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On November 26, 2018, General Motors announced it was laying off 14,000 employees and shutting four factories in the US, one in Canada, one in South Korea, and two in undisclosed areas. Quite naturally, the US corporate news media announced GM was doing this to reduce sedan production because they were not all that profitable. Actually, GM cut 14,000 workers because of its falling share price.

GM had earned tens of billions of dollars the last few years. In 2016, after taxes, the automaker earned a global net income of $9.43 billion, a 2.6% decline from the $9.68 billion it earned in 2015. As recently as October 31 of 2018, barely two months ago, GM announced “third-quarter 2018 earnings results reflecting profitability in all core operating segments. Strong results in North America were driven by all-new full-size trucks, and crossovers. GM China equity income and GM Financial EBT were third-quarter records.” Click here for the source of information.

What the corporate news media is not reporting is that GM is opening new factories in Mexico, where it will produce the Blazer. GM also continues to invest heavily in China. So, US jobs are being exported once again. (Click here for more information.)

In the US, this means most of, if not all, 3,600 factory workers will be out of a job, though some workers could be transferred to other plants. At its operations in Oshawa, Canada, GM employs currently about 2,500 hourly workers and 300 salaried workers; and they’ll be gone. The US and Canada’s losses will be Mexico’s and the wealthy’s gain.

Shutting the eight factories will cost three-plus billion dollars. General Motors has to borrow the money because it has spent $13.9 billion in cash on share buybacks over the past four years while earning record profits now and then. Despite the buybacks, the price of GM shares has fallen quite a bit.

GM’s share price was over $47 in October 2017. Then the share price began to fall in spite of the billions of dollars of share buybacks with the Trump tax cuts, which should have jacked up its share price since buying $13.9 billion worth of GM shares took quite a bit of them off the market. Yet the price continued to plummet until barely above $30 in October 2018.

Notice GM did not use the billions of dollars it saved with the Trump tax cuts to purchase new plant and equipment or to upgrade its US facilities, although it is creating new jobs in Mexico and China with the tax cuts. Instead, the tax money went to prop up its share price, but to no avail. In the end, in order to attract rich investors into buying GM shares, the automaker had to lay off thousands of employees and export jobs to Mexico. The Trump tax cuts, which were focused on corporations and the rich, quite naturally, as expected, were middle-class job killers.

Since GM announced its reductions of employees, its share price has gone up to 37.95 as of November 30th, 2018. The rich are getting richer by producing nothing since the old wages and benefits earned by those GM employees who worked for a living and are now out of jobs are going straight into the pockets of the affluent via higher share prices, rising dividends, and surging corporate earnings.

That is not what the corporate news media wants you to know.

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The rich and Wall Street executives have been quaking in their boots recently. Their Ponzi Schemes and bubbles known as the financial markets are in danger of collapsing. And it’s all because of President Donald Trump.

Trump is threatening to levy taxes on products made in China and exported to the USA. These taxes are called tariffs, and here’s what the corporate news media doesn’t want you to know. By doing this, Trump is also threatening to deflate the recent stock market bubble, which is the same thing as saying Trump is threatening to decrease by significant margins the income and wealth of the billionaires who control both major political parties in the United States.

Tariffs are taxes on goods being imported into the USA from foreign nations. US corporations export into the USA tens of billions of products manufactured in China, Vietnam, Mexico and other third world nations. Increased tariffs mean US corporations will need to raise the prices of their Chinese and other third world products, or lower their profit margins.

The profits of corporations are the primary component determining the prices of shares. When profits drop, especially in the long term, share prices fall. So the share price of say, Home Depot could fall from $176 a share to $14 a share. If you own millions of shares you lose quite a lot of money. This is why the threat of tariffs in steel and aluminum has roiled the US financial markets as of late. A lot of paper wealth is going to evaporate as stock prices drop should the tariffs be enacted. Dividends may decline, as well.

Tens of millions of US jobs have been exported from the US to China, Vietnam, India, Pakistan, Mexico, Honduras and elsewhere over the last twenty-five years. This has been done in order to jack up corporate profits by significantly reducing US labor and environmental costs. The difference between the old higher US wages and benefits and the new lower wages without benefits has gone straight into the already fat wallets and bank accounts of the superrich. They have used their ill-gotten gains to bid up the prices of corporate shares, gold, housing, commodities futures, and other investments.

President Trump’s threat to use tariffs against China and other nations means fewer dollars will go into the pockets of the rich if the tariffs are enacted. It also means potentially massive losses in the stock and maybe even bond markets.

Some corporations may even be inclined to export their jobs in China back to the United States if the tariffs are enacted. The middle class will benefit with additional jobs should this come about. In other words, the tariffs could redistribute income from the rich back into the pockets of the 99 percent, and this is something the billionaires will not allow their corporate media outlets to tell you. The proposed tariffs are limited, and therefore will not have much of an impact, but they will have some positive benefits to the US 99 percent.

Currently, six men own more wealth than the bottom 50 percent of the world’s people (See https://johnhively.wordpress.com/2017/02/23/six-men-own-more-wealth-than-the-bottom-50-percent-of-human-kind/). In the USA, the 1 percent own more wealth than the bottom 90 percent for the first time in US history (See https://johnhively.wordpress.com/2017/12/03/in-the-united-states-the-1-percent-now-own-more-wealth-than-the-bottom-90-percent-for-the-first-time-in-us-history/). In the United States, the 1 percent steal as much as 35 percent of the income produced in the USA every year, up from 8 percent in 1979.

Trump’s tariffs will likely put tiny brakes on the continuously growing inequality of wealth and income produced by free trade agreements. Those brakes will likely only slow down the growing income and wealth inequality rather than halting or reversing them. But the tariffs would be a beginning to reversing the massive income and wealth inequality which the rich have successfully conspired to produce over the last thirty-seven years.

A few other things are in order. The USA has the fifteen to twenty largest trade deficits in world history. That means the US imports more goods than it exports. Our largest trade deficit is not with China, as the media claims. In reality, the largest US trade deficit is with US corporations that have exported tens of millions of US jobs overseas. The purpose of exporting tens of millions of US jobs has been to redistribute trillions of dollars from US workers to the rich, avoid US pollution controls (thereby increasing profits),  and avoid US health and safety regulations.

What American Presidents Have To Say About Tariffs:

“America’s growth and future depend on trade. But we would insist on trade that is fair and free. We are always willing to be trade partners but never trade patsies”. President John F. Kennedy.

“Protection, which guards and develops our industries, is a cardinal policy of the Republican Party. The measure of protection should always at least equal the difference in the cost of production at home and abroad.” President Theodore Roosevelt

“A wise tariff protects American industries and manufacture. It encourages growth and enterprise among our own people. It opens our mines, it erects our machine shops, our furnaces and factories”.
President William Mckinley

It Was Good Enough For Kennedy, Roosevelt & McKinley. Why Isn’t It For Congress?

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The billionaires who control the US federal government and both major political parties are quaking in their boots because the Mexican government has increased the national minimum wage ever so slightly, by .45 cents per day. No doubt the billionaires are worried the increase will cut into corporate profits, slow the increase in share prices during the current economic and stock market bubbles, and perhaps even slow the increase in dividend payments. Heaven forbid!

CNN reports that “Nearly 25 million Mexicans are getting a pay raise next week. From $4.25 to $4.70 — a day. Mexican government and business leaders agreed on Tuesday to raise the country’s minimum wage starting on December 1 to 88.36 pesos from 80.04 pesos. The 10% raise is good news for 24.7 million Mexicans who work either one or two minimum wage jobs. But it also resurfaces a key complaint by American workers who voted for President Trump, in part because of his pledge to renegotiate NAFTA, the trade pact between the U.S., Canada and Mexico. Trump blames NAFTA for the loss of many American jobs. Cheap labor has attracted American companies to Mexico for decades.”

Trump, of course, is correct. Millions of US jobs have been exported to Mexico since before Nafta, and millions more have been created there by US corporations rather than here because the terms of Nafta paved the legal road to do so. Generally, the numbers have been egregiously understated by researchers because the methodology they use deliberately understates US job losses.

What Trump doesn’t want US citizens to know, which is also what the billionaires who run the Republican Party and the Democratic Party don’t want you to know is that US income and wealth inequalities have been fueled by Nafta, and the stock markets have been booming since Nafta, precisely because Nafta has allowed US corporations to export millions of US jobs to Mexico. The difference between the old higher US wages and benefits and the new lower Mexican wages with no benefits goes straight into the already super-sized and ultra-fat wallets of the uber-rich via higher corporate profits, surging share prices and rising dividends.

Do you ever wonder how Warren Buffett, Phil Knight, the Koch Brothers, Steve Jobs, Bill Gates and others ever got so much richer than they should be? These wonder boys have always been big-time supporters of cheap Mexican and cheaper Chinese, Vietnamese and Bangladesh wages with no benefits and fewer worker safety and relaxed or nonexistent environmental controls in those and other nations. They also have prospered because of these things.

So these rich folks owe quite a debt to the record income and wealth inequality they have created to Bill Clinton, Hillary Clinton, George W. Bush, Paul Ryan, and Wall Street Senator Ron Wyden. The rest of us pay the price of the massive political corruption they have created.

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Rexnord Corporation is closing its ball bearings plant in Indiana, laying off its 350 workers, and exporting those jobs to Mexico. In addition, as part of its US workers severance package, many of those workers are training their Mexican replacements, who will $3 an hour with no benefits. John Feltner is a machinist earning $25 an hour in the Indianapolis, Indiana plant. He resents having to train his replacement, but he’ll lose his severance package of $5,000 if he refuses.

Most of the difference in pay between US and Mexican workers will go straight into the pockets of wealthy shareholders. Rexnord’s share price peaked at $30.82 in April 2014. It’s been dropping ever since. It hit a low of $14.72 on January 15 2016, rose a tad, and has stayed stagnant since, hovering around $22. No doubt CEO Todd Adams is hoping that exporting jobs to Mexico will increase its bottom line and attract investors to bid up the share price and his compensation. His CEO pay is tied to the share price thanks to legislation signed by then President Bill Clinton.

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Exporting jobs and CEO pay tied to corporate share price are two of the biggest factors in the widening gulf between the 1 percent and everybody else because they redistribute income and wealth from one group to the other. Currently, six individuals own more wealth than the bottom 50 percent of humanity, while the 1000 richest individuals own more wealth than the bottom 70 percent. Currently, in the USA, the 1 percent steal 35 percent of all income every year, compared to 8 percent in 1980, thanks to their ownership of such politicians as the Clinton’s, Wyden, Mitch McConnell and Orrin Hatch.

John Feltner and his 350 fellow workers lost their jobs thanks to Bill Clinton, who signed legislation deregulating Wall Street, as well putting his signature on the North America Free Trade Agreement (NAFTA. NAFTA was negotiated by Clinton’s representatives with an eye to getting US corporations to export US jobs to Mexico in order to boost their bottom lines. After he left the presidency, Wall Street rewarded the Clinton’s for their service to the tune of tens of millions of dollars. The Clinton’s are still faithful servants of Wall Street in their war against the middle class, such as the workers at the Rexnord plant.

We also can’t forget Democratic Wall Street Senator Ron Wyden has continuously supported redistributing the income of the middle class to billionaires. The Democratic Party is corrupted to the core by big money, though maybe a bit less than the Republican Party. But then again, maybe not.

“The big picture is that American jobs are leaving this country to exploit cheap labor,” Feltner said. “When you start taking away the middle class, what do you have left?”

This is the sentiment that President Donald Trump played to so effectively during the 2016 presidential campaign. It spoke to John Feltner somewhere down deep.”

“He’d been a loyal union man for years, been raised on the notion Democrats were the party of the working man and made calls for Democrats from union phone banks. But after the trade agreements that Bill Clinton and Barack Obama signed, and after Trump spoke to the plight of workers at places such as Carrier, John Feltner broke ranks.

With the layoff fresh on his mind, he cast his November vote for Trump. He says most of his rank-and-file union members did the same.”

And what were those workers supposed to do? Support Hillary Clinton who aspired to export millions of US jobs to China via the Trans Pacific Partnership (TPP), which was being negotiated on behalf of Wall Street by then President Barack Obama?

Feltner and his fellow employees don’t know what they’re going to do once their jobs are gone. Thank you Bill Clinton. Thank you Barack Obama.

For more on this story, click the following link, Rexnord’s Indiana Plant Exported to Mexico–USA Today

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mustang

This week, the Ford Motor Company announced that it was no longer going to export all small car production to Mexico, which meant exporting US jobs. The company will invest $700 million in Michigan, instead, and create another 700 jobs in the process.

Ford CEO Mark Fields said this move was a vote of confidence in Donald Trump. “We didn’t cut a deal with Trump. We did it for our business,” Fields told CNN’s Poppy Harlow in an exclusive interview Tuesday.

During the election season, Trump repeatedly slammed Ford for exporting tens of thousands of US jobs to Mexico.

Now here’s what you haven’t been told. Ford’s share price dropped from a recent high of $17.72 in 2014 to $11.34 on November 2016. Then came the election on November 8, and a subsequent rise in the overall price of corporate shares. So far, Ford’s share price has risen to $13.17 since November 4. Would Ford have kept the jobs in the USA if its share price was heading in the other direction. Not likely.

The billionaires, Wall Street investment corporations and hedge funds are taking cash out of the bond markets and stuffing that cash straight into the stock markets, thereby expanding the bubble, which will soon pop.

When the bubble pops, share prices will fall, and you can bet your bottom dollar that Ford will soon be exporting as many jobs as possible to enhance its bottom line and prop up its failing share price.

The economy should hit the recession by June of this year. Expect the stock and housing market bubbles to pop shortly afterwards.

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Official portrait of President Barack Obama in the Oval Office, Dec. 6, 2012. (Official White House Photo by Pete Souza) This official White House photograph is being made available only for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way and may not be used in commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House.

Official portrait of President Barack Obama in the Oval Office, Dec. 6, 2012. (Official White House Photo by Pete Souza)

This is the second in a series of the accomplishments and the worst of President Obama. Click here for Part 1.

1. Obama normalized relations with Cuba after sixty years of trade embargo. Now Cuba can upgrade its economy, and the US has a new trading partner. There are a ton of people who opposed this move, but those are the same corporate hacks who support exporting US jobs to Mexico, China, Vietnam and elsewhere. I had a friend a long time ago who said he opposed the Vietnam War. This was back in 1980 or so. “If we hadn’t gone in there,” he said, “they’d be capitalists by now.”

2. Obama authorized the raid that killed Osama Bin Laden. He announced the terrorist leader’s death in a live speech to the country saying, “Last week, I determined that we had enough intelligence to take action and authorized an operation to get Osama Bin Laden and bring him to justice.” The Republican president before Obama was such an incompetent he couldn’t figure out where Bin Laden was, much less kill him.

3. He helped stimulate the auto industry after the financial crisis. Chrysler and GM have created 250,000 jobs since then. Of course, many of these new jobs are in Mexico.

4. He signed the Dodd-Frank Act, which holds Wall Street accountable a little bit in the event of another financial crisis. In reality, the Dodd-Frank Act doesn’t regulate hedge funds even a little, and the act was heavily watered down by Wall Street lobbyists. So Dodd-Frank wasn’t much of anything, except that it included a provision for the establishment of the Consumer Protection Agency, which Wall Street executives and billionaire investors feared because it meant they couldn’t cheat and lie to the common folk as easily as before.

5. Obama backed down like a whipped dog when Wall Street billionaires and executives demanded he not appoint Elizabeth Warren to head the new Consumer Protection Agency. This turned out to be a good thing, even if by accident. Warren later became a US senator and is likely to be the next president of the United States in 2020.

Among Obama’s worst decisions:

He appointed Arne Duncan to be US Secretary of Education. Duncan is a firm believer in using every child possible to enhance the profits of the testing industry, especially Pearson Limited, a long time financial sponsor of the Democratic Party. When Duncan announced his resignation the president of the AFT teachers union said, “there’s no question that the Department of Education’s fixation on charter schools and high-stakes testing has not worked.” US K-12 public education students are the most tested in the world, and by a wide margin. It’s all about the money folks, that’s what US educational reform means. Obama’s education policy was a complete, or nearly complete, failure.

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Several days ago, Donald Trump announced he had successfully negotiated with United Technologies, parent corporation of Carrier Corporation, to keep “1100” of the 1700 Indiana jobs about to be exported to Mexico. Trump had vigorously campaigned against exporting US jobs, but isn’t that primarily what US negotiated trade agreements are all about? Precisely!

Trump promised during his campaign that he would tax US corporations that exported jobs, and then shipped their products made in other nations to the USA.

When push came to shove, Trump backed down on his promise like a scared nerdy kid against a gang of bully thugs. Trump offered tax cuts, equivalent to giving up the nerdy kid’s lunch money, rather than tax increases. In other words, United Technology executives got away with extortion.

Worse yet, Trump must have known he’d been spanked, so he exaggerated the number of jobs he’d negotiated to save. For $7 million in tax breaks, Trump saved 730 jobs, not the 1100 he’d claimed a week ago.

According to the Washington Post,

“Trump had pledged to save the plant’s jobs, most of which were slated to move to Mexico. Then the businessman won the election, and the 1,350 workers whose paychecks were on the line wondered if he’d keep his promise.

Chuck Jones, president of the United Steelworkers 1999, which represents Carrier employees, felt optimistic when Trump announced last week that he’d reached a deal with the factory’s parent company, United Technologies, to preserve 1,100 of the Indianapolis jobs — until the union leader heard from Carrier that only 730 of the production jobs would stay and 550 of his members would lose their livelihoods, after all.

In exchange for downsizing its move south of the border, United Technologies would receive $7 million in tax credits from Indiana, to be paid in $700,000 installments each year for a decade. Carrier, meanwhile, agreed to invest $16 million in its Indiana operation. United Technologies still plans to send 700 factory jobs from Huntington, Ind., to Monterrey, Mexico.”

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