Watch: What One-Sided Trade Pacts Are Doing To Our Jobs

I was on “The Nicole Sandler Show” recently talking about the one-sided trade agreements we’ve been tricked into and the damage they do to the economy. It’s also quite entertaining. Seriously, it is. Bad puns, jokes and, of course, Nicole!!

On the show I talk about what the 2012 $540 billion trade deficit means. “Imagine if factories in America got orders for $540 billion of goods… the economy would be booming. … that was just one year of our trade deficit.”

The show was partly based on my recent post, New Fast-Track Bill Means Higher Trade Deficits and Lost Jobs.

And check out RadioOrNot.com.

PS Nicole and I are buddies and I’m on the show once in a while, so I can get away with terrible jokes and puns.
—–

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

NAFTA At 20: 1 Million Lost Jobs, 580% Increase In Trade Deficit

Public Citizen’s Global Trade Watch has issued a new report, NAFTA at 20: One Million U.S. Jobs Lost, Mass Displacement and Instability in Mexico, Record Income Inequality, Scores of Corporate Attacks on Environmental and Health Laws. The report compares the promises with which NAFTA was sold with the results we can measure 20 years later.

NAFTA was not just a “trade” agreement. Trade agreements focus on cutting tariffs and easing quotas and barriers to goods moving across borders. The report points out that NAFTA was much more, giving corporations special rights, incentivizing offshoring and limiting regulation. As the report puts it,

“NAFTA created new privileges and protections for foreign investors that incentivized the offshoring of investment and jobs by eliminating many of the risks normally associated with moving production to low-wage countries. NAFTA allowed foreign investors to directly challenge before foreign tribunals domestic policies and actions, demanding government compensation for policies that they claimed undermined their expected future profits. NAFTA also contained chapters that required the three countries to limit regulation of services, such as trucking and banking; extend medicine patent monopolies; limit food and product safety standards and border inspection; and waive domestic procurement preferences, such as Buy American.”

Some of the effects of NAFTA that are highlighted in the report include,

Continue reading

On TPP Call USW’s Leo Gerard Nails A Key Point

I joined a conference call yesterday that talked about the upcoming Trans-Pacific Partnership (TPP) trade agreement and the “Fast Track” process that the big corporations are trying to push on Congress to smooth the way for them to push this “trade’ deal through.

The call was hosted by Lori Wallach of Public Citizen’s Global Trade Watch. Also on the call were:
U.S. Representative Rosa DeLauro (D-Conn.)
U.S. Representative Louise Slaughter (D-NY)
Leo Gerard, President, United Steelworkers (USW)
Larry Cohen, President, Communication Workers of America (CWA)
James Hoffa, President, Intl Brotherhood of Teamsters
Michael Brune, Executive Director, Sierra Club

This was an involved, comprehensive discussion with a lot of information, and I will write more about the issues covered in future posts. But there was one statement that I think just nails the key point about the results of previous agreements that our country has managed to get itself into. It was made by USW’s Leo Gerard and I’ll let his words make the point:

In all the trade deals we’ve done since 1994, for those of you on the call from the press and friends in the political process, I think these are important numbers you should take a very close look at: in the period of time from 1994 to October 2013, America has accumulated an overall trade deficit of $8.3 trillion. And, if you subtract goods and services where we’ve been able to export certain services like accounting and stuff like that – that we have a slight surplus in – if you subtract that, the deficit in manufactured goods is over $10 trillion.

This should be the deficit that we’re looking at, rather than the one that keeps getting thrown up by some Democrats and rightwing Republicans.

And then if you go through this deal, before you look at this deal you have to look at all of the previous deals and ask “which one of these that we’ve done has resulted in net job gains and net trade surplus for America?” And you know what the answer is? None.

So in this deal, they’re looking at what are we going to do about state-owned enterprises that we’re supposed to compete with? We’ve got workers that can compete with any company, but they can’t compete with countries. What are they going to do about rules of origin? Put things in perspective: for example in NAFTA, to be country of origin you need 62.5% domestic content. The U.S.-Australia deal went 50%. The U.S.-South Korea deal went to 35%. Where will this one take us? We’re supposed to compete with countries that are getting their parts from China, Vietnam, Brunei, and exporting materials to here, when if they have 35% of material from their country they’re called ‘a domestic product’? That’s crazy.”

Later in the call Leo said, “The politicians keep telling us the same song and dance that turns out not to be the truth. We’ve lost five million manufacturing jobs. The public gets it, and the politicians don’t.”

What This Says

Leo nailed the key point about the trade deals we have gotten ourselves into. We have not yet found ourselves in a good, balanced trade deal that helps the country instead of just a few billionaires. In all of the trade deals we have made, the country has lost money and has lost jobs.

And why is this? Because these deals are not being negotiated to help the country, they are being negotiated to help a few giant corporations and the billionaires these corporations represent. The process leads to deals that dramatically enrich the 1% while they kill off the economic participation of the rest of us in our economy.

The trade deals we have entered into allow companies to move jobs and factories to countries with low democracy and therefore low wages and little if any environmental protection. So things made there cost less than things made here. This undermines our country and our democracy — but it enriches the few who own and/or run these giant corporations. Because it opens them up to move jobs wherever they want our unions are broken, unemployment is kept high (on purpose) and employers can threaten the remaining workers with moving their jobs, too, if they don’t accept cuts.

You can listen to the audio recording of this call: http://www.conferenceplayback.com/stream/98120468/48264901.mp3

And now for your entertainment: All our trade deal are belong to them.

—–

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

Here’s A Fresh, New Idea: Hire Some People To Fix Infrastructure!

Washington is embroiled in a round of budget-cutting fervor. There is a “budget conference” going on. There are rumors that “deals” are being made behind closed doors. How much to cut? Who to hurt? Who to lay off or furlough next?

Here’s the thing. The American Majority wants jobs. They want Congress working on jobs. (They also want Congress working on jobs for more than 5 days this month.)

Here’s a fresh, new idea: hire some people to fix the aging infrastructure. Ever since the Reagan tax cuts the country has been deferring essential maintenance. Everyone said, “If you do this, later you’ll be sorry.” Now it’s later, and we’re really sorry. Bridges are falling down. The power grid is ridiculous, as in “worthy of ridicule.” Etc., etc. We’re $3.6 trillion behind — $3.6 trillion that went out to the wealthy as tax cuts instead of used for infrastructure investment. P.S. click that link.

How many people would be hired if we just caught up to doing that deferred infrastructure maintenance — never mind crisp, new, modern, energy-efficient, 21st-century power grid and ports and roads and rail that would increase our country’s competitiveness internationally? $3.6 trillion of work that has to be done anyway, and we really need to employ Americans today. The longer we hold off, the more it costs and the more damage is done.

Speaking of damage done, here’s a simple infrastructure idea: hire some people to install speed regulation systems in trains.

It isn’t hard to realize this. In fact, not hiring people to fix the infrastructure now is intentional. It’s about keeping unemployment high and taxes on the wealthy low. Desperate, hungry people don’t ask for raises, and don’t demand their rights. They’ll take any nasty, humiliating, low-wage job they can find and will be told they should be thankful to have it.

—–

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

Why Do We The People Have To Read TPP On Wikileaks?

We the People finally get to read one chapter of the 29-chapter Trans-Pacific Partnership (TPP) “trade” agreement. If this agreement becomes law it will fundamentally alter the relationship between our government, other governments and giant multinational corporations, so you’d think America’s citizens would want to have a say in the negotiations. But the only reason We the People get to even read it at all is because it was leaked to Wikileaks.

Wikileaks Obtains TPP Chapter

Wikileaks has obtained one of the chapters of the Trans-Pacific Partnership (TPP) “trade” agreement that is being negotiated in secret. This leaked section is the chapter about patents, copyrights, trademarks, industrial design and other “intellectual property.” Note that this has little or nothing to do with “trade.”

This chapter is from August, and it is unknown how the chapter may have changed between then and now. The chapter indicates that the US is pushing hard to get strong “protections” for giant telecommunications companies and pharmaceutical patent-holders.

WikiLeaks’ Editor-in-Chief Julian Assange said this in the announcement that Wikileaks had obtained the chapter text,

“If instituted, the TPP’s IP regime would trample over individual rights and free expression, as well as ride roughshod over the intellectual and creative commons. If you read, write, publish, think, listen, dance, sing or invent; if you farm or consume food; if you’re ill now or might one day be ill, the TPP has you in its crosshairs.”

Continue reading

Economic Sabotage: Republicans Obstruct Infrastructure Work

There is consensus across the (sane) spectrum that the country absolutely needs to repair and modernize our infrastructure. There is widespread agreement this will help the economy now and in the future, and will create jobs. But Republicans in Congress refuse to allow infrastructure projects to proceed. Why? Because doing so will help the economy now and in the future, and will create jobs. Republicans in Congress are committing economic sabotage, and they know it.

Consensus

There is a bipartisan consensus — it even includes the Chamber of Commerce! — that the country has fallen behind and must maintain and modernize our infrastructure for the good of our economy.

President Obama talked about infrastructure in Jacksonville in July, saying,

We know strong infrastructure is a key ingredient to a thriving economy. That’s how the United States became the best place in the world to do business.

On the other end of things the Chamber of Commerce’s “Jobs & Growth Agenda” includes a section on “Reliable and Secure Infrastructure.” The Chamber says,

The U.S. Chamber is leading the charge to improve the quality of America’s infrastructure—whether it’s transportation, energy, or water networks—all of which directly impact our ability to compete in the global economy.

By modernizing our national infrastructure, we can improve commercial efficiency, increase U.S. competitiveness in the global economy, and create much-needed jobs in the near term.

Here are just a few of the other voices supporting a boost in infrastructure spending:

USA Today, USA’s creaking infrastructure holds back economy

Fareed Zakaria, Fixing infrastructure would help fix economy

Alliance for American Manufacturing, How Infrastructure Investments Support the U.S. Economy: Employment, Productivity and Growth

Business Insider, STUDY: Every $1 Of Infrastructure Spending Boosts The Economy By $2

Consensus vs. Obstruction

The Chamber of Commerce might say they are “leading the charge” but the Republicans in the Congress are obstructing the troops.

After the President asked for just a bit more infrastructure work, please, the Senate Republican leader responded, “No!” The House Republican leader has said that fixing the infrastructure is “more stimulus spending doomed to fail.”

The kook right (perhaps that should read “Koch right”) that really “leads the charge” for Republicans these days says Infrastructure Spending Is Not the Federal Government’s Business or that infrastructure spending is just more “big government.” Heritage Foundation claims here that government spending on infrastructure “takes money out of the economy”. Some of the (Koch-funded) kooks even actually claim that investing in infrastructure hurts the economy.

Obstruction Agenda Is Sabotage, Not Ideology

Look at this chart from the Financial Times’ FT Alphaville, The collapse of US infrastructure spending, charted:

This looks like lots of other recent charts, like the ones that show consumer confidence plunging in the face of Republican obstruction of everything (and especially their repeated hostage-taking over the debt-ceiling and their shutting down the government.) It is clear all of these things hurt the economy, and they continue to do them.

Maintaining the infrastructure is not about ideology. Even the conservative Chamber of Commerce understands that you have to maintain the roads and bridges, etc., and that it damages the economy if you don’t. And yet we don’t, and the obstruction continues.

So this is about a different agenda. Paul Krugman says it best at his blog,

This kind of behavior — ever-shifting rationales for an unchanging policy (see: Bush tax cuts, invasion of Iraq, etc.) — is a “tell”. It says that something else is really motivating the policy advocacy.

It is past time to argue that the Republican obstruction is hurting the economy, because it just is, and they know it. It is also past time to argue that they are doing this for some kind of ideological reason. Investing in infrastructure is not about ideology. Austerity is not about ideology.

Hurting the economy is not about ideology. There is a different agenda at work here. This is not an argument between differing visions of how best to help our economy. When this much is being done, hurting the economy again and again, and when the results of these actions are clearly that we are all being harmed, and yet it continues, this is not an accident. It is an agenda.

Economic Sabotage — Why?

So it is past time to argue if they are hurting the economy – that is settled. It is economic sabotage. There is no longer any question.

Now it is time to talk about why they are doing this.

Is it to damage Democratic election prospects? Are they betting that by making everyone feel enough pain, and blaming Democrats and President Obama, they can make people forget who got us into this mess? Do they think that economic sabotage will get them votes? That is the most charitable theory. Considering that much of the funding of the apparatus of the right that is behind this is secret, there are worse conclusions that could understandably be reached.

TPP/Fast Track Fight Is On

You’ve probably been hearing warnings about the Trans-Pacific Partnership (TPP) “trade” agreement that is being negotiated. And you might have heard that the big corporations are going to push to use something called “fast track” trade promotion authority (TPA) to push it through.

It’s time to learn about TPP and fast track, and then call your member of Congress to let them know if you want them to hand the giant multinationals an end-run around democracy and national sovereignty.

The Fast Track Push Is Coming

“Fast track” trade promotion authority, if passed, means Congress yields its constitutional authority and obligation to review and amend trade agreements. A “fast track” treaty has to be voted on quickly, cannot be amended, and Congress has to give it an up-or-down vote.

The U.S. Trade Representative (USTR) Michael Froman is pushing Congress to pass “fast track,” in hope of pushing through the TPP agreement by the end of the year. Politico lays it out, in “Froman pushing Congress to finalize trade deals,”

President Barack Obama was often criticized in his first term for moving too slowly on trade, but now his chief negotiator is pressing Congress to pick up the pace as the White House pushes to conclude a landmark trade deal in the Asia-Pacific by the end of the year.

[. . .] Froman and his team at USTR are pushing to finish the TPP talks by the end of the year, putting pressure on Congress to move a TPA bill to set the stage for the final phase of talks.

Fast Track To Push TPP

The next “trade” treaty will be the Trans-Pacific Partnership (TPP). This is a huge treaty with only a small part covering trade. Most of the agreement (according to leaks) sets down a new kind of regulatory structure for the giant corporations that would supersede the ability of any country to rein them in. The treaty is being negotiated in secret with only business interests “at the table.” Representatives of others with a stake in the outcome are not part of the process. Groups representing the interests of consumers, labor, human rights, the environment, democracy or even smaller and innovative companies that might want to compete with the giant multinationals are not part of the negotiations.

Economist Dean Baker explains that TPP is not about “free trade” and growth, writing,

Of course the TPP is not about free trade, in most cases the formal trade barriers between the countries negotiating the pact are relatively low. The main thrust of the negotiations is to impose a regulator structure in a wide range of areas — health, safety, environmental — which will override national and sub-national rules. This has little to do with trade and in some cases, such as the increased patent protection for prescription drugs being pushed as part of the deal (which is noted in the article), will actually involve increased barriers to trade.

In The Trans-Pacific Partnership: A Trade Agreement for Protectionists, Baker writes, “The

TPP is about crafting rules that will favor big business at the expense of the rest of the population in both the United States and in other countries.

… The world has benefited from the opening of trade over the last four decades. But this opening has been selective so that, at least in the United States, most of the gains have gone to those at the top. It is possible to design trade deals that benefit the population as a whole, but not when corporate interests are literally the negotiators at the table.

Other “Trade” Agreements Have Cost Us Dearly

One after another “trade” agreements come along that, rather than helping lift the working people of the world, instead help the multinationals use exploited workers to break unions and lower wages. These agreements also let companies manufacture in countries that do not require environmental protection while bringing the resulting lower-priced goods here with no added cost at the border, undermining our own protections. Allowing these things makes our democracy, and its good wages and protections, a competitive disadvantage in world markets.

Previous trade agreements were passed with the promise of increases in growth and wages here, but the opposite has resulted. And they have increased rather than reduced our trade deficits. They have only served to enrich the already-wealthy.

NAFTA: According to the Economic Policy Institute (EPI) briefing paper “Heading South: U.S.-Mexico trade and job displacement after NAFTA,” “As of 2010, U.S. trade deficits with Mexico totaling $97.2 billion had displaced 682,900 U.S. jobs.” (That is net jobs, taking into account jobs gained.)

China: In August, 2012 EPI estimated that the U.S. lost 2.7 million jobs as a result of the U.S.-China trade deficit between 2001 and 2011, 2.1 million of them in manufacturing. Aside from job losses wages US wages fell due to the competition with cheap Chinese labor costing a typical household with two wage-earners around $2,500 per year.

Columbia – “murders and threats”: A report issued Monday by Reps. George Miller (D-Calif.) and James McGovern (D-Mass.) titled The U.S.-Colombia Labor Action Plan: Failing on the Ground says,

Despite the LAP, murders and threats against union members and harmful subcontracting persist in Colombia largely unabated. At a minimum, 413 threats were documented, and 22 trade unionists were murdered for their union involvement in 2012.1 On April 1, 2013, the 991st death threat against a member of the labor movement was received since President Juan Manuel Santos became president in June 2011.2 Because of the fear of violence or employer retaliation associated with organizing or joining a union and the prevalence of anti-union and anti-worker prejudice, only four percent of Colombian workers are union members.

[. . .] “The members of the delegation conclude that the Government of Colombia is woefully falling short of compliance with the Labor Action Plan, and in many cases, these shortfalls have made working conditions for workers worse than before it came into effect,” the report said. “Before asking Congress to approve another trade agreement, such as the TPP, which poses similar labor and human rights issues, the Administration must first demonstrate concrete and effective improvements in workers’ rights on the ground in Colombia under the Labor Action Plan.”

Korea: EPI reported in July that the U.S.-Korea free trade agreement had already cost the U.S. 40,000 jobs and increased our trade deficit by $5.8 billion. According to EPI,

The tendency to distort trade model results was evident in the Obama administration’s insistence that increasing exports under KORUS would support 70,000 U.S. jobs. The administration neglected to consider jobs lost from the increasing imports and a growing bilateral trade deficit. In the year after KORUS took effect, the U.S. trade deficit with South Korea increased by $5.8 billion, costing more than 40,000 U.S. jobs. Most of the 40,000 jobs lost were good jobs in manufacturing.

Promises, Promises

The Politico story quoted above claims that President Obama is criticized for “moving too slowly on trade.” If anything, President Obama is criticized for promising in his 2008 campaign to renegotiate NAFTA, and reneging once in office.

[fve]http://youtu.be/PF9gpvI2UfU[/fve]

Get Informed

If you want to help stop “fast track,” call your member of Congress today!

Sign up for action alerts on fast track and TPP at Trade Watch.

Visit Stop TPP.

Visit the Eyes on Trade blog

Expose the TPP is a great action oriented site.

There’s also Flush the TPP.

The AFL-CIO recent convention passed a plan for people-oriented trade. Read the resolution here.

—–

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

A Corporate Tax Idea That Fixes Lots Of Problems

Here is one thing Congress could do that would create more jobs, boost the economy and reduce both the budget deficit and the trade deficit. This one thing would not only provide a big boost now, but would provide an ongoing boost from now on. Congress should modify the “deferral” tax loophole that lets companies dodge their taxes by moving and keeping profits “out of the country.” Tax this cash at 5% a year.

The top corporate tax rate is currently 35%. But corporations are allowed to “defer” paying taxes on profits earned outside of the country until they “repatriate” those profits, which means bringing the money back into the country. (Any taxes paid elsewhere are deducted from the amount owed.) There are solid reasons to allow corporations to do this. Simply put, they might need to put that money to good use, which will benefit the company, which in theory will later benefit our country.

But this tax deferral has turned into a huge loophole that is draining our country of jobs, tax revenue, investment, manufacturing infrastructure and other good things We the People are supposed to receive in return for allowing these corporations to operate. Companies not only are keeping profits out of the country, the loophole gives them an incentive to engage in schemes that shift more and more jobs, production and profit centers out of the country. (One well-known example: Apple transferred ownership of it’s “crown jewels” — “intellectual property” — to Ireland.)

A Ton Of Cash That We The People Could Really Put To Use

The amount now being held outside of the country is astounding. Some estimates say that it is as much as $1.5 to 2 trillion, or even more. If the full amount were brought back and the tax rate applied that would bring a $525-700 billion windfall that the government could use to hire people to get things done that really, really need to get done like modernizing our infrastructure, hiring teachers, building high-speed rail, retrofitting homes and buildings to be energy-efficient … so many things… (Of course it would be less because of taxes paid elsewhere, etc., but we’re still talking hundreds of billions.)

And, of course, after that $1.5-2 trillion is brought back and the appropriate taxes are paid the rest would either be invested or distributed to shareholders — another nice boost to the economy.

Beyond the one-time windfall from bringing that cash back there would be two other major effects of changing this deferral loophole. The first, of course, is that tens of billions of revenue now withheld each year would be coming in to be taxed, thereby reducing the budget deficit. But perhaps more important, the incentive to move jobs, factories and profit centers (“crown jewels”) out of the country would be eliminated, so companies would keep factories and jobs here.

 Why They Do It

The reason so much $$ is being kept away is that companies have good reason to believe that eventually they will be allowed to bring it back without paying the taxes they owe. Congress made a huge mistake in 2004 and gave corporations a “tax repatriation holiday.” They allowed companies that were holding profits outside of the country to bring those profits back without paying all of the taxes due. This created the expectation that Congress will of course do this again (and again). So, not looking a gift horse in the mouth, companies started to find ways to increase their outside-the-country profits and reduce their inside-the-country profits. Jobs, factories, production, profit centers (desks, chairs, carpets…) and everything else that could be moved out of the country started to be … moved out of the country. And it gets worse every year.

Solution: Put A Surtax On Money Held Outside The Country

Some people say we should just repeal the rule that lets companies defer taxes due on profits earned outside of the country until they bring it home. But that undoes the benefits that were the original reason to allow deferral.

Here is a simple idea that could go a long way toward solving this problem. Don’t eliminate the deferral, tax it. As I said, there are good reasons to allow it in certain instances. Instead, put a surtax on profits held outside of the country. Just for illustration, suppose this surtax was 5%. This means that if a company decides to keep $1 billion of profits outside of the country, they would pay 5% of that, $50 million, each year they do this. This is not later used to reduce the amount of taxes due when they eventually bring the money home; when they finally “repatriate” the profits they would be still taxed at the same rate as now (up to 35% minus taxes paid elsewhere, etc.) But instead of gaining from keeping the money out of the country, it instead costs them 5% each year they keep it out.

Of course, this must be coupled with the end of any hope that Congress will eventually give in to hostage-taking and let companies bring profits back at some reduced rate. That was a mistake that has cost the country dearly in lost revenue, jobs, factories, profit centers, (desks, chairs, carpets…) and also cost the country money that should be either invested or distributed to shareholders.

If the companies decide to continue to hold that $1.5-2 trillion outside of the country this surtax would bring the government between $75 and $100 billion per year of additional tax revenue, and these companies would also eventually have to bring it back and pay the up-to-$700 billion due in taxes as well. I’d be happy with that, and so would the country.
—–

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

Martin Luther King’s Dream Of Jobs And Freedom

Martin Luther King Jr. outlined his dream 50 years ago this weekend. We made much of it happen. Let’s dream some more. Let’s dream about what we could do in the next 50 years.

Fifty years ago Martin Luther King Jr. led the March on Washington for Jobs and Freedom and famously told the country “I have a dream.” Fifty years later there is progress and there are setbacks. We no longer have segregation — separate schools and bathrooms and the rest. Many states finally allow everyone to marry the person they love, but at the same time many states are returning to apartheid-era restrictions of voting rights.

One huge part of the “Jobs and Freedom” Dream that still evades us is the goal of full employment or an income until a job becomes available.

On August 16, 1967 King delivered a speech titled, “Where Do We Go From Here?” addressing the need for everyone to have a job or an income,

…our emphasis must be twofold: We must create full employment, or we must create incomes. People must be made consumers by one method or the other. Once they are placed in this position, we need to be concerned that the potential of the individual is not wasted. New forms of work that enhance the social good will have to be devised for those for whom traditional jobs are not available. In 1879 Henry George anticipated this state of affairs when he wrote in Progress and Poverty:

The fact is that the work which improves the condition of mankind, the work which extends knowledge and increases power and enriches literature and elevates thought, is not done to secure a living. It is not the work of slaves driven to their tasks either by the, that of a taskmaster or by animal necessities. It is the work of men who somehow find a form of work that brings a security for its own sake and a state of society where want is abolished.

A Country Based On A Dream

Our country was founded on the dream that We the People can do things for each other instead of depending on the rich and powerful to throw us scraps.

If you look at our Constitution you see that our country is supposed to be for We the People. And I mean just look at it, not read it. The only words you see from any distance are the words “We the People.” The Founders were making a point.

The Constitution told the world about a dream that “We the People” would build a country that protects and empowers us, where together we do things for the common good, to make our lives better. And for a while we did that.

We have lost sight of that dream. We no longer seem to recognize who our country is for. We no longer talk about the common good.

Who is our country for? Who is our economy for? Certainly a We the People economy would at the very least guarantee that We the People have jobs and an income until a job is available.

Continue reading

Detroit, Manufacturing And ReMaking America

We have to have things to sell to others to bring in the money to buy things from others. Detroit’s bankruptcy shows what happens when a country forgets that.

I hosted a blogger call yesterday with Carl Pope and Scott Paul to discuss the new book ReMaking America. I wrote about the book a month ago. (Harold Meyerson said, “Going down to Mississippi wages does not signal a bright future for American economy.”) Please visit www.remakingamericabook.com for more information about this book.

p1_pic1

Click this link to play a recording of the call.

But first, here are my remarks introducing the call:

On today’s call we are talking about the revival of manufacturing. This is especially timely because of the bankruptcy of Detroit, a city that used to exemplify of America’s manufacturing prosperity, now a wasteland of crumbling buildings and homes – and people.

So let me set the stage for today’s call.

Detroit’s bankruptcy shows exactly what this whole manufacturing discussion is really about.

Manufacturing is one of the main ways a country makes a living. We have to have things to sell to others to bring in the money to buy things from others.

American used to sell far more to the world than we brought in. Until the early 80s we were the largest “creditor” nation. We made things and sold them. Then tax and trade policies transformed us to the world’s largest debtor nation – we moved factories out of the country or just bought things from elsewhere – and since then that imbalance has only gotten worse and worse … and worse and worse.

The Southend portion of the 452-acre Buick City site, currently an EPA disaster area.

The Southend portion of the 452-acre Buick City site, currently an EPA disaster area.

Do you remember the movie “Roger and Me,” about what happened to Flint? THAT movie showed what happens to cities when “government gets out of the way,” and lets factories and industries move. That movie was in 1989, and the same thing has only gotten worse and spread around the country.

As the factories moved well-paying manufacturing jobs disappeared, and were replaced by low-wage jobs at places like Walmart and Staples. This started a downward spiral and now everyone feels the downward pressure on wages.

Entire regions were devastated as manufacturing left the country, and suppliers left the country, and design jobs and machine maintenance jobs and all the rest of the jobs associated with manufacturing left the country and over time the middle class started to shrink and feel the squeeze.

And now we see the results in major cities like Detroit.

So what are we going to do about it?

As a country we have to rethink this and remake America, and to talk about a new book called Remaking America I would like to introduce Scott Paul.

_0010_Scott Paul.JPG_

Scott Paul, Alliance for American Manufacturing

Scott is President of the Alliance for American Manufacturing, a partnership of some of America’s leading manufacturers and the United Steelworkers union, working to restore American manufacturing competitiveness.

After Scott talked he introduced Carl Pope, former Executive Director of the Sierra Club. Carl’s chapter in the Remaking America book, “Energy Manufacturing: The Linchpin for America’s Future,” argues for more support for renewable energy technology innovation and explains precisely how this can be done. Carl is going to tell us about this today.

 Listen to the call below:

—–

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

Blame The Auto Trade Deficit, Not Detroit’s Workers

Wow, it sure is convenient for Republicans and Wall Street to blame unions and working people and government for Detroit’s problems. (It’s what they do.) They talk about crime and corrupt inner-city politicians – Republicanspeak for “black people.” (It’s also what they do.)

So of course their solution is to further weaken government, weaken unions, strip working people of their pensions, tell workers they have to take even more pay cuts … and all the rest of the usual Republican/Wall Street solutions that always just happen to make a few already-wealthy people even wealthier. (It’s what they do.) Of course. And of course, always, always blame taxes. (It’s what they always, always do.)

Obvious Causes Ignored

But the obvious reasons for Detroit’s problems are right there in front of our eyes, so clear and obvious. Free-trade deals have forced jobs and factories and industries out of the country and we have a huge, massive, bloated, vast, incomprehensible trade deficit that is sucking the blood and money out of our economy. When the jobs left Detroit many of the people (and tax base) left and the problems exploded.

Here is a simple fact that tells us all we really need to know about what has happened to Detroit (and Flint and similar cities.) The trade deficit in automobile, parts and supplies is about $12 billion a month. Here is 2012 data from About.com:

Automotive is another category where the U.S. ran a trade deficit in 2012. It imported $298 billion worth of cars, trucks and auto parts, while only exporting $146 billion, running a deficit of $152 billion. (Source: Census Bureau, Real Exports by Principal End-use Category, monthly, 1994 – present and Real Imports by Principal End-use Category, monthly, 1994 – present. Note: These figures have been adjusted for inflation).

A January 2012 report from the Economic Policy Institute (EPI), “Jobs in the U.S. auto parts industry are at risk due to subsidized and unfairly traded Chinese auto parts,” discusses some of the cause and effect of this automotive trade deficit:

Although U.S. automakers have enjoyed a strong turnaround since the government helped restructure General Motors and Chrysler in 2009—with sales up 29.1 percent—that has not translated into a turnaround for the U.S. auto-parts industry, as indicated by the best-available measure of concern to American workers: jobs. Since the deepest point of the recession in 2009, the U.S. auto-parts industry has regained only 60,000 jobs, an increase of 13.8 percent (Bureau of Labor Statistics 2011). This gain is nowhere near what is needed to erase years of losses: The United States lost more than 400,000 direct jobs in auto parts between November 2000 and November 2011.

… Chinese auto-parts exports increased more than 900 percent from 2000 to 2010, largely because the Chinese central and local governments heavily subsidize the country’s auto-parts industry; they provided $27.5 billion in subsidies between 2001 and 2010 (Haley 2012).

It’s The Trade Deficit

Teamsters President James P. Hoffa drove the point home in March, well before the bankruptcy, in “It’s the Trade Deficit, Stupid“:

The root cause of the nation’s budget crisis is the same as Detroit’s. In both cases, decades of misguided trade policy hollowed out our manufacturing base, caused wages to fall and starved our governments of revenue. In both cases, our trade imbalance is masquerading as debt crises.

Detroit and its people are suffering collateral damage from decades of bad trade deals and trade concessions. For decades, the Motor City was the greatest manufacturing city in the world. Then the U.S. government started to dismantle the nation’s industrial base in order to achieve foreign policy objectives.

A Trade Imbalance Masked As Debt Crisis

This was echoed a few days later in Teamster Nation, in “Detroit’s problem: Trade, not debt“:

Detroit’s financial troubles are a trade imbalance masquerading as a debt crisis. Detroit and its people are suffering collateral damage from decades of bad trade deals and trade concessions.

$12 Billion/Month Auto Trade Deficit Ignored By Media

Finally, here is Dr. Charles McMillion writing at Manufacturing and Technology News the other day, “Motor City Dies, But The Big Wheels Keep On Turning“: (emphasis added, for emphasis) (Please click through and read the whole thing. It’s important.)

Ignored by the media, the U.S. Commerce Department routinely records $12 billion monthly trade losses for the country’s auto industry. There was no reporting earlier this year when it was officially noted that auto trade losses — including trucks and parts — rose last year to an annual world record of $146.9 billion. Since 2000, auto industry trade losses total $1.7 trillion as low-wage or heavily subsidized foreign-produced imports continue to devastate highly productive American jobs and wages, slash tax revenues and public services, and undermine U.S. financial independence requiring massive domestic as well as foreign borrowing. Especially in America’s Motor City, families, businesses and communities have been devastated. Now, with Detroit’s bankruptcy, more dreams and promises are being broken and debts unpaid.

Detroit has been singled out as uniquely corrupt and financially inept. Yet it is the small globalist financial community that has been in or near a constant state of failure, corruption and public bail out since promoting deregulation and a new form of globalization 30 years ago. Almost as absurdly, Detroit is ridiculed for not adequately adapting to the low-wage global and subsidized “market,” with New York Times columnist Paul Krugman literally raising the cliche of “buggy whips,” blithely urging Detroit to find a new competitive advantage. (Who wants to buy autos today?)

Over the past 30 years of lobbying by the financial sector in Washington and support by naive academics for “free” trade, the normal, small U.S. trade surplus in goods and services has turned into an unbroken torrent of 30 consecutive annual deficits that now total an astounding $9 trillion of which $7.7 trillion is for manufactured goods.

Detroit Not Alone

Detroit is not alone. The terrible trade imbalance is wiping out the middle class and entire regions of our country. Yes, it is making a few already-wealthy people fabulously wealthier, and yes, they have tremendous influence over our politicians. But we can do something about it. We the People have to stop being distracted by the lies. If we continue to pump hundreds of billions out of our economy every year with these massive trade deficits — caused by these terrible “free trade’ agreements — it will just keep getting worse and worse.

Call your member of Congress and tell them to stop the trade giveaways. Demand that we take steps to balance trade so we can get the jobs back.
—–

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