Archive for July, 2011

The economy added only 18,000 new jobs in June 2011 and that shouldn’t come as a surprise.
Nobel prize economists such as Paul Krugman and Joseph Stigletz warned that Obama’s stimulus packages were insufficient to spur serious growth in a severely wounded economy. Former labor secretary Robert Reich warned that the distribution of income had become too lopsided in favor of the rich for the economy to grow jobs.

Fool that he is, or so he appears to be, Obama ignored the people who are always right and listened to Wall Street drones like Lawrence Summers. Now with his reelection prospects dimming, Obama wants to foolishly curtail federal spending.

So is Obama stupid? Or foolish? Maybe. However, there might be a more sinister reason his legislative decisions have always favored redistributing income from working people to the rich.

The rich have been waging economic war against the middle class and the poor. They’ve been using their financial clout in government to redistribute income their way. The answer to Obama’s foolishness becomes obvious when seen through this light.

Obama decided long ago to enter this class war on the side of the rich. He’s a real class warrior—for rich folks.

The United States needs a new FDR. Obama is not that person, and he never will be. He is the wrong man for the wrong job at the wrong time.

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The time had come to fight power with truth. That’s why I raised my hand at a town hall meeting hosted by Oregon’s liberal Democratic Senator Ron Wyden. Last January, I’d driven thirty miles from Portland to St. Helens to ask one question. There were about 150 of us. I sat and listened as people asked a variety of questions. Nobody challenged any of the senator’s canned answers.

Wyden is a member of the senate finance committee. As chairman of the subcommittee on trade, the senator is in a position to determine the economic fate of millions of his fellow citizens.

I thought Wyden was a liberal, fighting for the good of the common man in the corridors of power in Washington D.C. I guess that was a long time ago, if ever. Nowadays, the senator is a plutocrat serving the corporate elite in their war against the middle class. The purpose of this war is to redistribute income from working people to the affluent. Like many Democrats and nearly all Republicans, Wyden has done his job well during the last thirty years.

Now, with the middle class staggered by job losses, along with thirty years of stagnant wages and declining benefits due in large part to trade policies that Wyden championed, the senator has decided to go for the kill. By all accounts, he intends to vote yes for the South Korea Free Trade Agreement this summer. Then he’ll vote for the Panama and Colombia free trade treaties when they come up for votes shortly afterward.

Free trade agreements are con games of the rich that enable them to swindle the vast majority of Americans out of their American dreams. The free trade income transfer scam is simple. These deals pave the way for corporations to ship jobs overseas. When they do, the difference between the old compensation in the United States and the new compensation overseas becomes profits. The newly available profits are then divvied up to the affluent as dividends and rising share prices. A job that costs an employer $50,000 a year in the United States costs $5000 or less in a lot of other nations. The difference is $45,000. That’s what the rich pocket. The American citizen who loses that job gets unemployment checks for a while, as well as an uncertain future. Wyden is not a dummy. He knows this.

The Economic Policy Institute (EPI) predicts the United States will lose over 800 thousand jobs within ten years if congress approves the free trade agreement (FTA) with South Korea. In other words, the affluent will get richer at the expense of the job losers. Imagine how many more jobs will be lost if congress also approves the FTAs with Panama and Colombia. Job losses from the three FTA’s could approach or exceed 1,500,000, especially if the results are similar to what happened after NAFTA became law on January 1, 1994.

Depending on who is doing the math and what figures they’re using, the experts have decided American job losses due to NAFTA are somewhere between 600,000 and 900,000. For example, Jobs with Justice has estimated the U.S. lost 766,000 jobs to Mexico from 1994 to 2001. More recently, an EPI study estimated the USA has suffered a net loss of 879,000 positions due to the treaty.

Lots of US corporations have taken advantage of NAFTA. Take General Electric (GE) for example. According to Business Week, the company has exported thousands of jobs to Mexico since 1994. This includes jobs making refrigerators and parking meters. However, not all of the positions shipped to Mexico are in manufacturing. By 2008, GE was hiring an engineer a day in Mexico. Those employees earned one-third as much as their U.S. counterparts.

Of course, there are plenty of other companies that manufacture their products in Mexico and then import them to the United States. For example, some Craftsman power tools are now made in Mexico and are then exported to the USA. This brings us to another point. Plenty of U.S. corporations manufacture goods overseas and then export them to the United States. Most Nike shoes are made in Vietnam and China and many of them are then exported to the United States. My Hewlett-Packard computer was manufactured in China. Thousands of other things are manufactured abroad by U.S. corporations and are then exported to the United States.

This brings us to an unfortunate truth about trade deficits. Much of the total US trade deficit is with US chartered corporations that have exported jobs, or created jobs overseas that would otherwise have been established here had it not been for investment clauses in trade treaties. This is especially true with respect to deficits the United States has with developing nations, such as China and Mexico. The same will be true with South Korea, Colombia and Panama.

Obviously, this is not necessarily valid about US trade deficits with more advanced countries, such as Germany, Japan and Canada. However, one has to remember that US companies ship many of their products to developed countries from their factories, contractors and sub-contractors in less developed nations. In other words, the shipping of jobs from the USA to lower wage countries also contributes to the US trade deficit with more developed nations.

All of this means trade deficits are a rough tool to gauge the redistribution of income in the United States. The larger the trade deficit, the more income is being redistributed in the USA from working citizens to the affluent. That’s why the trade deficit and the mal-distribution of income exploded upward in tandem after President Ronald Reagan began his war against the middle class thirty years ago. The United States total trade deficit of nearly $17 billion in 1981 has exploded to nearly $500 billion in 2010. During this same period the richest 1 percent of Americans saw their chunk of national income rise from less than 9 percent to almost 24 percent. This was not a coincidence. It was cause and effect.

The EPI projects growing trade deficits with South Korea, Colombia and Panama if the trade deals are approved by congress. This leads us to an unspoken truth. The real purpose behind these FTAs is to redistribute more income from working Americans to the affluent. In other words, on behalf of the rich, Senator Wyden is preparing another frontal assault against the middle class during the summer of 2011. That’s why I was in St. Helens.

These weren’t the only thoughts racing through my head. I didn’t want the senator to redistribute my son’s future to the affluent, just like he’d done to other Americans when he voted for NAFTA, as well as the Central American Free Trade Agreement (CAFTA). I hoped he might respond to reason.

An hour or so into the meeting, the senator announced he only had enough time to take three more questions. Tons of hands shot up. One of those was mine. I figured there was no way I’d get called on. Then the aide to the senator made a critical mistake; he pointed his finger at me.

I stood and fidgeted for a moment. Earlier, the senator had answered my question when he told a woman he hadn’t made up his mind on which way he was going to vote on the South Korea FTA. That was nonsense. He’d had years to decide. That brought up another question and it wasn’t all that simple. After the aide called on me, I had a few seconds to organize my thoughts. Then I steeled myself and said what I felt needed to be said:

“I don’t understand your position on the free trade agreement with South Korea. Numerous studies show these trade agreements redistribute income and wealth from working people to the rich. That’s one of the biggest problems today. The rich have more of the national income than possibly at any time in our history. Former Labor Secretary Robert Reich called this the biggest issue of our time in his most recent book. The demand for goods and services is weak in the United States because of it. This trade agreement is going to ship more jobs from the United States to South Korea according to the Economic Policy Institute. Everybody knows the difference between the old wages here and the new wages in South Korea are going to be redistributed to the rich via greater dividends and enhanced share prices.”

I started gesturing with my hands as I continued, “Look what’s going on around you. Look at your country. There’s massive unemployment. The demand for goods and services is weak. How can we have a robust economy if people can’t buy stuff because their jobs have been shipped overseas? People have gone without jobs for years. Much of the tax base has been shipped overseas. That’s one of the reasons why they’re tens of thousands of people protesting in the streets of Madison, Wisconsin. These treaties only make the wealthy richer at the expense of the rest of us. They weaken the demand for goods and services in this country.”

At this point, I wanted to say, “Your position on this treaty is complete bullshit.” However, I held my tongue and opted to say something a tad nicer, “Your position on this treaty is completely silly.”
As I began to sit down, the senator stood ramrod straight. Then he pointed his finger at me and said, “Sir, I said I haven’t made up my mind on the treaty.”

My posterior hadn’t even hit the chair when I began to rise with my hand in the air. I was indignant. I was going to say, “That’s my point. How could you not have made up your mind?”

At that exact instant, just as the senator was beginning to defend his position with his earlier answers, two of his assistants appeared like magic at my sides. They asked for my name, if I wanted to provide any additional information and several other things. After about thirty seconds, I sat down and told them, “No, you can’t have my name.” I figured the assistants were there to distract anybody who asked a question that might make the senator uncomfortable. So I shooed the assistants away. Then I realized something.
It didn’t matter what anybody in the audience said. We were working people. The senator didn’t care that the South Korea FTA was going to redistribute income from working people to the affluent and weaken the demand sector of our economy even more.

I figured Wyden had already laid the groundwork to wage war again against the middle class on behalf of his biggest campaign contributors: Nike shareholders, hedge fund managers and investors, as well as other affluent institutions and people. Income redistribution: that’s how the wealthy have gotten richer while sucking the middle class dry. In addition, this scheme gives the affluent more money to purchase additional lobbyists and senators.

As the senator finished his rebuttal, I realized the future of our children was on the line. The time had come. I decided to get politically involved in the hope that enough committed voters might change Wyden’s mind.

In April, I attended a meeting with one of Wyden’s assistants. Everything he said indicated the senator intended to vote for the treaty no matter how devastating it was for the majority of Americans.
I now spend more time working as a volunteer with Oregon Fair Trade, an organization aligned against free trade income redistribution treaties. I got involved with Portland Central America Solidarity Committee (PCASC), which is against the treaty. They’re taking direct action against any members of congress not opposed to the South Korea FTA. Along with others, these groups are informing voters and taking part in protests. And they’ve had success.

Oregon Congressman David Wu was sitting on the fence on the South Korea FTA. These groups got him to change his mind. This proved one truism.

We can stop the rich and their plutocrats in congress. If we educate enough people, if we get voters to say enough is enough, we have a chance to stop this latest rich man’s scam. The time for action is now. Stand up for yourselves and for your children. Get involved. Go online. Numerous organizations are defending the vast majority of Americans against members of congress intending to vote yes on these trade treaties. The lists are long. We can stop this summer’s free trade income redistribution con game. Sign up, get active and stop the madness.

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