurts the economy, is "in the way," and that taxes and government spending "take money out of the economy." So they continue to block all efforts to revive the economy through jobs programs, investment in infrastructure, even helping the unemployed.

They say that providing unemployment benefits keeps people from being forced to take the lowest-paying, nastiest, most demeaning job that comes along. But progressives believe in democracy and say that's the point of helping each other -- that we are a country where we are in this together to build mutual prosperity -- unemployment benefits prevent a death spiral of continually falling demand.

Republicans talk about “pro-growth” policies, always meaning tax cuts for the rich. They say that only rich people "create jobs" so giving more and more money to these "job creators" will eventually trickle down to the rest of us. But all actual evidence shows that this policy does nothing to promote growth, only inequality. In fact the times of highest taxes on the wealthy have been the times of more jobs and more economic growth shared by more of us.

Business Gets It

I recently came across this Comstock Partners, Market Commentary: The Deficit Did Not Cause The Recession; The Recession Caused The Deficit,

Both Wall Street and Washington have lost sight of the major cause of the deep recession and exceedingly slow economic recovery. To hear all the talk, the major concern is about the impending fiscal cliff and the federal budget deficit. Fix the fiscal cliff and make major reductions in the deficit, they say, and all will be ok. We think they've got it wrong.

Go read why...

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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 12:14 PM | Comments (1) | Link Cosmos

How the Territorial Tax Cut Destroys Jobs

There is a little-discussed proposal that was introduced into the "fiscal cliff" discussions by the CEOs of the "Fix the Debt" campaign. This is for a “Territorial Tax System" idea that lets multinational companies off the hook for taxes on offshore profits. This plan is particularly dangerous to American wages and jobs -- YOUR wages and job -- as well as any American companies that don't export their profit centers. This threat is not limited to the blue-collar jobs that have been disappearing, it also threatens the professionals, "knowledge workers," designers, innovators and others who contribute to corporate profits here in the US.

The Territorial Tax proposal asks for no taxes on foreign profits of American corporations. This system would encourage and practically force companies to move profit generation (innovation, intellectual property, etc.) out of the US. This gives corporations an incentive to move everything that makes them money out of the country — every profit center, every job, every factory, every designer, inventor, etc.

This plan only benefits the giant multinational corporations — and helps them kill off even more American jobs and smaller businesses. And without those wages and taxes our infrastructure, schools, police and fire protections, and everything else here will decline even more.

If executives brought these American-company profits back to America now, disbursed it to shareholders or reinvested it in their companies -- and paid the taxes due -- this would be at least a $1.2 trillion boost to our economy. The taxes owed to We, the People wold help pay for our schools, etc., or help pay down our debt. But instead of just doing the right thing, this Territorial Tax Dodge System will add another layer of corporate game-playing, encouraging them to report even more of their profits as being made out of the US. It also lets the ones who have dodged taxes by holding cash offshore -- and away from their own shareholders -- get away with it. See this Citizens for Tax Justice report on companies that have been holding cash offshore -- away from our ability to tax them as well as from their own shareholders, Which Fortune 500 Companies Are Sheltering Income in Overseas Tax Havens?

A new CTJ analysis of the financial reports of the Fortune 500 companies shows that 285 of these corporations had accumulated more than $1.5 trillion in overseas profits by the end of 2011, and there is evidence that a significant portion of these profits are located in tax havens.
In particular, our analysis shows that ten corporations, representing over a sixth of the $1.5 trillion in unrepatriated profits, reveal sufficient information to show that they have paid little or no tax on their offshore profit hoards to any government. That implies that these profits have been artificially shifted out of the United States and other countries where the companies actually do business, and into foreign tax havens.

A March Bloomberg report, Cash Hoard Grows by $187 Billion in Untaxed Overseas Profits also looked into specific companies that hide profits offshore (and away from shareholders) to avoid their corporate taxes.

The Institute for Policy Studies warns about the Territorial Tax in a report, The CEO Campaign to ‘Fix’ the Debt, A Trojan Horse for Massive Corporate Tax Breaks,

The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.

The full report continues,

A territorial system would give companies additional incentives to disguise U.S. profits as income earned in tax havens in order to avoid paying U.S. income taxes.
[. . .] S&P 500 companies as a whole have nearly $1.5 trillion parked offshore, according to Citizens for Tax Justice. While some of these profits are offshore because a U.S. multinational corporation produced a product offshore and sold it to a foreign consumer, a significant share is there for the purpose of avoiding taxes.
Here’s how it works. The U.S. corporate tax code requires U.S.-headquartered corporations to pay a tax rate of 35 percent on their profits regardless of where in the world those profits are earned. But there are two important exceptions. First, U.S. corporations are granted credits for any taxes paid to foreign governments. Second, any profits deemed permanently reinvested offshore are exempted from U.S. taxes until and unless they are returned to the United States.

The report details ways that corporations shift profits out of the country.

David Cay Johnston talked about this idea on the Ed Show in May,

Well, what it would encourage companies to do is to take all their intellectual property that they haven`t moved and anything else they can out of country, so that they earn a dollar here in the U.S. and they show it to their shareholders, and then they may magically send it to the Cayman Islands and it disappears to the IRS.
So even if they are making things here in the U.S., they`ll be able to move profits out of the country by having their intellectual property out of the country. Secondly, if they find a place that has similar rules, then you move the jobs offshore and you can still earn tax free profits.

2004 - Been There, Done That, CUT Jobs

In 2004 corporate lobbyists got the American Jobs Creation Act passed, letting multinationals bring their foreign cash back at a special low rate. 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.

After bringing the profits back from the tax havens where they had been parked, the companies involved actually cut jobs. Alain Sherter, in Sure, a “Tax Holiday” on Overseas Profits Is a Great Idea — If You Hate America, looked into what happened and wrote,

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.

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.

Be aware of this Territorial Tax proposal. It is offered by the Fix the Debt CEOs, and it is entirely about reaping even more billions for the billionaires, at the expense of all of the rest of us and the country.


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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 8:34 AM | Comments (0) | Link Cosmos

October 26, 2012

Why Voters Need To Know About #Sensata

Right now a company named Sensata is moving equipment out of a factory in Freeport, Ill. and shipping it to a factory in China. Sensata will be laying off all of the American workers, but first they are making the workers train their Chinese replacements. The workers' last day is the day before our election. Here's the thing: this company is owned by Bain Capital, and Mitt Romney -- who says he is against shipping jobs to China -- will make a fortune from the move to China.

The Sensata employees have set up a camp outside the factory that they call Bainport and are trying to stop the Bain trucks that are moving the equipment out for shipment to China. These soon-to-be-jobless workers have asked Romney to come help them.

This is a tremendous opportunity for Mitt Romney. As the former head of Bain Capital and with all the visibility of a presidential campaign, he could step in and help these workers. It offers him the chance to demonstrate to voters that he means the things he says on the campaign trail, and is not just saying these things to get votes. But Romney has refused.

Mitt Romney says on the campaign trail that he will crack down on China and is against companies shipping jobs to China. These are very popular positions to take -- the public overwhelmingly wants to see things made in America again, and understands that China's trade cheating is costing us dearly. So a candidate for president would certainly say he is for doing this. But when it comes time to show that he will actually means it and will do something about it, it looks as though Romney is not doing it. These workers have asked for his help, but he won't do it. Voters should know about this, and make up their own minds about whether Mitt Romney means what he says, or just says what he needs to say to win.

Bain Capital And Sensata

Mitt Romney started the "private equity" firm Bain Capital. Bain's business model is to purchase companies using "leveraged buyouts" that borrow huge sums using the purchased company's own assets as collateral, uses the borrowed money to immediately pay itself, then cuts costs by doing things like sending jobs to China, cutting wages and manipulating tax rules to cut taxes owed, along with standard big-business practices like consolidating business units, taking advantage of economies of scale not available to smaller competitors, squeezing distribution channels for price cuts, and other practices that bring competitive advantages. (See So DID Mitt Romney Really "Create Jobs" At Staples? and Truthout: Romney & Company Shipped Every Single Delphi UAW Job to China.) After reorganizing the purchased companies and cutting costs -- namely: you -- Bain then "harvests" them for profit.

One company that Bain Capital purchased -- after Romney's time as CEO -- is Sensata, a sensor manufacturer that makes key components for our automobile supply chain. Sensata then announced it is closing the factory in Freeport, Ill., and sending all of the manufacturing and jobs to China. This is significant because China is engaged in an effort to capture the automobile manufacturing supply chain, and sensors are a key strategic chokepoint. China built a factory for Sensata, and offers other incentives to the company to move manufacturing there.

So Bain is currently moving all of the equipment out of the Freeport factory, preparing to shut it down and lay off all of the American workers. Bain/Sensata brought in Chinese workers and made the Freeport workers train them. Bain/Sensata is moving the equipment out of the Freeport factory and shipping it to China right now.

The Sensata employees heard Romney on the campaign trail, and somehow got the idea that he opposes sending our jobs to China just because he says that he opposes sending our jobs to China. So the Sensata workers asked him to come to Freeport/Bainport and help them. Read on to learn about Romney's response to the Sensata workers, and how Romney is actually making big money right now from shipping their jobs to China.

"The week before they came they took the American flag down outside the plant. The week after they left they put it back up."

Romney Making A Fortune From Sensata Sending Jobs To China

While Mitt Romney no longer manages Bain Capital, he still has millions of dollars in Bain funds and will personally make a fortune from this company moving to China - both from profits and from tax breaks. (What you and I consider a fortune, Romney might consider a drop in the bucket.)

A must-read news report by Sharon LaFraniere and Mike McIntire in The New York Times explains. As Romney Repeats Trade Message, Bain Maintains China Ties (emphasis added, for emphasis),

Mr. Romney also has millions invested in a series of Bain funds that have a controlling stake in Sensata Technologies, a manufacturer of sensors and controls for vehicles, aircraft and electric motors that employs 4,000 workers in China. Since Bain took over the operation in 2006, its investment has quadrupled in value. Bain continues to own $2.6 billion worth of Sensata’s shares.

Two years ago, Sensata bought an operation that made automobile sensors in Freeport, Ill. At the first meeting with the plant’s 170 workers, Sensata managers announced that by the end of 2012 all the equipment and jobs would be relocated, mostly to Jiangsu Province. Workers have staged demonstrations, pleading for Mr. Romney to intervene on their behalf.

Chinese engineers, flown to Freeport for training on the equipment, described their salaries as a pittance compared with Freeport wages. Tom Gaulrapp, who has operated machines at the factory for 33 years, said he fears he will go bankrupt after he loses his job on Nov. 5.

“This goes to show the unbelievable hypocrisy of this man,” he said of Mr. Romney. “He talks about how we need to get tough on China and stop China from taking our jobs, and then he is making money off shipping our jobs there.”

Please read the entire New York Times report, As Romney Repeats Trade Message, Bain Maintains China Ties. There is much more there about Romney, China, Bain and the huge gap between what Romney says on the campaign trail, and how Romney made his current $400,000/week income and how Bain Capital still makes its money.

Also see this Huffington Post report, Mitt Romney Gets Tax Break Off Firm Sending Jobs To China,

According to his recently released 2011 tax returns, Romney transferred $701,703 worth of Sensata stock to the Tyler Charitable Foundation, a 501(c)3 tax-exempt nonprofit controlled by Romney. The gift is listed on page 323 of the pdf, on form 8283 (below).

Moving the stock to his nonprofit brings Romney twin benefits. First, he gets to deduct the full value of the stock. At a 35 percent tax rate, that's nearly a $250,000 benefit. At 15 percent, it's just over $100,000.

Second, Romney is able to avoid paying capital gains taxes on the stock price increase. Romney's returns list no cost for the stock, and indicate he obtained them as part of a partnership interest in Bain. Avoiding capital gains taxes on the full increase would save an additional $100,000. In 2010, Romney gifted $170,000 worth of Sensata stock to his charity, saving $25,000 in capital gains taxes that year.

Cheryl Randecker, a Sensata worker facing an imminent layoff, said, "I could pay off my house with that [$25,000], and he doesn't need it anyway."

So there you have it. Mitt Romney says he opposes sending jobs to China, and says he will "crack down" on China. But he refuses to do things that he could do right now that would make an actual difference right now. And it turns out that right now he is making big money from Sensata and other companies that are sending people's jobs to China right now.

Laying off American workers – usually shipping the jobs to China – and pocketing their wages for themselves is the story of the rise of the wealth of the 1%, and the decline of the American middle class. It is the Romney/Bain/Sensata business model. And the remaining workers have to do the jobs of the laid-off workers, often for lower pay, and are threatened with losing their jobs, too, if they don't like it.

Economic Traitor?

This is an advertisement titled "Economic Traitor," that is being aired by superPACs Workers' Voice and Patriot Majority, based on Sensata:


Click here to see all of CAF's coverage of Sensata.

Bain Of Our Existence - The Go-To place for stories and info about Bain Capital.

For more information, photos and stories from the Sensata workers, please visit bainport.com.


For Fun

From UnitedNY, if Bain Capital was your psychologist:

PATIENT (LYING DOWN on couch): I think he’s depressed. I mean, he is a good kid but he just keeps to himself. I can’t get him to talk or spend time with the family and barely does any chores.
BAIN: Have you consider outsourcing? (hold shot of PATIENT)
PATIENT (confusion) You want me to outsource my son? (TURNS HEAD towards BAIN in surprise)
CUT to Bain face
BAIN: Yes, you can find some very obedient children in China or Bangladesh, even the Philippines.

(P.S. The reason I use #Sensata in the titles is because on Twitter the "hashtag" helps get the word out.)

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 4:00 PM | Comments (0) | Link Cosmos

October 19, 2012

I'll Be Talking About #Sensata On The Young Turks Tonite

The Young Turks with Cenk Uygur // Current TV

Posted by Dave Johnson at 1:06 PM | Comments (0) | Link Cosmos

October 15, 2012

Here Is What Is Happening With #Sensata

If you are hearing about a company names Sensata, here is the story. Right now this company is moving equipment out of a factory in Freeport, Il. and shipping it to China. They are making the workers there train their Chinese replacements. And the end of the year they are laying off the American workers. The workers have set up a camp across from the factory and have named it Bainport. (please click!) Supporters are trying to block the trucks, and some have been arrested. This is all happening right now, even as Mitt Romney says he wants to "get tough on China." So the workers have asked Romney to come to Freeport and help them.

"The week before they came they took the American flag down outside the plant. The week after they left they put it back up."

See Wendi Kent's moving photos of the Bainport camp, where workers are asking Romney to hep them:

Bainport, Illinois Pt.1

Bainport, Illinois Pt.2- Profits Over People

What's Going On?

Republican presidential candidate Mitt Romney started the "private equity" firm Bain Capital. Bain Capital makes its money by purchasing companies using "leveraged buyouts" that borrow huge sums using the purchased company's own assets as collateral. They often use part of the borrowed money to immediately pay itself. Bain then cuts costs by doing things like sending jobs to China, cutting wages and manipulating tax rules to cut taxes owed, along with standard big-business practices like consolidating business units, taking advantage of economies of scale not available to smaller competitors, squeezing distribution channels for price cuts, and other practices that bring competitive advantages. (Please see So DID Mitt Romney Really "Create Jobs" At Staples? for a look at how this works.) Then, after reorganizing the purchased companies Bain "harvests" them for profit. ("Harvest" is Romney's word, watch the linked video.)

Bain Capital purchased a sensor manufacturer that makes key components for our automobile supply chain, and named it Sensata. They immediately announced they closing a factory in Freeport, Ill., and sending the manufacturing and jobs to China to save money. (This is significant because China is engaged in efforts to dominate American auto supplies. See China Cheating Costs 400K Auto Parts Jobs and Why The Latest Trade Complaint Against China Matters. )

Bain/Sensata brought in Chinese workers and made the Freeport workers train them. Bain/Sensata is moving the equipment out of the Freeport factory and shipping it to China right now. The Freeport employees have set up a camp outside the factory that they call Bainport and are trying to stop the Bain trucks that are moving the equipment out for shipment to China. Supporters were arrested this week, trying to stop those trucks.

The Sensata employees have asked Romney to come to Freeport/Bainport and help them. Read on to learn about Romney's response to the Sensata workers, and how Romney is actually making big money right now from shipping their jobs to China.

Romney's Opportunity

Mitt Romney is not running Bain Capital anymore. While he still makes millions from the company, and gets checks from the profits made when they ship jobs to China), this is a tremendous opportunity for him. Can you imagine a better spokesman for the Bainport employees than the former head of Bain Capital, who now says he opposes the kinds of things that Bain Capital is doing here?

This is an opportunity for Romney to show the public that he actually means it when he says he wants to do something about companies sending jobs to China! Here is his former company, people who know him, sending jobs to China right now and there is no one in a better position to put pressure on them to stop this than the former head of the company, and on top of that a presidential candidate!

What an opportunity for Romney to show that he means what he says!

Will Romney Help?

Mitt Romney wants to be President, and polls show that the public overwhelmingly wants something done about jobs and factories moving to China and the resulting was pressure that puts on the rest of us and on our economy. So Romney says he will do something about it.

But Romney's current actions are opposite his current words. He complains about China currency manipulation, but refuses to ask the Republican House leadership to bring the China currency bill up for a vote, and refuses to ask more than 60 Republican co-sponsors of that bill to sign a "discharge petition" that would force a vote.

And Romney refuses to even meet with Sensata workers. When asked if Romney would help these workers the Romney campaign says Romney will not do it:

"Governor Romney has not worked at Bain Capital for over a decade, but for four years President Obama has been presiding over an economy that is creating too few jobs and sending more jobs overseas. Despite the President being invested in Sensata through his personal pension fund, and the government owning a major Sensata customer in GM, President Obama has not used his powers to help this situation in any way."— Curt Cashour, Romney Campaign Spokesman.

PS - SNL

Here is SNL addressing the disparity between how Chinese workers are treated (because they don't have a say) and American expectations:

For More On Sensata

Is This Why Romney Won't Talk To Sensata Workers Whose Jobs Are Being Shipped To China?

You Should Know About Sensata - It's What The Election Is About

Election Or Not, What Happens To Sensata-Style Workers?

Blocking Bain Trucks To Save Jobs In Freeport – This Is An IMPORTANT Story

Breaking – Arrests At Sensata "Bainport" Camp

Paul Harris at The Guardian: 'I'm sick to my stomach': anger grows in Illinois at Bain's latest outsourcing plan

Also, see:

Bain Of Our Existence - Go To place for stories and info about Bain Capital.

Laura Clawson at Daily Kos: Mitt Romney profits as Bain sends American jobs to China PLUS a Daily Kos campaign:
Send a message of support to the Sensata workers as they fight to keep their jobs and shine a light on what a Romney economy would look like.

Unraveling The Romney/Bain Tax Story,

Romney, Jobs And China – Let's Connect Dots

Rights Report Describes Romney-Owned "Brutal Chinese Sweatshop"

Romney, Republicans Again Side With China Over US Companies

Ohio And China – One Side Promises While The Other Delivers

China Is Very "Business-Friendly"

Will Conservatives Support American Companies ... Or Chinese?

Ohio And China -- One Side Promises While The Other Delivers

Here is a Democracy Now! report:

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 10:42 AM | Comments (0) | Link Cosmos

October 10, 2012

Is This Why Romney Won't Talk To Sensata Workers Whose Jobs Are Being Shipped To China?

On the campaign trail Romney says we shouldn't ship jobs to China and should "crack down" on China trade problems. But he refuses to help or even meet with the Sensata workers whose jobs are being shipped to China right now.

Why the refusal to line up his actions with his promises? A must-read, must-read, must-read news report explains how part of Romney's $400,000/week income comes from ... get this ... shipping jobs to China!

First, the background...

Sensata - Happening Today

Mitt Romney started the "private equity" firm Bain Capital. Bain purchases companies using "leveraged buyouts" that borrow huge sums using the purchased company's own assets as collateral, uses the borrowed money to immediately pay itself, then cuts costs by doing things like sending jobs to China, cutting wages and manipulating tax rules to cut taxes owed, along with standard big-business practices like consolidating business units, taking advantage of economies of scale not available to smaller competitors, squeezing distribution channels for price cuts, and other practices that bring competitive advantages. (See So DID Mitt Romney Really "Create Jobs" At Staples?) After reorganizing the purchased companies Bain then "harvests" them for profit.

One company Bain Capital purchased is Sensata, a sensor manufacturer that makes key components for our automobile supply chain. Sensata then announced it is closing a factory in Freeport, Ill., and sending the manufacturing and jobs to China. (China is engaged in efforts to dominate American auto supplies. See China Cheating Costs 400K Auto Parts Jobs and Why The Latest Trade Complaint Against China Matters.)

Bain/Sensata brought in Chinese workers and made the Freeport workers train them. Bain/Sensata is moving the equipment out of the Freeport factory and shipping it to China right now. The Freeport employees have set up a camp outside the factory that they call Bainport and are trying to stop the Bain trucks that are moving the equipment out for shipment to China. Supporters were arrested this week, trying to stop those trucks.

The Sensata employees heard Romney on the campaign trail, and somehow got the idea that he opposes sending our jobs to China. So they asked him to come to Freeport/Bainport and help them. Read on to learn about Romney's response to the Sensata workers, and how Romney is actually making big money right now from shipping their jobs to China.

"The week before they came they took the American flag down outside the plant. The week after they left they put it back up."

The China Problem – The Public Gets It

During the George W. Bush administration we lost more than 50,000 factories and at least 6 million manufacturing jobs directly to China. (Never mind the effect on the supply chains, the grocery and clothing stores where those people shopped, etc... The foreclosures, the bankruptcies, the misery...) Thanks, George!

This chart from Think Progress shows what happened to our manufacturing base immediately after Bush took office. Seriously, look at this chart and see if you can just guess why we have such a terrible economy today:

The public gets it – the problem is China. Polls show that the public overwhelmingly – by percentages in the 80s and 90s for Democrats and Republicans alike – understands that a huge part of our economic troubles come from the was we have been shipping jobs, factories and industries to China.

ABC News, from July: ‘Made In America’ Policies Hugely Popular, Survey Shows

Nearly 9 out of 10 Republicans and Independents and 91 percent of Democrats said they support “Buy America” preferences, according to the survey, which was conducted by the Democratic-leaning Mellman Group.

Another poll,

When it comes to trade with China, the poll found that voters emphatically support tough action on Beijing’s cheating on currency and other trade obligations.

Another, from a key state: New Zogby Poll: Ohio Voters Favor Boycott of China Over Unfair Trade.

Romney Can Read Polls

One thing the Romney campaign can do is read polls. So Mitt Romney sees the polls and says he wants to do something about China.

The Hill: Romney, campaigning in Ohio, vows to stop China's 'cheating' trade practices

Bloomberg: Romney Ad Says He Will `Stand Up to China': Video

The Hill: New Romney ad says Obama won’t ‘stand up to China’ on trade, jobs

So, on the campaign trail Romney says he will stand up to China's cheating, and opposes companies that send jobs and factories to China.

Romney Refuses To Help – Even Talk With – Sensata Workers

Romney wants to be President, and polls show that the public overwhelmingly wants something done about the problem of jobs and factories moving to China, and the resulting was pressure that puts on the rest of us and on our economy. So Romney says he will do something about it.

But Romney's current actions are opposite his current words. He complains about China currency manipulation, but refuses to ask the Republican House leadership to bring the China currency bill up for a vote, and refuses to ask more than 60 Republican co-sponsors of that bill to sign a "discharge petition" that would force a vote.

And Romney refuses to even meet with Sensata workers. When asked if Romney would help these workers the Romney campaign says Romney will not do it:

"Governor Romney has not worked at Bain Capital for over a decade, but for four years President Obama has been presiding over an economy that is creating too few jobs and sending more jobs overseas. Despite the President being invested in Sensata through his personal pension fund, and the government owning a major Sensata customer in GM, President Obama has not used his powers to help this situation in any way."— Curt Cashour, Romney Campaign Spokesman.

Why is Romney saying he wants to do something about the trade problem with China, but refusing to actually do anything about the trade problem with China? Here is one possible reason why.

Romney Making Big Money From Bain Sending Sensata Jobs To China

A must-read news report today by Sharon LaFraniere and Mike McIntire in The New York Times explains. As Romney Repeats Trade Message, Bain Maintains China Ties (emphasis added, for emphasis),

Mr. Romney also has millions invested in a series of Bain funds that have a controlling stake in Sensata Technologies, a manufacturer of sensors and controls for vehicles, aircraft and electric motors that employs 4,000 workers in China. Since Bain took over the operation in 2006, its investment has quadrupled in value. Bain continues to own $2.6 billion worth of Sensata’s shares.

Two years ago, Sensata bought an operation that made automobile sensors in Freeport, Ill. At the first meeting with the plant’s 170 workers, Sensata managers announced that by the end of 2012 all the equipment and jobs would be relocated, mostly to Jiangsu Province. Workers have staged demonstrations, pleading for Mr. Romney to intervene on their behalf.

Chinese engineers, flown to Freeport for training on the equipment, described their salaries as a pittance compared with Freeport wages. Tom Gaulrapp, who has operated machines at the factory for 33 years, said he fears he will go bankrupt after he loses his job on Nov. 5.

“This goes to show the unbelievable hypocrisy of this man,” he said of Mr. Romney. “He talks about how we need to get tough on China and stop China from taking our jobs, and then he is making money off shipping our jobs there.”

So there you have it. Mitt Romney says he opposes sending jobs to China, and says he will "crack down" on China. But he refuses to do things that he could do right now that would make an actual difference right now. And it turns out that right now he is making big money from Sensata and other companies that are sending people's jobs to China right now.

Laying off American workers – usually shipping the jobs to China – and pocketing their wages for themselves is the story of the rise of the wealth of the 1%, and the decline of the American middle class. It is the Romney/Bain/Sensata business model. And the remaining workers have to do the jobs of the laid-off workers, often for lower pay, and are threatened with losing their jobs, too, if they don't like it.


Please read the entire New York Times report, As Romney Repeats Trade Message, Bain Maintains China Ties. There is much more there about Romney, China, Bain and the huge gap between what Romney says on the campaign trail, and how Romney made his current $400,000/week income and how Bain Capital still makes its money.

Visit the Bainport blog for pictures and details about the Sensata workers who are trying to stop the Bain trucks from shipping the equipment from the factory to China.

More on Sensata:

You Should Know About Sensata - It's What The Election Is About

Election Or Not, What Happens To Sensata-Style Workers?

Blocking Bain Trucks To Save Jobs In Freeport – This Is An IMPORTANT Story

Breaking – Arrests At Sensata "Bainport" Camp

Also, see:

Unraveling The Romney/Bain Tax Story,

Romney, Jobs And China – Let's Connect Dots

Rights Report Describes Romney-Owned "Brutal Chinese Sweatshop"

Romney, Republicans Again Side With China Over US Companies

Ohio And China – One Side Promises While The Other Delivers

Update: Here is a Democracy Now! report:

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 2:51 PM | Comments (0) | Link Cosmos

October 8, 2012

Breaking -- Arrests At Sensata "Bainport" Camp

Sensata is a Bain-owned company that is closing a factory in in Freeport, Il to move the jobs to China. The workers have set up a camp they call "Bainport" and workers and supporters are trying to block the Bain trucks that are moving equipment out to ship to China right now. In breaking news there were arrests made today.

Last week in the post Blocking Bain Trucks To Save Jobs In Freeport -- This Is An IMPORTANT Story I wrote about the Sensata workers in Freeport who have set up a camp they call Bainport, and are asking Mitt Romney to show that he means what he is saying about cracking down on China by coming to Freeport and asking his former company not to send these jobs to China.

The Sensata workers camping at Bainport as asking Mitt Romney to come help them keep their jobs. Romney insists that he has nothing to do with Bain Capital anymore (his tax returns showed that he gets more than $400,000 a week from Bain investments).

Helping the Sensata workers would show that he means it when he says he has nothing to do with the things Bain does now, and that he will do something about the jobs being sent to China. What better opportunity to prove both than to show up and confront Bain for sending these jobs to China!

Romney, Bain And The Outsourcing Strategy

Mitt Romney and Bain "pioneered" outsourcing strategies. They invested in companies set up to help other companies send jobs to China, and they especially used offshoring in their strategies to avoid paying the taxes that enable We, the People to have good schools, roads, courts etc. The NY Times story, Offshore Tactics Helped Increase Romneys’ Wealth explained,

Some of the offshore entities enabled Bain-owned companies to sidestep certain taxes, increasing returns for Mr. Romney and other investors. Others helped Bain attract foreign investors and nonprofit institutions by insulating them from taxes, again augmenting Mr. Romney’s bottom line, since he shared in management fees based on the size of each Bain fund.

In Unraveling The Romney/Bain Tax Story I explained how it works,

The complicated story of how the 1%ers and their corporations evade democracy's taxes is the story of our crumbling schools and infrastructure and the flow of all the gains of our economy to a very few at the top. This tax evasion is also part of the story of our deficits and debt. The tax evasion is "legal" -- because the tax evaders pay the people who write the tax laws. And even as their tax evasion adds to our budget deficits and debt, the 1%ers are insisting we close the deficit by cutting Social Security, Medicare and "safety-net" programs!

[. . .] The American-based entities can buy American companies without incurring "foreign-based" obligations. Then the foreign-based entities can avoid the taxes that the American-based buyers of companies would have to pay. And the foreign-based investors can be in the foreign-based parts of the company, avoiding US tax obligations. Also American entities like pension funds can avoid US taxes they would otherwise have to pay.

To put it another way, the same company can pretend it is US-based when that is what it needs to be, and foreign-based when that is what it needs to be.

Mitt Romney is wealthy because he engaged in strategies to lay people off, sending their jobs to China and pocketing the wage differential for himself. Then his companies would force people to take wage cuts or risk losing their jobs, too, and pocking the wage difference for himself. The profits from these "enterprises" were manipulated in ways that enabled him to pay very little in taxes, so the rest of us end up not only with layoffs and lower wages, but bad schools, crumbling infrastructure and government debt.

Then later, Mitt Romney can claim that We the People are the cause of the resulting government debt and that we need "austerity" -- less for We, the People in order to keep taxes low.

Arrests

Today community members supporting the Sensata workers were arrested for trying to block Bain trucks from sending the factory's equipment to China.

Visit the Bainport blog for pictures and details.

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 11:10 AM | Comments (0) | Link Cosmos

October 1, 2012

Election Or Not, What Happens To Sensata-Style Workers?

A group of workers whose jobs are being outsourced to China is touring the "rust belt." They are trying to make an election point. But what about the day after the election?

Sensata Workers - More Jobs Going To China

Two weeks ago I wrote about the workers at the Sensata factory, You Should Know About Sensata - It's What The Election Is About,

Workers facing outsourcing by Bain Capital are camping outside the Sensata factory in Freeport, Ill. They are asking Mitt Romney to show up and help save their jobs. They say they will stay camped there until Romney shows up and stands with them – or with Bain.

Mitt Romney can can use this to show us if he wants to be president of the whole United States, or just president of, by and for the outsourcing 1 percenters.

All Mitt has to do is show up and help these workers. He says he is not part of Bain, and wants to be President of all of the country. Mitt Romney can can use this to show us if he wants to be president of the whole United States, or just president of, by and for the outsourcing 1 percenters. He could - and should - do that.

The Bain Workers Bus Tour

Workers from Sensata have left Missouri and are stopping in are stopping in Iowa, Wisconsin, Michigan, Ohio, Pennsylvania, Virginia, Florida, the presidential debate in Hempstead, NY -- and are (eventually) heading toward Boston where both Bain Capital and the Romney headquarters are located.They want Romney and Bain to ask them not to send their jobs to China. You can read about their progress at BainWorkerBus.com.

The thing is, these workers might be at this plant, run by this company, but there are millions of workers - millions - in the same boat. Or whose jobs have left or are leaving on the same boat, anyway.

The Chart That Says It All

It is more than just these Sensata workers -- they are a symbol of the damage that our terrible "trade" policies have done and are doing to our country. A company can just close a factory here, open it there, bring the same stuff back to sell in the same stores here and call that "trade?" And they can get tax breaks for doing that? They can use the threat of doing that to bust unions and cut our wages? Polls show that We, the People overwhelmingly want this changed, yet it doesn't change.

Look at the chart in this post at Think Progress: After Nearly A Decade Of Declines, Manufacturing Jobs Begin Rebound. It shows what happened to our manufacturing base literally immediately after George 'W' Bush took office. Seriously. Look at this chart and see if you can just guess why we have such a terrible economy today.

During the Bush administration we lost more than 50,000 factories and at least 6 million manufacturing jobs directly to China. (Never mind the effect on the supply chains, the grocery and clothing stores where those people shopped, etc... The foreclosures, the bankruptcies, the misery...) We have a huge trade deficit with China -- money that we send to China and then complain that there is not enough money to do things here.

Imagine how our economy would be doing if we had actual trade with China, where we buy things from them and they buy just as many things from us?

After The Election

After the election the country is going to be diverted into a battle over how much more damage we can do to ourselves. Instead of addressing the trade deficit -- the cause of our budget and jobs deficit -- our plutocrat-funded elites are going to play a Shock Doctrine game of whipping up hysteria about the budget deficit. They are going to terrify the public about "the fiscal cliff" that occurs when the Bush tax cuts expire, and when the deal that put off the hostage-taking over the debt ceiling cuts the military budget, and then the safety net.

Instead of addressing jobs and inequality and wage stagnation and trade and climate and crumbling infrastructure and manufacturing policy and, and, and, they are going to all try to outdo each other offering ways to cut the things that We, the People do for each other -- all to keep taxes low for the super-wealthy. Some call this the "Grand Bargain" where they offer up austerity -- working so well in Europe -- instead of jobs.

Bob Borosage wrote about an alternative approach. Since Jobs Fix Deficits, let's wait on attacking the budget deficit until there are enough jobs. He calls this a "Jobs Trigger" - enough jobs triggers the time to cut the deficit. From Good Jobs First: No Grand Bargain Without A Jobs Trigger,

Poll after poll shows that voters are concerned most of all about jobs and the economy. Yet in Washington and on the campaign trail, attention has turned to deficits and how to get our books in order.

[. . .] The presidential candidates and Congress should be pressed to adopt a budget version of the “jobs trigger.” Putting people back to work is the first step to getting our books in order. So Congress should pass a fiscal trigger as part of any grand bargain: Comprehensive deficit reduction measures will kick in only when the economy is moving, and unemployment comes down to 5 percent or so.

Please go read the whole post, We must all demand a jobs trigger after the election. Jobs first, then fix the deficits.

And to fix jobs, we have to fix "trade." We have to stop this idea that it is OK to close a factory here, open it there, then send the same goods back here to sell in the same stores, and use the threat of doing that to even more of us to force wage and benefit cuts, bust unions, etc.

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 3:12 PM | Comments (0) | Link Cosmos

September 18, 2012

The Real Question: WHY Don't People Make Enough To Pay Income Taxes?


Mitt Romney was caught on video complaining that 47% of us don't make enough to pay taxes, believe they are victims, are dependent on government, etc. The right question is why do so many of us make so little?

Moving Jobs To Places Where People Don't Have A Say

You often here that competition due to "globalization" means that we have to accept lower wages and fewer benefits, because people "over there" make so much less. What has caused the pressure, however, is "free trade" agreements that allow companies here to close factories here and open them over there, and then bring the same things they used to make here to sell in the same stores. The only "trade" involved in this transaction is trading who does the work.

In places where people are able to have a say, they say they want better wages, benefits, good schools, good roads, parks, a clean environment, safety standards, and things like that. In places where people do not have a say, they are told they can't have better wages, benefits, good schools, good roads, parks, a clean environment, safety standards, and things like that.

When we allow our companies to close factories here, where people have a say and move them there, where people do not have a say, and then bring the same goods back here to sell, we are allowing them to escape the borders of democracy. When they are no longer subject to the We, the People that has a say, they can do what they want, exploit workers, exploit the environment, and reap the profits of not having responsibilities to others. And because it costs less to pay people less and exploit the environment, allowing them to escape these responsibilities makes democracy a competitive disadvantage.

The Wal-Martization Of Our Economy

Another reason so many people don't make enough wages to pay taxes is because we let companies like Wal-Mart and Staples pay close to minimum wage. That is part of how they compete with our smaller, local businesses. Low wages, selling cheap stuff made in China by people with lower wages. (And by the way, we don't raise the minimum wage to a livable level! This means that government ends up helping employees of these companies through "safety-net" programs like Medicaid, Food Stamps, and the other "dependency" programs Romney complains about.)

Also, bigger companies are able to use their size. They can also apply the advantages of access to capital that smaller, local companies and regional chains cannot. They can also take advantage of scale in their purchasing, negotiations, management functions and elsewhere. This is smart business, but then we let them drive down wages, and send the difference to a few at the top, without even taxing those at the top so we can use the money to make up for the circumstances this imposes on those at the bottom.

In So DID Mitt Romney Really "Create Jobs" At Staples? I looked at whether Staples really invented new jobs or really just shifted jobs from other companies to their company. Unfortunately Staples didn't "create jobs," it grew by putting other companies out of business, thereby shifting people into lower-paying jobs. That is the Wal-Mart model, Bain Capital model, that has taken over our economy.

Staples grew by putting local stationery stores out of business, local office supply, and other chains like Businessland out of business. All those small business owners who had local stores, making a modest small-business income, now instead are working maybe as managers at a Staples. From the post,

As Staples grew it overtook competing chains like Businessland and others. In other words, Staples took business from other, existing stores -- often local retailers. Staples did not “create” jobs, it shifted office-supply jobs from local stores, etc., probably to lower-paying jobs. (The former owners of local businesses certainly were worse off from this.) They likely even lowered overall office-supply, stationery, etc. employment in the larger economy.

Low Wages?

How do these"Romney job creator" jobs stack up against other jobs? Average Staples salaries for job postings nationwide are 51% lower than average salaries for all job postings. The pay at Staples appears to be around $8-10 an hour. That's $16-20,000 a year, certainly not enough to support a family, or even pay rent in many areas, never mind buying food. (The 2012 poverty guideline for family of four is $23,050.)

So Mitt Romney complains that the changes in our economy over the last few decades that have made most of us so much poorer are our own fault. But he concludes that government - We, the People - shouldn't try to do something about it! He complains that government - We, the People - are really just in the way of letting it go on and make a few at the top get even richer at the expense of the rest of us.

In democracies We, the People are supposed to have a say. And WE say we want better wages, bnefits, and a piece of the pie. When democracies function, that is what happens. When the Romneys and the Bain Capitals and the Wal-Marts are able to tell us what the government's policies should be, then things fall apart. 6 Wal-Mart heirs have more wealth now than around 1/3 of all Americans combined. Mitt Romney has an income of approx $440,000 per week.

And yes, 47% of us don't make enough to pay income taxes.

The solution is to restore our, We the People's, yes government's control over these circumstances. Government is US making the decisions and bug government is us making more of the decisions. And when We, the People have a say we say we want to restore the virtuous circle of prosperity: we create the fertile ground for businesses to prosper by building roads and bridges and good schools, we help them prosper by providing good courts, regulation to keep the giants from domination and to keep the components of the economy functioning smoothly, and investing in research and universities. And then when the business are doing well we ask for good jobs with good wages and benefits and working conditions, and we collect taxes to pay for the investment that keeps that virtuous circle going.

Please read also: Tax Cuts Are Theft


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 5:10 PM | Comments (1) | Link Cosmos

July 30, 2012

Report: Offshoring Of Manufacturing Capacity Leaves America Vulnerable, Unprepared

A new report says American is too dependent on non-US suppliers. If there were to be a catastrophic event or serious emergency -- or war -- our country could not respond quickly enough, because of the offshoring of critical manufacturing sectors and a reliance on foreign suppliers.

The Report, Preparing For 21st Century Risks: Revitalizing American Manufacturing to Protect, Respond and Recover was co-authored by Tom Ridge, the first secretary of the U.S. Department of Homeland Security, and Robert B. Stephan, a former Assistant Secretary for Homeland Security for Infrastructure Protection. It is is the first comprehensive analysis of America’s growing reliance on global suppliers, and its effect on our national preparedness and security.

From Washington Post, Reliance on imports leaves U.S. vulnerable to disasters, report says,

The report, which Ridge shared with homeland security officials Tuesday morning, warns that the offshoring of U.S. factories means that rebounding from a catastrophe will be more difficult because so many critical supplies would have to come from overseas.

We are a country at risk because we’ve ignored the gradual erosion of our manufacturing basis,” he said in an interview. “We’ve ignored the need to rebuild the nation’s infrastructure.”

Citing the aftermath of disasters such at Hurricane Katrina and the Sept. 11, 2001, attacks, the report adds to the long-running debate over whether the offshoring of U.S. manufacturing has harmed the nation.

“At a time when the frequency of large-scale disasters seems to be increasing, the U.S. seems to be at an all-time low in terms of being able to supply our own critical needs,” said Scott Paul, director of the Alliance for Manufacturing, which sponsored the report by Ridge and Robert B. Stephan, who was an assistant secretary of homeland security from 2005 to 2008.

Paul said, for example, that half of the world’s steel comes from China.

The report says that our increasing reliance on foreign suppliers for steel, cement, batteries, and critical high-technology components and even every day medical supplies such as antibiotics and penicillin results in risks to our preparedness and security. These risks include insufficuent access to or delays getting needed materials and products. Right now, no U.S. plant produces key ingredients for antibiotics, leaving us more vulnerable to pandemics and possible bioterrorism attacks.

From the press release, New Report: U.S. Too Dependent on Foreign Suppliers in Crises:

The report recommends taking a two-track approach to reduce vulnerabilities and to build the capacity to respond and recover quickly and efficiently in the aftermath of a catastrophic disaster. Some recommendations include:

• Develop a plan to make the restoration of a strong American manufacturing sector a key component of both national and economic security strategies.

• Reinvest in America’s infrastructure, using U.S.-made materials.

• Incentivize the revitalization of American manufacturing, including the use of domestic-content preferences that maximize the power of federal procurement funds.

• Enforce trade laws to ensure a level playing field for U.S manufacturers and their workers facing unfair competition.

• Invest in the American workforce to ensure we have the trained workers needed to rebuild our infrastructure and work in a larger, more modern manufacturing sector.

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 10:54 AM | Comments (1) | Link Cosmos

July 14, 2012

WTF Moment -- US Olympic Team Uniforms Made In China

The U.S. Olympic team's uniforms were made in China? This might be a WTF moment for the country, over the practice of sending our jobs, factories, industries and economy to China for the super-enrichment of a few. What next, a President made in China?

Made In China

ABC News discovered that the US Olympic Committee is "partnered with" American designer Ralph Lauren for the uniforms. But ABC looked at the labels and found that every single item was made in China or elsewhere, not in the United States.

This is symbolic of something very important. Americans are universally tired of looking for American-made goods in stores and finding only goods made in China. People are increasingly coming to understand that the practice of closing factories here and moving the manufacturing and jobs to China, to take advantage of the lack of democracy that results in low wages and poor environmental standards, is the cause of the job fear here that is hollowing out the middle class, while greatly enriching a few at the top.

So people are fed up, and it is crystallizing. Things like this could be the trigger-point that brings this issue to the surface of public discussion. Heck, maybe it could even be enough to get Mitt Romney to put his actions where his campaign speech is, and tell Republicans in Congress to allow a vote on the currency bill!

Burn Them And Start Over

Senate Majority Leader expressed the feelings of many Americans:

"I am so upset. I think the Olympic committee should be ashamed of themselves. I think they should be embarrassed. I think they should take all the uniforms, put them in a big pile and burn them and start all over again," Senate Majority Leader Harry Reid, D-Nev., told reporters at a Capitol Hill news conference on taxes. "If they have to wear nothing but a singlet that says USA on it, painted by hand, then that's what they should wear," he said, referring to an athletic jersey.

Olympics Says Screw You

In a statement, the U.S. Olympic Committee defended the choice of designer Ralph Lauren for the clothing ... "Unlike most Olympic teams around the world, the U.S. Olympic Team is privately funded and we're grateful for the support of our sponsors," USOC spokesman Patrick Sandusky said in a statement. On Twitter, Sandusky called the outrage over the made-in-China uniforms nonsense.

Republicans Say Screw You

As reported by the Washington Post, Republicans immediately began mocking Democratic concerns over the outsourcing of the manufacturing. They assumed that Reid's clothing is made in China because they apparently don't know people who actually care about that.

Within minutes, Republicans used Twitter to ask Reid spokesman Adam Jentleson whether the senator planned to burn any of his foreign-made clothing. (They also asked whether Democrats planned to return thousands of dollars in political donations from Lauren.) In response, Jentleson posted a photograph of the label on the Reid’s suit coat: “Made in the U.S.A.” For emphasis, Jentleson carried Reid’s suit coat through the halls of the Capitol to show reporters.

These are the same Republicans who opposed requiring that stimulus dollars be used first for American-made goods, and are now running ads accusing President Obama of sending taxpayer dollars out of the country .

Profits Before Patriotism

The Christian Post, in US Olympic Uniforms Made in China, Seen as 'Profit Before Patriotism', found that the clothing very well could have been made in the USA.

"Why shouldn't we have pride not only in the American athletes, but in the American manufacturers and laborers who are the backbone of our country?" asked Nanette Lepore, a U.S. fashion designer. "Why? What's wrong? Why was that not a consideration?" Lepore insisted that it was "absolutely" possible that the uniforms could have been in the United States instead of sending the job over to China – and argued that U.S. manufactures could have even made the uniforms for less money.

The Christian Post highlighted a reader comment that sums this up nicely: (Though I'm not sure we need to "preach to the world that we are a superior Christian Nation"...)

"When all you care about is money the only thing that counts is price. We used to stand for quality, self-reliance, a commitment to excellence and the prestige that comes with it. Those virtues mean nothing anymore. Only price," offered a reader named "Joe." "We devastate our economy and society by closing productive businesses and off-shoring jobs needed here for the survival of our citizens the most precious and greatest resource we have for the sole purpose of increasing investor dividends by a few pennies a share and then preach to the world how we are a superior Christian nation advancing the goals of civilization. If we can't afford uniforms made in our own country we can't afford to be in the Olympics, period," he added.

Take Action

Petitions telling the US Olympics association to Buy American: Click to sign and tweet this petition:

.@USOlympic - do the right thing, get new uniforms #madeinAmerica 4 #TeamUSA http://act.ly/5za RT to sign #olympics #bringjobshome #1u

Online petition: http://signon.org/sign/demand-made-in-america

To be delivered to: U.S. Olympic Committee
I urge the U.S. Olympic Committee to do the right thing and have new uniforms manufactured in America for our U.S. Olympians.
Hundreds of Olympians from the United States will be competing in the Summer Olympics in London at the end of this month. These athletes represent values that make America great: hard work, determination, pride in our country and the things we can accomplish as a nation. Unfortunately, the U.S. Olympic Committee seems to have forgotten some of those values. Instead of making sure the uniforms Olympians will be wearing during the Opening Ceremony were made here in America, the U.S. Olympic Committee decided to outfit them in Ralph Lauren uniforms made in China at a whopping cost of $1945 for men and $1473 for women uniforms—more than they may have cost if produced in the United States. More than 2.8 million jobs have been shipped to China since 2001. We have lost 6 million manufacturing jobs in the last decade. The failed policies that have encouraged companies like Ralph Lauren to create jobs overseas, not in America, have hurt working families and our communities. Tell the U.S. Olympic Committee to do the right thing and have new uniforms manufactured in America that are union made for U.S. Olympians.


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 8:09 AM | Comments (1) | Link Cosmos

July 13, 2012

10-Year-Anniversary: Trade Problem

For Seeing the Forest's 10th anniversary I'll be posting a few of my favorites. Here's one, from 2005: The Trade Problem

View of San Francisco from Sausalito.

See how this ship is riding high off the water? This ship is loaded with empty containers, bound for China.

Ships come into the port loaded with goods that we buy from China. But China doesn't buy very much from us. So we have to send ships back loaded with empty containers. (Well almost empty, they're actually filled with dollars, and jobs, and the future.)

Posted by Dave Johnson at 3:28 PM | Comments (0) | Link Cosmos

July 11, 2012

Job Fear From Trade Deficit Is What Happened To Jobs And The Middle Class

The middle class is disappearing. Our economy is "hollowing out" because the money goes to the top and the people fall to the bottom. This is because we allow American companies to close factories here and open them there, shipping the same goods back here to sell in the same stores, costing jobs, companies, industries and our economy. This makes us afraid for our own jobs and afraid to make waves. By helping a few at the top get fabulously rich, China has essentially recruited our own businesses leaders to fight against our own government - and us.

Yesterday's Jobs Emergency Hollowing Out The Middle Class examined the reasons that our economy has shifted in ways that enrich a few at the top while the rest of us fall further and further behind. This is called "hollowing out" because the middle class is disappearing while the money goes to the top and the people fall to the bottom. In it I quoted Dean Baker on the real cause of the hollowing out. I want to repeat this part of the post for emphasis. Baker writes that last decade's manufacturing job loss is because of the trade deficit. From the post:

Dean Baker responds, in Income Is Definitely Being Redistributed Upward, but Why Do We Think It's Technology? at the Center for Economic and Policy Research's Beat the Press, (emphasis added to emphasize):
...the piece refers to the millions of manufacturing jobs that the United States lost over the last decade. The biggest factor behind the job loss was not technology; productivity growth in manufacturing was not markedly faster in the 2000s than in prior decades. The main factor leading to job loss was the growing U.S. trade deficit.

The predicted result of an over-valued dollar is the loss of jobs and lower wages in the sectors of the economy that are exposed to international competition. However, the availability of low-cost imports raises the living standards of those who are protected from international competition.

The latter group would include highly paid professionals, like doctors and lawyers. Note that it is not technology that protects these professionals from seeing their wages depressed by competition from their low-paid counterparts in the developing world, it is deliberate policy. While it has been the explicit goal of trade policy to put manufacturing workers in direct competition with workers in the developing world, the barriers that make it difficult for qualified doctors, dentists, and lawyers in the developing world to work in the United States have been left in place or strengthened.

Once again, for even more emphasis: "The main factor leading to job loss was the growing U.S. trade deficit. The predicted result of an over-valued dollar is the loss of jobs and lower wages in the sectors of the economy that are exposed to international competition. ... it is deliberate policy."

And for more emphasis: "The main factor leading to job loss was the growing U.S. trade deficit. The predicted result of an over-valued dollar is the loss of jobs and lower wages in the sectors of the economy that are exposed to international competition. ... it is deliberate policy."

Job Fear

When you close factories and ship them out of the country people lose their jobs. And the rest of the people are afraid of losing their jobs, so they "keep their heads down." Companies can make them accept lower wages. They work longer hours. They even stop taking vacations and sick days. They certainly don't ask for raises or better working conditions. This terrible job fear everyone has helps a few at the top get even richer.

This is why corporate profits are the highest ever. From the recent post, Here Is Why Our Elites Are Not Fixing The Economy,

When we had democracy, We, the People made the rules and we ran our country and our economy for our benefit. Now that we are a plutocracy things are different. The reason our elites are not doing anything to fix the economy is because from their viewpoint, things are just fine.

... The reason our leaders are not doing anything to fix the economy is because, from the viewpoint of our real leaders, the economy is working just fine.

Trade Deficit Is The Root

From last month's post, Trade Deficit - One Root Of Many Problems,

You buy things till your wallet is empty. So you raid the savings account to buy more stuff. Then you get a loan, and buy more stuff. Another loan, another, you keep buying stuff... Finally you're selling off the tools you had used to make a living. That's where the country is now because of the huge imbalance in our trade relationships. We buy more from them than they buy from us and we have let this go on and on and on. This is the deficit we should be worried about.

The Root

Pick a national problem, and the odds are that our trade imbalance is aggravating it. Our trade deficits literally suck money out of the country. When looking up the numbers I had to double check, our annual trade deficits are so huge. In the chart below that first line under the dates represents $100 billion. Look at what happened in the late 90s, when we opened the China flodgates. (Click to enlarge):


In the 70's the trade balance dipped below zero because of oil, and the country responded with conservation and the beginning of the search for alternatives -- until Reagan. To make matters worse, Reagan preached "free trade" -- as in use cheap foreign labor to break American unions. (But Reagan also enforced rules against "dumping" and other trade violations.) The real break in our balance of trade clearly begins around the time that NAFTA and the World Trade Organization went into effect, and then went absolutely nuts after China was brought in. Between 2001 and 2009 we lost 1/3 of all of our manufacturing jobs, more than 50,000 factories, and entire industries. We drained trillions of dollars out of our economy.

Why Can't We Fix This?

This is so hard to fix because the trade imbalance that drains our country transfers great wealth and tremendous power to a few. The trade deficit results from allowing companies to just pack up American factories and industries and move them to China. This lowers labor costs, which translates to profits for the few at the top. This wealthy few use some of that wealth to buy off our government and shower us with propaganda to let them keep this scheme going. And it creates jobs fear.

Job fear makes people want to "keep their heads down," not make waves, not appear demanding or ungrateful, lest they lose their jobs. It keeps people inside. It keeps people from organizing unions. The organizers are fired, and the threat to just hire cheaper people if you don't stop this is very real. People are afraid.

High unemployment helps the rich get richer. It brings them more power. Every claim to "create jobs" gains power, be it through cutting taxes on big corporations, cutting government oversight of what corporations do, passing laws restricting unions, you name it -- hand the treasury over to big corporation sand they will "create jobs."

So don't count on the "job creators" to be creating very many jobs, as long as high unemployment means the highest profits in history, and a "job fear" public that will vote to support any big-corporate scheme that promises to "create jobs."

In Why Can't Apple Make Your IPhone In America?, presented at Netroots Nation,

When people have a say they say they want better pay, health care, retirement, vacations, sick pay, protections, worker safety, clean environment and taxes to support the country – things like that – the very things China offers to let our businesses escape from.

So what China offers is that China is “business-friendly.” Because people there do not have a say, so they can’t ask for the things people should have.

Corporate conservatives here say we should be more business friendly, we should lower wages, lower taxes, stop taking care of the environment, stop all those pesky health and safety and environmental inspections, stop telling businesses what they can and cannot do, and all the rest. They say we should be more like China.

What they are saying is that we should abandon the benefits that democracy brought to We, the People – the 99%

in order to enrich a few people – the 1%.

When we opened up our borders to goods from China, and let this treatment of workers and the environment offer advantages to our elites,

we made democracy a competitive disadvantage.

... China offers these things to our business leaders for a reason. This is the reason : China sees itself as a country, and we no longer do.

China competes with us as a country. But our businesses see themselves as GLOBALIZED, not as part of a country.

So since we – at least our businesses – no longer see themselves as part of a country we are not responding to this competition. We are not mobilizing to fight back.

In fact, China has essentially recruited our own business leaders to fight against our own government.

By helping a few at the top get rich China has essentially recruited our own businesses leaders to fight against our own government.

Again: By helping a few at the top get rich China has essentially recruited our own businesses leaders to fight against our own government -- and 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 9:33 AM | Comments (0) | Link Cosmos

July 10, 2012

Republicans Attacking Obama Because Republicans Blocked "Buy American" In Stimulus

Sometimes it is painful to live in America and to also have a memory...

In the news, Republicans are running ads attacking Obama for "sending taxpayer dollars" out of the country in the stimulus... Republicans level outsourcing accusations against Obama,

The Republican National Committee on Tuesday launched a new website charging that Obama “sent taxpayer dollars” to build solar panels in Mexico, windmills in Denmark and batteries in South Korea. The accusation involves money from the 2009 stimulus package that went to foreign-owned companies or to companies relying on foreign suppliers.

And GOP looks to paint Obama as outsourcer of stimulus dollars,

At an event in Iowa on Tuesday, Republican National Committee (RNC) Chairman Reince Priebus will debut a new website — ObamanomicsOutsourced.com — that features companies that received stimulus dollars and opened factories in foreign countries. Among the examples: a solar panel factory in Mexico, windmills in Denmark and a battery manufacturer in South Korea.

... “President Obama has promised over and over that he would focus on creating ‘jobs that pay well and can’t be outsourced,’ but his record speaks otherwise,” said Priebus in a statement. “Through his ‘stimulus’ program, billions of dollars from hardworking taxpayers were sent overseas.

But here is what I remember about this:

Top Republican: Scrap 'buy American' stimulus clause.

and

Debate over 'buy American' in stimulus,

A "Buy American" provision being debated as part of the Senate's nearly $900 billion economic stimulus package - requiring that infrastructure projects use U.S.-made materials and equipment - is sparking talk of a trade war and is forcing President Obama to choose whether to defend domestic industries or champion free trade.

The top Senate Republican, Minority Leader Mitch McConnell of Kentucky, said Monday that the measure should be stripped from the bill, saying it could endanger more U.S. jobs than it protects.

"I don't think we ought to use a measure that is supposed to be timely, temporary and targeted to set off trade wars when the entire world is experiencing a downturn in the economy," McConnell said. "It's a bad idea to put it in a bill like this, which is supposed to be about jump-starting the economy."


Remember the Seeing the Forest rule: "When right-wingers are accusing others of something it is usually a cover for something THEY are doing."

Posted by Dave Johnson at 4:27 PM | Comments (0) | Link Cosmos

July 3, 2012

Conservatives Demand Surrender To China

The worldwide battle to get away from the coal and oil industries has been underway for some time. Countries are fighting to gain a share of the new green manufacturing industries with millions of jobs and trillions of dollars on the line. Country after country is executing plans to grab a share of this new industry. But not us. Oil-funded conservatives are trying to keep us from even fighting in that war.

Oil And Coal Are The Problem

Look around you, the climate is changing, the seas are rising, terrible storms are hitting, huge fires are burning, terrible droughts are causing crop failure, and plants, animals and insects are migrating to new areas. (In DC right now you might not be able to turn on a light because of that huge, freak storm you just had, so maybe wait and look around you after the sun comes up.) We have to stop burning oil and coal, and find a way to get that carbon back out of the air.

Aside from the terrible effects of climate change, our country has a trade deficit that is partly about buying oil, and those purchases send money to places that use that money against our country's interests.

Other countries get all of this. But our country is in the grip of an oil-and-coal-funded propaganda machine that tries to keep us from getting it.

Green Job Opportunities

We are in a worldwide economic competition to build the post-oil economy. This is a competition for millions of jobs and trillions of dollars. Every country wants a share of the design and manufacturing of wind turbines, solar panels, geothermal systems, biofuels, electric cars, high-speed rail, urban and suburban light rail, advanced batteries, smart-grid power transmission systems, and all of the rest. And there is also the fight for the construction, installation and maintenance contracts for all of these systems.

Many countries are fully engaged, and have national plans to capture a share of this new industry. They compete with us as countries, and see us as a country to compete with even if we do not. Because we refuse to act as a country, we send our companies out to compete with countries, and as big as our companies are they cannot compete with the resources of engaged countries.

Conservatives Demand Surrender

Our top competitor is China. Shots have been fired; China is helping their companies compete, and this has cut solar prices. So a few American companies are going under. In response, America's oil-backed conservatives are demanding immediate surrender. In fact, they don't just demand surrender, they are giving aid and comfort, even actively helping the other side, running down America's efforts to fight for a share of the new green economy.

This huge effort by conservatives to keep our country out of the world competition for a share of the new green economy kind of makes you wonder about the secrecy surrounding all of the money that funds the conservative movement, its think tanks, media outlets, and now even funds political campaigns. We don't even know where the hundreds of millions funding these horrible, negative ads comes from! Does any of it come from our economic competitors? Shouldn't we at least be able to find out who (or where) is funding the conservative propaganda and political machine that is running down our own government and demanding we surrender the new green economy to China?

Solyndra And Chevy Volt

Conservatives celebrated the fall of Solyndra, declaring that its demise meant that green energy in general is a "bad bet," or losing technology. They also have been trying to convince people not to purchase hybrids and new technologies like the Chevy Volt. The next time you hear someone of FOX running down our country's green energy efforts, knocking the Chevy Volt or denying climate change, think abougt this: Fox's second-largest shareholder is a billionaire Saudi oil prince. Fox might just have an agenda beyond backing conservatives here. Speaking of conservatives, though, keep in mind that the Koch brothers == oil.

Abound Solar Goes Under

Last week solar panel manufacturer Abound Solar filed for bankruptcy. NY Times reports in "A 2nd U.S.-Supported Maker of Solar Panels Will Close,"

Republicans, including Mitt Romney, the presumptive Republican presidential nominee, seized on Solyndra’s failure as evidence that the Obama administration was wasting taxpayer money by supporting clean energy companies.

... The company said it could have been profitable if it had had large-scale manufacturing under way, but “aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage start-up company like Abound to scale in current market conditions.”

Abound Solar was unable to compete with low solar prices resulting from Chinese subsidies for their own solar manufacturers. (Add to that, China's currency manipulation which keeps the prices of everything made there up to 30% lower, even bore their subsidies, trade barriers, etc.) Federal officials froze their credit line last year, after the Solyndra failure, so Abound was unable to draw on credit to scale its manufacturing to a level that could compete with subsidized Chinese imports.

Conservatives immediately stepped up their drumbeat of demands that we surrender to China. Here are a few examples of conservatives blaming America first, calling America's efforts a failure, or generally running down efforts to fight for a share of the new green economy:

Hot Air: Yet another DOE-backed solar panel company bites the dust

Good grief. I feel like these ailing Department of Energy-backed loan guarantees are so laughably many that they’re barely even worth noting anymore, but you’re darn tootin’ I’ll continue to do so as long as President Obama keeps acting like it’s the federal government’s divine right to pick and choose winners in the energy market on the taxpayers’ dime.

... This article tries to spin the situation to suggest that the company’s failure is the result of too much unfair competition and global oversupply, and we should therefore direct our ire at China. No — just no. This is the fault of the Obama administration. Maybe if we had just left the decision to develop solar (or not!) up to the private sector, we would’ve quickly figured out that investing in solar energy was a bad idea.

Weekly Standard: Video: Obama Touted $400 Million Loan to Another Solar Company Now Declaring Bankruptcy

Washington Moon Times: Yet another government-backed solar company turns out the lights

News of the company’s demise prompted early criticism from Rep. Jim Jordan, Ohio Republican and chairman of the House subcommittee on regulatory affairs, stimulus oversight and government spending.

In a statement, Mr. Jordan, among other Republicans, said Abound’s collapse shows that “our government is not good at picking winners and losers in the marketplace but has certainly proved it is good at wasting taxpayer dollars.”

National Legal and Policy Center: Yet Another DOE Green Failure as Abound Solar Goes Bankrupt

And now with failures like Solyndra and Abound Solar, in addition to several others, these crony redistributors leave the political fallout to others and just move on to their next “green” scheme. Unfortunately we won’t find out if the ultimate political price is paid until November, but in the meantime DOE continues with its renewable energy “investments,” which will undoubtedly lead to more pain for taxpayers.

Human Events: Your Obama “green energy” bankruptcy of the day: Abound Solar,

Abound had borrowed about $70 million against these loan guarantees. That would have bought a lot of health care for poor people, but the Obama Administration blew it on solar panel junk instead.

Heritage Foundation: Another Stimulus Backed 'Green Energy' Company Goes Bankrupt

Another stimulus-backed green energy company has filed for bankruptcy, further fueling criticism of Energy Department programs that backed highly-risky investments on the taxpayer dime.

Like Solyndra and a number of other green energy investments made under this administration, Abound Solar had a very poor credit rating, but enjoyed a wealth of political connections.

So ... should we respond as a country to this economic attack on us by other countries who see us as a country and compete with us as a country? Or should we surrender the new green economy to others?


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 9:26 AM | Comments (0) | Link Cosmos

June 29, 2012

Short Video - Making It In America: Reviving And Strengthening U.S. Manufacturing

Here is a short video with highlights and interviews from the Take Back the American Dream conference panel, Making It In America: Reviving and Strengthening U.S. Manufacturing:

See also: Reviving And Strengthening U.S. Manufacturing and Why Can't Apple Make Your IPhone In America? for even more conference-panel excitement.

Posted by Dave Johnson at 3:08 PM | Comments (0) | Link Cosmos

June 22, 2012

Romney, Jobs And China -- Let's Connect Dots

Will Mitt Romney create jobs and help our economy, or will he just take us back to the Bush-era, send-jobs-to-China destruction that made him rich? With Romney there is no way to connect what he says with what he means or might do. So we are forced to read tea leaves and look for signs. Should be reading Chinese tea leaves?

The Fire Sale Of Our Economy

Mitt Romney made his huge fortune partly by taking over companies, sending the good-paying American jobs to places like China -- or using the threat to do that to force wage and benefit cuts -- and keeping that money for himself and his business partners. A Washington Post story says that Romney's company not only took advantage of this technique, but actually helped pioneer the technique!

While Romney and those like him became enormously wealthy from this since-Reagan fire-sale of American factories, companies, industries and technologies, our economy suffered terribly. Working people's wages stagnated and people turned to credit cards and borrowing on their homes just to get by. Evenually the economy collapsed.

The Romneys and Wall Street 1%er types did very well from this destruction of our economy and our capacity to earn a living, as they have been doing since the collapse. China has also done very well by this. And they are all trying to keep things that way.

Connecting Dots

Dot: Under Bush we lost 50,000+ factories and 1/3 of our manufacturing jobs. Non-manufacturing was also hit hard with outsourcing of jobs to other countries. Companies then used the threat to move other jobs to force wage and benefit cuts here. "If you don't agree to this we'll just move your job, too."

Dot: Since the "recovery" began the richest 1% received 93% of the economic gains. It's all going to the top -- to the Romneys among us.

Dot: Washington Post: Romney’s Bain Capital invested in companies that moved jobs overseas. Note that Romney's company "pioneered" the practice. They didn't just do it, they "pioneered" it,

Mitt Romney’s financial company, Bain Capital, invested in a series of firms that specialized in relocating jobs done by American workers to new facilities in low-wage countries like China and India.

During the nearly 15 years that Romney was actively involved in running Bain, a private equity firm that he founded, it owned companies that were pioneers in the practice of shipping work from the United States to overseas call centers and factories making computer components...

Dot: The Supreme Court's "Citizens United" decision allows unlimited secret money to influence our elections. Secret, as in we don't even know what country the money comes from, never mind what companies or billionaires.

Dot: Huge amounts, from the 1%ers, all coordinated: Romney plans posh weekend donor retreat featuring Rove and VP hopefuls,

The presumptive Republican nominee and his senior advisers and aides are hosting two days of policy sessions and campaign strategy discussions at the Deer Valley resort for more than 100 top fundraisers and their spouses. Those who raised more than $100,000 are expected to attend. ... Rove’s appearance could raise questions because of laws barring any coordination between super PACs and campaigns. ...

Dot: One source (of many) of this flood of money has been disclosed. Casino billionaire Sheldon Adelson, has already given $10 million to Romney's campaign, promises a "limitless" amount -- $100 million or more. (He has $25 billion, largely thanks to China.) There are also allegations of corruption, bribery and violations of US law in the operation of these Chinese-licensed casinos.

Dot: Adelson's exclusive Chinese-granted casino license is worth billions, and he has used his influence with Republicans in Congress to help China. Adelson influenced Republicans to help China get the Beijing Olympics and then received the license to build casinos in Chinese territory. From the New Yorker, The Brass Ring: A multibillionaire’s relentless quest for global influence,

In July, 2001, Adelson met with a Vice-Premier of China, Qian Qichen ... [and] met with the mayor of Beijing, who asked Adelson for help with a matter pending in the U.S. House of Representatives, which he believed was threatening China’s chance to host the Olympics.

Adelson ... immediately made calls on his cell phone to Republican friends in Congress—including Tom DeLay, then the majority whip—who had received generous support from Adelson. DeLay told him that there was indeed a resolution pending ...opposing China’s Olympic bid, saying, “China’s abominable human rights record violates the spirit of the games and should disqualify Beijing from consideration.” ... Three days later, the International Olympics Committee voted in China’s favor. [Adelson received the casino license soon after, in early 2002 - dj]

[...] In May, 2004, the first gamblers entered the Sands Macao. Its construction costs were two hundred and sixty-five million dollars, and Adelson made back his initial investment in a year. In December, 2004, Adelson took Las Vegas Sands public (according to Forbes, he owns sixty-nine per cent of the stock) and became a multibillionaire, overnight.

Adelson used his influence with the Republicans in Congress to help China get the Olympics, and then got a casino license worth billions to him. What else has he helped or will he help China get?

Dot: McCain: Adelson funding Romney Super PAC with 'foreign money'.

Senator and Romney presidential campaign surrogate John McCain (R-AZ) said Thursday that casino magnate Sheldon Adelson is indirectly injecting millions of dollars in Chinese "foreign money" into Mitt Romney's presidential election effort.

Owing China

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair.

When China offers you a path to make a huge fortune, you start to have a hard time understanding how this can hurt your own country. As I said last week in Why Can't Apple Make Your IPhone In America?,

China offers our business leaders an amazing deal – a deal that they can’t refuse. The owners and managers of our companies get really, really rich if they play along with China. Nerver mind if the companies go away later, they’re rich.

... In fact, China has essentially recruited our own business leaders to fight against our own government.

Romney's Bain Capital, and so many others, have made fortunes from offshoring our jobs, factories, industries, technologies and our economy. Fortunes. And now they are applying those China-made fortunes to our election process.

How Much Of Romney's Campaign Money Comes From Or Depends On China?

So we know about one source of secret money funding Romney's campaign, and this source is directly obliged to China for much of his multi-billion fortune, and has influenced our government on China's behalf in the past. But we don't know anything about much of the rest of the money that is being spent on the flood of negative ads and other persuasion and election efforts.

How many of Romney's other funding sources are dependent on China for their fortunes, directly or indirectly? And how much will this lead them to have trouble understanding how shipping jobs and factories and industries to China hurts our country?

The question is out there, and really should be answered before the election. How much of Romney's huge, secret, campaign war chest comes directly or indirectly from China? And beyond China, where else is Romney's campaign money coming from?

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 1:43 PM | Comments (1) | Link Cosmos

June 20, 2012

Reviving And Strengthening U.S. Manufacturing

Following is the talk I gave to the Take Back the American Dream conference panel, Making It In America: Reviving and Strengthening U.S. Manufacturing.

You have undoubtedly heard the numbers, almost all of them bad.

We have a trade deficit of more than $550 billion dollars a year. This is actually an improvement from before the financial collapse, but only because people’s buying power remains down.

On this chart that first line down is $100 billion. Each line down is another $100 billion. Each year. This is real money that bleeds out of our economy.

If we were engaged in actual “trade” the money would be coming back as fast as it is leaving – that is what the word “trade” means. And that would be a win-win for all trade partners. But it has not worked out that way. Imports stay ahead of exports.

Our manufacturing sector has been bleeding out of our country along with the money.

The lure of low-prices, fueled by currency manipulation and subsidies, combined with the ability to treat workers in ways they cannot be treated here where people have a say, has led businesses to close factories here and open them over there. Eventually entire industries vanish.

This problem of the loss of manufacturing – and its jobs and factories and industries -- has been building for decades but in the Bush years it reached a crescendo. We lost 54,000+ factories, and 1/3 of all of our manufacturing jobs.

Our country has allowed key industries, key supply chains and key national skills to erode or vanish. And along with those we allowed communities and entire regions to decline. And worse than just decline – how many of you have seen Detroit with your own eyes?

We have lost hard-won capacity that will take enormous investment to get back. We lost a large part of our ability to make a living in this world. And now we are feeling the consequences of these losses.

This is because manufacturing is different.

Manufacturing doesn’t exist in isolation; it requires a manufacturing ecosystem, or commons, to properly function. This is where manufacturers, suppliers, designers, innovators, educators and all the other manufacturers, suppliers, designers, innovators and educators all complement each other, creating a synergistic "cluster" effect.

This is why they say that a manufacturing job supports so many other jobs. Manufacturing in particular supports communities surrounding the factories. This is why closing a factory loses so many jobs and effects entire communities. This is why so many of our country’s once-strong manufacturing areas now look the way they do.

I would like to present an overview of the key policies ideas for reviving American manufacturing.

First, of course, is the trade problem. We have to find ways to BALANCE trade.

This starts with CURRENCY. China manipulates its currency, keeping it low so the price of things made there stays a lot lower than the price of things made elsewhere. So out of the gate they start with this competitive advantage.

The administration has been unable to make a formal currency manipulation declaration. The Senate has passed legislation to address currency manipulation but it is stuck in the House, with over 60 Republican co-sponsors who won’t sign a discharge petition, and a Presidential candidate who says he will address the problem on his first day in office – but won’t ask his party to address it today.

Next, a national economic / industrial policy. Other countries see themselves as COUNTRIES, and have national policies. We do not. So we send our companies into the world alone to fight against countries. We need to say that WE as a country will work to put the components in place to secure a share of key industries like green manufacturing so that we can continue to make a living as a country.

We need to fix tax policy to promote manufacturing. We should eliminate tax incentives that encourage U.S. companies to ship jobs overseas and end the system of tax deferral that allows American multinational firms to keep profits offshore.

And finally, Buy American! Trade rules allow us to specify that our tax dollars be used to buy American, and it’s just a no-brainer to strengthen this. If other countries reciprocate, fine – but they don’t!

One last point. To kick-start this effort, we need to invest in rebuilding and modernizing our infrastructure. In the plenary with Paul Krugman he pointed out that this really would be a free lunch. He said that we would not be diverting anyone from other jobs because we have millions of construction workers looking for jobs. We have construction equipment sitting idle. And we can finance the necessary projects at the lowest cost in history. And, of course, all of this work is work that needs to be done eventually, so we should do it right now.

And we should require that all of it be done under Buy American procurement policies!


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 4, 2012

Trade Deficit - One Root Of Many Problems

You buy things till your wallet is empty. So you raid the savings account to buy more stuff. Then you get a loan, and buy more stuff. Another loan, another, you keep buying stuff... Finally you're selling off the tools you had used to make a living. That's where the country is now because of the huge imbalance in our trade relationships. We buy more from them than they buy from us and we have let this go on and on and on. This is the deficit we should be worried about.

The Root

Pick a national problem, and the odds are that our trade imbalance is aggravating it. Our trade deficits literally suck money out of the country. When looking up the numbers I had to double check, our annual trade deficits are so huge. In the chart below that first line under the dates represents $100 billion. Look at what happened in the late 90s, when we opened the China flodgates. (Click to enlarge):


In the 70's the trade balance dipped below zero because of oil, and the country responded with conservation and the beginning of the search for alternatives -- until Reagan. To make matters worse, Reagan preached "free trade" -- as in use cheap foreign labor to break American unions. (But Reagan also enforced rules against "dumping" and other trade violations.) The real break in our balance of trade clearly begins around the time that NAFTA and the World Trade Organization went into effect, and then went absolutely nuts after China was brought in. Between 2001 and 2009 we lost 1/3 of all of our manufacturing jobs, more than 50,000 factories, and entire industries. We drained trillions of dollars out of our economy.

Causes

Energy. The trade imbalance started with OPEC and the oil price shocks in 1970s, and oil imports since then. This is a huge problem but the beneficiaries of this trade imbalance fight to keep things the way they are. (By the way, next time you hear someone of FOX running down our country's green energy efforts, knocking the Chevy Volt or denying climate change, think abougt this: Fox's second-largest shareholder is a billionaire Saudi oil prince. Also, FYI, Koch brothers == oil.)

"Asymmetries." One-sided trade relationships are now draining money from our country at a dramatic rate. We are much more open to imports than many of our "trading partners" are. We buy from them, they don't buy from us -- and we just let this continue year after year.

"Strong" dollar policies, combined with currency manipulation by others. A strong dollar is great for Wall Street, but is terrible for manufacturers and producers. When the dollar is "strong" it means that goods made here cost more than goods made elsewhere. The dollar went way up in the early 1980s because of the borrowing following the Reagan tax cuts for the rich and the trade deficit went up along with it. Dollars had to be purchased to buy our bonds, creating a "demand" for them, which increased their "price," contributing significantly to the then-record U.S. trade deficits. Meanwhile, we let countries like China manipulate their currencies to make them "weak," which means goods made there cost must less in world markets.

Trade cheating. Many countries violate trade rules (like manipulating currency), which brings them a competitive advantage in world markets. We don't call them on it for various reasons, largely because powerful interest groups benefit from the cheating. When goods from elsewhere cost less than they should it undermines our own manufacturers and producers, but the lower prices enrich distributors, retailers, and others.

The Trap

Here is the trap of our one-sided trade agreements: these "free-trade" agreements increase exports. The reason this is a trap and a problem is that they increase imports more. So, on the one hand the agreements create and enrich interest groups that push for continuation and expansion of the agreements, while on the other hand they increase trade deficits, which drain our economy.

Example: We opened up trade with China. China lets their imports grow, so we have some appearance of increasing sales to China, but they keep barriers while manipulating currency and subsidizing their companies, and their exports to us grow faster than their imports from us, which increases the imbalance. They can steadily reduce their import barriers and let their currency rise slowly, giving the appearance of moving toward open trade and providing what appear to be incentives to keep the relationship going, but by also increasing their exports they continue to drain us.

The Answer: Balance

We must balance our country's trade. Of course, to do that we must understand ourselves as a country again. Our competitors certainly do.

We're A Country. Deal With It.

Here's the important thing to understand, even if you think the idea of "countries" is out of date, and don't think of the United States as a country is important anymore: Others see themselves as countries and they organize their countries to win as countries. And you don't live in those countries. They see us - this geographic region we live in -- as a country, even if we do not, and they plan their efforts accordingly. They attack us as a country and you happen to live in the geographic region called a country that they are attacking. So as they seize the jobs and factories and industries from our country all of us who happen to live within the geographic borders that we refuse to call a country lose out economically, whether we believe we are part of this country or not. This means we have to respond as a country regardless of whether our ideology says we shouldn't. We are under economic attack as a country, so national government still matters as the only force capable of organizing a national response.

Our government must say that the amount coming in must match the amount going out. Period.

(Note, The Causes of the U.S. Trade Deficit, Robert A. Blecker, Ph.D., August 19, 1999 is a good read.)

Join me at the June 18-20 “Take Back the American Dream” conference.

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 2, 2012

Stimulus Stimulated Manufacturing

Go see this chart: CHART: How The Recovery Act Boosted U.S. Manufacturing | ThinkProgress

Posted by Dave Johnson at 8:05 AM | Comments (0) | Link Cosmos

May 18, 2012

Will Conservatives Support American Companies ... Or Chinese?

Which is better for an economy: millions of future jobs and trillions of future dollars, or a few people making a quick buck today by selling out their country? For decades America's 1%-backed conservatives have chosen the latter course, and we can see the results all around us. Now the Obama administration has imposed stiff tariffs on Chinese solar panels because China was "dumping" -- selling below cost -- to drive American manufacturers out of business. Will conservatives support their country and our companies or will they continue to side with our country's competitors?

US Imposes Stiff Tariffs

The Commerce Department yesterday concluded that Chinese solar panel companies are “dumping” product – selling below the cost of production – into the US market, and imposed stiff tariffs. NY Times, U.S. Slaps High Tariffs on Chinese Solar Panels,

The United States on Thursday announced the imposition of antidumping tariffs of more than 31 percent on solar panels from China.

... The antidumping decision is among the biggest in American history, covering one of the largest and fastest-growing categories of imports from China, the world’s largest exporter.

Industry Of The Future

Again and again technology revolutions come along and disrupt economies. Countries that jump on new technologies are the countries that win the industries and jobs and revenue. This is how the United States became the world power that it is was. Railroads, steel, automobiles, airplanes, electronics, semiconductors, computers, the Internet, pharmaceuticals, biotech and software are a few examples. And in every case our government helped these new industries get off the ground. When these industries took root the payoff was enormous.

Green energy is one such technology of the future. Producing solar panels, wind turbines, etc. will bring millions and millions of jobs and trillions of dollars, and several countries are competing to win a share of this new industry.

China is fighting hard for those jobs and dollars. They are being smart and they are also pushing past the limits of the rules. From the NY Times story,

Alan Price, a partner who heads the international trade practice at Wiley Rein, the law firm representing the United States companies in both the solar and wind cases, said that China posed a particular threat to America’s developing green energy sector.

“China’s method is straightforward: it sets forth industry-specific Five-Year Plans and then uses all forms of national and local subsidies and other governmental support to quickly transfer jobs, supply chains, intellectual property and wealth, to the permanent detriment of U.S. and global manufacturers,” he said. “China’s ability to ramp up and overwhelm an industry is unique and particularly devastating with new and emerging technologies, where global competitors may be less established and can be knocked out more easily and quickly.”

To compete for a share of this new industry we need to be proactive. We need national efforts to develop the industrial commons, or ecosystem, that will foster green-tech industries. We also need government policies that promote a market for these products until they take hold, just as our defense industry did for aircraft and other new technologies. And we need to enforce the rules for international economic competition, which is what has happened with the tariff decision.

Decision Not Political

The NY Times story points out that this was not a political decision by the Obama administration,

The American decision was made by civil servants in a quasi-judicial process that is heavily insulated by law from political interference and does not represent a deliberate attempt by the Obama administration to confront China on trade policy. But that distinction has been largely lost in China, where the solar panel issue has been one of many causes embraced online by the country’s vociferous ultranationalists, who put heavy pressure on Chinese officials to respond forcefully to perceived snubs to China.

The rules say that if a country is dumping, then we must impost tariffs. The Commerce Department investigated and concluded that China has been dumping so they had no choice. If we do not enforce trade rules, they are meaningless and countries that cheat gain an advantage, driving out the honest players. That is how cheating, accountability and enforcement work. (Hint: this also applies to banking fraud laws.)

In the case of solar-panel tariffs, we were losing companies and jobs and facing losing the possibility of losing the entire industry to China. From Tariffs On Chinese Solar Might Help Prevent The Next Solyndra,

You have probably heard about a solar-energy company named Solyndra, but probably what you have heard is a bunch of negative, conspiratorial, anti-alternative-energy, anti-Obama stuff from the corporate/conservative spin machine. The real story is that our government is trying to help us capture some of the new green energy industry that will create the jobs of the future. But China is, too. And China doubled down, and then quadrupled down on government support. They even directly subsidize their companies so their products cost less. This helped put Solyndra out of business. But the Obama administration is doing something about it.

China cheats, and we don't usually do anything about it. They let companies pollute, don't do much about worker safety, pay low wages, and make people work long hours. So-called "free trade" lets companies cost us more than 50,000 factories in the Bush years, and millions of jobs. And it empowers companies here to tell their workers to shut up and behave and accept wage and benefit cuts, or they'll send their jobs to China, too. We continue to just let China take jobs, factories and industries because powerful interests, like Wall Street, make tons of money off of it.

So the decision is made, our country is engaging in the economic war that has been underway against us. Will our country's conservative take our country's side?

Solyndra, Chevy Volt And The Anti-Green Propaganda Campaign

Oil-backed conservatives have been waging a campaign to discredit green energy, trying to stop government efforts to move us away from dependence on oil and coal. (Please click the links.)

They have used the failure of solar-panel manufacturer Solyndra -- partly due to Chinese dumping -- to paint green tech in general as a bad investment. They have even tried to turn the public against the Chevy Volt, claiming that it "ran out of juice in the Lincoln Tunnel" when it actually just kicked over to the gas-engine charger, and that the car is "flammable" because on test battery got too hot -- as compared to cars that run on gasoline! (Gasoline car-fire data at the link.)

These anti-dumping tariffs change the dynamics of this oil-backed anti-green campaign. Now when conservatives slam Solyndra or the Chevy Volt and otherwise join in this anti-green-energy campaign they are taking China’s side against American companies at a time when the country is engaged in economic conflict. This presents a tough choice to the conservative movement, do they continue to accept oil and coal company funding and side against their country and support China, or will they return to their pro-American roots and side with their country in a time of conflict.

Installers Hit Hard?

Low prices from trade-cheaters are always attractive. But if we want a slice of the jobs, factories, industries and economy of the future we have to fight back when our competitors cheat.

The solar-installer industry is worried they will be hit hard by this because prices for solar panels could increase sharply. BusinessWeek: U.S. Solar Tariffs on Chinese Cells May Boost Prices,

The tariffs “will increase solar electricity prices in the U.S. precisely at the moment solar power is becoming competitive with fossil fuel generated electricity,” Shah said in a statement. “This new artificial tax will undermine the success of the U.S. solar industry.”

[. . .] The U.S. decision to impose import duties on Chinese solar panels will raise their price to $1.11 per watt, according to calculations by Bloomberg New Energy Finance, a London-based researcher owned by Bloomberg LP. That price is 17 percent higher than the current spot price of non-Chinese panels.

Forbes: Solar Installers Caught In Cross Fire Of Escalating China Trade War,

On Thursday, the U.S. Commerce Department issued a preliminary decision levying steep tariffs against Chinese solar manufacturers, finding they illegally dumped cheap photovoltaic cells on the American market. But the companies that install those solar panels on residential and commercial rooftops – and which have benefited from a 75% plunge in photovoltaic prices in recent years – are split over the impact of the tariffs on their burgeoning business.

The government could remedy the impact on domestic customers and installers several ways, including:

- by using the new tariffs to fund tax credits and other incentives that help homeowners and businesses make the move to solar power,

- by imposing a large "carbon tax" that is refunded on a per-capita basis. This would mean high users of carbon-based fuels would pay in, the revenue is divided up evenly to everyone over 21 and paid out with a monthly check, and people could use this money to both cover their own added energy expenses and to purchase solar and other alternative energy products to lower their carbon-energy footprint,

- and by setting a national renewable energy standard, requiring power producers to use a certain percentage of solar, wind and other alternatives, creating more of a market for green tech.

Oil And Coal And "Buggy-Whip" Technologies

Of course the oil and coal companies will continue to fight this shift from their "buggy-whip" technology, and will use their tremendous influence over our government to try to hold off the inevitable. But the tide is shifting. The fact that China is fighting so hard and putting so much investment into this sector shows its value to the world economy in the future. The fact that our government is responding shows that we have a chance to win a share of the jobs and revenue that green tech promises to bring.

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 2:47 PM | Comments (0) | Link Cosmos

May 8, 2012

Trade Alert! Another Job-Killing Trade Agreement Heading Our Way

The trade agreements we have entered into over the last few decades have greatly enriched the already-wealthy 1% but not worked for the benefit of most of us. They have created massive trade deficits that drain our economy. They have cost millions of manufacturing, textile and other jobs. They have empowered huge, multi-national corporations to break unions and force pay and benefit cuts. Now the Trans-Pacific Partnership (TPP) agreement is coming up, and once again things don't look so good for most of us. Maybe "look" is the wrong word to use, since We, the People are not even allowed to know what "our" government is proposing!

The TPP Trade Agreement

The Trans-Pacific Free Trade Agreement is a major trade deal for Pacific Rim countries -- Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, the United States, and Vietnam. Japan, Mexico and Canada have said they plan to sign on later. Other Pacific Rim countries including Indonesia, Russia, the Philippines and possibly China are also expected to join. So this is a big deal.

So far there have been eleven rounds of negotiations. Reports say that the United States has introduced proposals for the rest of the agreement. The 12th round of negotiations for the TPP start today in Dallas.

Another NAFTA-style Trade Agreement?

The NAFTA-style trade agreements we are familiar with have been used as weapons by the already-wealthy and their huge corporations to break unions and force working people to accept pay and benefit cuts, resulting in the "hollowing out" of our middle class. They have turned democracy -- with its good wages & benefits and environmental protections -- into a competitive disadvantage in world markets.

These agreements are sold as "opening up trade" into new markets. This supposedly helps us by increasing exports, which supposedly should open up lots of jobs in the exporting industries. But now we see how these agreements have really been used. While increasing some exports like agricultural products and raw materials they have increased imports more, costing us jobs, factories and entire industries. The resulting trade deficits have literally drained our economy. The resulting movement of good-paying jobs has hollowed out our middle class.

These trade agreements have empowered companies to break unions. Companies cut pay and benefits, telling workers their jobs can be offshored. This forces other companies to do the same whether they want to or not.

The Citizens Trade Campaign, in What Corporations Want with the Trans-Pacific FTA, worries about TPP, saying,

If it continues on its current course, the Trans-Pacific FTA will serve two primary purposes: 1. Making it easier for corporations to shift jobs throughout the world to wherever labor is the most exploited and regulations are the weakest; and 2. Putting checks on democracy at home and abroad by constraining governments’ ability to regulate in the public interest.

... Here, specifically, are examples of what corporations want with the Trans-Pacific FTA:

* Cheaper Labor Costs. ... (click through to read)
* New Tools for Dismantling Environmental Laws. ...
* Longer Drug Patents. ...
* Further Financial Deregulation. ...
* Caps on Food Safety Protections. ...
* Concentration of Global Food Supplies. ...
* Greater Access to Government Contracts. ...
* Lower Taxes. ...

Why The Big Secret?

We, the People are not allowed to know what our own government is proposing in these trade negotiations! But corporate lobbyists are working with the negotiators and are able to review drafts of the agreement.

U.S. Trade Representative Ron Kirk, -- formerly Mayor of Dallas, candidate for US Senate, lobbyist for Energy Future Holdings Corporation, which was created by KKR, TPG Capital and Goldman Sachs in a $45 billion 2007 leveraged buyout -- has refused to release any of its negotiating proposals for public scrutiny. At the same time approx. 600 corporate lobbyists have been given "cleared advisor" status.

Why are our own country's proposals kept secret from We, the People? They are not a secret to the other governments involved in these negotiations, nor to the corporate lobbyists who have "cleared advisor" status.

TPP Concerns

Several chapters of the proposed agreement have leaked, raising questions about who this agreement will benefit. The Citizens Trade Campaign, "a broad and diverse national coalition of environmental, labor, consumer, family farm, religious, and other civil society groups" has a list of questions about the TPP:


  • Labor rights: Will the Trans-Pacific FTA include labor standards based on International Labor Organization conventions, and if included, how will they be enforced?
  • Investment Provisions: Will the Trans-Pacific FTA include so-called “investor-state” provisions that allow individual corporations to challenge environmental, consumer and other public interest policies as barriers to trade?
  • Public Procurement: Will the Trans-Pacific FTA respect nations’ and communities’ right to set purchasing preferences that keep taxpayer dollars re-circulating in local economies?
  • Access to Medicines: Will the Trans-Pacific FTA allow governments to produce and/or obtain affordable, generic medications for sick people?
  • Agriculture: Will the Trans-Pacific FTA allow countries to ensure that farmers and farm workers are fairly compensated, while also preventing the agricultural dumping that has forced so many family farmers off their land?

Buy America Banned?

"Buy America" procurement preferences for federal procurement contracts are one of the few tools we have left to make sure that We, the People benefit when our own tax dollars are spent. Currently and since the 1930s, American-produced goods have received preferential "buy America" treatment in federal procurement contracts.

It has been leaked that the TPP agreement grants the TPP countries the same privilege. In other words, Buy American in federal procurement will give these countries -- Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam -- the same preferences as American-made goods. The idea is that these countries will then have to give American producers equal access to their own government contracts. Of particular concern is that Chinese-based firms in these countries will be able to bid against American companies for these government contracts.

This would force American producers to compete with countries that do not have minimum wage laws or environmental protections, undermining our own such protections.

A group of 68 House Democrats and one Republican sent a letter to President Obama last week, urging him to reconsider any potential ban on Buy America preferences.

Actions You Can Take

Occupy Wall Street: Occupy TPP: Dallas, TX – May 8-19,

via Texas Fair Trade Coalition:

International trade ministers and corporate lobbyists will be descending on Texas from May 8 to 18 for a critical trade summit aimed at rushing the secretive new Trans-Pacific Partnership (TPP) Free Trade Agreement toward completion. The Texas Fair Trade Coalition and our allies are planning to welcome them — and we need you to join us.

Occupy Dallas: Take Action for Fair Trade!

Public Citizen petition: Derail the Trans-Pacific Partnership - No backroom deals for the 1%

Friends of the Earth: Demand transparency in the Trans-Pacific free trade agreement!

Citizens Trade Campaign: REPORTERS’ MEMO: Former Mayor Brings Controversial Trans-Pacific Trade Negotiations to Dallas, USTR Ron Kirk Urged to Publicly Release What His Office Has Proposed in Americans’ Names

Leo Hindery, Jr.Chairman, U.S. Economy/Smart Globalization Initiative at the New America Foundation: Free Trade Run Amok: The 'TPP', (this is a must-read!)

I believe that TPP could very likely dwarf the negative impacts from all prior FTAs combined, including the still notorious multilateral NAFTA (which went into effect in 1994) and the multilateral CAFTA (signed in 2003).

Lori Wallach, director of Public Citizen’s Global Trade Watch: A Stealth Attack on Democratic Governance

Tim Robertson, California Fair Trade Coalition: Why Is the TPP Such a Big Secret?

Michael Brune, The Sierra Club: What Are They Trying to Hide?

Public Citizen's Tradewatch

Public Citizen's Global Trade Watch

Eyes On Trade, Public Citizen's Blog on Globalization and Trade.

Public Knowledge: TPP Info


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 11:53 AM | Comments (0) | Link Cosmos

April 30, 2012

Transportation & Infrastructure = IMMEDIATE Jobs = Deficit Reduction

President Obama spoke today at the AFL-CIO's Building and Construction Trades Department Legislative Conference in Washington, asking Republicans to stop blocking infrastructure and transportation projects. (See transcript here.) These projects would immediately create jobs, which would immediately start reducing the country's deficit -- which is probably why Republicans are blocking them.

There are millions of infrastructure jobs that absolutely need doing. There are millions of people out of work who really, really need jobs. On top of that the cost of financing is the lowest ever. So maintaining and modernizing our infrastructure would immediately put millions of people to work. But wait, there's more! Modernizing our infrastructure would make our economy more efficient and our businesses more competitive, bringing returns for decades. So, of course, with all these points going for it Republicans are blocking it.

The Obstruction

We have been deferring infrastructure maintenance since the Reagan years, but in recent years Republicans have doubled down on blocking public investment, calling it "just more government spending" and even "socialism." And, they complain, construction projects help union members.

So Republicans have blocked bill after bill to repair and modernize the infrastructure, or to maintain and modernize out aging transportation system, build high-speed rail, etc. The President discussed this obstruction in his speech today,

...over the last year, I’ve sent Congress a whole series of jobs bills that would have put your members back to work. But time after time, Republicans have gotten together and said “no.” I sent them a jobs bill that would have put hundreds of thousands of construction workers back to work repairing our roads, bridges, schools and transit systems, along with saving the jobs of cops, teachers, and firefighters, and creating a new tax cut for businesses. They said “no.” Then, I sent them just the part of that bill that would have created those construction jobs. They said “no.” And we’re seeing it again right now. As we speak, House Republicans are refusing to pass a bipartisan bill that could guarantee work for millions of construction workers. Seeing a pattern here? That makes no sense. Congress should do the right thing and pass this bill right away.

The Cost

Our aging infrastructure costs our economy. As things break down it gets harder to get things done. It is harder to start new businesses and our businesses are less competitive in the world. Shipments are delayed, etc.

There are other costs. Cars have to be repaired from driving on our substandard roads, people have to pay higher fuel costs as they try to get where they are going on clogged streets or taking detours around closed bridges, etc. People's time is wasted, which also costs. As we move toward third-world status property values decline, we lose tourism, etc.

From a report on the President's speech in The Hill, (differs from advance transcript.)

"There are bridges between Kentucky and Ohio where some of the key Republican leadership come from, where folks are having to do detours an extra hour and half drive every day on their commute because these bridges don't work," Obama said in a speech to the Building and Construction Trades Department Legislative Conference in Washington. "Time after time, the Republicans have gotten together and they've said no," he said.

The Missed Opportunity

This infrastructure work has to get done at some point, and gets more expensive the longer we put it off. It not only gets more and more expensive to do this work the longer it is put off, but we are falling far behind our economic competitors as we fail to modernize.

But here’s the thing—as a share of the economy, Europe invests more than twice what we do in infrastructure; China about four times as much. Are we going to sit back and let other countries build the newest airports and the fastest railroads and the most modern schools, at a time when we’ve got private construction companies all over the world—or all over the country—and millions of workers who are ready and willing to do that work right here in the United States of America?

Jobs Fix Defitics

Jobs fix deficits. People are paying income taxes instead of collecting unemployment benefits or food stamps, they are spending their paychecks and the stores are paying taxes, etc. So government revenues are up and payouts are down.

This is why the deficit is jobs, but there is a deficit of jobs.

If you want to fix the deficit problem you have get people working again. And since we have to maintain and modernize the aging infrastructure anyway, then let's get people working on ... maintaining and modernizing the aging infrastructure!

Take Back The American Dream Conference

This and other issues will be talked about and worked on at the Take Back The American Dream Conference, June 18-20 in Washington DC.

This is where you need to be to forge the relationships and develop the strategies to change the direction of the country. At this conference, we'll be tackling some of the most pressing questions we face today:
  • How do we compel candidates to embrace a jobs agenda big enough to end our economic crisis?
  • How can we stop unlimited corporate campaign cash from buying this election?
  • How many progressive champions can we help win in congressional, state and local races?
  • How will we take back our democracy—to Take Back the American Dream?
Be part of the American Dream movement. Join Campaign for America’s Future, Rebuild the Dream, Progressive Majority and many other groups—and thousands of progressive activists—at the Take Back the American Dream conference.


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 3:10 PM | Comments (0) | Link Cosmos

April 24, 2012

1% Vs 99% Battle Comes To GE Detroit Shareholder Meeting Tomorrow

I'm in Michigan to cover the GE shareholder meeting tomorrow. I grew up in Michigan and have to say that Mitt Romney was exactly right that the trees here really are the right size. The look of the houses, the layout of the roads, the birds, everything feels right. Of course, my wife grew up in England, and she says that the trees in England are the right size. (She also says the beer there is better -- and she's right.)

I grew up in Michigan. My family was in Michigan because my grandfather worked in what is now called "Carriage Town" in Flint in the days of Dort and Durant and Nash and the rest of the early auto company industrialists. (No he didn't get stock.) He fought in the first world war, and considered himself an American. Later he was an executive at different companies, living outside of Detroit. In WWII he and a number of other auto company executives went to work in Washington for $1 a year, because they felt it was their patriotic duty. Later, when Eisenhower was President he went to work in the government, and considered it public service.

My grandfather was a proud Republican, and even spoke at Rotary Club events. He worked under and was a friend of Mitt's dad George, another auto executive. I found a speech online where he said he felt that big corporations should be taxed more to incentivize formation and competition of smaller, innovative companies and said they they create more jobs. I know he agreed that we need a high top tax rate (it was over 90% when he was in the Eisenhower administration), that the revenue should be used to invest in infrastructure because it is the soil in which businesses grow and prosper. He believed in his country and in investing in this country and in the importance of making things in America.

"Bean-Counters" Take Over, Sacrifice Long-Term

Later on the auto companies went in a different direction. Bob Lutz, former vice-Chair of GM is a "car guy" and a conservative. In his recent book Car Guys vs. Bean Counters: The Battle for the Soul of American Business Lutz wrote about how the MBA and finance types took over management from the "gar guys" and didn't care about design, product quality, customer satisfaction -- only about money, and really only short-term money even if it meant sacrificing the company in the long term.

The "bean counters" took over more than just the car companies, they took over company after company, industry after industry. And they sacrificed more than just their companies to short-term profits. When they closed factories, as documented in Michael Moore's Roger & Me, the community of Flint, Michigan was devastated when GM closed car factories there. This was back 1989 and presaged the tsunami that was coming. As I wrote about in 2010, the movement of more and more manufacturing out of the country wiped out the midwest and other regions, and the resulting loss of jobs and wages combined with the huge trade deficit helped lead to the financial crisis and current "jobless recovery."

On My Way To Detroit

I stayed in Flint last night and am writing this from a coffee ship in downtown Pontiac on the way to Detroit. I mentioned "carriage town" in Flint - the little area which incubated much of our automotive industry and with it the Midwest's manufacturing prosperity. Today the area is neglected. The original buildings at least have historical markers, but the area is relatively deserted, several houses in the area are boarded up, with vacant lots where the city has cleared derelicts. The roads are not in good shape, there are many empty storefronts, roadside businesses, offices and manufacturing facilities. The city has lost and is losing population, and has been taken over by Michigan's anti-democracy "emergency manager" law. ("If you people won't sell off your assets to private interests, cut public employee pay and pensions, cut back on the things democracy does for citizens, etc., and other "reforms" that enrich the 1%, then we'll just take over and make it happen and you don't get a say.)

Downtown Pontiac is one more of so many examples of the devastation of our country's communities by the short-term-profit, long-term-collapse mentality of America's ruling elites. We drove by closed factories, boarded-up stores and houses, and sit in a little coffee shop - one of the few remaining businesses in the "downtown."

GE Shareholder Meeting Tomorrow -- 1% vs 99%

The 1% vs 99% clash comes to Detroit tomorrow. The GE shareholder meeting takes place in that city tomorrow, and while it is going on inside, outside people will be making their voices heard with nonviolent protests. GE brings to light the the battle between short-term-gain-for-a-few vs long-term health of the communities and economy of the rest of us.

GE has made billions in profits, but paid zero federal income taxes from 2008 to 2010. Over the last ten years, GE’s effective tax rate has been 2.3%. In 2010 alone, the top five GE executives received $75.9 million. Just five people. Over the last three years, GE's executives collected $234 million.

Since 2008, GE has spent more on DC lobbyists than it paid in taxes. GE spent $84.35 million on lobbyists from 2008-2010.

The cause of our terrible economic inequality is clear: the 1% have too much power, and use that power to enrich themselves at the expense of the rest of us -- the 99%. Since 2008, at least thirty big American corporations reported big profits and paid their CEOs excessively while laying off workers and spending more on Washington lobbyists than they paid in taxes. In fact, 100 of the Fortune 500’s most profitable companies received average tax refunds of 2%.

Tomorrow in Detroit, people are taking it straight to the top of GE.

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 13, 2012

The National Manufacturing Strategy Debate

President Obama has been pushing policies to boost American manufacturing. Democrats in Congress are pushing a package of bills under the label "Make It In America." The Obama administration's Gene Sperling gave a big speech recently describing the vital importance of a healthy manufacturing sector to our economy. But others say promoting manufacturing is "the wrong target" and reviving manufacturing won't help revive our economy. So what's the story?

Gene Sperling, Director of the Obama administration's National Economic Council gave a big speech at the recent Conference on the Renaissance of American Manufacturing. Sperling talked about how a manufacturing "commons" works, and why it is a good thing if government promotes this commons.

A manufacturing commons is an ecosystem, in which manufacturers, suppliers, designers, innovators and all the other manufacturers, suppliers, designers and innovators all complement each other, creating a "cluster" effect. When all of these components are working together it creates a "virtuous cycle" but when they don't it creates a "vicious cycle." So because the sum of these parts is greater than the whole, each component's interests do not align with the interests of the whole -- and "our" (We, the People's) manufacturing capacity is degraded, which degrades our standard of living. So government (We, the People) must play a role in promoting the whole effort. From Spreling's speech:

The ecosystems that grow up around these intersections of innovation and production tend to be complex. They are the result of evolutions that occur over periods of years and decades. Once the virtuous, reinforcing cycles are broken they are difficult to recreate, and they can turn to a vicious cycle. That’s why losing pieces of our manufacturing base should be such a serious concern.

... For any single firm, the decision to move production elsewhere may make economic sense. But that decision impacts suppliers and the local talent pool. This makes the decision even easier for the next firm to leave and even harder for the next firm considering coming there to say yes.

Job Loss Not Just Competition And Productivity

Sperling traces the history of our manufacturing and shows that we didn't lose jobs when competing with Japan, and didn't lose jobs during periods of high productivity growth. He shows that what happened between 2000 and 2009 (the Bush years, and China in the WTO) with the loss of 50,000 factories and millions of manufacturing jobs was different, saying "the dramatic loss of manufacturing employment in the past decade was a break from the past and cannot be explained by the conventional view of productivity and technology gains."

Since 2000, the manufacturing sector lost nearly one-third of its workforce, a total of nearly 6 million jobs. Unlike the preceding decades, according to the Federal Reserve, manufacturing production, the measure of the physical amount of goods that we make, actually declined from 2000 to 2010 by five percent. This drop was not just a result of the recession. From 2000 to 2007, manufacturing production grew at only 1.3 percent per year, the worst peak-to-peak performance since World War II.

Sperling explains why this loss is so significant to our economy: manufacturing is special in that so many other jobs depend on manufacturing, extending "from the web of suppliers that support manufacturers to the communities where manufacturing plants often serve as an anchor employer."

For those of you here from towns across the U.S. that rely on a major manufacturer, or states like Michigan where I come from, you understand the impact of manufacturing. In addition to the web of suppliers, the expansion of an auto plant brings other types of businesses to town including new restaurants, retailers, and service providers feeding off of this economic activity. If an auto plant opens up, a Wal-Mart can be expected to follow. But the converse does not necessarily hold - that a Wal-Mart opening definitely does not bring an auto plant with it.

So it is clear that this is not just about the back-and-forth of companies competing, we have a national interest in bolstering the manufacturing sector.

Finally, Sperling described some of the administrations manufacturing initiatives. He did not come out and advocate for a coordinated national industrial strategy -- which every major competitor has and we don't have. But his speech did advocate "policy to support manufacturing." This is at least a start.

Criticisms And Agreements

Matthew Yglesias at Slate, in Forget the Factories writes that it is "foolish" and worries about the, "troubling possibility that these ideas will actually guide policy in a second term rather than simply serve as props in a re-election campaign." Yglesias writes that.

it should be obvious that the path forward for America is to focus on our strengths in information technology and media, and not compete with the Chinese for manufacturing supremacy.

Yglesias writes that manufacturing areas are "poor" while high-tech areas are "richer" and "more prosperous" and we should "learn from the most prosperous parts of the country, not to imitate Chinese clusters that are even poorer than America’s industrial hubs." Also, "creating new billion-dollar software startups has a lot more to do with the future of American prosperity."

Yglasias concludes that we should "instead build and expand new industries that push living standards up and keep factory owners searching abroad for cheap labor."

Ezra Klein, writing Is industrial policy back? at the Washington Post, writes that "cozy consensus against industrial policy is, at least when it comes to manufacturing, flawed." Describing what Sperling's argument, Kleinwrites,

There is, in other words, a building argument that the market is failing to appropriately price the benefits of manufacturing firms. They're worth more to the economy than they are to individual firms. And that's the key to this new argument: Sperling isn't saying America should support the manufacturing sector because it delivers good jobs, or it's been important to America's middle class, or even because China is competing unfairly. He's saying there's a market failure. And even the most orthodox economists will tell you that it's appropriate for the government to intervene to correct market failures.

Even so, he says the Obama administration isn't really doing all that much,

For all this, the Obama administration's strategy to promote high-tech manufacturing is modest: A couple of tax cuts, mostly. Some money for research into basic technologies and new techniques. And a sustained effort to talk up the industry's importance and thus signal to investors that America intends to fight for its manufacturing base. None of these are gamechangers.

At least the consensus against doing anything is changing.

Economist Mark Thoma writes in Is Manufacturing the Answer?, "At one time I would have been opposed to industrial policy, but I have been reevaluating my position lately (I can't say I've been convinced as of yet, but I want to stay open-minded on the question)." He links to EPI's Lawrence Mischel, who writes in Robert Lawrence misleads the New York Times on manufacturing, saying that,

... closing the trade deficit would provide millions of jobs and boost the economy. For instance, my colleague Robert Scott has shown that growing trade deficits with China eliminated 2.8 million U.S. jobs between 2001 and 2010 alone, including 1.9 million jobs displaced from manufacturing. Similarly, correcting the currency imbalances with China, Hong Kong, Taiwan, Singapore, and Malaysia could add up to $285.7 billion (1.9 percent) to U.S. GDP, create up to 2.25 million jobs over the next 18 to 24 months (most in manufacturing), and reduce U.S. budget deficits by up to $71.4 billion per year.

... manufacturing employment will not return to 25 percent of employment. Nevertheless, we can gain a lot of manufacturing jobs by strengthening the recovery and through appropriate trade and currency policy. This would provide millions of good jobs, aid many communities, and be good for the nation.

At Financial Times, Edward Luce writes in America reassembles industrial policy that we do have an industrial policy, that favors oil and Wall Street,

Whether it is the schooner-rigging of tax incentives for Wall Street – and the federal tax system’s subsidies for debt over equity – or the panoply of write-offs for Big Oil, Washington never stopped promoting favoured sectors. Manufacturing was simply not among them.

Most are of long pedigree. Some might say it would be easier to pass through the eye of a needle than to separate the fossil fuel sector from its Washington subsidies, which date from the second world war. No presidential hopeful would dare to suggest scrapping Depression-era farm subsidies because they skew so heavily towards key states such as Iowa.

Luce points out that Facebook and Twitter might be glamorous, but making actual things is where innovation comes from,

Facebook and Twitter may bring disruptive social change. But the most valuable innovation still comes from making products such as semiconductors, batteries and robotics.

Just Look Around

I think a problem with economists (and a lot of big-city columnists and journalists) is that they somehow are unable to just look around them. All one has to do is drive around the midwest for a few days, Michigan, Ohio, etc. and you will see for yourself how important - and different - manufacturing is to the country, and what happens when factories close. It affects the entire community and those jobs are not replaced - and the ripple effect from the loss of a community's jobs base is terrible. All the other jobs that manufacturing supports go away, too, when manufacturing goes away.

I live in Silicon Valley. Facebook, Google and Twitter employ relatively few people relative to manufacturing. Apple sends its manufacturing to China, because in China working people don't have any say, so they can treat workers there worse than workers here in our democracy will allow. In fact Silicon Valley has high unemployment, in some areas here as much as 25% or more of the office and light industrial buildings are for lease, and our downtowns and commercial streets have plenty of empty stores. They're just newer, so they don't look as bad as the downtowns across the midwest. But it is as bad.

In February economist Christina Romer wrote in a NY Times op-ed, Do Manufacturers Need Special Treatment? that our government should not promote manufacturing. She wrote,

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.

I responded, in Manufacturing On Planet Economus, and think it very much applies in response to this ongoing discussion:

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).

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.

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.

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 5:31 PM | Comments (1) | Link Cosmos

April 4, 2012

California Taxpayers Financed A New Chinese Competitor!

American tax dollars should employ American workers and build American companies. But the Bay Bridge project not only didn't do that, it paid to build up a new Chinese state-owned competitor that will bid against American companies on future projects! Let's not make that mistake again. Jeeze!

Should Be Made In America

Last week I wrote about the Should Be Made In America project. A coalition of American companies and labor organizations has launched this campaign to let taxpayers know when their state sends jobs out of the country. This is an effort to get state governments to buy steel and supplies from American companies when they do infrastructure projects. If they do not, there will be a PR campaign to shame the elected officials and state procurement agencies who made the decision to outsource American jobs with taxpayer dollars.

The New San Francisco Bay Bridge Project

The new San Francisco Bay Bridge is underway. The eastern span of the new bridge is called the self-anchored suspension span (SAS), which will have a single 525-foot-tall tower and uses a single mile-long cable to support the deck, which is two side-by-side steel roadways. The cable is made up of 137 strands of steel which are being pulled across the bridge one-by-one right now. The 1,542 ft span is the largest span of its kind in the world. (Lots of info is available here.)


They Turned Down Federal Dollars So It Could Be Made In China!

The cable and key sections of the tower and deck were outsourced to China. Governor Arnold Schwarzenegger's administration wanted this done in China, saying the low wages and lack of environmental regulations would lower the cost. Federal procurement rules require that taxpayer dollars be spent here, so Schwarzenegger turned down federal funds for the job, in order to be able to outsource the work. Never mind the cost of lost tax revenues, unemployment benefits, food stamps and other "safety net" programs for the lost workers and bankrupted companies that resulted. And never mind the cost to the larger economy and country from the foreclosures, closed businesses, lost jobs, etc. Those larger costs to the larger economy and country were not Schwarzenegger's problem

Built Up A Competitor!

Shanghai Zhenhua Heavy Industries got the job -- even though they had never done a job like this before. Until now the company manufactured cranes and ship loaders. But, thanks to California's tax dollars, they can now. California paid for this Chinese state-owned company to build its capacity to do major infrastructure projects like this one. And they will be bidding against American companies on project in the United States and around the world from now on.

Here is Scott Paul from the Alliance for American Manufacturing, talking about the Should Be Made In America project, on KQED's show Forum. Skip to around 16:00.

"What it has done now unfortunately is established a competitor to these American firms, that has been subsidized by the taxpayers of California, that will compete on future infrastructure projects. And California taxpayers have given this state-owned firm in California China the knowledge and the know-how to do this. And that is not fair to other private-secotr firms in the United states."

(Note, at 16:18 Scott says the Bay Bridge project has "given a state-owned firm in California" the obviously meant to say China.)

So one agency of California "saved money" by outsourcing a project to China. But the state government overall probably lost money when you add in all the costs to other state agencies who lost tax revenue and have to pay out "safety net" expenses. And the national government and larger economy certainly lost out from the lost jobs, closed businesses and loss of steel and manufacturing capacity. American businesses certainly lost out.

At least now as other states look to future infrastructure projects the Should Be Made In America project will be there to remind them of the larger costs that come from "saving money" by sending taxpayer dollars out of the country.

P.S. here is the video from the Should Be Made In America launch event:


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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March 8, 2012

Call Senators! "Buy America" Amendment Today!

There is a "Highway Bill" amendment in front of the Senate today that closes loopholes in "Buy America" preferences when government spends money on infrastructure. This is the Brown-Merkley Amendment #1819. Call your senators now!

The Brown-Merkley Amendment #1819 fixes the following:


  • Transparency: Requires agencies to provide notification on a public website and a 15 day comment period before proposed waivers of Buy America preferences are granted – similar to current practice by FHWA.
  • Reporting: Requires an annual report on the use of Buy America waivers for transportation projects, including justification for each waiver and the monetary value for each waiver.
  • Closes the “Segmentation” Loophole: Ensures that public works projects receiving federal aid cannot be “segmented” to evade Buy America preferences by clarifying that Buy America applies to contracts carried out within the scope of the National Environmental Policy Act (NEPA) assessment – same language in amendment to H.R. 7 by Rep. Cravaack (R-MN) passed in the House Transportation and Infrastructure Committee.
  • Works with Trade Agreements: Requires that Buy America preferences be carried out in a manner consistent with our international trade agreements.

About Buy America

Buy America provisions support American companies and workers by giving a preference to domestically produced iron, steel, and other manufactured goods in infrastructure projects that receive federal aid. They have commonsense exceptions that permit waivers to allow procurement of foreign product when there is insufficient domestic capacity, if the cost of the domestic product is unreasonable, or when the administering agency deems the waiver to be in the public interest.

Call now!


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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March 1, 2012

Free Trade Or Democracy, Can't Have Both

Recent stories about the conditions of Apple's contractors in China have opened many people's eyes about where our jobs, factories, industries and economy have been going, and why. The stories exposed that workers live 6-to-12-to-a-room in dormitories, get rousted at midnight to work surprise 12-hour shifts, get paid very little, use toxic chemicals, suffer extreme pollution of the environment, etc. Is this "trade?" Or is it something else?

Is This "Trade?"

"Trade" means to exchange, to buy and sell, you buy from me and I buy from you. I have something you want and you have something I want, and we exchange. We both end up better off than where we started.

Is it "trade" to close a factory here and move it to a country where people don't have a say? It is "trade" to just move all of the machines from a factory here to a factory there, send the same parts and raw materials over there, and then bring bring back whatever it was the factory used to make and sell it in the same places here? Is that really "trade?" Or would another word be more appropriate?

When People Have A Say

When people have a say we insist on good wages, benefits, safe working conditions, and a clean environment. We even go so far as to say we want good public schools, parks and opportunities for our smaller businesses. When We, the People have a say we get so uppity and ask for the most outrageous things!

Efficiency vs. Humanity

Yes, countries where people do not have a say are more "efficient" and "business friendly." Countries where people do not have a say can make things at a much lower cost than workers where people have rights. But when we let exploitation of human beings be a competitive advantage it undermines our own democracy. It means that democracy is a competitive disadvantage in world markets.

We Can't "Compete" With This, We Have To Fight It

Let's get right to the core of this. Suppose the South actually did rise again, and they reimposed all-out slavery. Would it be "trade" to close factories here and move them south, so the companies would have lower costs?

When we allow companies to just import stuff that is made by exploited workers in countries where people do not have a say, we are granting not-having-a-say an advantage over having a say. We make democracy a competitive disadvantage.

This Is About Preserving Democracy, Not About "Trade"

How often do you come across arguments that "globalization" and "free trade" mean that America's workers have to accept that the days of good-paying jobs and US-based manufacturing are over? We hear that countries like China are more "competitive." We hear that "trade" means that because it's cheaper to make things over there we all benefit from lower-cost goods that we import.

How often do you hear that we need to cut wages and benefits, work longer hours, get rid of overtime and sick pay? They say we should shed unions, get rid of environmental and safety regulations, gut government services, and especially, especially, especially we should cut taxes.

What they are saying is that we need to shed our democracy, to be more competitive.

P.S. Tell Congress and the White House to Stop China's Illegal and Unfair Trade Practices


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 27, 2012

We're A Country. Deal With It.

Again and again (and again and again) we hear -- and learn the hard way -- that our "keep government out of it" approach to economic and manufacturing policy is hurting us. The countries that see themselves as countries and therefore have national strategies -- where the ecosystem of an industry and/or sector is coordinated and nurtured by government strategies -- are doing much better than the countries where leaders think "government interference" is a problem. We send our companies out to compete against organized national systems, and the result is we lose our jobs, factories, infustrues and economy. And maybe one day our country, too.

We're A Country. Deal With It.

Here's the important thing to understand, even if you think the idea of "countries" is out of date, and don't think of the United States as a country is important anymore: Others see themselves as countries and they organize their countries to win as countries. And you don't live in those countries. They see us - this geographic region we live in -- as a country, even if we do not, and they plan their efforts accordingly. They attack us as a country and you happen to live in the geographic region called a country that they are attacking. So as they seize the jobs and factories and industries from our country all of us who happen to live within the geographic borders that we refuse to call a country lose out economically, whether we believe we are part of this country or not. This means we have to respond as a country regardless of whether our ideology says we shouldn't. We are under economic attack as a country, so national government still matters as the only force capable of organizing a national response.

This Time, Brookings Is Saying It

This time, a Brookings study looks at manufacturing, and concludes that it is special to an economy, creating more jobs than other endeavors. Making things is what brings the income and generates the innovation that supports the service sector. "Manufacturing is the major source of commercial innovation and is essential for innovation in the service sector."

Reuters: Lack of national policy hobbles U.S. manufacturing: study

Lack of a public policy on manufacturing is the main obstacle to a vibrant factory sector in the United States, according to a study which also dismissed the notion that high wages are frustrating growth.

Between June 1979 and December 2009, the country lost 41 percent of its manufacturing jobs, the study said. The loss of factory jobs worsened further, with manufacturing's total share of employment falling to 8.9 percent in December 2009 from 13.2 percent in 2000.

"Countries in continental Europe as well as Canada are performing much better. They shed much fewer jobs, particularly over the last decade and many have higher wages," said Wial, who co-authored the study, told Reuters.

"They have policies and strategies for trying to retain manufacturing jobs and higher wages, and we really don't."

From Brookings: Why Does Manufacturing Matter? Which Manufacturing Matters?

American manufacturing will not realize its potential automatically. While U.S. manufacturing performs well compared to the rest of the U.S. economy, it performs poorly compared to manufacturing in other high-wage countries. American manufacturing needs strengthening in four key areas:
  • Research and development
  • Lifelong training of workers at all levels
  • Improved access to finance
  • An increased role for workers and communities in creating and sharing in the gains from innovative manufacturing
These problems can be solved with the help of public policies that do the following:
  • Promote high-road production
  • Include a mix of policies that operate at the level of the entire economy, individual industries, and individual manufacturers
  • Encourage workers, employers, unions, and government to share responsibility for improving the nation’s manufacturing base and to share in the gains from such improvements


The Brookings research warns, "The nation need not and should not passively accept the decline or stagnation of manufacturing jobs, wages, or production. American manufacturing matters because it makes crucial contributions to four important national goals."


  • Manufacturing provides high-wage jobs, especially for workers who would otherwise earn the lowest wages.
  • Manufacturing is the major source of commercial innovation and is essential for innovation in the service sector.
  • Manufacturing can make a major contribution to reducing the nation’s trade deficit.
  • Manufacturing makes a disproportionately large contribution to environmental sustainability.

Click for the full Brookings paper: Why Does Manufacturing Matter? Which Manufacturing Matters? A Policy Framework


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 15, 2012

China Is Very "Business-Friendly"

China is very, very "business-friendly." Corporate conservatives lecture us that we should be more "business-friendly," in order to "compete" with China. They say we need to cut wages and benefits, work longer hours, get rid of overtime and sick pay -- even lunch breaks. They say we should shed unions, get rid of environmental and safety regulations, gut government services, and especially, especially, especially we should cut taxes. But America can never be "business-friendly" enough to compete with China, and here is why.

Workers In Dormatories, 12 To A Room, Rousted At Midnight

China is very, very "business friendly." Recent stories about Apple's manufacturing contractors have started to reveal just how "business-friendly" China is. Recently the NY Times' Charles Duhigg and Keith Bradsher exposed the conditions of workers at Apple's Chinese suppliers, in How the U.S. Lost Out on iPhone Work. They describe how China's massive government subsidies and exploitation of workers mean, as Steve Jobs told President Obama, “Those jobs aren’t coming back.”

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. ... 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.”

Right. No American plant can roust workers out of nearby dorms at midnight to force them onto a 12-hour shift. And the corporate conservatives criticize America for this, not China, saying we are not "business-friendly" enough to compete. This is because we are a place where We, the People still have at least some say in how things are done. (Don't we?) 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.

“Business-friendly” = living 12 to a room in dorms, rousted out of bed at midnight for 12-hour shifts, working in a plant paid for by the government, using a neurotoxin cleaner that harms people but enables more production for companies like Apple.

Forced Labor Is The Real "Business-Friendly"

Arun Gupta at AlterNet, in iEmpire: Apple's Sordid Business Practices Are Even Worse Than You Think, writes,

Researchers with the Hong Kong-based Students and Scholars Against Corporate Misbehavior (SACOM) say that legions of vocational and university students, some as young as 16, are forced to take months'-long “internships” in Foxconn’s mainland China factories assembling Apple products. The details of the internship program paint a far more disturbing picture than the Times does of how Foxconn, “the Chinese hell factory,” treats its workers, relying on public humiliation, military discipline, forced labor and physical abuse as management tools to hold down costs and extract maximum profits for Apple.

... Foxconn and Apple depend on tax breaks, repression of labor, subsidies and Chinese government aid, including housing, infrastructure, transportation and recruitment, to fatten their corporate treasuries. As the students function as seasonal employees to meet increased demand for new product rollouts, Apple is directly dependent on forced labor.

... The use of hundreds of thousands of students is one way in which China’s state regulates labor in the interests of Foxconn and Apple. Other measures include banning independent unions and enforcing a household registration system that denies migrants social services and many political rights once they leave their home region, ensuring they can be easily exploited. In Shenzhen about 85 percent of the 14 million residents are migrants. Migrants work on average 286 hours a month and earn less than 60 percent of what urban workers make. Half of migrants are owed back wages and only one in 10 has health insurance. They are socially marginalized, live in extremely crowded and unsanitary conditions, perform the most dangerous and deadly jobs, and are more vulnerable to crime.

Please read the entire AlterNet piece, iEmpire: Apple's Sordid Business Practices Are Even Worse Than You Think. These things are not “costs” that we can compete with by lowering our wages, these things are something else.

Not JUST Low Taxes -- Massive Government Subsidies

These stories also describe how the Chinese government massively subsidizes these operations, assists their low-wage labor-recruitment schemes, and looks the other way at violations of labor and trade policies. The Chinese government is very "business-friendly." They hand money to businesses so they are much more able to "compete." They are so friendly to business that they even own many businesses.

Trade Secret Theft

Another area where China has very "business-friendly" policies is when their own businesses steal from non-Chinese businesses. This NY Times story, U.S. to Share Cautionary Tale of Trade Secret Theft With Chinese Official details just one case of the "unbelievably endemic" problem of Chinese theft of "intellectual property" -- the trade secrets that keep businesses competitive. In this case China's Sinovel sole the software that ran an American company's products, and immediately cancelled their orders for those products because they could now make them in China:

Last March, China’s Sinovel, the world’s second largest wind turbine manufacturer, abruptly refused shipments of American Superconductor’s wind turbine electrical systems and control software. The blow was devastating; Sinovel provided more than 70 percent of the firm’s revenues.

... Last summer, evidence emerged that Sinovel had promised $1.5 million to Dejan Karabasevic, a Serbian employee of American Superconductor in Austria.

If you steal the ideas, processes, techniques, expertise, plans, designs, software and the other things that give companies a competitive edge, then you don't have to pay them and you can just make the things yourself. When you get in bed with a very "business-friendly" country, you might find that they are more friendly to their own businesses. Because they consider themselves to be a country with a national strategy, not a self-balancing, self-regulating "market."

Trade Deficit Drains Our Economy

As a result of our ideological blindness, refusing to understand China's game, we have a massive trade deficit with them. This means hundreds of billions of dollars are drained from our economy, year after year. And to make up for this we borrow from them in order to keep buying from them. But this does not cause their currency to strengthen in the "markets" because China loves this game the way it is going, and intervenes against the markets to keep their currency low. And so it continues, year after year. We believe in "markets" they believe in rigging markets so they come out ahead...

Markets Can't "Compete" With This

Corporate conservatives tell us we need to be more "business-friendly" to "compete" with China. But at the same time Steve Jobs was being a realist when he said "the jobs are never coming back" because he understood that the current political climate, controlled by a wealthy few who benefit from China's "business-friendly" policies will not let us fight this. Why should these companies bring jobs back here, when over there they can roust thousands from dorms at midnight and make them use toxic chemicals for 12 hours a day for very low pay to make iPhone screens that he can sell at fantastically high prices? Why should they, unless We, the People tell them they can't do that to people, and that we won't let them profit from it?

As long as we continue to think that this is about "markets" competing, we will lose. China sees itself as a nation, and they have a national strategy to continue to be so "business-friendly" that our businesses can't compete. Our leaders and corporations may have "moved on" past this quaint nation thing but China has not.

We, The People Need To Act To Fix This

As long as we continue to send our companies out there alone against national economic strategies that engage entire national systems utilizing the resources of nations, our companies will lose. But the executives at those companies are currently getting very rich now from these schemes, so what happens in the future is not their problem. Maybe the companies they manage won't be around later, but that is not their problem. Others are concerned, but are forced to play the game because no one can compete with national systems like China's.

When everyone is in a position where something isn't their problem, or where they can't do anything about it on their own, it means this is a larger problem, and this is where government -- We, the People -- needs to get involved. It is our problem but we have been convinced that we -- government -- shouldn't interfere, or "protect" our industries, because "the markets" don't like "government" -- We, the People -- butting in. This is a very convenient viewpoint for few who are geting very, very wealthy at the expense of the rest of us.

We Need A Plan

In U.S. must end China's rulers' free pass at Politico, AAM's Scott Paul writes, Read it, read it, read it!)

We shouldn’t fear China’s citizens. But we should be worried about the actions of its authoritarian — and, yes, still communist — regime that tightly controls the People’s Republic. And we should be downright terrified by some of our own leaders’ attitudes toward China.

... China is not merely the key U.S. supplier of cheap toys, clothing and electronics: Its government is also one of our foreign financiers. China achieved this status by defying the free market and its international obligations toward more open trade and investment.

[. . .] History didn’t do in the Soviet Union. A sustained and aggressive strategy did. China engaged our business and political elites — and seduced them into believing these policies were no longer necessary.

... There has been no strategy, no effort to prevail economically.

... No one is suggesting that China is an enemy and we should just update our Cold War strategies. No one can accurately define what China’s intentions are in terms of foreign policy or defense. But on the economic front, the lessons of the past are instructive: We need a plan.

We need a plan. We need to understand that China is not competing with us in "markets' they are competing with us as a nation. We need a national economic/industrial strategy that understands the urgent need to fight as a country to win the industries of the future.

It’s not just price, it is things a democracy cannot allow. We can’t ever be “business-friendly” ENOUGH. We have to do something else. We have to understand that We, the People -- the 99% -- are in a real fight here to keep our democracy, or we will lose what is left of it.

Democracy Is The Best Economics

When people have a say they demand good wages, benefits, reasonable working conditions, a clean environment, workplace safety and dignity on the job. We need more of that, not less of that. We must demand that goods made in places where people who do not have a say do not have a competitive advantage over goods made in places where people do have a say. And we must demand that those places give their people a say.

As long as we let democracy be a competitive disadvantage, We, the People will lose.


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 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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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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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:

wealth2

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:

wealth2

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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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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Posted by Dave Johnson at 12:37 PM | Comments (0) | Link Cosmos

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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    Posted by Dave Johnson at 11:41 AM | Comments (0) | Link Cosmos

    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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    Posted by Dave Johnson at 6:25 PM | Comments (0) | Link Cosmos

    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.

    Sign up here for the CAF daily summary.

    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.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 10:09 AM | Comments (0) | Link Cosmos

    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.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 7:08 AM | Comments (0) | Link Cosmos

    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.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 9:51 AM | Comments (0) | Link Cosmos

    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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    Posted by Dave Johnson at 10:16 AM | Comments (0) | Link Cosmos

    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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    Posted by Dave Johnson at 2:51 PM | Comments (0) | Link Cosmos

    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)

    P1000784P1000802 P1000791P1000795P1000789P1000787

    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.

    Sign up here for the CAF daily summary.

    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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    Posted by Dave Johnson at 5:49 PM | Comments (1) | Link Cosmos

    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.

    ISMFedApril2011

    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.

    chart_jobs2

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

    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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    Posted by Dave Johnson at 4:06 PM | Comments (0) | Link Cosmos

    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:

    wealth2

    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:

    chart_jobs2

    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.


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    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

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    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:

    EmploymentRecessionsNov


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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 (3) | 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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    Posted by Dave Johnson at 11:04 AM | Comments (0) | Link Cosmos

    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:

    Ford_free_trade_ad

    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_stim_chart

    . . . 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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    Posted by Dave Johnson at 10:50 AM | Comments (0) | Link Cosmos

    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.

    im_voting_for_the_economy.gif 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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    Posted by Dave Johnson at 10:26 AM | Comments (0) | Link Cosmos

    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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    Posted by Dave Johnson at 7:22 PM | Comments (0) | Link Cosmos

    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."

    aaDSC_8974

    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

    aaDSC_8967

    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.

    aaDSC_8984

    "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:

    aaDSC_8993

    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.

    aaDSC_9007

    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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    Posted by Dave Johnson at 11:21 AM | Comments (0) | Link Cosmos

    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.

    aaDSC_8798

    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:

    aaDSC_8742

    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,

    aaDSC_8761

    "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:

    aaDSC_8781

    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:

    aaDSC_8792

    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.

    aaDSC_8794

    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:

    aaDSC_8805

    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.

    aaDSC_8825

    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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    Posted by Dave Johnson at 7:15 AM | Comments (0) | Link Cosmos

    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)

    P1000784P1000802 P1000791P1000795P1000789P1000787

    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.

    DSC_8660
    DSC_8629

    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


    DSC_8661

    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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    Posted by Dave Johnson at 10:29 AM | Comments (0) | Link Cosmos

    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:

    PartTimeSep2010


    And, finally, here is Calculated Risk's "scariest jobs chart," updated:


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    Posted by Dave Johnson at 10:02 AM | Comments (0) | Link Cosmos

    Infrastructure Jobs, Repeat And Amplify

    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.

    Just a short note here, to repeat and amplify what Krugman said:

    And right now, by any rational calculation, would be an especially good time to improve the nation’s infrastructure. We have the need: our roads, our rail lines, our water and sewer systems are antiquated and increasingly inadequate. We have the resources: a million-and-a-half construction workers are sitting idle, and putting them to work would help the economy as a whole recover from its slump. And the price is right: with interest rates on federal debt at near-record lows, there has never been a better time to borrow for long-term investment.

    Amplifying:
    We have: Work that really, really needs doing. People that really, really need work. Borrowing money is really, really cheap.

    Now, repeating and saying it a different way. We have:

    • Work that really, really needs doing.
    • People that really, really need work.
    • Borrowing money is really, really cheap.

    Elaborating: All this infrastructure work needs to be done anyway. Since Reagan we have fallen waaayyyy behind on maintaining and modernizing our infrastructure. This lowers our quality of life and makes us less competitive in the world.

    Repeat: We are going to have to do this work anyway -- it has to be done. Right now money costs less to borrow than ever before. There are millions of people who need work.

    Repeating a different way:

    • We are going to have to do this work anyway -- it has to be done.
    • Right now money costs less to borrow than ever before.
    • There are millions of people who need work.
    In case conservatives still don't get it, let me repeat and amplify:.

    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. And right now there are millions of people who need work. Finally, it has never been cheaper because money costs less than ever before.

    • Work that really, really needs doing.
    • People that really, really need work.
    • Borrowing money is really, really cheap.
    Now, conservatives, should I repeat it for you, spell it out, say it a different way? Maybe pictures?

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    Posted by Dave Johnson at 7:45 AM | Comments (0) | Link Cosmos

    October 7, 2010

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

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

    The official tour announcement:

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

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

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

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

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

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

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


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

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

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

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

    October 6, 2010

    How "Free Trade" Led To Currency War

    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.

    Lyndon Johnson is said to have commented that the press is like birds sitting on a telephone line. When one flies away, they all fly away. This week they are all flying around squawking "currency war!" But the world has been in a currency/trade war for some time, with only one side fighting and the rest losing. Now the world, on the edge of defeat in that war, sees that China is not "trading" they are taking. So, how to fight back, without (further) blowing up the world's economy?

    The world can’t get to full recovery from this terrible recession without more balanced trade. That is a huge part of the equation. Our trade deficits started with Reagan when "free trade" was used to force concessions from labor by threatening to move the factories to non-democracies, away from the wage and environmental protections We, the People fought so hard to achieve. The wage squeeze resulted in unprecedented concentration of wealth - and loss of buying power for the rest of the population. Under 'W' Bush, Wall Street used China for short-term profits and bonuses and China used the power that brought to buy advantage around the world. So now the rest of us are living with the long-term consequences of race-to-the-bottom policies. Namely, the bottom.

    That loss of buying power -- lack of demand -- is holding back recovery. To lift the economy we need to lift wages. We can’t get there without challenging current arrangements with China.

    Yves Smith sums up this "full boil," in Currency War Threats Escalating, at naked capitalism,

    Last week, the simmering threat of trade disputes erupted into a full boil when Brazil’s finance minister Guido Mantega said that national governments around the world were weakening their currencies in an “international currency war” to gain competitive advantage. Mantega stressed that Brazil was prepared to back his words with action to lower the value of the Brazilian real. Yesterday, IMF chief Dominique Struass-Kahn warned that countries were beginning to use their currencies as “a policy weapon” in a Financial Times interview.

    So does the world now go into a full-on, chaotic currency/trade war? Martin Wolf weighs in at the Financial Times, How to fight the currency wars with stubborn China, (Click through to see the charts)

    Has the time for a currency war with China arrived? The answer looks increasingly to be yes. The politics and economics of an assault on Chinese exchange rate policy are increasingly convincing. The idea is, of course, deeply disturbing. But I no longer believe there is an alternative.

    Wolf runs down the issues.

    Currency manipulation? "If a decision to invest half a country’s gross domestic product in currency reserves is not exchange rate manipulation, what is?"

    Does it matter? "By keeping its real exchange rate down, China subsidises production of its exports and import substitutes. Since China is now the world’s biggest exporter, this has to be a significant distortion of world trade."

    What might China reasonably be asked to do? Stop the manipulation and increase domestic demand. "[T]he menu of possible options for the Chinese authorities could include a cap on the intervention, an end to sterilisation of the monetary consequences and targets for real domestic demand, household consumption and the current account."

    Can other countries shift China’s policies, with limited collateral damage?

    Negotiation remains a hope. The rest of Group of 20 leading countries should unite in calling for these changes. But if negotiation continues to fail, alternatives must be considered. Import surcharges are one possibility. ... countervailing currency intervention ... affected countries could prevent other countries from purchasing their financial instruments, unless the latter offered reciprocal access to their financial markets.

    OK, about that "without (further) blowing up the world's economy" I mentioned at the top. Instead of tariffs and other trade sanctions Wolf suggests currency-rate counter-policies,

    "I find ideas for intervention in capital markets far more attractive than those involving action against trade. ... A trade war would be very dangerous. Insisting that China stop purchasing the liabilities of other countries so long as it operates tight controls on capital inflows is, instead, direct and proportionate and, above all, moves the world towards market opening."

    Will China retaliate by ceasing to buy US bonds? If they do, that would be a good thing.

    Some fear that a cessation of Chinese purchases of US government bonds would lead to a collapse. Nothing is less likely, given the massive financial surpluses of the private sectors of the world and the continuing role of the dollar. If it weakened the dollar, however, that would be helpful, not damaging.

    Yves Smith weighs in on Wolf's recommendations,

    Yves here. I see the odds of things going Wolf’s way as close to zero. China has no intention of “opening” its markets to investment bankers; it is not about to have its capital markets colonized, and it lacks the domestic finance skills to cope. China has made a close study of the errors Japan made in its peak years, in the 1980s, and one was the overly rapid deregulation of its financial sector….in response to US pressure.

    Similarly, the impetus to put pressure on China IS coming from the trade front, due to high unemployment. Action on the trade/tariff front looks like a more direct remedy, even if, as Auerback points out, the lags in trade are long. And with more economists lining up behind the crowd-pleasing idea of getting tough with China, the pressures and the intellectual cover, are in place.

    Even though no one wants a trade war with China, it is not beyond the real of possibility that we wind up there. ... he odds of miscalculation have to be magnified when operating across a large cultural divide.

    I wrote the other day, and want to repeat: There are always winners and losers. Right now in China there are currently winners and losers from the manipulated currency rate. If rates adjust to where they should be China might lose some jobs, but Chinese workers will immediately be higher-paid relative to the world than they had been, and Chinese consumers will also be more able to buy things made elsewhere.

    Right now those in control of industries that are moving to China are winners and those in China who want higher pay and want to import are losers. And as is the way of the world the winners in China are fighting to keep their advantages, while the losers want change to occur. And outside of China the winners are fighting to keep their advantages, while the losers want change to occur.

    But if China starts bringing its currency to market rates the world's winners and losers will be the winners and losers for the right reasons. It is time for China to move on from currency manipulation.

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    Posted by Dave Johnson at 10:42 AM | Comments (1) | Link Cosmos

    September 27, 2010

    Consensus Grows: Confront China On Trade

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

    In the day-to-day news about trade problems with China the bigger picture can get lost. America is giving up its competitive position in industries of the present and future and it is costing us. Even the people you would think would defend "free trade" are coming to understand that America is losing its vital ability to invent, keep and create industries and jobs and to keep a modern economy humming.

    Robert J Samuelson has a significant op-ed today in the Washington Post, The makings of a trade war with China in which he says we need to confront China's illegal trade manipulations. You should read the whole thing but here are excerpts,

    ... Confronting China's export subsidies risks a similar tit-for-tat cycle at a time when the global economic recovery is weak. This is a risk, unfortunately, we need to take.

    ... The trouble is that China has never genuinely accepted the basic rules governing the world economy. China follows those rules when they suit its interests and rejects, modifies or ignores them when they don't.

    ... China's worst abuse involves its undervalued currency and its promotion of export-led economic growth.

    Samuelson concludes,

    The collision is between two concepts of the world order. As the old order's main architect and guardian, the United States faces a dreadful choice: resist Chinese ambitions and risk a trade war in which everyone loses; or do nothing and let China remake the trading system. The first would be dangerous; the second, potentially disastrous.

    It's not just Samuelson concluding that we need to confront China's cheating on trade. Many others have been weighing in that we are losing too much and have to take steps. For example, in July Andy Grove, Intel's influential former CEO published a very important opinion piece on a similar topic, 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. (These are excerpts but Grove's entire piece is an absolute must-read.)

    You could say, as many do, that shipping jobs overseas is no big deal because the high-value work -- and much of the profits -- remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work -- and masses of unemployed?

    ...evidence stares at us from the performance of several Asian countries in the past few decades. These countries seem to understand that job creation must be the No. 1 objective of state economic policy. The government plays a strategic role in setting the priorities and arraying the forces and organization necessary to achieve this goal.

    Grove also says that we need to fix this and fix the unemployment problem for other reasons as well,

    Unemployment is corrosive. If what I’m suggesting sounds protectionist, so be it.

    One after another our business leaders and economists are realizing that the "free trade" ideology has not worked out very well for us. We were told by the "experts" that moving our factories out of the country was a good idea, that new jobs would replace those lost. They didn't. We were told that we don't need or want a national strategy to be competitive in the world because an invisible hand would guide us. It didn't. We were told that trade "partners" would reciprocate by buying from us equally. They didn't. We were told that we would invent new industries to replace ones we lost. We did, but the new industries moved or are moving out of the country, too.

    Now that we are in the midst of the resulting crisis even the "experts" are realizing that trade needs to be a two-way street for it to work, and it hasn't been. "Free trade" was supposed to be a panacea, bringing us a prosperous future. The reality was different. A few corporate leaders (the ones who promoted these ideas) have gotten really, really rich at the expense of the rest of us (and that includes other corporations and corporate leaders). Now that the beneficiaries of the "free trade' bamboozlement are off to their private islands in their private jets or private yachts the rest of us are looking around at the devastation of our economy and standard of living, wondering what to do and finally becoming aware that rigid ideologies and their enforcers have kept us from looking for practical solutions that actually work for all of us as a country and community.

    So finally from the depth of the resulting crisis a rational national discussion may be beginning, one in which people on the "free trade' side are not able to just shut down different opinions by shouting "protectionist" or other slogans. As this discussion gets underway here are three principles to help guide us:

    1) Let's drop ideological preconceptions and look at what has worked in history and what is working for other countries today. Science is supposed to DEscribe, but economics has too often been about "if only people would do such-and-such, so-and-so would result." That is PREscribing and is not science.

    2) We have to talk about how we handle mercantilist nations like China who are not playing by the trade rules and what we, together as a nation, can do about it. Let's also talk about and multinational reactions to the mercantilists. We can join with countries interested in lifting each other with fair trade, interested in trade models that help us mutually lift each other, and together take on those who want it all for themselves.

    3) Ultimately we can't all export our way out of this mess. And ultimately we can't return to unsustainable old economic models that have failed us over and over. We can't continue with a few taking as much as they can get at the expense of the rest of us. As machines and technology solve more of our problems and do more of our work our overpopulated, undereducated world has to come to grips with equitable models for who gets what for what and how to take care of our planet and each other. That is the only thing that will work in the long run.

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    Posted by Dave Johnson at 3:03 PM | Comments (0) | Link Cosmos

    September 24, 2010

    House Committee Approves China Currency Bill

    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 House Ways and Means Committee just approved a bill that pushes China to raise the value of its currency. It looks like the bill will go to a vote on the House floor next week. This is a very big deal because it is a "second front" pushing China to bring its currency to market rates. President Obama met with Chinese Premier Wen yesterday and most of their 2-hour meeting was taken up discussing this issue, and today he gets backing from the House. This tells China that we are serious, that it is more than just the administration talking, and they have to start doing the right thing.

    China has been manipulating its currency to keep it low, which means goods made in China cost less in world markets. This, combined with other trade manipulations, has created a huge imbalance in world markets. It moves industries, jobs, expertise, money and power to China, and has created a huge "bubble" of imbalance that threatens the world's economy. Currently the interests in China and elsewhere, including here, that benefit from the imbalance have the upper hand. But this vote demonstrates that the rest of us, here, in China and around the world, that would benefit from a rebalancing are rallying and challenging the current policies.

    Bloomberg: China Currency Measure Heads for House Vote After Panel Approval

    The measure would let companies petition for higher duties on imports from China to compensate for the effect of a weak currency. President Barack Obama “does not take a position on this specific legislation,” Jeff Bader, his director of Asian affairs, said yesterday.

    “China’s exchange-rate policy has a major impact on American businesses, and American jobs, which is what this is all about,” Levin said before the vote.

    The U.S. trade deficit with China widened to $145 billion in the first seven months of this year, from $123 billion for the same period in 2009. The expanding deficit, the unemployment rate lingering at almost 10 percent and polls showing Democrats’ seats at risk heading into the elections have added support for the bill, which has been discussed since 2005.

    China had agreed to start rebalancing its currency, but the currency has moved only 1 percent since the agreement - nothing near the 40% some claim it needs to move. Meanwhile our trade deficit with China has increased. China's Wen claims that China is still a poor country and needs this protection to help it build the industries that will help its people rise out of poverty,

    China might now be the second largest economy in the world, but Premier Wen insisted at the UN General Assembly that the "real China" was still in the "primary stage of socialism" and remains a developing country.

    Pointing out that 150 million Chinese people still live in poverty, Wen said many regions in central and western China were still very poor and this is the "real China".

    "Taken as a whole, China is still in the primary stage of socialism and remains a developing country... These are our basic national conditions. This is the real China," he said.

    The way to bring China, now the second largest manufacturer in the world, out of poverty is to trade fairly and work with its trade partners, not to manipulate the rules and create a huge imbalance that threatens the economy of the entire world.

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    Posted by Dave Johnson at 3:40 PM | Comments (0) | Link Cosmos

    September 23, 2010

    China Currency Bill Moves -- Why Some Corporate Interests Oppose

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

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

    WaPo: Bill combating China currency to advance,

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

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

    But there is opposition from inside our own country.

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

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

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

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

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

    What does this mean for Main Street? Reich says,

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

    Meyerson picks up on this today,

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

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

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

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

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    Posted by Dave Johnson at 10:15 AM | Comments (0) | Link Cosmos

    September 16, 2010

    Welcome Home, Tire 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.

    Today the US Trade Representative (USTR) Ron Kirk filed two complaints with the World Trade Organization (WTO). The first alleges that China is keeping American credit and debit card companies out of their electronic payment market. The second is a "dumping" (selling under cost) complaint on steel products.

    "We are concerned that China is breaking its trade commitments to the United States and other WTO partners," Kirk said in announcing the two cases.

    This is a big deal, because it tells China that we are willing to fight back. But Sen. Charles Grassley said this was not enough,

    "The administration should go one step further and bring a case against China's unfair currency manipulation at the WTO. Everyone knows China is manipulating its currency to gain an unfair advantage in international trade," Grassley said.

    Almost exactly a year ago I wrote a post, President Obama Enforces Trade Law In China Tire Case!, celebrating President Obama's decision to enforce the ITC's recommendation to impose tariffs on Chinese tire imports.

    What was the result of that decision to actually enforce trade laws? Did the world end? Did it start a "trade war" with China? No, the result was that jobs started to return.

    The Alliance for American Manufacturing is running this full page ad in a few newspapers today:


    (Click for large pdf)

    AAM explains: (click through for links)

    Why did we do it? To make sure lawmakers understand just what is at stake today.

    First, Treasury Secretary will be appearing at not one but two hearings today to examine China’s currency policies. We suspect he’ll get grilled by lawmakers for not doing more.

    Second, the International Trade Commission is examining today a trade case filed by several domestic paper companies and the United Steelworkers on coated paper from China and Indonesia. Here’s the witness list. We want to remind folks that trade enforcement works.

    Finally, some in Congress want the Obama Administration to remove tariffs imposed last year some imported Chinese tires that were causing market disruptions in the U.S. The Alliance for American Manufacturing has already set the record straight on this issue. It’s important to counter these false claims.

    The BIG issue, of course, is China's currency manipulation. Congress is holding hearings on this and Treasury Secretary Geithner testified this morning that the administration is reluctant to formally declare that China is doing what it is doing. A WSJ report puts it this way:

    While the Treasury secretary feels the yuan is "significantly undervalued," a formal designation would "not be a particularly effective tool" for achieving U.S. goals.

    Congress needs to act because the administration won't. Pushing this is in China's best interests as well. Entrenched and powerful interests on both sides of this dispute are keeping their governments from acting in the broader interest. This is causing a huge bubble of imbalance to expend, threatening the world's economy. Passing a bill mandating tariffs to force China to bring its currency to market levels is the way around the standoff for both countries.

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    Posted by Dave Johnson at 11:12 AM | Comments (1) | Link Cosmos

    September 15, 2010

    China Currency Battle Heating Up

    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.

    Since China joined the World Trade Organization (WTO) our country's balance of trade has gotten worse and worse and we have lost jobs and jobs (and money and money). Between 2001 and 2008 we lost 2.4 million jobs just to China. Normally a situation like this balances out because China's currency would rise, making goods made here competitive and helping China's workers be able to buy things we make. So we would benefit from the gains they make. That's why trade can be a win-win when parties play fair.

    But China isn't playing fair. They manipulate their currency, "pegging" it to the dollar, so goods made there continue to have a lower price in world markets. Some say that they have a 40% pricing advantage just from the currency manipulation. And after that you can take into account the many other ways that China is cheating on trade. So we have a huge problem and a huge imbalance, both growing to extremes.

    Japan got tired of waiting for China to stop cheating. Financial Times: Japan intervenes to weaken yen,

    Tokyo intervened in the currency markets for the first time in more than six years to weaken the yen, sending it nearly Y3 lower against the dollar to mitigate the threat its strength posed to Japan’s export-reliant economy.

    Note that this means we now have both China and Japan weakening their currencies against ours, giving both pricing advantages against our goods, which will add to the pressures on us.

    Congress is looking into China's currency manipulation with hearings beginning today, and may act soon. The Hill: Punishing China becomes issue for Democrats in midterm election,

    Ryan’s bill would allow the Commerce Department to consider currency manipulation in calculating countervailing and antidumping duties on any imports from countries manipulating their currencies to lower the cost of their exports. ... Many rank-and-file Democrats are frustrated with China, which promised in June to allow its currency to follow market trends. Since that announcement, China’s currency has increased by less than 1 percent.

    Action by Congress would be politically popular. Harold Meyerson writes in the Wash. Post about this today, in Time to stand up to China on trade

    There's little dispute that the Chinese government controls such strategic industries as alternative energy and that it subsidizes that industry massively, in clear violation of WTO rules. Politically, the American public plainly supports policies that boost American industry and curtail offshoring. A Heartland Monitor poll, sponsored by Allstate Insurance and the National Journal, released last week, asked Americans to choose one of three options for how America should deal with the global economy. Thirty-six percent backed a program that instituted tariffs on imports and penalized companies for offshoring jobs. Thirty-two percent supported governmental programs to help strategic domestic industries. Just 23 percent backed a laissez-faire free-trade policy.

    Business groups representing the huge multinationals are fighting on China's side on this. Reuters, US groups urge Congress not pass China currency bill,

    Thirty-six U.S. farm and business groups urged Congress on Tuesday not to pass legislation threatening China with duties on some of its goods if Beijing does not revalue its currency.

    Meyerson again,

    Consider what this says about contemporary American capitalism. American big business is now so inextricably invested in China that it won't defend or promote American-based manufacturing. Those tasks have fallen to our largest manufacturing union. By any dispassionate measure, it's our labor movement, not our leading businesses, that deserves the term "American."

    If China would play by the rules, this would balance itself and turn into a win-win. If the administration would insist that China plays by the rules, backed up with a strong tariff if they don't, China would likely start coming around. And if nothing else works, a strong tariff on Chinese goods is needed. It is time for Congress to act.

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    Posted by Dave Johnson at 9:59 AM | Comments (0) | Link Cosmos

    September 9, 2010

    To Fix The Economy Raise Wages

    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.

    To fix the economy we have to fix wages. Increased wages will restore demand. The changes that will increase wages will help restore democracy.

    The social contract used to be that citizens in our democracy share the benefits of our economy through increased wages that come from increases in productivity. This broke down and working people's incomes have been stagnant since the Reagan Revolution. (Yes, I'm telling the same story again. It needs to be told, over and over so people can understand what is happening to us. We are feeling the effects of the Reagan Revolution coming home to roost.)

    Reagan and the conservatives weakened the government and broke the unions. Government and organized labor were the forces in our society that had stood up for the interests of regular people against the "moneyed interests" and weakening them fundamentally changed the fairness equation of our economy. After the Reagan Revolution working people's share of the benefits from increased productivity turned down:

    All of the benefits of improvements in our economy now flow to a few at the top. This results in intense concentration of wealth:

    With more and more of the income and wealth going to a top few, We, the People are thought of less and less as citizens and more and more as "the help." But who is our economy for, anyway? Our economy can operate for the benefit of We, the People, or it can operate for the benefit of a wealthy few at the expense of the rest of us. This is the ongoing battle. And history has shown over and over that when economies operate for the few, they don't work.

    This is not just about sharing the economy, it is about sharing the decision-making power. In our form of government We, the People are supposed to make the decisions. When Reagan said, "Government is the problem" he was really saying that decision-making by We, the People is a bad thing. When conservatives complain about "big government" they are complaining about We, the People having a big share in decision-making. When they call for "less government" they are calling for less of a share of the decisions-making by us. This means the wealthy and powerful have more of a share -- of everything.

    With the income, wealth and benefits of the economy increasingly flowing to a top few, working families tried to compensate for the loss in various ways. Women entered the workforce. Former Labor Secretary Robert Reich explains, "By the late 1990s, more than 60 percent of mothers with young children worked outside the home (in 1966, only 24 percent did)." (Please read his whole post if you have time.)

    Then, still not getting by on stagnant wages with rising prices, people worked more hours or added second jobs. Then they started using up their savings.

    Finally they resorted to adding debt.

    This all finally broke down, demand slowed, and the economy has slowed to a crawl. The 90s financialization and "dot com" bubbles obscured the way things were headed, and then the housing bubble of the 2000s continued the illusion. But debt just kept rising people kept working longer and harder to get by, while the richest few kept getting richer. Finally it all crashed and current attempts to prop it up by helping the wealthy and big businesses are not succeeding. Bailing out big banks and their executives and shareholders and not holding anyone accountable, while letting predatory corporations continue their economy-draining practices has not only kept the worst parts of the "share of the wealth" problem in place, it has undermined people's faith in government and demcoracy. Changes need to be made.

    Most people pay for things with income from jobs. If we want demand to rise, then we need to raise incomes. But things are still going in the wrong direction. As CAF's Robert Borosage writes today,

    "Over the last decade, we lost one in three manufacturing jobs. Inequality reached Gilded Age extremes. CEOs and bankers pocketed million dollar bonuses while cooking the books and gambling on exotic securities, inflating the housing bubble until it burst. Health insurance companies kept a strangle hold on a health care system that costs twice as much as those in other industrial countries, leaves millions uninsured and provides worse health care."

    Who Gets What For What?

    This bad economy situation is going to drag on until we make real changes in the structure of who gets what for what in this country. Every incentive in the economy is to try to reduce wages, cut benefits and eliminate jobs. Think about that. People get bonuses and raises and owners get richer if they eliminate YOUR job or at least cut back your pay and benefits. For example, by replacing a worker with a machine, the owner of the machine gets more money, the worker gets nothing. But in the larger economy each time this happens it means there are fewer people in a position to buy whatever goods or services the same companies that eliminated the jobs are in business to provide. And it means that a few wealthy people become more wealthy and powerful.

    This is where government comes in. Government is supposed to be the force that speaks for and protects the interests of the people, empowers people through education and rules, set conditions to keep wages high, lay down the infrastructure in which businesses thrive, and coordinates the international competition for industries and jobs. But the Reagan Revolution broke that. We need to restore it.

    There are so many things that government could be doing to get the economy working again for working people, small and medium businesses and big corporations that want to make an honest living. Boost the minimum wage, modernize the infrastructure, provide health care, provide free education through graduate level, increase Social Security, help unions organize, impose a democracy tariff so imports don't get around the protections provided by our democracy, and return to taxing the rich who reap the dividends and payout of all the past investment that We, the People made to make business thrive.

    And there are larger structural changes we can make. Just brainstorming but what if workers replaced by machines directly got some of the income generated by the machine. Workers laid off this way several times might then have enough income to get by without working! Or what if we cut the workweek from 40 hours to, say, 35 before overtime kicks in. Maybe that would increase hiring, while giving regular people more leisure time. (And keep cutting the workweek as machines and computers do more of the work.)

    And, of course, to have wages at all people have to have jobs. One would think this would go without saying but these days it seems there is a need to point out that people are hurting for jobs, because the DC elite seem to have moved on from that. We badly need government programs to directly hire people to do things that help the people of the country. We would have all of this if the Reagan Revolution hadn't weakened government of, by and for We, the People.

    Other posts in the Reagan Revolution Home To Roost series:

    Tax Cuts Are Theft
    Reagan Revolution Home To Roost -- In Charts
    Reagan Revolution Home To Roost: America Drowning In Debt
    Reagan Revolution Home To Roost: America Is Crumbling
    Finance, Mine, Oil & Debt Disasters: THIS Is Deregulation

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    Posted by Dave Johnson at 11:52 AM | Comments (0) | Link Cosmos

    September 4, 2010

    American Jobs Tragedy

    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 stimulus worked but was not enough. Here is the result:

    JobLossesAlignedAug2010

    This is known as "the scariest jobs chart," from Calculated Risk.

    Robert Reich: The Great Jobs Depression Worsens, and the Choice Ahead Grows Starker

    The number of Americans willing and able to work but who cannot find a job hasn't stopped growing since the start of 2008. All told, about 22 million Americans are now jobless. Add in those who are working part-time who'd rather be working full time, and we're up to 25 million.

    And because most families depend on two paychecks, the practical impact is almost double.

    The DC and business elite don't feel it. They explain the problem by blaming the people they put out of work, saying the unemployed are just lazy, and unemployment checks keep them from looking for work. They're doing just fine and taking good care of each other.

    Frank Sobatka describes one of the main reasons for the problem:


    Frank's right. Our choice is to manufacture or borrow (until we can't.) Other countries are being smart on trade. Why aren't we? We really, really need an industrial policy to guide us back to growth. We can build a new economy from old roots. I mean, what were we thinking? We turned our companies into buy-sell commodities with our country and people as "costs." So we ended up caught in a machine that grinds us up. This has led to and attitude that citizens are an infestation, if you feed them they breed, like "the help" -- you have to make them work, certainly no longer as the people in charge.

    We thought moving a factory was "trade," when it is really about evading democracy's protections of We, the People. We didn't see that Wall Street was at war with the real economy and We, the People, paying out $140 billion for bonuses but zero for America's future. We thought getting back to "normal" was an option. But really, It's The Economic Paradigm, Stupid!

    Here's another part of the problem: Tax cuts are theft. Our investment in infrastructure created the conditions that enable commerce to prosper – the bounty of democracy. In return we ask those who benefit most from the enterprise we enabled to share the return on our investment with all of us – through good wages, benefits and taxes.

    What Can We Do?

    Here are parts of the solution: We need a democracy tariff at the border to stop greedy employers from stepping around the wage, safety and environmental protections that We, the People fought to build. We need to tax the wealthy and Wall Street to pay to fix up the infrastructure and public structures that enabled their wealth. Tax Cuts Leave Nothing Behind -- Infrastructure Investment Leaves Behind Infrastructure. Not only that, Tax Cuts Caused The Deficits, Therefore...

    Where Are The Jobs, Jobs, Jobs, Jobs, Jobs, Jobs? It's The JOBS, Stupid! Why DC Elites Don't See This?

    P.S. if you have time, please click the links.


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    Posted by Dave Johnson at 1:07 PM | Comments (1) | Link Cosmos

    September 3, 2010

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

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

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

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

    (List continues into infinity...)

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

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

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

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

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

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

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


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

    August 30, 2010

    America Is Strong When Our Unions Are Strong

    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.

    America was formed as a government of, by and for We, the People. It says so right in the first words of our Constitution. To get that Constitution we rebelled against the King and England's aristocracy and their corporations, with their concentrated wealth and power. And we continued that fight and over time we extended our system of one-person-one-vote, adding women and minorities to that equation.

    The fight has gone back and forth. When our democratic government works, it pushes for increasing the protections and benefits of a strong economy for We, the People. This has included, for example, the mandated 40-hour workweek and minimum wages to fight exploitation, both pushed by labor. But at other times our government was "captured" by the power of concentrated wealth and working people are not well-represented. Even then we're still not necessarily each on our own. During those times we have depended on labor unions to push back against that power of concentrated wealth. Working people can organize into labor unions to bargain for higher wages and better treatment than workers could obtain individually.

    What difference can unions make? In 1945 labor unions represented about 1/3 of all workers. When American unions were strong working people got the minimum wage, the 40-hour week, weekends off, paid vacations, health insurance, pensions, dignity and respect. This was when America built the middle class that everyone has been taking for granted since. Even the wealthy benefited greatly over the long run as more consumers with more money to spend lifted the whole economy.

    But what has happened to us since the Reagan Revolution, when concentrated power of the big corporations weakened America's unions? Since the days of FDR membership in unions has fallen, but in 1980 unions still represented 24% of American workers. The Reagan administration famously launched an all-out assault on organized labor, resulting in membership falling to 16.4% by 1989. And the trend continued: by 1998 union membership fell to 13.9 percent. By 2009 that had decreased to 12.3%, but only 7.6% in the private sector. And here are the results:

    This is a chart of working people's share of the benefits from our economy. Note the brief return to normal under Clinton, erased by Bush II. But the assault on working people has recently been bipartisan. Clinton pushed to pass the Bush I-negotiated NAFTA treaty which hammered the bargaining position of workers, while Bush II consolidated the practice of "outsourcing" labor competition from non-democratic countries where workers didn't have rights or protections.

    As we all know, since the Reagan Revolution weakened the negotiating power of working people, wealth and income have concentrated at the top, our country's debt has massively increased, household debt as well, the country is crumbling and everyone except the wealthy few and big corporations is generally worse off.

    Unions still make a difference. According to the Bureau of Labor Statistics, "In 2009, among full-time wage and salary workers, union members had median usual weekly earnings of $908, while those who were not represented by unions had median weekly earnings of $710." Union members also often have paid vacation, paid sick leave, health insurance and other benefits that non-union workers do not. The difference is dramatic. In March 2009, 78 percent of union workers were covered by health insurance through their jobs, compared with only 51 percent of nonunion workers. Seventy-seven percent of union workers participate in defined-benefit pension plans, compared with 20 percent of nonunion workers.

    When you hear someone complain about unions and complain that people in unions are paid better than the rest of us, let them know that they are reaching the wrongest conclusion. They shouldn't resent union members and complain about their pay, they should join a union and support unions, so they they and everyone else can come out ahead.

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    Posted by Dave Johnson at 5:40 PM | Comments (0) | Link Cosmos

    August 27, 2010

    GDP Revised Down -- Conservative Trade Policies Exporting Our Growth And 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.

    When we pack up a factory here -- and all of its jobs and supply chain and its support/.maintenance structure -- and send it all over there to a country that doesn't have the wage and safety and environmental protections we have, just to save a bit of money today we are also sending them the ability to make money in the future. And that future is here now.

    The country's second-quarter GDP was revised down sharply to 1.6%. So the "stimulus," by raising GDP somewhere between 1.7% and 4.5%, is the only thing that has kept us from falling completely over the cliff. But we can't just get by on stimulus forever (especially when we waste one-third of it on tax cuts that leave nothing behind but debt). We have to fix the causes of the problems.

    One big reason we are having so much trouble is that we haven't solved the trade problem and our efforts to get growth going are just being used to help other countries grow.

    In The Washington Post today, Flow of imports drags down economic growth:

    The government said the trade deficit subtracted almost 3.4 percentage points from second-quarter GDP - the largest hit from trade in 63 years.

    Corporate conservatives talked us into sending our manufacturing out of the country. In the short term some executives got huge bonuses as assets and capacity were sold off and payrolls reduced. But in the long term the ability for the country to earn money has been sent "over there."

    I recently came across this talk by Ian Fletcher, author of Free Trade Doesn't Work, given at the Heritage Foundation. I recommend watching, and clicking through to order his book. Ian doesn't come from the left or right (watch him make this clear in the video) but instead just looks at trade with a scientific, fact-based, analytical approach.

    Comparative Advantage?

    Here is the most important point he makes, 20 minutes in (use that slider bar), in regards to the problem of moving factories to cheap labor countries. Comparative statics: Free-trade economists argue that cheap labor is a "comparative advantage." Fletcher explains that this means that if they are already making something more efficiently, today, then our best move today is to buy it from them. But it doesn't make sense to just pack up an industry and reassemble it in a different country with low wages because then you are doing nothing more then sending away your ability to earn a living.

    Yes, as I said, some people make a bunch of money in the short term doing that. But "it's obviously going to cause a decline in our capacity to produce goods and services in the future."










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    Posted by Dave Johnson at 1:49 PM | Comments (0) | Link Cosmos

    August 25, 2010

    Boehner Trade Plan: Go Back To Disaster

    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.

    House Minority Leader John Boehner (R-OH) gave a speech yesterday describing his party's positions on jobs & the economy going into the fall election. Summary: Our economic policies destroyed the country’s economy and millions of lives, but it made a few of my buddies really REALLY rich, so let’s do more of it.

    I write about the specifics of Boehner's call to return to disastrous trade policies below, but first I just have to say a few words about his economic ideas in general and how utterly wrong they are. In the speech Boehner said we have an "economy stalled by ‘stimulus’ spending." But according to FOX News' Wall Street Journal, yesterday the CBO reported that "the impact of the stimulus program estimated ... the plan lowered the unemployment rate by between 0.7 percentage points and 1.8 percentage points." In addition, the Washington Post reported, "The CBO said the act also increased the nation's gross domestic product by between 1.7 percent and 4.5 percent in the second quarter, indicating that the stimulus may have been the primary source of growth in the U.S. economy."

    Boehner also said that "each dollar the government collects is taken directly out of the private sector." This is the old "taxes take money out of the economy" argument, which is intended to trick people into thinking that the money just disappears instead of being used to pay for the schools, courts, agencies and infrastructure that enable businesses to thrive and drive the country's prosperity. If you think that President Eisenhower's spending on the Interstate Highway System "took money out of the economy" you really need to see someone about your problems and not take them out of the rest of us.

    Taking direct shots at democracy, Boehner complained about "big government" -- namely We, the People making decisions instead of a few wealthy corporate owners making decisions for us -- and said, "As Mitch Daniels, the governor of Indiana, recently said, "You'd really be amazed at how much government you'd never miss." Boehner really has a problem with this whole "We, the People" thing.

    Boehner on Trade

    Boehner wants to go back to the trade policies that brought us massive job losses and trade deficits. In the speech he called for “passing free-trade agreements” with Colombia, Panama, and South Korea. He doesn’t mention what is IN these agreements, only calls for passing them. These trade agreements were negotiated by the Bush administration. Here are charts showing the Bush administration's record:

    Manufacturing_job_decline_China_0.jpg
    baltrade

    This is bad enough, but these "free trade" agreements create a worldwide race to the bottom, allowing companies to bypass the protections that democracies fought to provide for their citizens, pitting exploited, low-wage workers against citizens in democracies, forcing wages and standards ever lower.

    These "free trade" agreements need to be reviewed and reformed, so they protect wages, the environment., worker's rights and small businesses around the world. We have a chance to lift each other up instead of push each other down. In February I wrote about Whirlpool closing a refrigerator plant in Evansville, moving the jobs to Mexico where workers are paid $70 a week. The problem is that Mexican Workers Paid $70/Week Can't Buy Refrigerators! If they were paid decent wages, we could sell things we make to them, while they sell things they make to us. But if we follow Boehner's trade ideas everyone just gets poorer and eventually the economy stops.

    Oh, wait, we DID follow Boehner's trade plans, and everyone DID get poorer, and the economy DID stop! But a few of his buddies got really REALLY rich. So he wants to do more of that.

    This speech by Boehner is just more calling for a return to the policies of the past: we’ve been seeing the trade deficit soaring in the last few months, as the economy tries to go back to old economy. China is 96% of our trade deficit. Boehner sayting lets go back to the path we followed when we were borrowing $2 billion a day, it took away 2.8% growth in 1st quarter, sapping the recovery. This notion that Boehner calling for continuing course shows a perverse blindness to changes country has to make.

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    Posted by Dave Johnson at 9:50 AM | Comments (0) | Link Cosmos

    August 23, 2010

    DC Elites Pushing Korea Trade Pact

    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 way a lobbyist argues for or against anything today is to say it will create or cost jobs.

    Prohibiting lawsuits against giant corporations that harm people creates jobs. Making oil drilling safer costs jobs. Tax cuts for the rich creates jobs. Just getting rid of government will create jobs.

    So, of course, we hear now that passing the South Korea trade pact will create jobs. From the Washington Post today.

    ...administration officials estimate the deal could mean more than $10 billion annually in increased U.S. exports to Seoul and tens of thousands of new U.S. jobs.

    Maybe, and maybe not. South Korea currently has high tariffs and other restrictions on American goods, so a trade pact that gets rid of these tariffs would increase American exports, creating American jobs. As the story says,

    [South Korea] remains in some ways a closed shop with extensive tariffs, a paltry share of its large auto market devoted to imports, and a notorious set of non-tariff barriers that has prompted companies such as Peoria-based Caterpillar to complain that their products are routinely excluded for minor regulatory problems.
    But ...
    Skeptics of the proposed agreement include some major corporate interests such as Ford Motor Co., which argues that the pact isn't aggressive enough in trying to open the South Korean market. Ford officials, for instance, noted that imports now represent less than 5 percent of South Korea's auto market.

    Unions, environmental advocacy groups and other organizations, meanwhile, are urging Obama to keep his campaign promises and stiffen the terms for South Korean access to the U.S. market.

    Meanwhile, Pork Magazine writes,

    The latest supporter is South Korean Ambassador Han Duk-soo, who has assumed the unusual role of a foreign official promoting U.S. jobs. "This is an opportunity to stimulate the U.S. economy at no cost to U.S. taxpayers,” he says.
    The Koreans are telling us how good this pact will be for us? That is a warning sign. Their job is to take care of (certain interests in) Korea. Our government's job should be to take care of our interests - meaning ours - We, the People - not the interests of a few wealthy executives and major owners of a few big, multinational corporations.

    There are jobs and then there are jobs. There are good jobs that raise living standards and enable people to buy things others make, and there are low-paying jobs that companies use to extort concessions from workers and communities that create a worldwide race to the bottom. And there are trade deals and then there are trade deals. There are trade deals that help working people on both sides of a trade boundary. And there are trade deals that allow companies to ship jobs overseas and evade the protections our democracy has fought so hard to build.

    This trade deal was negotiated by the George W. Bush administration. This (along with the South Korean ambassador pushing this treaty as good for America) is a warning flag if every there was one. The Center for Economic and Policy Research writes,

    The trade agenda of the United States had been about reducing barriers to trade in manufactured goods with the purpose of putting non-college educated workers in direct competition with much lower paid workers in other countries. The predicted and actual result of this policy is to reduce the pay of non-college educated workers, thereby increasing inequality in the United States. This is a policy of one-sided protectionism. It has nothing to do with "free trade."

    As I wrote last month: This is a test and an opportunity. Does the accord show a path to a new way of relating to trade that will help us and our partners? This Korean trade deal should be revised into a model for how we change our trade relations with countries like Korea and China. We can trade in ways that benefit both sides, not just one side.

    I'll be following this debate as it continues.


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    Posted by Dave Johnson at 11:20 AM | Comments (0) | Link Cosmos

    August 11, 2010

    Our Growth Is Outsourced, Like Our 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.

    In the news today, a familiar story: imports increased, exports declined. About $50 billion in one month alone. The trade gap isn't just costing jobs, it's a significant factor in the slow recovery as well. See below.

    In 2005, when we were halfway down to where we went, I wrote a post at my own blog titled, The Trade Problem. With (my) permission, here is the entire post:

    LeavingSF1
    View of San Francisco from Sausalito.
    LeavingSF2
    See how this ship is riding high off the water? This ship is loaded with empty containers, bound for China.

    Ships come into the port loaded with goods that we buy from China. But China doesn't buy very much from us. So we have to send ships back loaded with empty containers. (Well almost empty, they're actually filled with dollars, and jobs, and the future.)

    June 2010 Trade Numbers: We're Back To Terrible

    That was 2005, And now we're importing shiploads of stuff again, and sending the ships back filled with cash - and what's left of our future. The trade deficit widened to $49.9 billion in June,

    The trade deficit in the U.S. unexpectedly widened in June to the highest level since October 2008 as consumer goods imports rose to a record and exports declined.

    [. . .] Exports from the U.S. decreased to $150.5 billion from $152.4 billion, reflecting fewer shipments abroad of semiconductors, computers and steelmaking materials. Imports increased in June to $200.3 billion from $194.4 billion, led by telecommunications equipment, automobiles and consumer goods such as pharmaceutical preparations, televisions and furniture.

    The quantity of imported petroleum increased, while the price per barrel fell to $72.44 from $76.93 the prior month, according to today’s report.

    Trade Deficit Cuts Jobs And GDP

    We are not just outsourcing jobs, we are outsourcing our own economic growth to others! Charles McMillion of MBG Information Services writes that, "the worsening trade deficit cut the Q2 GDP growth rate by -2.8%."

    That is, if trade and production losses in Q2 had remained at Q1 levels, all other things equal, GDP would have risen at a 5.2% rate in Q2 rather than the actual estimate of meager 2.4% growth. Today’s report suggests BEA must now revise its estimate which could show the worsening trade deficit lowering the Q2 growth rate by a full -3.0% leaving growth at just 2.2% with, apparently, worse to come.
    A lot of people think it's just "old stuff" like steel that is losing out. But look at this chart:

    Note how the chart has to be extra tall to fit the huge decline in exports of advanced products. There are more charts with more bad news. (PDF)

    Congress And The President's New "Make It In America" Initiative

    Congress and the President are trying to do something about it, with the new "Make It In America" initiative. CAF's Bob Borosage in Politico today, Save American manufacturing,

    More than 75 percent of Americans support a “national manufacturing strategy to make sure that economic, tax, labor and trade policies work together to help support manufacturing in the U.S.”

    Not surprisingly, the Democrats’ lead initiative now is the National Manufacturing Strategy Act ... It calls for quadrennial review of U.S. manufacturing policy — including assessing strategic industries, reviewing tax and trade subsidies and requiring agencies to coordinate strategies.

    . . . Obama’s “new foundation” for the economy offers first steps: public investment in 21st-century infrastructure, in education and training, in research and development. Yet these, slighted in years of conservative control, are necessary but not sufficient.

    To ensure products are “made in America” requires hardheaded steps to balance trade and challenging the mercantilist countries, starting with China.

    AAM: "Wrong Direction" and "Giving China Benefit of Doubt on Currency Falls Short

    Alliance for American Manufacturing (AAM) Executive Director Scott Paul on this morning's latest monthly U.S. trade figures:

    "The trade deficit is headed in the wrong direction, and that's bad news for American workers. ...

    "The White House strategy of giving China the benefit of the doubt on currency has fallen short. The House and Senate must now step in and pass strong legislation to penalize China's currency manipulation and bring down our trade deficit. Over the longer term, we're encouraged that the recent focus by Congress and the Administration on 'Made in America' solutions to revitalize our manufacturing base and create jobs will bear fruit ...

    "The drop in exports is also an enormous blow to the Administration's efforts to double American exports. ... The biggest internal obstacle is the lack of an aggressive strategy to boost American manufacturing. ...."


    Are we right back to the "new normal" with even more jobs and industries being shipped overseas? Or are we going to learn from the past and do something about it this time? Conservative "free trade" and "free market" nonsense just doesn't work. It's time to leave that stuff behind instead of trying to accommodate and appease, and all the resulting backup that brought us, keeping us from moving forwards: We need "Buy American" in procurement. We need high-speed rail and local mass transit projects. We need a huge infrastructure rebuilding and modernization effort. We need the Local Jobs for America Act. We need a national Renewable Energy Standard. We need to set a high price on carbon. We need to build out the smart electrical grid. We need to address Chinese currency manipulation and trade violations. We need to restore taxation of the wealthy. We need free education for our people. We need to extend unemployment and COBRA subsidies for the "99ers." We need to increase the minimum wage. We need to pass the Employee Free Choice Act. We need Immigration Reform.

    And this is just some of what we need. And these all just buy time until we can figure out how to restructure the economy by reforming who gets what for what and ideas of what "ownership" means, so that we can all move into a prosperous, progressive future.

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    Posted by Dave Johnson at 11:17 AM | Comments (0) | Link Cosmos

    August 6, 2010

    Where Are The Jobs, Jobs, Jobs, Jobs, Jobs, Jobs?

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

    The economy is stuck. We need jobs, jobs, jobs, jobs, jobs, jobs jobs, jobs, jobs, jobs. Not tax cuts.

    The government released the July Employment Situation Summary and it isn't great.

    First, in context, before the stimulus we were losing around 800,000 jobs a month. The problem is that the stimulus is fading and structural changes were not made in how the economy operates. So there is no special reason to point to that makes people think that this stagnation won't continue or even get worse again.

    Eric Lotke sums up the numbers,

    Unemployment remains unchanged at 9.5 percent, with 14.6 million people out of work. In July, we lost 202,000 jobs in the government sector as the census winds down, and we gained 71,000 jobs in the private sector. African American unemployment grew fractionally worse to 15.6 percent, and teenagers to 26.1 percent.

    The "scariest" jobs chart sums it up with a picture, from Calculated Risk: (click for full-size)

    EmployRecessionJuly2010

    Solutions?

    Eric Lotke has one that involves work that needs to be done and people out of work,

    We know what we need to do. Put people to work rebuilding our crumbling infrastructure. Fix our potholed roads, our overcrowded schools and our bursting water mains. Create new infrastructure like wind turbines and solar cells. Lay the tracks for high speed rail, the 21st century parallel to the interstate highways of the 20th century and the transcontinental railroads of the 19th. And make the parts in America! Put us to work building our economy of the future, like our grandparents did for us.

    Yes, it will cost money. But don’t worry, money is out there. Those top-end Bush tax cuts are worth $43 billion annually. Restoring the estate tax for multi-millionaires brings in $50 billion. A financial transaction tax brings in $177 billion annually, and stabilizes our financial system to boot. Draw down our troops and rein in Pentagon procurements gives us another $100 billion every year for productive endeavors. That’s without even trying bold new sources of revenue. More progressive taxation at the top end. Confronting corporate power and redirecting subsidies that go to agriculture, oil and pharmaceutical giants. Ferreting out the rest of those tax subsidies for moving production offshore. We can do this.

    What, you say? Give people government jobs fixing up infrastructure? Yes, because infrastructure is government's job. As Atrios says today,

    I'm not going to deny the importance of private sector job growth, but there's no reason to see private sector jobs as somehow superior to public sector jobs. More than that, plenty of private sector jobs really are "government jobs," from contractors in the military-intelligence industrial complex to private highway construction workers. Plenty of jobs and companies wouldn't exist without government spending, however they're technically classified.

    It's The JOBS, Stupid! Why DC Elites Don't See This? Come on, people, the jobs answer is right in front of you. There is work that needs doing, and there are people out of work. There are Ten Million Jobs Needed - Ten Million Jobs That Need Doing!

    Tax the wealthy and Wall Street to pay to fix up our infrastructure. Tax Cuts Leave Nothing Behind -- Infrastructure Investment Leaves Behind Infrastructure. Not only that, Tax Cuts Caused The Deficits, Therefore...

    Connect the dots.

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    Posted by Dave Johnson at 8:49 AM | Comments (0) | Link Cosmos

    August 4, 2010

    President Obama Says ‘Made In America’ At Heart Of US Recovery

    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.

    Addressing the AFL-CIO Executive Council today, President Obama signaled support for the new Congressional "Make It In America" initiative, saying, (full transcript here)

    "As long as I'm president, I'm going to keep fighting night and day to make sure that we win those jobs, that those are jobs that are created right here in the United States of America -- (applause) -- and that your members are put to work.

    So the message I want to deliver to our competitors and to those in Washington who've tried to block our progress at every step of the way is that we are going to rebuild this economy stronger than before. And at the heart of it are going to be three powerful words: Made in America. (Applause.) Made in America."

    A Washington Post story today, New Democratic strategy for creating jobs focuses on a boost in manufacturing, explains,

    President Obama and congressional Democrats -- out of options for another quick shot of stimulus spending to revive the sluggish economy -- are shifting toward a longer-term strategy that promises to tackle persistently high unemployment by engineering a renaissance in American manufacturing.

    That approach, heralded by Obama last week in Detroit and sketched out in a memo to House Democrats as they headed home for the August break, is still evolving and so far focuses primarily on raising taxes on multinational corporations that Democrats accuse of shipping jobs overseas.

    The strategy also repackages policies long pursued by the White House -- such as investing in clean energy, roads, bridges and broadband service -- with more than two dozen legislative proposals aimed at developing a plan for promoting domestic manufacturing.

    CAF's Eric Lotke has further details of the Congressional initiative in his post today, Made In America: The Good And Bad News For A Jobs Recovery.

    This new initiative was triggered in part by the results of a poll conducted by Mark Mellman and Whit Ayres for the Alliance for American Manufacturing (AAM). According to AAM,

    When asked about prospective economic solutions, pro-manufacturing policies won overwhelming support across demographics including non-union households, independents, union households and Tea Party supporters. ...

    Other highlights from the poll include:

    • A majority believe the U.S. no longer has the world’s strongest economy—a title they want to regain
    • Voters are anxious about the economy—specifically China debt, spending and loss of manufacturing
    • 86% of voters want Washington to focus on manufacturing, and 63% feel working people who make things are being forgotten while Wall Street and banks get bailouts
    • Two-thirds of voters believe manufacturing is central to our economic strength, and 57% believe manufacturing is more central to our economic strength than high-tech, knowledge or financial service sectors

    The AFL-CIO blog has more on the President's address in the post, Obama Says ‘Made in America’ at Heart of US Recovery, (yes, I flat-out stole the title of this post from them)

    Speaking on his 49th birthday at the Washington (D.C) Convention Center, the president told the council that this fall’s election is a choice between
    polices that encourage job creation here in America or encourage jobs to go elsewhere…The choice is whether we want to go forward or we want to go backwards to the same policies that got us into this mess in the first place.

    He spoke about the need to invest in clean technology, like solar panels, wind turbines, nuclear plants, clean coal and new car batteries.

    Instead of giving tax breaks to corporations that want to ship jobs overseas, we want to give tax breaks to companies that are investing right here in the United States of America.


    Note - the President also said, "And we are going to keep on fighting to pass the Employee Free Choice Act."

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    Posted by Dave Johnson at 5:42 PM | Comments (0) | Link Cosmos

    August 3, 2010

    Do We Need A Democracy Tariff?

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

    We need a Democracy Tariff, imposed at the border on goods that are brought in from countries where the people have not been able to build a strong democracy that protects their workers, wages and environment.

    Yesterday in Exporting Jobs Is Not “Trade.” It Evades Democracy's Protections I wrote that ... well ... exporting jobs is not "trade." Packing up a factory here to send the jobs there, and then bringing the same goods that factory was making back here to sell is done for one and only one reason. It is done to get around the wage, safety and environmental protections that We, the People fought to build.

    We formed this country and we fought to build protections that brought us a reasonably good life, and a middle class, and some security - social security - so we don't always have to be struggling and living on the edge of a cliff, surviving only at the whim of a wealthy few with all the power. We fought a revolution against government by a wealthy and powerful few, and we fought again and again to keep and protect government of the people, by the people and for the people.

    Our wage, safety and environmental protections are the result of our democracy. We, the People fought and built a government to empower and protect us, to provide good wages and provide some security and that involves rules that limit what the owners of companies can do -- regulations. We build up a system of public structures like courts, laws, schools, roads, bridges -- spending -- that enable commerce to prosper. And we ask those who benefit from that commerce we enabled to share the return on our investment with us -- taxes and wages.

    Democracy, government, regulations, spending, taxes. The stronger each of these are, the better We, the People do. The weaker they are, the worse off we are.

    Lately wealthy corporate owners -- who benefit from the commerce that our democracy, government, regulations, spending and taxes enabled -- have found another way to get around these protections that We, the People built for ourselves. They move manufacturing and jobs to countries where the people have not been able to build strong democracies to protect their interests, and then bring the goods made by the exploited workers there back here to sell. They call that "trade" when really it is just a way to get around the borders that we are able to protect. As I wrote yesterday,

    These workers make the same products that had been made here, sell them in the same stores here, but make them outside of the boundaries of our democratically-won protections. And to make things worse, the companies then demand wage and benefit cuts from the workers who are still here, claiming that "globalization" means they now have to compete with workers with no rights, so they must accept less.

    There is a solution to this problem. These protections that we built brought us prosperity. And that means we have a strong market. Everyone in the world wants to be able to sell to us, and we can use that power to set the rules for access to our markets.

    A Democracy Tariff

    We should not let exploitation of workers and the environment be a competitive advantage that is used against the democratic protections we have built for ourselves. We can and should set a "Democracy Tariff" on goods that come from countries that do not protect their workers and/or environment. This tariff should be enough to offset the competitive advantage that comes from exploiting workers and the environment. If those countries do not change we can use the revenue from the tariff to build our infrastructure and strengthen our competitive position. If those countries do change, all the better, because as democracy strengthens there, the people will prosper and can trade fairly with us to buy things we make here. Everyone is better off when trade is free and fair.

    There are degrees of democracy and there can be degrees of Democracy Tariff. For example, some countries might protect workers but not the environment. The tariff on goods from those countries should be enough to offset the advantage gained from exploiting the environment but not as high as for countries that exploit both workers and the environment. Other countries might have some degree of protections but not allow unionization. The tariff should be enough to offset whatever degree of exploitation is at work.

    If a Democracy Tariff is called "protectionism" so be it. We have learned the hard way that democracy is fragile and must be protected.

    We must not allow exploitation of workers and the environment to be a "comparative advantage" used against our democracy -- government of the people, by the people and for the people -- and the protections and prosperity it has brought us.

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    Posted by Dave Johnson at 11:19 AM | Comments (1) | Link Cosmos

    August 2, 2010

    Exporting Jobs Is Not “Trade,” It Evades Democracy's Protections

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

    We, the People have fought hard to build and strengthen our democracy. We built up laws and institutions and protections. It has been a particularly hard fight to build a middle class with weekends off, good wages, worker protections and some degree of protection of our environment. Step by step we fought and built, fought and built, and a prosperous democracy with a strong middle class developed.

    But this has been changing. Beginning under President Reagan our government has allowed companies to bypass the strong rules that we fought to implement. Companies have been allowed - even encouraged - to pack up and move factories to low-wage, low-protection, non-democracy countries where the workers have no choice but to do what they are told if they want to feed their families and stay out of jail. These workers make the same products that had been made here, sell them in the same stores here, but make them outside of the boundaries of our democratically-won protections. And to make things worse, the companies then demand wage and benefit cuts from the workers who are still here, claiming that "globalization" means they now have to compete with workers with no rights, so they must accept less.

    This is not "trade." This is evasion of our democratically-won protections. Moving a factory across a border to evade the protections that good governments bring to their people is not “trading with other countries” it is evasion of the rules that We, the People placed on the once-level playing field of business.

    The results of these anti-democratic policies have been profoundly destructive. What is called free trade has helped bring about an intense concentration of wealth, because poor people without even the benefit of our minimum wage laws are used to threaten or just replace union workers who had fought just to get a piece of the pie.

    The globalization argument says that all of this destruction of rights and protections is inevitable. The people are there, they are desperate, they will accept less, so there is nothing we can do about it. Economists even argue that economic theory says this is the correct way to do business. They say that different countries have different "comparative advantages" -- some unique ability to produce something better that other countries. Central and South America are better at producing bananas and our Midwest is better at producing grain, so these items should be traded.

    It is correct that they grow bananas and we grow grain, but it is not correct to say that countries with democracy, where workers can demand wage, safety and environmental protections as well as protection of the public's common resources should be pitted against desperate and exploited people, living under repressive governments that they do not have control over. We must now allow lack of democracy and lack of worker or environmental protections to be an advantage, used against us!

    We can and must stop this. We have fought this fight before and we can fight it again. We need a democracy tariff at our border that protects us and protects the democracy and its protections that we have fought so hard to build. I will write more about this in my next post.

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    Posted by Dave Johnson at 12:03 PM | Comments (0) | Link Cosmos

    Tax Cuts Leave Nothing Behind -- Infrastructure Investment Leaves Behind Infrastructure

    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.

    Actually, the title kind of says it all, no?

    If we spend money on tax cuts, the next year we only have debt and pay interest on the debt. For a clear example, just look at the damage the Bush tax cuts have done to the country. They left behind worse than nothing -- we had years of slow growth, and the cuts caused a massive deficit and debt that plagues us now. And, because we didn't have the money to use to maintain the infrastructure we are that much further behind on that task now.

    If we spend money on improving the country's infrastructure, we get all the job creation that comes from that work, and the next year you have that infrastructure there to help drive the economy. For a clear example, how did all that government spending on the Interstate Highway System work out for the economy? For a clear example, look at China's investment in high-speed rail. They can now move people and goods so much more efficiently and faster between their cities, and they developed an industry that is now selling its expertise to the rest of the world.

    Our country has a huge, huge infrastructure deficit. After the Reagan tax cuts started draining the government's ability to be a government we slowed down or stopped maintenance of the country's roads, bridges, water and sewer systems, transit systems, schools, dams & levees and everything else that didn't blow someone up. Our rail system is not last-century, it is century-before-last! The American Society of Civil Engineers calculates that we are $2.2 trillion behind where we need to be. As a result we have fallen behind the rest of the world in competitiveness, efficiency, and of course job creation.

    Connect the dots: We have about 10% unemployment and we have a huge, huge backlog of work that needs doing. And after that work gets done the economy will run much more smoothly and will be much more competitive.

    To me it's a no-brainer. Everyone benefits when we invest in jobs and infrastructure. We can see all around us that tax cuts leave nothing behind, and in fact make our problems worse.

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    Posted by Dave Johnson at 12:01 PM | Comments (0) | Link Cosmos

    July 28, 2010

    Bravo To Congress' Making It In America Push -- What It Still 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.

    House leaders deserve praise for fighting for working people by launching a "Make It In America" initiative which they officially unveiled today. The country still badly needs an immediate job-creation effort, but this is a very important longer-term initiative for reviving America's manufacturing base and restoring our competitiveness in the world economy. Good work!

    Manufacturing is the core of our country's income. Making things that we sell is how we earn money to buy things that others make. This is why it is so important to restore America's manufacturing base and the infrastructure that supports it. People want to go into a store and have a choice to buy things that are made here.

    This week these important bills made it to the House floor: (click through for details)

  • National Manufacturing Strategy Act

  • Clean Energy Technology Manufacturing and Export Assistance Act

  • End the Trade Deficit Act



  • As the Congress rolls out this initiative here are important components it should include:


    Buy American

    Public money should be going to our people. This is what other countries, like China, are doing with domestic preferences and "indigenous innovation" policies.

  • Pass "Made in America" policies in every phase of any manufacturing plan, boosting domestic content requirements in federal procurement, (state and local government should do the same with their procurement policies).



  • Trade policies

    (Is "trade" even the right word for making the same things in other countries that we used to make here.)

    We are doing very little to combat the mercantilist nations, in particular China and Germany. China manipulates its currency and will not match its exports with imports. Germany is limiting domestic consumption -- the resulting trade surplus is out of balance.

  • End tax incentives to move production overseas; create incentives to keep production at home. Current laws allow corporations to defer taxes on income earned overseas, which almost forces companies to develop schemes to make goods outside the country.

  • Require tariffs on goods from countries that manipulate currency, to overcome the pricing advantage this creates.

  • What about a "democracy tariff?" This is a tariff on imports to counter the advantages that come from moving factories to countries where the people don't have the power or opportunity to insist on fair wages and worker and environmental protections.



  • Encourage the "Green Economy"

    Stimulate American manufacture of wind turbines, solar panels, biofuels, etc. This creates jobs and makes us competitive in the new green economy that will replace the carbon economy.

  • Create a domestic non-carbon energy market with a strong Renewable Energy Standard (RES) and a direct carbon tax (since the Senate has blocked cap-and-trade).

  • Use government procurement to help trigger this market. Phase in purchases of non-carbon energy, creating a strong market, triggering increased investment. Procurement should require American-made components. For example, wind-power purchases should require American-made turbines are used.



  • Infrastructure

    Our roads, bridges, rail, water and electrical systems, etc. are the backbone of a competitive economy. The infrastructure enables business to thrive. If it is not kept in good working order and up-to-date (and it has not been), businesses do not thrive (and they aren't).

  • We need the Congress to create a National Infrastructure Investment Bank, capitalized with public money to lure private capital for investment in rebuilding key components of America's infrastructure. Stop the obstruction - we need this!

  • Rebuild existing, crumbling infrastructure. This "spending" investment earns the money back many times over.

  • Pass the surface transportation reauthorization bill. This will boost American industry as while creating jobs, saving energy and incentivizing green development.

  • Build new infrastructure-for-the-future like high-speed internet and high-speed rail and a national electric "smart grid".

  • Require companies to make the infrastructure components in America.



  • This is a brief outline of some of the needed components in a Make It In America strategy. These are things that Congress can do. Congress must not back away from bold reforms in the face of resistance from the right-wing monopolist business lobbyists, who speak for the job exporters, and their "free-trade ideologue" allies.

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    Posted by Dave Johnson at 12:24 PM | Comments (0) | Link Cosmos

    July 24, 2010

    Pelosi: Congress' Coming 'Making It In America' Initiative

    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.

    At the Netroots Nation convention today in Las Vegas, Speaker Nancy Pelosi talked about an upcoming Congressional initiative to help restore American manufacturing. The initiative, called “Making It In America” will include a series of bills to be introduced after the summer recess.

    A few days ago Politico wrote about the upcoming initiative,

    Democrats are priming the House floor for a manufacturing agenda they hope will bolster the economy, produce easy bipartisan votes and boost their chances in the midterm elections — at least if the polls they’re using are on target.

    Speaker Nancy Pelosi (D-Calif.) teased the plan — sometimes dubbed “Making It in America” — after a White House meeting with President Barack Obama last week. The agenda appears to be the Democrats’ final pre-election push to clear the deck of jobs-related bills that have been sitting around for months.

    Democrats plan to present the agenda as a means of creating jobs, promoting green manufacturing through tax credits and grants and enhancing national security by rebuilding the domestic manufacturing sector at a time when many Americans are worried about China’s strength, according to aides.


    The Politico story referred to the impact made on members of Congress by a new poll from the Alliance for American Manufacturing. According to the poll,

  • A majority believe the U.S. no longer has the world’s strongest economy—a title they want to regain
  • Voters are anxious about the economy—specifically China debt, spending and loss of manufacturing
  • 86% of voters want Washington to focus on manufacturing, and 63% feel working people who make things are being forgotten while Wall Street and banks get bailouts
  • Two-thirds of voters believe manufacturing is central to our economic strength, and 57% believe manufacturing is more central to our economic strength than high-tech, knowledge or financial service sectors
  • Across all demographics, voters’ economic solutions center on trade enforcement, clean energy, tax credits for U.S. manufacturing and replacing aging infrastructure using American materials, a surprising overlap between Tea Party supporters, independents, non-union households and union households.
  • Wednesday the House passed the first bill of the initiative, H.R. 4380, the U.S. Manufacturing Enhancement Act, to help American manufacturers by temporarily suspending or reducing duties on materials these companies use that are made abroad or opposed by domestic producers.

    California Rep. John Garamendi has introduced three bills to close corporate tax loopholes that reward the off-shoring of jobs and end taxpayer subsidies for foreign-produced clean energy technology, buses, railcars, and ferries.

    Garamendi says "I want to walk into Target and see "Made in America" throughout the store. We can make it in America,"

    At Netroots Nation Speaker Pelosi also said that Congress is looking at addressing the China currency problem, where China is manipulating its currency to give goods made there a huge pricing advantage. She also pointed out that China imposes many other barriers to free trade, including not allowing American companies to bid on government procurement, even when the goods are made in China.

    I will be writing more on this, but it is a breaking story and I want to get the news out.


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    Posted by Dave Johnson at 1:03 PM | Comments (0) | Link Cosmos

    July 19, 2010

    Netroots Nation Panel: The 2010 Elections: Channeling The Power Of Jobs, Populism And The Angry Voter

    Will you be at Netroots Nation in Las Vegas later this week? I will be on a panel, The 2010 Elections: Channeling the Power of Jobs, Populism and the Angry Voter, Thursday at 10:30am. Come on by and attend the panel!

    Here is the complete description:
    The 2010 Elections: Channeling the Power of Jobs, Populism and the Angry Voter
    THURSDAY, JULY 22ND 10:30 AM - 11:45 AM, PANEL, BRASILIA 6

    "The rising tide of populist anger in the face of Wall Street bailouts and continued high unemployment threatens to take an ugly reactionary turn unless it is channeled to more progressive policies of job growth. This panel will address current public attitudes and ideas for steering opinion and action more progressively."

    Also on the panel will be:

  • Scott Paul, founding Executive Director of the Alliance for American Manufacturing (AAM).
  • Annabel Park, documentary filmmaker, political activist and community volunteer. Founder, Coffee Party USA.
  • Mark Mellman, one of the nation’s leading public opinion researchers and communication strategists. He is CEO of The Mellman Group and recently named "Pollster of the Year" by the American Association of Political Consultants.

    Posted by Dave Johnson at 7:48 PM | Comments (0) | Link Cosmos

    July 14, 2010

    Against All Odds: Save the Middle Class and the American Dream

    The American Dream is what is at stake for the Obama Administration, and they know it. This is the dirty, little secret that can longer be contained -- it is escalating, cannot remain hidden, and may have significant political ramifications for the 2010 elections. The atrocity of the past years is this broken promise with the people, and it is deeply affecting the way they think, behave, vote and live. Moreover, it could begin to explain the groundswell response to candidate Barack Obama in 2008. The power of his words helped them believe that the dream was recoverable. He exemplified what was possible through education and hard work in his meteoric rise through American politics to the Oval Office. Further and more importantly, it also explains why we are now suffering such profound political despair reflected in the dropping poll numbers.

    The middle class, for its survival, needs life to return to a semblance of "normalcy" - a time when they didn't know how to spell the word "deficit" and didn't have to care. They want their retirement savings back so they don't have to work until they drop. They want a bank account that makes more then one percent interest. They want to know what their health insurance premiums will be this year and in ten. They want to know if their kids study, and if they save and sacrifice, that their lives will be better. They want their kids to get good jobs, and they want to hold onto our own jobs. And with despair and anger they realize that despite the heroic work of the Congress with this President in passing landmark legislation in all of these areas -- they still are not safe. Economic ruin may still be right around the corner, and makes it hard to sleep at night.

    You know we've all been hoodwinked and sold a bill of goods about the sanctity of the middle class in this country. It is a basic tenet of our lives, and made us different from other countries. The ranks swelled over the last decades after FDR to the present. But now for the first time since the Great Depression, the middle class is at risk of tipping over once and for all. They are not coming out of the financial, housing and environmental crises intact. Interest rates have ratcheted up on the family home, maybe there's a balloon payment on the mortgage and its impossible to refinance under the "new" programs; savings have virtually no interest and are drying up; pensions have evaporated; health insurance premiums are basically unaffordable until 2014 if then; schools are overcrowded and on the decline; there are no jobs except in China and they don't speak Mandarin; and unemployment is still at 9.5% -- higher in key areas throughout the country. The new legislation is riddled with loopholes, as all legislation can be after laborious compromises and extensive details. What is different is that each of these loopholes is flagrantly being exploited by the banks, the credit card companies and the health insurance companies. For example, many of the unemployed cannot qualify for COBRA because their companies failed which is code for closed their doors. COBRA is not available when a company terminates their health insurance plan, and 2014 is a long way off when you need health insurance coverage now.

    Frankly, this is not what the middle class signed up for. It was not part of the implicit promise made to them. As a result, they are angry (enter stage right the Tea Party to exploit this vulnerability), and depressed (evidenced in the lackluster June election voter turnout). This is a deadly combination that could seal the deal on the November elections for the big, bad guys. Yet somehow the middle class and its Democrats must rally again and rise above the collective depression (no pun intended). We cannot let the brilliant and effective message machine of the Republican Party lull them into universal amnesia -- forgetting all the wrongs of the past. Remember these are the same guys (Bush and Cheney) that put the nails in the coffin cementing the potential extermination of the middle class. These same guys two weeks ago even blocked the extension of unemployment benefits while they frolicked on vacation. How could they do that to working families in this country? The extension passed the House before the break, but was filibustered in the Senate. And given all that, imagine life when we essentially give away the House because we are too depressed to vote or disorganized to keep these seats.

    I will take liberal Speaker Nancy Pelosi any day over anti-choice, sanctimonious Republican Representative John Boehner as Speaker of the House. That would be a bad dream that just keeps on giving. This threat should be enough for the White House to saddle up and come out with a plan, a message (remember "hope and change"), and leadership to deliver - not the White House Press Secretary Gibbs message yesterday. David Gregory of Meet the Press has gotten so very good and Gibbs just walked into a fiasco announcing the potential lose of seats in the House. It was as bad as giving away candy instead of feeding the homeless, and maybe that's why White House Special Advisor, David Axelrod, was so snarky with CNN's Candy Crowley during the next hour on the Sunday morning political shows because it sure didn't make any sense.

    Snarky or not, we all know Obama and his team are awful busy with the economy, the oil spill and a few dozen Russian spies, but we need them to reach out to that disenfranchised middle class again, aka big voting block. After all, Obama is the master communicator and we know that he can do it because he has done it before to win in 2008. And now the stakes may even be higher. If we allow 40 seats in the House to go asunder and a few more in the US Senate -- we can start waving bye-bye to the American Dream, the middle class, economic recovery, and maybe the Supreme Court for the next couple of decades.

    Please see my Pearltree for some of the reference materials with more to come. This is a new tool to organize and share materials on the web. In full disclosure, I advise them as they build out the new features of this platform.

    Middlle Class

    Note, an earlier version of this article appeared this week on the Huffington Post.

    Posted by Michelle at 1:32 PM | Comments (0) | Link Cosmos

    July 6, 2010

    If You Feed Them They Breed -- And Other Dehumanizing Conservative Idiocy We Should Ignore

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

    The country is in an economic emergency. Unemployment -- especially long-term unemployment -- is at extremely high levels and the recovery is faltering. Conservatives are obstructing efforts to solve this because they believe it helps them in the November election. To this end conservatives are throwing out every possible argument against helping the economy to see if any of them stick, and to provide cover for opposing taking any action that might help matters.

    The latest nonsense they are spreading is that helping the unemployed keeps them from finding jobs. Good Lord! This is basically the old "if you feed them they just breed" storyline. They say "it makes them dependent" as if hard-working people laid off because of Wall Street's scams are squirrels. Or, to hear the nasty way conservatives talk about these human beings, they are like rats. "Hobos," one Congressman called the unemployed! And the DC elite listen, chuckle and repeat.

    But while they say unemployment assistance keeps these lazy parasites from finding jobs, they also obstruct bills that create jobs by maintaining and modernizing our infrastructure. This tells you it's just something they say, to cover for what they do. And what they do is obstruct any effort to fix the problem because they believe they will benefit if it is not fixed.

    For example, the big DC drumbeat right now is against "spending." They claim that government spending caused the crisis, ignoring and passing the buck on everything that actually caused it, especially their deregulation and their lack of oversight. They blame government for everything, so why should this be different.

    Along these lines they claim that the stimulus didn't work, or even that spending made the problem worse, because there are still people out of work. But look at the following chart. The right side of the chart shows the effect of the stimulus. (Source, Jed Lewison and Karina Newton)

    monthly_private_sector_job_creationloss

    A conservative, anti-government myth that is everywhere now is that "Government forced banks to give loans to people who couldn't pay them back, and this caused the financial collapse" -- and its variant that it was about forcing banks to "help minorities. This is an example of the tactic of repeating a lie over and over until enough people believe it. To deflect people from understanding what really caused the crisis and from seeing that they are obstructing the effort to reform the financial system they made this one up" Unfortunately this has become what bloggers call a "zombie lie" -- no matter how many times you prove it is just a lie, it comes back from the dead.

    The Zombie Lie Problem

    The "zombie lie" problem shows that it is a mistake to think that just arguing facts is a way to shoot this stuff down. Spending your time arguing facts with people who are trying to mislead misses the point. The lie is not about the facts, it is cover for the obstruction. When you try to argue a fact they will make up something else to throw you off track. Facts are not what this is about, feeding a narrative of no action is what this is about, because they understand that a bad economy helps them in the Fall.

    Listening to this stuff at all, and trying to argue facts just contributes to the lack of action. There comes a point when you have to stop llsteneing and getting bogged down by intentional distractions and get something done for the economy and the public.

    It Is Time To Stop Listening To This Stuff And ACT

    Enough with these stupid, heartless, dehumanizing right wing "if you feed them they breed" arguments that are preventing action. People are out of work and the recovery is faltering. It is time to push aside the nay-sayers, and get something done. The government simply has to step in and act. First, do the minimal, obvious things:

    1) Pass the unemployment extension, because people can't find jobs.

    2) Continue COBRA subsidies, because so many of the long-term unemployed are older people who cannot get or afford insurance any other way. This is simple humanity, people! And, by the way, COBRA itself is running out for many people, never mind subsidies.

    3) Send aid to the states. 900,000 jobs in the states are riding on this help.

    At a minimum do this. Don't get lost in the weeds of what bill to attach it to. Just do it. Bring it out by itself for an up or down vote so the public can clearly see who is helping and who is voting against jobs and help for the unemployed.

    But what Congress really ought to be doing is passing the George Miller "Local Jobs for America Act." .

    As economists like Paul Krugman keep saying we risk going into a serious depression. At the least we are entering a pattern of slight recovery, slight decline for a decade. Look at what happened to Ireland when they tried "austerity."

    Here is an undeniable fact about government spending. Government spending on infrastructure creates the conditions that enable businesses to prosper. Tax cuts leave nothing behind, but the roads, transit systems, ports, electric grid, Internet, courts, schools, universities, research, and all the rest that government spending creates make us competitive and are needed by businesses

    Do it. Ignore the obstructors who are trying to set the stage for November. Put people to work. Help the long-term unemployed. Pass jobs bills.. And spend on modernizing our infrastructure so American can be competitive again.


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    Posted by Dave Johnson at 11:47 AM | Comments (1) | Link Cosmos

    June 30, 2010

    Chinese Paper Subsidies: Boring? Jobs: Not Boring!

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

    China is cheating again. Yawn... China is subsidizing its paper industry ($33 billion 2002-09) and has tripled their production, and now is the largest producer of paper and paper products. Yawn.

    This has cost jobs and approximately 400,000 remaining American jobs are at risk. And the companies they work for. NOT so yawn!

    The Economic Policy Institute has released a briefing paper, titled, No Paper Tiger. This paper documents the different government subsidies behind the surge of Chinese paper imports, and look at its implications for the American paper industry.

    Some of the subsidies that government provides,

    This Briefing Paper estimates that in China’s paper industry, subsidies for electricity amounted to $778 million • (from 2002 to 2009); subsidies for coal, $3 billion (from 2002 to 2009); subsidies for pulp $25 billion (from 2004 to 2009); subsidies for recycled paper, $1.7 billion (from 2004 to 2008); subsidy income reported by companies, $442 million (from 2002 to 2009); and loan-interest subsidies, $2 billion (from 2002 to 2009). Missing data prevented calculation of pulp or recycled-paper subsidies in 2002, 2003, and 2009.

    Implications for our own industry,

    Cheap, subsidized Chinese paper exports have affected the U.S. paper industry. Despite comparable cost structures, high efficiencies, and plentiful natural resources, U.S. paper companies have failed to compete globally or nationally on price against much-cheaper Chinese imports. In 2010, the United States remains a net importer of paper and paper products. Imports from China are rising faster than those of any other country for this industry, with the value of U.S. imports from China growing at an annualized rate of 22%.

    And the cost in jobs,

    “From 2002 through the end of 2009, U.S. employment in the paper and paper products sector dropped 29 percent, from roughly 557,000 workers to 398,000.”

    As the paper shows, China has no competitive advantage or cost advantage that would lead to the lower prices that are powering this surge. Labor is only 4% of the cost, and they import much of the pulp for the paper. They don't have economy of scale. It is only the government subsidies that enable them to take over the industry.

    From the Alliance for American Manufacturing, (See press release here.)

    China’s massive subsidies to its paper sector are doing severe damage to the U.S. paper industry, its workers and their families,” said Scott Paul, executive director of the Alliance for American Manufacturing (AAM). “The only way to stop the bleeding is for U.S. policymakers to take action against China’s blatant violations of trade laws, including sweeping subsidies to paper and many other industries.”

    The manufacturethis blog lets you look up how many jobs this costs in your state and Congressional district.

    We need better trade law enforcement.

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    Posted by Dave Johnson at 11:14 AM | Comments (1) | Link Cosmos

    June 29, 2010

    The Real Deficit Is Jobs!

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

    The real deficit is jobs. That is one more of those things that everyone can see in front of their faces, but we're told it isn't what it is. There aren't enough jobs, and we're being told this is our fault because we wanted pensions and good wages and vacations and respect and dignity and please, sir, just a little slice of the pie.

    In case you haven't noticed, the world's economy is suddenly undergoing a classic "Shock Doctrine"-style, coordinated propaganda attack. The wealthy and powerful, having insisted that countries cut their taxes and run up debt, now insist that the middle class and poor must work harder, have their pensions reduced, sell off (to them) their publicly-held resources, and take other "austerity" steps to pay off the debt that these lazy, parasitic peasants dared to run up.

    The excuse is that "the markets" will “lose confidence” in us. Apparently we aren't working the salt mines hard enough. "The markets" -- that's the crowd who got in trouble and insisted that the world would end unless we immediately handed over to them all the rest of the money in the world -- will "lose confidence" in our ability to work the mines hard enough, and will cut us off, unless we cut our pensions, sell off (to them) our resources, and promise never to be lazy and make demands for better wages, pensions, workplace safety, and do it now.

    The real deficit is jobs.

    History teaches that the way out of an economic slowdown is to invest in infrastructure, education and modernizing manufacturing.

    Slactivist said it best the other day,

    This calls to mind an old story:
    But knowing their hypocrisy, he said unto them, "Why are you putting me to the test? Bring me a dime and let me see it."

    And they brought one. Then he said to them, "Whose head is this -- FDR's or Herbert Hoover's?"

    They answered, "Roosevelt's."

    And he said unto them, "Right. So shut up. Have you morons already forgotten the 20th Century? When the choice is between imitating what worked and what really, really didn't work, why are you pretending it's terribly complicated?"

    And after that, no one dared to ask him any question.

    I'm not an economist, but we've got five applicants for every single job opening. If you tell me that the best response to that situation is to lay off hundreds of thousands of teachers, I will not accept that this means that you're smarter and more expert than I am. I will instead conclude -- regardless of your prestige or position or years of study -- that you're a moral imbecile.


    According to the Labor Department,
    By the end of 2009, the jobless rate stood at 10.0 percent and the number of unemployed persons at 15.3 million. Among the unemployed, 4 in 10 (6.1 million) had been jobless for 27 weeks or more, by far the highest proportion of long-term unemployment on record, with data back to 1948.

    That's right, it was the policies of austerity that created a depression, and the policies of job-creation, infrastructure investment and taxing the wealthy to pay for it that got us out. But that was back when We, the People were still in charge.

    In other news:

    Number Of Millionaires Grew Amid Recession.

    The rich grew richer last year, even as the world endured the worst recession in decades.

    Top 1 Percent of Americans Reaped Two-Thirds of Income Gains in Last Economic Expansion, Income Concentration in 2007 Was at Highest Level Since 1928, New Analysis Shows,

    Two-thirds of the nation’s total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928, according to an analysis of newly released IRS data by economists Thomas Piketty and Emmanuel Saez.

    During those years, the Piketty-Saez data also show, the inflation-adjusted income of the top 1 percent of households grew more than ten times faster than the income of the bottom 90 percent of households.

    Top 1% Increased Their Share of Wealth in Financial Crisis,

    According to his analysis, the top 1% held 34.6% of all national wealth in 2007. By Dec. 31, 2009, they held 35.6%.

    Meanwhile, share of national wealth held by the bottom 90% fell to 25% from 27%.

    Corporate Wealth Share Rises for Top-Income Americans

    In 2003 the top 1 percent of households owned 57.5 percent of corporate wealth, up from 53.4 percent the year before, according to a Congressional Budget Office analysis of the latest income tax data.

    . . . For every group below the top 1 percent, shares of corporate wealth have declined since 1991.

    . . . Long-term capital gains were taxed at 28 percent until 1997, and at 20 percent until 2003, when rates were cut to 15 percent. The top rate on dividends was cut to 15 percent from 35 percent that year.

    See if you can make the connection. They want us to cut back our pensions, cut our wages, sell off our resources and work harder, to pay back the money that was borrowed and handed to them.

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    Posted by Dave Johnson at 11:14 AM | Comments (1) | Link Cosmos

    June 16, 2010

    Obama: We've Been Outflanked, Cap & Trade Dead

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

    The headline of my local paper today is Obama: Act on clean energy. (But a different headline online - do they do that just to mess up bloggers?)

    In the speech the President paid homage to President Carter's efforts to change America's energy policies, saying,

    For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we’ve talked and talked about the need to end America’s century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked -- not only by oil industry lobbyists, but also by a lack of political courage and candor.

    Outflanked

    Then the President said we have been outflanked on the coming green manufacturing revolution by countries like China,

    The consequences of our inaction are now in plain sight. Countries like China are investing in clean energy jobs and industries that should be right here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil. And today, as we look to the Gulf, we see an entire way of life being threatened by a menacing cloud of black crude.

    Cap And Trade Dead

    In the Huffington Post today, Teryn Norris, Director of Americans for Energy Leadership writes that the President also signaled the death of cap and trade legislation,

    Instead of using last night's prime-time opportunity to push cap and trade ... President Obama pressed the reset button on energy and climate policy, saying he was "happy to look at other ideas and approaches from either party, as long they seriously tackle our addiction to fossil fuels." He made no mention of setting a price on carbon or establishing an emissions cap and trade system.

    Others are trying to get things done on this front. Norris discusses the emerging Innovation Consensus,

    The energy innovation consensus currently includes dozens of Nobel Laureates, Breakthrough Institute, Brookings Institution, National Commission on Energy Policy, Third Way, Association of American Universities, Clean Air Task Force, Information Technology & Innovation Foundation, Google, and Americans for Energy Leadership, among others. The latest group to join is the American Energy Innovation Council (AEIC), made up of several of the nation's top business leaders: Bill Gates, Jeff Immelt, John Doerr, Chad Holliday, Norm Augustine, Ursula Burns, and Tim Solso. Last week, these leaders released a new report, "A Business Plan for America's Energy Future," calling for major new federal investment in clean energy technology RD&D -- at least $16 billion annually, more than triple the current level (see our news roundup).

    Here is the problem. Action on energy requires direct government action and rejection of deficit hysteria to do it. But every single initiative of the Obama Presidency has been blocked by powerful interests, playing on the use of the filibuster on almost every major bill in the Senate. Health care reform was severely weakened by the pharmaceutical and insurance lobbies. Financial reform has been severely weakened by the financial lobbies. Jobs measures and further stimulus have been blocked by a strategic lobbying campaign to make people think the Bush-created deficit must be cut first. Now cap and trade may have been killed by the oil and gas lobbies.

    We are in a direct confrontation between the big corporations and We, the People over who will run things and control the resources of the United States, and We, the People are losing. There is time to turn it around, but only if we recognize this battle for what it is.

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    Posted by Dave Johnson at 10:15 AM | Comments (0) | Link Cosmos

    June 10, 2010

    Conservatives Call For Massive Deficit Spending To Create JOBS

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

    Saying that the Obama "stimulus" was not big enough, conservatives are demanding that the government massively increase deficit spending to create badly-needed jobs. Newt Gingrich, at the conservative media outlet Human Events, calls for an Economic Freedom Act that includes,

    • Reducing the payroll tax by half for 2010...;

    • Eliminating the capital gains tax ...;

    • Reducing the corporate tax rate to 12.5% ...;

    • Permanently eliminating the death tax ... ; [note - what he refers to as a "death tax" is an income tax on wealthy children - DJ]


    Each of these tax cuts demanded by conservatives would greatly increase the deficit. Many other conservative organizations and politicians are joining this demand for massive deficit spending to create jobs.

    In the article, Gingrich also criticized the size of the Obama stimulus because it did not create enough jobs, writing, "The Obama stimulus has clearly failed. It’s time to get back to what we know works for job creation. 2+2=4."

    Gingrich was right that the stimulus was insufficient. The CBO recently reported that the stimulus put up to 2.8 million people to work, lowered the unemployment rate by up to 1.5% and boosted the GDP by up to 4.2%. But the conservative-created job and recession crisis is much, much worse than that. We need emergency action to create 10 million jobs!

    Tax cuts are the wrong approach because they would also reduce the country's ability to maintain and modernize the infrastructure while increasing the problem of extreme concentration of wealth. Economists say that tax cuts are not effective at creating jobs (and create structural deficit problems), while directly creating jobs through infrastructure investment also leaves behind ... badly-needed infrastructure.

    Posted by Dave Johnson at 7:28 AM | Comments (0) | Link Cosmos

    June 3, 2010

    Tomorrow's Jobs Report Will Look Great But Includes Census Hires

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

    Today ADP reported that private-sector jobs may have increased by 55,000 last month. (ADP is able to make this estimate because the company processes 1 of every 6 paychecks nationwide.) Meanwhile the Labor Department reported that initial claims for unemployment dropped 10,000 to 453,000 for the week ended May 29. Note that this drop brings the level "down" to what was nearly the peak number of layoffs in the last recession.

    Tomorrow the Bureau of Labor Statistics will release its May jobs report. The report is expected to show that as many as 4-500,000 jobs were created last month. That 55,000 increase in the ADP report is private-sector jobs, while tomorrow's jobs report includes government hiring, and this could include as many as 400,000 temporary census workers.

    But while one hand gives, the other takes away. Over at Firedoglake, David Dayen warns in Pre-Gaming the Jobs Report,

    The other factor here is that, while temporary federal government jobs are rising because of the Census, permanent local government jobs are going away. State budget cuts could lead to as many as 900,000 jobs lost in 2010. And Congress decided last week to do nothing about that, cutting money in a jobs bill for the states to balance their Medicaid budgets.

    A report showing 4-500,000 new jobs is always a great thing. But let's not get ahead of ourselves. We need to see reports like that continue for a year just to catch up to the jobs lost due to conservative policies of the previous administration!

    The danger is that deficits hawks will cite this report and say it is time to turn to deficit reduction instead of investing in our economy and our people. But deficit reduction comes from investing in our economy and our people. Cutting back on unemployment checks, health care, infrastructure, education and all the things conservatives want us to cut back on means a worse economy in future years.

    Another danger is that conservatives will misrepresent the report (imagine that!) and say that the economy is not creating real jobs, only temporary "government jobs." Jobs are jobs and temporary government paychecks still buy food at local groceries, clothes at local retailers, etc. Conservatives also say the stimulus "didn't work" or even claim the stimulus is the reason unemployment is high. Actually the CBO recently reported that the stimulus put as many as 2.8 million people to work, lowered the unemployment rate by as much as 1.5% and boosted the GDP by as much as 4.2%.

    Calculated Risk has its own prediction on the unemployment report tomorrow, that it will be reported badly.

    Finally, a reminder of where we are:

    Posted by Dave Johnson at 1:50 PM | Comments (0) | Link Cosmos

    High Unemployment Used To Be A National Emergency

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

    In Does Washington care about unemployment? economist Brad DeLong asks the question,

    In 1983, Ronald Reagan's Washington regarded high unemployment as a national emergency. Today, with unemployment kissing 10 percent, Barack Obama's Washington scarcely seems perturbed. Why?

    In 1983, when unemployment hit 10.5%, Washington was in a panic and it was considered a "genuine national emergency." Unemployment is just about as high today. But, DeLong points out, "Yet, unlike 1983, there is no sense of urgency in Washington. ... Instead, deliberations within the Federal Open Market Committee appear preoccupied with how best to apply the brakes."

    He says that D.C. insiders he knows tell him to calm down, that things are getting better. He thinks the problem is something else.

    But whenever I wander the halls of Washington these days, I can’t help but think that something else is going on—that a deep and wide gulf has grown between the economic hardships of Americans and the seeming incomprehension, or indifference, of courtiers in the imperial city.

    Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who’ve lost their connection to mainstream America? Has the collapse of the union movement removed not only labor’s political muscle but its beating heart from the consciousness of the powerful? Has this recession, which has reduced hiring more than it has increased layoffs, left the kind of people who converse with the powerful in Washington secure in their jobs and thus communicating calm while the unemployed are engulfed in panic? Are we passively watching an unrepresented underclass of the long-term unemployed created before our eyes?

    The price of Treasury bonds is up, which means demand is high -- and that investors are not-at-all worried about our deficit. But D.C. is focused on reducing the deficit. This reflects more concern for the interests of the wealthy of Wall Street than of the working people on Main Street. This division is similar to the division between those who wanted more money circulating in the 1890, and were calling for us to move from a gold standard to a bimetal gold/silver standard so there could be more money circulating.

    If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.

    But crucifying the jobless on cross of stock certificates is OK?

    The way to reduce the deficits is invest in the economy and to get people working again.

    Posted by Dave Johnson at 1:23 PM | Comments (0) | Link Cosmos

    June 1, 2010

    Why The Deficit Dominates DC Thinking

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

    Washington politicians are convinced that the public is demanding cuts in spending, even over creating jobs and restoring the economy. This pressure comes because much of the public believes that "Obama tripled the deficit." This has been the right's drumbeat for over a year and the public has not heard any response. You can barely turn on the radio or TV, or go on the Internet, or read the letters-to-the-editor in your local paper without hearing one or another form of this message repeated.

    Fact: Bush's 2009 budget-year deficit was $1.4 trillion. 2009 was President Bush's last budget and included the Wall Street bailouts, unemployment benefits and other costs of the incoming recession, plus Iraq and Afghanistan. This massive deficit was just one more conservative failure.

    But the right's propaganda campaign telling the public that this was Obama's deficit, not Bush's has gone unanswered. The Obama administration and their allies are not reaching the public with the truth or any message that counters the lies the right is putting out.

    Charts that make it appear that the huge deficit was Obama's doing are an example of how the public is being conned:

    obama-deficit-slide

    The well-funded Heritage Foundation is one leader of the effort to convince the public of this. Bush Deficit vs. Obama Deficit in Pictures demonstrates an effort to mislead the public into blaming Obama for Bush's massive deficits.

    FOX News had this headline: Obama Triples Budget Deficit to $1.4 Trillion (they have since changed the headline but here is it as it appeared:)

    fox nation clip

    On the radio the drumbeat continues with people like Rush Limbaugh, saying, President Obama Lies About His Massive Deficits and Tax Increases,

    People are fed up with this spending. They're scared to death of it. They know full well what it portends. It portends massive tax increases for years on us, our kids and grandkids. It weakens the country. This is just an abomination. Nine years ago we were attacked. Barack Obama cannot tell the truth. Constitutionally, he's not capable of telling the truth. He has increased the deficit, not by twice, not by three times, but by four times... Last year's deficit surged to $1.42 trillion, more than three times the record of the previous year. An imbalance of $454.8 billion in 2008. So Bush's last year budget deficit was $454.8 billion. Obama's budget deficit last year was $1.42 trillion. That's nearly $1 trillion more that he added to it in fiscal 2009.
    Here is Sean Hannity claiming Obama "quadrupled the deficit",


    This is why the deficit dominates the agenda in DC. This dishonest propaganda campaign is the source of the political pressure to cut spending. Fine. What else would you expect from the right? It's what they do. But why has this campaign gone unanswered? Why haven't the forces allied with the President reached out with the facts? Why have they let themselves be put into this box?

    A bigger question, why does the Obama administration still not seem to get it that this is what they do? The right has a coordinated, funded propaganda machine that just lies, and smears, belittles and humiliates people, makes the public afraid, stirs up division - even encourages sedition, all to get their way.

    The right is well-funded because there is a monetary payoff to the big corporations and wealthy individuals who fund campaigns like this one. Their anti-government campaign is buying tax cuts, subsidies, deregulation or just non-enforcement of regulations, waivers or just lack of enforcement of anti-trust rules, military contracts, and a long list of other financial benefits.

    Meanwhile people interested in democracy and good government are largely unfunded. They are largely shut out of TV and radio. For example, you rarely see a representative of labor on TV, radio or in the news. Bloggers reach a lot of people, but nothing like the talk radio/TV empire of the right. So how can we do this better?

    We will be talking about this Tuesday afternoon at the Americas Future Now conference session, Can Bloggers Bring Populism To The Potomac? with Digby, Sara Robinson, Zach Carter, Terrance Heath, RJ Eskow and myself.

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

    May 26, 2010

    Teacher Layoffs Loom Nationwide, DC Restaurants Humming

    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.

    Some say that "government can't create jobs." Others respond "unemployed people can't create votes." Meanwhile, conservatives, whose policies put so many people out of work, now say unemployed people are lazy and should not be collecting unemployment benefits.

    Washington, DC is the center of a strange Information Deficit Disorder. The restaurants in DC are humming, the median income is really high, the Pentagon contracts are flowing. Seriously, pick a DC-area zip code, say 22314, and go to this site: "Dollar Amount of Defense Contracts Awarded to Contractors in this Zip Code from 2000 to 2009: $7,086,397,848." Even better, scroll down the page and look at some of the contracts and amounts awarded. So-and-so Consulting, $54,024, 204. So-and-so Associates, $1,698,274. Even better, see how many have the same address. This is just one zip code. There are pages and pages and pages like this for DC-area zip code after zip code. Clearly it is really, really good to be part of the military industry.

    So from DC's viewpoint things are doing mighty fine. One Representative from Pennsylvania actually said the other day, "businesses back home complain that they want to start hiring but are getting few applicants because Congress has repeatedly extended unemployment benefits." Her district has 10% unemployment. There appear to be 14,900 people unemployed just in the city of Erie, which is in her district. Here are ALL 99 jobs advertised in the local paper.

    Maybe this strange DC Information Deficit Disorder explains why hundreds of thousands of teachers are about to be laid off around the country because Congress isn't interested in acting. Republicans, who want schools privatized, call it a "bailout." Fox News, Teachers Seek $23b- Lifeline or Bailout?,

    Education analyst Lindsey Burke of the Heritage Foundation ... questions the wisdom of funneling federal taxpayer funds, in any amount, to the public school system as it is presently structured. [. . .] they dont need another bailout from Washington for public education.

    Sen. Harkin's $23 Billion Teacher Bailout Stalls

    Iowa Sen. Tom Harkin's $23 billion amendment to bailout 300,000 teachers who will otherwise lose their jobs has stalled. “I have no Republicans who want to vote for it," he told Capitol News Connection. Meanwhile, in the House today, the Secretary of Education and top Democrats in the House struggle to drum up support for the same measure.

    It isn't so good to be part of the teaching profession right now. Or a parent, for that matter. In fact, these days it isn't so good to be part of almost any profession except military or Wall Street.

    I have been attaching the following paragraph to several posts about the jobs emergency:

    President Obama has talked about a bold, large scale vision for a new direction for the country. But Congress and the President are getting trapped in austerity budget thinking that won’t allow them to go in the direction of stimulus and helping regular people. If there is to be no money because of an austerity budget then American competitiveness, the economy and the mood of the public can only get worse. Do the DC elites actually believe the public is going to reward this with votes?


    NOTE: Part of the America's Future Now conference in Washington D.C. from June 7-9 will be devoted to strategy on how the progressive movement can fight the deficit cutters. Speakers such as Van Jones, House Speaker Nancy Pelosi, Howard Dean, AFL CIO President Richard Trumka, Arianna Huffington will offer a build vision for how the progressive movement can rebuild America's economy and put people back to work. Click here to attend.

    Posted by Dave Johnson at 11:20 AM | Comments (0) | Link Cosmos

    May 24, 2010

    Are You Unemployed Because You Are Lazy?

    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.

    Are you still unemployed? Obviously it is because you are lazy. At least, many members of Congress think so, anyway.

    And besides, cutting the deficit -- caused by tax cuts for the rich and massive military spending increases -- is much more important than paychecks for Americans. The solution to the deficit -- caused by tax cuts for the rich and massive military spending increases -- is to cut back on things that help the American public.

    Here is Senator Gregg on CNBC (Senate salary $174,000, see benefits below**), saying that unemployment checks mean people are "encouraged not to go look for work" and "don't want to go look for work":

    And this in the news today, In Congress, spending measures meet bipartisan resistance,

    "It's time to start paying for things," said Rep. Kathy Dahlkemper (D-Pa.), a freshman who voted for last year's economic stimulus bill but said she is likely to oppose the next spending package, scheduled to hit the House floor Tuesday. "We've done some good things, but one of the best things we could do right now is get control of our fiscal house."

    . . . Dahlkemper, facing a well-funded Republican car dealer in the blue-collar district she seized from the GOP in 2008, said businesses back home complain that they want to start hiring but are getting few applicants because Congress has repeatedly extended unemployment benefits.


    and
    "At some point we have to pivot" away from saving the economy and start reducing the deficit, said Sen. Robert P. Casey Jr. (D-Pa.).

    So remember, the deficit -- caused by tax cuts for the rich and massive military spending increases -- has to be brought down and the way to bring down the deficit -- caused by tax cuts for the rich and massive military spending increases -- is to cut back on things that help the American public, and cut back on the investments in infrastructure (the seed corn) that bring future economic growth. But not to do anything about the cause of the deficits: tax cuts for the rich and massive military spending increases.

    So if you are unemployed, just remember, in Washington the people who put $13.89 trillion at risk to bail out the big Wall Street firms, $4.71 trillion disbursed with $2.01 trillion still outstanding, think this is because you are lazy.


    **Senate benefits:

    Along with earning salaries, senators receive retirement and health benefits that are identical to other federal employees, and are fully vested after five years of service. Senators are covered by the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS). As it is for federal employees, congressional retirement is funded through taxes and the participants' contributions. Under FERS, senators contribute 1.3% of their salary into the FERS retirement plan and pay 6.2% of their salary in Social Security taxes. The amount of a senator's pension depends on the years of service and the average of the highest 3 years of their salary. The starting amount of a senator's retirement annuity may not exceed 80% of their final salary. In 2006, the average annual pension for retired senators and representatives under CSRS was $60,972, while those who retired under FERS, or in combination with CSRS, was $35,952.

    NOTE: Part of the America's Future Now conference in Washington D.C. from June 7-9 will be devoted to strategy on how the progressive movement can fight the deficit cutters. Speakers such as Van Jones, House Speaker Nancy Pelosi, Howard Dean, AFL CIO President Richard Trumka, Arianna Huffington will offer a build vision for how the progressive movement can rebuild America's economy and put people back to work. Click here to attend.

    Posted by Dave Johnson at 3:22 PM | Comments (0) | Link Cosmos

    Video Interview: Scott Paul Of AAM On China Dialogue

    Today I was able to conduct a short webcam interview with Scott Paul, Executive Director of the Alliance for American Manufacturing. The occasion is this week's Us-China Strategic and Economic Dialogue taking place in Beijing. This dialog is a series of meetings between top-level officials of both governments on a number of issues. Secretaries Geithner and Clinton are leading the US delegtation. The trade imbalance between the US and China is one of the top issues being discussed.

    Scott has posted a video at the AAM manufacturethis blog, titled THE 15 NUMBERS YOU NEED TO KNOW, which discusses AAM's 15 Numbers You Need to Know before the U.S.-China Strategic and Economic Dialogue in Beijing next week. (Example: 2.4 million: Number of U.S. jobs lost or displaced due to U.S.-China trade imbalance, 2001-2008.)

    Here is our interview with Scott Paul:

    Scott will be speaking on Making It In America at the America’s Future NOW! Conference in Washington, DC, June 7-9. Click here to register for the conference.

    Posted by Dave Johnson at 2:55 PM | Comments (0) | Link Cosmos

    May 21, 2010

    Week Of Action On 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.

    On the one side there are millions of people needing jobs and millions more "underemployed," the economy is still mired in a very, very slow recovery that is a recovery only in the technical sense, an increasing wave of foreclosures that has reached into the "prime" loans and 1 out of every 7 mortgages has at least missed a payment and has at worst stopped paying.

    Foreclosures continue to rise.

    Businesses are not hiring. People need jobs that only government programs can provide. The reason only government can is because of the spending gap created by the economic crisis.

    The Spending Gap

    This chart from Brad DeLong explains why and by how much government needs to make up the difference:

    Deficit Hawks Following The Plan

    On the other side are the "deficit hawks," driven by anti-government ideology, following The Plan of the Reagan Revolution:


    • Step 1: Cut taxes to "cut the allowance" of government so that it can't function on the side of We, the People. Intentionally force the government into greater and greater debt.

    • Step 2: Use the debt as a reason to cut the things government does for We, the People.. When the resulting deficits pile up scare people that the government is "going bankrupt" so they'll let you sell off the people's assets and "privatize" the functions of government. Of course, insist that putting taxes back where they were will "harm the economy."

    • Step 3: Blame liberals for the disastrous effects of spending cutbacks.

    Now, true to the plan, Bush leaves behind a $1.4 trillion deficit and the corporate/conservative opinion-shapers are saturating us with warnings that the government is going to go bankrupt if we don't cut back. Typical of the debate, Jobs Bill Funded by Higher Buyout Tax Faces Friction on Deficit

    A jobs bill containing a proposal to more than double taxes on managers of buyout firms is running into resistance from House and Senate lawmakers worried that the legislation will widen the U.S. budget deficit.

    Facing A Lost Decade

    Paul Krugman warns that we face a "Lost Decade" if we listen to the deficit cutters now,

    But the truth is that policy makers aren’t doing too much; they’re doing too little. Recent data don’t suggest that America is heading for a Greece-style collapse of investor confidence. Instead, they suggest that we may be heading for a Japan-style lost decade, trapped in a prolonged era of high unemployment and slow growth.

    Don't Fall For It

    President Obama has talked about a bold, large scale vision for a new direction for the country. But Congress and the President are getting trapped in austerity budget thinking that won’t allow them to go in direction of stimulus and helping regular people. If there is to be no money because of an austerity budget then American competitiveness, the economy and the mood of the public can only get worse. Do the DC elites actually believe the public is going to reward this with votes?

    The corporate conservatives know darn well that government job-creating programs will help and that is why they are trying to block them. See what one of the top anti-government, anti-spending conservatives has to say in Gingrich: Obama a One-Term President Because Team Can't Create Jobs. From the video: "No ability to craft positive programs that work. ... You don't have anything like an appropriate level of focus on job creation in this administration."



    The only way to realistically cut the deficit is to invest in our economic future.

    This means maintaining and modernizing our infrastructure, increasing educational opportunities for our people, investing in the new Green Manufacturing Revolution and government programs to create jobs now. Common-sense changes in taxes can help pay for jobs programs. For example, what about getting rid of the amazing tax break for hedge fund managers? At the same time it makes sense to bring taxes on the wealthy and corporations back to pre-Reagan/pre-borrowing levels to fight the deficits (that the tax cuts created in the first place) and decrease the concentration of wealth that is killing our democracy.

    WEEK OF ACTION

    The Jobs For America NOW coalition is organizing a Week Of Action next week, around the country. Please see Week Of Action Events. Also, see the resources on the Jobs for America now site including the click to call feature at Finish the Job on State Aid, Unemployment insurance and COBRA Health Subsidies NOW

    More JOBS resources:

    Citizens for Tax Justice has a report on The American Jobs and Closing Tax Loopholes Act of 2010.

    The American Federation of Teachers is organizing a “Pink Hearts, Not Pink Slips” campaign. "Schools throughout America are facing devastating cuts. Our children’s future hangs in the balance."

    Our government didn’t walk away from Wall Street. We should demand no less from them when it comes to saving our children’s future. We must voice our support for federal legislation that will provide $23 billion to help school districts avoid layoffs and cuts in vital services for children. Help us preserve the education lifeline our students deserve.


    NOTE: Part of the America's Future Now conference in Washington D.C. from June 7-9 will be devoted to strategy on how the progressive movement can fight the deficit cutters. Speakers such as Van Jones, House Speaker Nancy Pelosi, Howard Dean, AFL CIO President Richard Trumka, Arianna Huffington will offer a build vision for how the progressive movement can rebuild America's economy and put people back to work. Click here to attend.

    Posted by Dave Johnson at 12:57 PM | Comments (0) | Link Cosmos

    May 14, 2010

    Congress FAILs On Jobs AGAIN!

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

    It is hard to imagine out here in the real world, but there seem to be people in the Congress who think they can get (or deserve to be) re-elected when they are failing to do anything about jobs or extending unemployment and COBRA with unemployment at 10%, underemployment at 17%,and forecasts that say this will go one for years.

    The public certainly is well aware of the disconnect:

    jobsbillboard

    This billboard was put up by a local Buffalo group representing young people, and I recommend clicking through to see their site. Especially if you are a member of Congress.

    Failing is the wrong word this time. Maybe "disgusting" better fits the lack of seriousness of our representatives. Childish and spineless are the words that come to mind. Anti-porn provision sinks Dem jobs bill,

    House Democrats had to scrap their only substantive bill of the week Thursday after Republicans won a procedural vote that substantively altered the legislation with an anti-porn clause.

    Quick backstory: Bush's SEC, the people who were supposed to be regulating Bernie Madoff and Wall Street banksters were instead spending days surfing for porn on their computers. Republicans -- the people who put the porn-surfers into the SEC -- offered an "anti-porn" amendment to the jobs bill.
    That provision scared dozens of Democrats into voting with Republicans to approve the motion to recommit. After it became clear the GOP motion was going to pass, dozens of additional Democrats changed their votes from "no" to "yes." In the end, 121 Democrats voted with Republicans -- only four fewer than the number of Democrats who voted with their party.

    Because of idiocy like this,and a few other killing provisions they had to set aside the bill. The unemployed sit and wait for news. Playing games and posturing when we have a serious set of problems to solve, and real people out here in the real world are facing the worst crisis since the Great Depression. You can try to blame this on the obvious conservative obstruction strategy to stop the government from working, but spineless Democrats were stampeded into going along with it! Who's "not serious" now? If there are disruptive kids in the back of the class snickering and giggling, you aren't supposed to join them.

    A new WSJ/NBC poll came out yesterday. 72% disapproval of Congress. (I wonder why?) Highest priority: Job creation and economic growth 35%, Deficit and government spending 20%. (Guess which one the out-of-touch DC elite are concentrating on.)

    Listen, Congress, in DC you are employed, or you wouldn't be there. And the people you know are probably all employed. The lobbyists swarming you are employed. The people in the nice restaurants you enjoy are employed. But out here where I live the "official" unemployment rate is 13%. People we all KNOW are out of work and getting desperate. People in our families are out of work and getting desperate. 10% is NOT OK!

    Trillions given to Wall Street, used to pay bonuses, FAIL on jobs. Do they think the public doesn't see that? What is the matter with these people?

    Lesson: It's the jobs, stupid. JOBS FOR MAIN STREET!

    Sign up here for the CAF daily summary.

    Update I got fooled by that billboard. The group behind it is just another right-wing front group. Sorry.

    Posted by Dave Johnson at 10:53 AM | Comments (1) | Link Cosmos

    May 12, 2010

    Govt Spending: JOBS Today, Payoffs For Years To Come

    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 commute between Baltimore and DC is the 4th-most congested route in the country. But a high-speed rail line would make this trip an 18-minute breeze (and also free up some of that congestion). They have been talking about building this rail line since 1994. Meanwhile other countries have been doing.

    Japan, Europe and now China are known for their efficient, high-speed rail transportation systems.

    By 2012, just four years after it began its first high-speed passenger service, China will have more high-speed train tracks than the rest of the world combined.

    Why is China inveswting so heavily in high-speed rail infrastructure? What does this investment bring to China?
    ...designed to boost exports and revolutionize the flow of people and goods in the world's fastest-rising economic powerhouses.

    "Just like our investment in the highway system in the 1950s and the rail system in the late 1800s, this will pay huge dividends for China to years to come,"

    Governement spending pays dividends for years to come

    That's right. Government spending is investment that pays off. It pays off in jobs today, and it pays dividends for years to come. As I wrote the other day in China's Stimulus Payoff "because China's government has invested heavily internally in high-speed rail, China is now in a position to bid on our own high-speed rail projects."

    Japan also invested heavily in high-speed rail, and they are also bidding on our (talked about) rail projects. In the news: LaHood Rides 502 KPH Maglev Train as Japan Seeks U.S. Sales

    Transportation Secretary Ray LaHood rode on a 502 kilometer-per-hour (312 mph) magnetic- levitation train in Japan, stoking optimism that the Asian nation may be able to sell the technology overseas.
    ...
    Japan’s government has pledged to support JR Central’s bid to build the Washington-Baltimore line, possibly including loans from a state-owned bank. Maglev trains float above the tracks and are propelled along by magnetic currents.

    Other countries understand that investing in infrastructure creates jobs today and enables economic growth later. Other countries understand that having a coordinated nation industrial/economic policy helps their businesses compete in the world's economy. Other countries are swooping down on us, bidding for our minuscule projects and selling us their green energy systems. Meanwhile we are mired in this weird "free market" anti-government ideology that keeps us from taking control of our destiny and our economic future.

    Instead of talking about cutting back on spending, we should instead be investing heavily in our people and our infrastructure.

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 9:43 AM | Comments (0) | Link Cosmos

    May 11, 2010

    It's The JOBS, Stupid! Why DC Elites Don't See This

    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, and the "Virtual Summit on Fiscal and Economic Responsibility for People Who Did Not Wreck The Economy." I am a Fellow with CAF.

    People care about jobs. They still care about jobs. And politicians who don't care about jobs will lose their jobs, because that is what motivates voters.

    Polling at Pollingreport.com proves that people are much more concerned about jobs than deficits. (Note there are some polls that show equal concern, no polls that show deficit with a higher concern)

    * FOX News/Opinion Dynamics Poll. May 4-5 Economy and jobs 47% Deficit, spending %15
    * BS News/New York Times Poll. April 5-12 Economy/Jobs 49% Budget deficit/National debt 5%
    * CNN/Opinion Research Corporation Poll. March 19-21 The economy 43% The federal budget deficit 8%

    Lesson: Spending and deficits matter, but jobs matter more. When Dick Cheney said, "Reagan proved deficits don't matter" he meant that voters didn't vote against politicians like Reagan and Bush for running up huge deficits. Bush's tax cuts and military spending increases left us with a $1.4 trillion deficit, but that isn't the reason people voted for Obama. The biggest reason was that we were losing millions of jobs.

    Why don't DC elites see this?

    It is obvious that people vote on jobs, not deficits. But for some odd reason the DC politicians don't seem to grasp that. I think I know part of the reason why they don't. If you are in DC the "information environment" is making it look as though the public is clamoring about deficits and don't care that much about jobs.

    DC is a manufactured information environment

    People in DC see things differently because there is a manufactured environment there. The one time when lobbyists do care about manufacturing is when they are manufacturing the appearance of public support for their issue.

    If you are trying to influence national policy you influence DC. You spend a lot of money to make the DC opinion leaders think that your issue is urgent and the public is demanding action. You create "astroturf" which is a name for a lobbyist-manufactured appearance of grassroots support. You get your stories into the morning Politico, which every DC staffer reads on the train into the capital, but no one outside of DC cares about. You get the cable news show producers to book your talking heads. You wine and dine (and get lucrative speaking engagements for) the DC punditocracy so they'll talk urgently about your issue. You put ads on the DC radio stations.

    After a while everyone in the DC area thinks your issue is the only thing voters are concerned about, while outside of DC everyone wonders why DC people are talking about something so idiotic and unimportant to regular people.

    Deficits: a manufactured drumbeat

    There is a well-funded effort to stampede Congress into thinking there is an urgent voter concern about deficits. One source of the manufactured concern is a Wall Street billionaire named Peter G. Peterson, who has for years been trying to get the Congress to cut the Social Security benefits that people paid for all of their working lives. Recently, for example, he made a deal with the Washington Post to print stories for the DC elite to read, about how the deficit needs to be cut and that "entitlements" like Social Security are the problem that needs fixing. There are numerous other examples of the deficit drumbeat manufacturing process..

    Tea Party vs real grassroots concerns

    Example: The other day there were mass rallies all around the country, by people who want the government to act on immigration. Hundreds of thousands of people turned out in cities from LA to New York. But if you are in DC, this barely registered. In DC it is "Tea Party, Tea Party, Tea Party." A few hundred people turn out (also here, here, here,here) for Tea Party rallies, and "the Tea Parties" are just about the only thing in the news, and the discussion topic on the cable news shows for weeks. (And never mind the Coffee Party, with more members and more events than the Tea Party.)

    Politicians should remember the bailouts

    These were just a few examples of how it works. And, for sure, it works. The process is so well-tuned that DC politicians can be stampeded easier and faster than Wal-Mart shoppers promised $100 flat-screen TVs on Black Friday.

    Remember the Wall Street bailouts, with the Bush administration demanding they be passed in just 48 hours, or the entire world would end? (Remember "non-reviewable by any court or any agency?")

    So how is it working out for politicians who were stampeded into voting for bailouts for Wall Street instead of jobs for Main Street?

    Lesson: It's the jobs, stupid. JOBS FOR MAIN STREET!
    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 12:10 PM | Comments (0) | Link Cosmos

    May 3, 2010

    We Need Jobs, Jobs, Jobs. And 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.

    Things are good for the plutocrats. Stock market soaring, bonuses are big... Things are going mighty fine. So fine, in fact, that the urgency of extending unemployment, COBRA and programs to help the people harmed by the financial disaster is moving off the table.

    But out here on Main Street we need jobs, jobs, jobs. And we need jobs, too. You just hear people say this over and over, and it's like we're told in response, "OK go to bed now, children."

    Here's the deal: Say what you want about bailing out Goldman Sachs and AIG pass-throughs, and letting the FASB suspend "mark to market" accounting, it was unemployment benefits and the FDIC and the stimulus' job-creation that kept this economic crisis from turning int a full-blown depression. And it is still unemployment benefits and FDIC and the stimulus' job creation that are preventing it from happening. They may have hidden the bad assets on the banks' books by using a "mark to model" trick, but the bad assets are still there. The private-sector jobs are not.

    We need a real economy, and real jobs for real people. If the plutocrats think they can have an economy without all of those people who are right now losing their benefits, losing their homes, losing their dignity, then we might all be in for a surprise. We need jobs. And that requires government action. If the available money goes instead to deficit reduction, you can't create the jobs. You can't create the green jobs that will drive the economy of the future, you can't keep the teaching jobs, and you won't keep the stimulus jobs.

    Why isn't the Local Jobs For America bill on the front burner of the Congress?

    We need a new WPA program to directly create jobs.

    We need unemployment benefits and COBRA extended -- both the subsidies and COBRA itself.

    What is the matter with these people? Do they really think an economy of, by and for the rich and only the rich can really work? It's been tried, and the results aren't usually pleasant:

    guillotine

    Oh, did I mention that we need jobs, and we need government action to create jobs, and in the meantime we need unemployment and COBRA extended?

    Sign up here for the CAF daily summary.

    Posted by Dave Johnson at 11:59 AM | Comments (0) | Link Cosmos

    April 16, 2010

    A Tax Trick That Forces Companies To Close Factories

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

    Yesterday was April 15, so I wrote about Tax Tricks. Here's a tax trick to talk about: Offshore Tax Havens for corporations.

    Here's one way that offshore tax havens work. You make an item in one country, and sell it at cost to a subsidiary that is based (post office box) in a tax haven country with no or low taxes. So there is no profit to report in the country that it was made in. Then, your company or another subsidiary buys it for import in the US, for a price near to the amount the product will be sold for here. So when it sells, there is no profit to be taxed here. All the profit occurs in the low-or-no tax country. We, the People collect no taxes with which to pay for the schools and roads that make our economy competitive.

    This tax trick encourages companies to move offshore, closing factories, laying off workers, kill the local suppliers and force costs onto the community. So not only are we losing the tax base and suffering the loss of the jobs and factory, we're picking up many of the costs. When a company like Whirlpool says they have to close a plant and destroy a community for competitive reasons, it's because they can do it, and if they don't their competitors will. If their competitors do and they don't respond they lose out, even to the possible point of going out of business (and closing factories and destroying communities.)

    Don't blame the companies. Companies do what we let them do. If you don't take advantage of this your competitors will. If your competitors gain enough advantage and you don't you even face going out of business -- and closing factories, destroying communities, putting the costs on the public etc. So by allowing this, Congress forces companies to do this. The word you hear is "encourages" but really, in a competitive environment, allowing it at all forces not encourages.

    It is OUR job to set up the playing field on which these companies compete and to define the rules they will use. Zach Carter writes in 10 Ways to Force the Stinking Rich to Share Their Wealth,

    According to the Government Accountability Office, 83 of the 100 largest American corporations (pdf) engage in this kind of tax evasion. All of those companies have lobbyists.
    These companies do it because we let them, which means we make them do it.

    Congress: FIX IT!

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    Posted by Dave Johnson at 10:06 AM | Comments (0) | Link Cosmos

    April 14, 2010

    A Wealthy Few Pick Up The Cash, We Pay The Costs

    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.

    A few weeks back I wrote about Whirlpool closing their Evansville, Indiana plant and moving the work to Mexico. I wrote about the lunacy of an economic system that encourages companies to destroy lives, communities and the very economy that the Whirlpools depend on. This company was taking stimulus dollars with one hand and laying people off with the other.

    Whirlpool did this because they could do it, making a wealthy few a bit more wealthy, and because you and I - not Whirlpool - have to pick up all the costs. This is called externalizing costs. It means you and I pick up the costs and an already-wealthy, connected few pick up the cash. It's the way our system currently is designed.

    A step toward a solution to this problem would be to require companies to start estimating the externalized effects of their actions. What is the cost of cleaning up all the discarded cigarette butts? What is the cost of cleaning up the trash near a McDonald's? What are the costs from the health effects of added salt or sugar? So how about requiring companies to just estimate externalized costs so that We, the People can start getting a handle on this problem. Just start Is that too much to ask?

    Now there is a study of the ripple effects of the Evansville plant closing. The full study, Layoff at Whirlpool: Costs to the Evansville Metro Area and Indiana Taxpayers, written by Greg LeRoy, executive director of Good Jobs First, concludes that direct costs to the community (us) will include:

    - An additional 1,536 “ripple effect” jobs, for a total loss of 2,502 jobs;
    - The loss of $138 million in income, including about 90 cents in additional income lost for every dollar lost by a Whirlpool employee; and
    - A decline in tax revenues of $17.7 million, especially property, sales and both personal and corporate income taxes.

    But that's not all.

    This taxpayer-cost estimate... does not include substantial lost federal revenues... Nor does it include social safety-net programs to assist the dislocated workers. However, for one such program alone we conservatively estimate that: - Unemployment Insurance Benefits for the dislocated Indiana Whirlpool workers will cost more than $4.15 million....

    Combining tax losses with Unemployment Insurance costs generates a conservative taxpayer-cost estimate of more than $21.8 million—or $22,588 per worker dislocated in Indian