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:
Do I have this right? Republicans are demanding that Atty General Holder turn over documents that incriminate the Obama administration and voted to hold him in contempt because he hasn’t done so. He has turned over thousands of documents, but since none are incriminating they are furious.
This reminds me of when Clinton was President and Republicans launched hundreds of “investigations.” No evidence of any wrongdoing ever turned up, and this was obviously proof there was a vast cover-up going on.
Also we invaded Iraq because Saddam wouldn’t turn over the WMD.
For conservatives reading this and not getting the point, Iraq didn’t have any WMD to turn over.
The student loan deal is badly needed. It should have just been extended – duh! But the 1 percenters took it hostage and demanded their pound of flesh before We, the People can preserve even this little bit of what we do for ourselves. So as part of the “sweetener” for those 1 percenters there is a corporate pension giveaway in the deal that has nothing to do with student loans. It appears they are going to let companies underfund pensions — money that should be set aside for worker pensions tomorrow will instead go into 1 percenter pockets today — and are setting up for a taxpayer bailout (or just stiffing retirees) later.
Pension Calculations Are Tricky But Regulated
This is kind of tricky, so bear with me. When companies (and governments) put money into pension funds they have to calculate how much will be needed to pay the promised pensions. This involves estimating things like how long (and how many) people will live, and how much “return” (interest, stock price increases,dividends…) to expect as the money is set aside. Key point: If you expect a too-high rate of return you can set less aside now (and put it in your pocket,) but when the time comes to pay the pensions you won’t have enough.
This is supervised by government standards and regulations. They say how much of a rate of return is allowed to be used in these calculations. A higher expected-rate-of-return allowance means less has to be set aside, so more money can go into 1 percenter pockets. So there is a lot of pressure from corporations to let them get away with overestimating, and therefore putting more in their pockets today. Since this is complex, it is easier to get away with diverting promised-worker-retirement money into 1 percenter pockets.
This student loan deal apparently lets corporations claim a higher expected rate of return, thereby diverting more money today into 1 percenter pockets.
Money Into Worker Pensions Or 1 Percenter Pockets?
For a long time the government has been allowing pension funds to use a too-high estimated rate of return, with the result that many pensions are now underfunded. Money that should have gone into savings to pay worker pensions was diverted into 1 percenter pockets, either through improved corporate bottom lines in the case of companies, or through lower taxes in the case of state & local governments. (Of course, many companies shifted worker-pension promises into 1 percenter pockets using the 401K scam — you fund your own retirement, on your own, with little help, and have to know how long you’ll live, and it turns out badly every time — but that’s for another post.)
In fact, this worker-set-asides-for-later vs 1 percenter-pockets-today issue is similar to what happened with the Social Security Trust Fund. Money from workers was set aside into the fund but was used to pay for tax cuts (and massive military increases). Now 1 percenters are demanding austerity — cutbacks in the things We, the People do for each other — instead of workers getting the money back from where the money went, namely the 1 percenters.
And since this is about money for worker retirees, and retired workers don’t have big, influential PR firms while 1 percenters do, it is convenient and easy to blame workers when the promised money isn’t there for their retirement.
The Much-Hyped Public-Employee Pension Crisis
The supposed public-employee pensions crisis is partly the result of state and local governments not setting aside enough money to pay up on pension promises (because of tax cuts). It is also partly caused by Wall Street scamming on those same governments as they got into riskier investments trying to get a high enough rate of return to make good on their pension promises. But the blame is being placed on the workers themselves.
The post Discover The Network Out To Crush Our Public Workers traced just a few of the corporate-conservative think tanks (really just PR firms) promoting the idea that public-employee unions are responsible for pension shortfalls. Almost all of these organizations traced back to Wall Street firms and individuals for their governance or funding. They are engaged in a campaign to divert attention and blame the workers themselves for pension shortfalls,
These corporate/conservative organizations are very good at manipulating the media and public opinion — it is their purpose. Their “experts” are well paid and always available to talk to reporters, appear on TV and radio shows and write articles and opinion pieces for newspapers, blogs and for their network of similar organizations. Their “reports’ and “studies” reach the conclusions that fit the strategy, and are crafted to sound just right. And there are so many of them! The result is development of “conventional wisdom” about what is going on in our society. This is why that conventional wisdom more and more reflects the corporate/conservative line. And right now the corporate conservative line is that we should think that public employees and their unions are responsible for state and local budget shortfalls.
See also Understanding The Attacks On Public Employees, Ten Holiday Attacks On Public Employees and Are Public Employee Unions Strangling Us? Also, Rick Smith And Dave Johnson Counter The Attack On Public Employees.
Others See It, Too
NY Times Editorial, The Deal on Student Loans,
The pension provision is not ideal. It could mean that more companies will underfinance their pension liabilities, shortchanging employees down the road. Lawmakers have tried to address that potential shortfall by strengthening the agency that insures private pensions with more money from higher premiums.
Thus from the Competitive Enterprise Institute, usually a most unreliable source. (The check from the big corps who want to underfund pensions must have been late.) In this case it is the same gimmick but added the the highway bill…: Threat of Pension Fund Bailouts Lurks in Senate Highway Bill, “Pension Smoothing” a License to Make Up Numbers,
The bill … would amend the Employment Retirement Income Security Act (ERISA) to allow for an accounting gimmick known as “pension smoothing,” whereby pension managers spread losses out over several years, while overestimating projected investment returns.
Specifically, this provision would expand the range of allowable projection figures, starting this year at a 20 percentage point range, to 60 percentage points after 2015. This is essentially a license to make up numbers for income projections four years out from now. …
“This accounting trick will likely expose taxpayers to potential pension fund bailouts in the future. ” …
“It would further remove pension investment return projections even further from reality, by expanding the range of allowable projections so broadly as to render them meaningless.”
Making Things Worse
To get a deal that keeps student-loan interest rates low enough for more people to afford to go to college, we had to pay off the 1 percenters with this “pension-smoothing” deal. Such is the way of Washington since we shifted from a democracy (rule by the people, for the people) to a plutocracy (rule by the rich, for the rich). Or, in this case a 1 percenter kleptocracy (rule by the rich, stealing from everyone).
But make no mistake, this deal makes the country’s future pension problems even worse. It diverts even more money from promised pensions into 1 percenter pockets. The result will be clear in 10, 20 or 30 years when people are retiring and the money isn’t there. Taxpayers will be asked for ever more “austerity” to cover money that was diverted to the 1%.
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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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.
plu·toc·ra·cy noun \plü-ˈtä-krə-sē\
1: government by the wealthy
2: a controlling class of the wealthy
Our political leaders dance with the ones that bring them. Increasingly they are dancing with the billionaires and their giant corporations.
Our politicians are doing and saying increasingly incomprehensible things. The separation from regular people is unbelievable. But in politics you “dance with the one that brung ya,” and these things become comprehensible and believable when you look at who is bringing them to the dance.
In a democracy a successful business is the result of our investment in infrastructure, education, and a system that enables our businesses to thrive. A business can’t deliver products except over the roads or ports or the Internet our government built. Our police and firefighters protect our businesses. Our schools and universities train and educate the inventors and managers and line workers. Our scientific research brings about the innovation that leads to new technologies and products.
“Entitlements” are the things We, the People are entitled to as citizens of a democracy. Those who do well as a result of our investment in our system pay back through taxes, good jobs and great products. When we were a democracy we were entitled to a minimal level of retirement, and health care, education, protection if we lost our jobs, protection of our environment, protection from corporate fraud, and other things that are now disappearing.
Now that democracy is gone, a wealthy few are living off our past investment, and cutting back on the things we used to do for each other.
Why All The Cuts, No Jobs?
Here is the reason that our leaders are cutting back on the things our country does for We, the People, and are not working very hard to do anything about the high unemployment and economic troubles most of us are feeling:
2010: Corporate Profits Were the Highest on Record Last Quarter
2011: Corporate Profits At All-Time High As Recovery Stumbles
2012: Corporate Profits Just Hit An All-Time High, Wages Just Hit An All-Time Low
2012: Bank CEO pay rises. Corporate profit margins rise. Worker wages, not so much.
2012: Richest 1 Percent Account For Nearly All Of U.S. Recovery’s Gains: Report
The billionaires and their giant corporations are doing just fine, thank you.
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.
A golden oldie (updated a bit): Democracy Or Plutocracy? A Chart
|We, the People||Wealthy Few|
|One Person One Vote||One Dollar One Vote|
|Taxes on the Wealthy||Tax Cuts for the Wealthy|
|Public Schools||Private Schools|
|Studying the arts, literature, history, philosophy, etc.||Mocking people for studying the arts, literature, history, philosophy, etc.|
|Jobs programs||Bank Bailouts|
|Express Lanes for 2 or More People||Express Lanes for 2 or More Dollars|
|Security Lines at Airports||Special First-Class Security Lanes at Airports|
|Public Investment||Private Investment|
|Public Transportation||Private Jets|
|Rule Of Law||Above The Law|
|Sustainable growth||Polluter Growth|
|Medicare-For-All||Healthcare For Profit|
|Clean Elections||Rigged Elections|
|Savings Accounts||Offshore Accounts|
|Credit Card Debt||Credit Default Swaps|
|Free Will||At Will|
|Healthy Communities||Gated Communities|
|George Baily||Henry F. Potter|
|America the Beautiful||America the Profitable|
|The Many||The Rich|
What a complex web we weave, when our lives are ruled by greed. Verizon is an example of what corporate greed (the 1%) is doing to our middle class and vulnerable (the 99%). It is a highly profitable company, just gave its CEO a huge raise, but dodges its taxes (schools, roads, police, firefighters for the 99%), and to top things off is asking its workers to take cutbacks. So its workers are going over the head of the CEO, and look what they find.
Verizon is a highly-profitable company. Last August (yes this has been going on a long time) I wrote in, Verizon’s Workers Strike Back At Corporate Greed — You Can Join Them!
The giant telecom company Verizon, currently raking in the billions ($6 billion in profits and a $10 billion dividend on $108 billion in revenue last year), while paying no taxes, is putting the squeeze on its workers, and they are fighting back. With all those profits, the company has been consumed by greed: Now Verizon is asking for $1 billion in concessions from its workers.
Verizon’s directors recently approved a 200% increase in compensation for the CEO, to $23.1 million. But Verizon continues to demand cuts in compensation from its workers of at least $10,000 a year.
Taxes are how our government does what it does for We, the People and our small and medium businesses. Schools, teachers, police, firefighters, courts, ports, enforcing environmental regulations, enforcing worker safety regulations, enforcing consumer-protection regulations, etc. Verizon, with all of its profits, dodges taxes. In November’s How Wealthy Companies Like Verizon Avoid Taxes,
Verizon needs to open a call center, which means a few new low-paying jobs. They get local governments bidding against each other, offering all kinds of tax breaks if only they’ll bring those jobs there. Before the bidding war these jobs will be in the economy somewhere, but local schools, police, etc. will be funded. After the bidding war the same number of jobs open up but schools, police, etc. are not funded — and the 1% are that much richer. Company after company does this. Community after community, desperate for jobs, loses. Schools, police, infrastructure go unfunded. Just who does this help? The 1%.
… [Verizon] aggressively manipulated state tax rules, demanded subsidies, and used other methods to end up with a negative federal income tax rate, and receiving state and local tax subsidies in at least 13 states. When setting up call centers, for example, they offer localities the prospect of jobs that that will be created somewhere in US, where the company would have paid taxes to fund schools and infrastructure, but get the localities bidding against each other until they end up making a profit instead of paying taxes.
45,000 Verizon’s workers are are still trying to get a fair contract and are now turning to Verizon’s directors, asking them to get this company to act responsibly. But looking into Verizon’s corporate governance seems to reveal the very kind of web of 1% greed that is destroying our country.
Friday Verizon’s workers launched protests aimed at members of Verizon’s Board of Directors, asking them to take responsibility and get the company to negotiate and give workers a fair deal. Joined by members of the IBEW, Jobs with Justice, Restaurant Opportunities Center (ROC), AFL-CIO and the Change to Win coalition, actions took place at nearly 300 locations across the country (300 protests, but not in the newspapers or TV news), including Chicago, Los Angeles, New York, Miami, Boston and Washington D.C., as well as in San Juan, Puerto Rico.
Targeted in these protests are directors Richard Carrión, CEO of Peurto Rico’s Banco Popular, and Clarence Otis, CEO of Darden Restaurants. Looking into Verizon’s corporate governance you find that Carrión and Otis currently are being criticized for their own business practices at their companies Banco Popular and Darden Restaurants.
Richard Carrión has been a Verizon director … not quite forever, just since 1997. He is a member of the Corporate Governance and Policy Committee and the Human Resources Committee. Carrión has also been a board member of the Federal Reserve Bank of New York since 2008. He serves on that board (sits in that web?) with Jamie Dimon of JPMorgan Chase, who is currently in the news. (Previous directors include Stephen Friedman who resigned but was not prosecuted – who is? – after it was disclosed he purchased millions of dollars of Goldman Sachs stock while serving both as a director of the bank and of the NY Fed while the Fed was bailing out AIG, which directly benefited Goldman Sachs and bolstered its stock.)
Carrión’s Banco Popular owes taxpayers more than $900 million in TARP bailout money – just one bank in the US owes more. Yet, Carrión’s own compensation has more than doubled since 2009. Meanwhile, under Carrión, the bank has controversially loaned millions of dollars to companies controlled by Carrión’s relatives – much of which has been written off as a loss to the bank.
Bloomberg, N.Y. Fed Director’s Puerto Rico Bank Loses On Nephew’s Loan,
Popular Inc. (BPOP), Puerto Rico’s largest lender, amassed record losses during the credit crisis and got a $935 million injection from U.S. taxpayers. Now a loan to a real estate venture overseen by the chief executive officer’s nephew is burning a hole in the bank’s books.
Popular loaned the money two years ago to a developer controlled by Jose Vizcarrondo, whose uncle, Richard Carrion, is the bank’s CEO … Popular said it wrote off more than half the $15.7 million.
Add that Vizcarrondo, 49, is a Popular board member who until two months ago helped set Carrion’s pay, and the saga exposes conflicts of interest and potential weaknesses in the bank’s governance…
Meanwhile, Clarence Otis has been a Verizon director since 2006 and is a member of the Audit Committee and the Human Resources Committee. Otis has been Chairman of Darden Restaurants since 2005 and CEO since 2004. Darden Restaurants is the largest company-owned and operated full-service restaurant company in the world. The Darden brand includes: Red Lobster, Olive Garden, Longhorn Steakhouse, The Capital Grille, Bahama Breeze, Seasons 52, and Eddie V’s. There are more than 1,900 Darden restaurants.
Otis is also on the Board (web?) of the Federal Reserve Bank of Atlanta.
So, what about Darden? What happens if we pull on the web a bit further? The Restaurant Opportunities Center (ROC) is an organization working to better the conditions of people who work at outfits like Darden’s. From their website,
The mission of the Restaurant Opportunities Centers United (ROC-United) is to improve wages and working conditions for the nation’s low-wage restaurant workforce. ROC-United is the only national restaurant workers’ organization in the United States. ROC-United is the only national organization in the United States dedicated exclusively to the needs of restaurant workers.
In December 2011, workers from the Capital Grille Restaurant stood up for dignity in their restaurant company. On January 31st, Capital Grille workers in New York, Chicago, and in the Washington, DC area filed federal litigation against Capital Grille’s parent company Darden for discrimination and wage theft (Click here to find out more about the lawsuit). On February 15th, workers from Capital Grille in Los Angeles joined the struggle. On February 28th, Miami Capital Grille workers also launched their campaign and added their claims to the litigation.
Dardens was in the news recently, when the Food Chain Workers Alliance (FCWA) released a report, The Hands That Feed Us, looking at wages and working conditions of workers across the entire food chain. A report on the FCWA report, Many Food Workers Keep Working While Sick, Survey Finds, looke at how lack of paid sick days can help spread disease,
Many well-known restaurant chains have been implicated in recent foodborne illness outbreaks. Just take a look at this list of recent Hepatitis A outbreaks tied to sick workers at restaurants like Olive Garden, Quiznos, and McDonald’s. … This spring, the New York City branch of ROC demanded that Darden, which owns Olive Garden and Red Lobster, among other chains, provide paid sick days to protect the health of consumers and employees.
From FCWA, Tell Darden: Take the High Road,
Alliance member Restaurant Opportunities Centers United has launched an exciting new national campaign, Dignity at Darden. In December 2011, workers from the Capital Grille Restaurant stood up for dignity in their restaurant company. On January 31st, Capital Grille workers in New York, Chicago, and in the Washington, DC area filed federal litigation against Capital Grille’s parent company Darden for discrimination and wage theft. Employees at all of the 1,680 Darden Restaurants across America – such as Capital Grille, Red Lobster, and Olive Garden – deserve to be given equal opportunities, to be fully and fairly compensated for their efforts, and to enjoy a safe and healthy workplace. Listen to workers’ stories on the website.
So Verizon’s workers are bringing attention to the conditions at Darden restaurants. With reports that workers at some Darden restaurants are not fully compensated for their work and others have been subjected to racial discrimination, Verizon workers protested these problems at Darden locations across the country as part of last week’s Day of Action.
“Mr. Otis and Mr. Carrión are each paid $230,000 per year to direct Verizon’s business,” said CWA Communications Director Candice Johnson. “It’s time for them to step up and make Verizon management recognize the contributions of front line workers who have helped the company become so successful. Leaving the workers’ contracts unresolved undermines the workforce, hurts employee morale and creates unnecessary uncertainty for the company.”
For more information, please visit www.verigreedy.com.
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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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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.
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.
“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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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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If debt is bad, why is giving free money to banks so they will lend (put you in debt) better than giving free money to people to pay off debts?
Last week at Netroots Nation we talked about the problem of Apple (and all the others) manufacturing in China, costing our country jobs and dollars. Next week at the Take Back the American Dream Conference we will talk about what can be done to fix things.
Last week I was on a panel at Netroots Nation, talking about the problem of companies like Apple doing all of their manufacturing in China. We used to think companies moved to China because labor was cheap. Now we know that it has more to do with the ability to force workers to do things that they can’t force them to do here. I wrote up my talk in the post Why Can’t Apple Make Your iPhone in America?,
The business advantage China offers is not low wages, it is that in China the people do not have a say, and here people have a say.
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.
… 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.
Next week at the Take Back the American Dream Conference, among the many topics the conference will cover I will be discussing what we can do to revive American manufacturing. Please come and join the discussion!
The Take Back the American Dream Conference
Join Paul Krugman, Nobel Prize-winning economist and NY Times columnist; Rebuild the Dream’s Van Jones, Rep. Keith Ellison, Sen. Sherrod Brown, Sen. Sheldon Whitehouse, MSNBC’s Alex Wagner and Melissa Harris-Perry, Katrina Vanden Heuvel of the Nation, Sen. Bernie Sanders, Rep. Peter DeFazio, Rep. Chris Murphy, Rep. Barney Frank, and Rep. John Garamendi at the conference.
Click through to learn about and register for the Take Back the American Dream Conference:
The Republicans don’t have a job creation plan, they have a job destruction plan: bring back the Bush economy.
President Obama has proposed a small jobs plan. But Republicans are blocking even that — and Democrats are not doing enough to attack those who are stopping progress on jobs.
This election should be about who fights for JOBS and who stands for job-killing austerity. To make sure that is the choice, we are coming to Washington and we will do it ourselves.
To end the jobs crisis, mobilize! Click here to register for the June 18-20 Take Back the American Dream conference in Washington, DC.
In this election, we have to send politicians a message: Good Jobs First. Turning now to austerity will only create more misery and more unemployment. The best deficit reduction measure is to put people back to work.
We have to make sure that politicians in both parties get the message. So we are coming to Washington to lay out strategies to do just that.
Fight for Good Jobs First! Click here to register for the June 18-20 Take Back the American Dream conference in Washington, DC.
From June 18 to 20, that’s what Paul Krugman, Van Jones, Chris Hayes, Rep. Jan Schakowsky, Melissa Harris-Perry, Rev. Jesse Jackson, Katrina vanden Heuvel and many more are going to do.
At the Take Back the American Dream conference, we will shatter the false boundaries of the budget debate imposed by the Washington elites. And we’ll forge the grassroots strategy necessary to rally the nation behind a jobs plan as big as the crisis.
We’ll hear Paul Krugman discuss practical solutions to “End this Depression Now!” with MSNBC’s Chris Hayes.
And Rep. Jan Schakowsky and the AFL-CIO’s Damon Silvers will take on the austerity conservatives are imposing around the world — and they want to impose here after the election.
We’ll get a plan for “Fair Share Taxes to Rebuild America” from progressive champion Sen. Sheldon Whitehouse.
We’ll learn the “99 Elect” grassroots strategy to “Build Progressive Power” with former Gov. Howard Dean.
We’ll put the fundamental choice before America, “Plutocracy or Democracy,” with independent Sen. Bernie Sanders and Congressional Progressive Caucus co-chair Rep. Raul Grijalva.
And we will sculpt our own strategy to win the argument, not just the election.
Stand up for the 99%. Come to the Take Back the American Dream conference.
We cannot sit back and expect the crisis to solve itself. Washington is coming down with European austerity fever while the nation screams out for jobs and growth.
So if you care about solving the jobs crisis, we have a job for you.
The Take Back the American Dream conference is one place this election year where Americans committed to saving our economy and our future will plot and plan to put a Good Jobs First agenda in the center of the 2012 campaign.
This is our chance to develop the strategy and the arguments vital for saving America from the dustbin of austerity.
Don’t miss it. Join us in Washington, and help Take Back the American Dream.
Robert L. Borosage & Roger Hickey, Co-directors
Campaign for America’s Future
Register today to make victory possible, at the June 18-20 “Take Back the American Dream” conference.
Actually I’ll probably just beg for money to help pay the bandwidth bills…
There’s an orange PayPal Donate button in the left column. I’m trying to raise $1,000,000 to pay the income tax on what I make doing this.
As much as conservatives want to pretend otherwise, you can’t have strong, healthy, prospering businesses without a big, strong government. The kinds of businesses that don’t want a big, strong government are exactly the kinds of businesses that We, the People don’t want.
Government Provides The Soil For Businesses To Thrive
Government creates the “public structures” that support smaller, innovative business. Government defines the playing field for business, right down to defining and regulating the money itself. Government creates the laws that define what business even is, and the police and courts to enforce that law. Government provides the infrastructure that is the soil in which businesses thrive — or whither and die. Government educates the employees and innovators. Government negotiates the trade agreements that let businesses sell outside our country, and is supposed to protect our businesses from being undercut by those in other countries.
Government keeps larger, ultra-wealthy businesses from dominating, monopolizing and destroying the newer, innovative, disruptive, creative businesses that rise up out of We, the People.
But government can only do those things for us when it is big and strong. And that is why the very people and businesses — and countries — that want to dominate, monopolize, cheat, scam and take everything for themselves at the expense of the rest of us don’t want our government to be big and strong enough to stop them.
Imagine this, though it might be difficult: some people are greedy and want more for themselves, at the expense of the rest of us. Yes, this is shocking, but true!
Government protects us from those who would take advantage and take too much. Government does this both domestically and internationally. At home it protects us from criminals and exploiters. Government also protects us from physical and economic threats from other countries. As I discussed last week in Why Can’t Apple Make Your IPhone In America? we as a country face an updated, economic-attack version of these threats to our national security,
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.
Government Keeps The System Going
Our “system” generally works when it is in balance; consumers with jobs and money are customers for our businesses. When customers are coming in the door, companies hire more people to serve them. However, in a system the things that each individual wants to do can be bad if too many of them do those things at the same time.
An example of an unbalanced system: if every driver decided to drive on the same road at the same time no one would be able to move. This is where government is absolutely necessary to regulate the larger system and make sure it maintains balance.
Am economy example: all businesses want to reduce costs, and one way to do this is to cut the number of employees they have, increase the workload of the rest and do what they can to cut their pay and benefits. This is an example of something that each player in a system does that might be “good” for that individual player, but is really bad for the larger system if they all do it. When too many business reduce costs by cutting employees or paying less, the system collapses from lack of demand. Government is needed to keep businesses from laying off too many people or cutting pay. Sometimes government does this by stepping in and hiring people (or just giving them money like unemployment benefits), or buying things, thereby creating demand, causing businesses to hire. (See Actually, “The Rich” Don’t “Create Jobs,” We Do.)
Another example: When a business becomes powerful it uses that power to monopolize, to keep competition from being able to compete. Pretty soon there are just a few large businesses that can charge whatever they want. Without strong government to keep this from happening the system breaks down.
Taxes are the payback We, the People receive from our investment in creating the public structures that protect and empower us and enable our business to thrive. Taxes pay for the protections, courts, infrastructure, education and all the rest of the system that creates the prosperity and redistributes that prosperity to all of us, thereby balancing the system.
The American Social Contract is supposed to work like this:
A beneficial cycle: We invest in infrastructure and public structures that create the conditions for enterprise to form and prosper. We prepare the ground for business to thrive. When enterprise prospers we share the bounty, with good wages and benefits for the people who work in the businesses and taxes that provide for the general welfare and for reinvestment in the infrastructure and public structures that keep the system going.
We fought hard to develop this system and it worked for us. We, the People fought and built our government to empower and protect us providing social services for the general welfare. We, through our government built up infrastructure and public structures like courts, laws, schools, roads, bridges. That investment creates 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.
But the “Reagan Revolution” broke the contract. Since Reagan the system is working like this:
Since the Reagan Revolution with its tax cuts for the rich, its anti-government policies, and its deregulation of the big corporations our democracy is increasingly defunded (and that was the plan), infrastructure is crumbling, our schools are falling behind, factories and supply chains are being dismantled, those still at work are working longer hours for fewer benefits and falling wages, our pensions are gone, wealth and income are increasing concentrating at the very top, our country is declining.
All Of Us Or Just A Few Of Us?
“We, the People” are the first three words of our Constitution. The writers of the Constitution were making a point, and to drive that point home they also made those three words the only words you can see from any distance:
“We, the People” was the point. This country exists for We, the People not for just a few people. We had fought a war to free ourselves from a system that was of, by and for a few wealthy and powerful people who controlled the levers of power, and we said, “Never again!” We designed a new system that was supposed to ensure that all of us prosper instead of a few people at the expense of the rest of us.
We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
This Constitution is supposed to be for our benefit — all of us. The economy is supposed to be for the benefit of all of us. For our general welfare, not for just a few. And to protect us from the wealthy and powerful, government has to be big and strong.
When Government Is Weak
Conservatives, funded by the already-wealthy — the 1% and their giant corporations — say we need less government, smaller government, government out of their way. They say they want our government to be small enough that they can “drown it in a bathtub.”
Think about what they are saying when they say they want less government: they want less decision-making by We, the People. They want less protection of our general welfare. They want less infrastructure for our smaller businesses to thrive in. They want less enforcement of laws that protect our wages, safety, environment and rules against scamming, scheming, and defrauding us. That is what “less government” means in a country where the government is We, the People…
When government is strong we have more enforcement of a level playing field for all of us, more education for all of us, more security for all of us, more protection of our environment, more infrastructure so our own startup businesses can flourish and compete, more parks, more promotion of the general welfare.
And when government is weak we end up with a very few greedy, ruthless billionaires and their giant corporations controlling the economy, stifling competition, scamming and defrauding us, and consuming the environment and resources for their own short-term profit.
What Government Does For Us And Our Smaller Businesses
- International agreements.
- National Security.
- Regulate and balance business activity.
Enable and empower:
- Define and regulate money.
- Redistribute – keep the top from having too much and the rest of us from having too little money, power, etc.
Invent and innovate:
- Public universities.
- Scientific research, esp. basic research for our businesses to apply.
- Protect the environment and resources from those who would use them up for their own profit.
- Fight monopolies so new businesses can innovate and compete.
Help me fill in this list. Leave a comment.
I love everything on Current TV lately. Especially Cenk. But Granholm is great, too.