Tuesday, February 8, 2011

The Obama Agenda for American Workers

Here is the analysis by Robert Reich, Clinton's former Secretary of Labor. He's a man I trust. He has a very low opinion of the maneuvering Obama is doing with respect to American labor. From Reich's blog:
“We can, and we must, work together,” the President told the U.S. Chamber of Commerce today. “Whatever differences we may have, I know that all of us share a deep, abiding belief in this country, a belief in our people, a belief in the principles that have made America’s economy the envy of the world.”

Really? I’ve been watching (and occasionally trying to deal with) the Chamber for years, and all I know is it has a deep, abiding belief in cutting taxes on the wealthy, eroding regulations that constrain Wall Street, cutting back on rules that promote worker health and safety, getting rid of the minimum wage, repealing the new health-care law, fighting unions, cutting back Medicare and Social Security, reducing or eliminating corporate taxes, and, in general, taking the nation back to the days before the New Deal.

So what, exactly, is the deal Obama is pitching to the Chamber?

He said his administration will “help lay the foundation for you to grow and innovate,” by eliminating “barriers that make it harder for you to compete - from the tax code to the regulatory system,” and by completing more trade deals.

In return, the President said he wants businesses to hire more Americans. “Many of your own economists and salespeople are now forecasting a healthy increase in demand. So I want to encourage you to get in the game,” he said. “And as you hire, you know that more Americans working means more sales, greater demand and higher profits for your companies. We can create a virtuous cycle.”

Virtuous cycle? American businesses are doing quite nicely as it is. Their profits are soaring. And one reason they’re doing so well is they’re holding down costs, especially payrolls. So why would they ever agree to add more workers now?

From the standpoint of the nation as a whole more Americans working may mean even higher profits overall. But publicly-traded companies aren’t in the business of spending money to help other companies. To the contrary, they’re competing with one another to show high quarterly earnings in order to boost their share prices. They’ll “get in the game” and begin to hire large numbers of Americans only when it helps their own bottom lines.

And when will that be? Not long ago I debated a conservative economist who argued American workers had priced themselves out of the global labor market and would therefore have to settle for lower real wages and benefits before they’d be hired back in large numbers. By his logic, many health and safety regulations would also have to be compromised or abandoned, since they also make American workers more expensive.

If this is the tacit bargain the President is offering business – more trade-opening agreements, less regulation, lower taxes, and lower real wages and benefits, in return for more jobs – it’s not a good deal for American workers.
Sadly almost nobody in the bottom 90% of the American population pays attention to articles about Obama addressing the US Chamber of Commerce. How boring! But in reality, this is very important. Obama has signaled a willingness to trade away the standard of living for generations to come so that he can get a boost in employment in time for the next election so he can get his second term. That's the problem with politicians. Their goals are short term and self-centred. What the public needs is government officials focused on the long term and the benefit of the whole population.

There has never been a utopia where politicians lived up to the ideals of "public service". But over the last 30 years with the right wing rhetoric about "government is the problem" and "greed is good", the level of civic mindedness, public spirit, and sacrifice for the greater good has gone the way of the dodo. It has created a meaner society and it threatens to blow apart much like Egypt. You can suppress the great majority for only so long before they catch on that they've been duped and then their rage is a wildfire that is impossible to control. The right wing nuts in the US don't realize they are playing with fire.

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