At the same time as U.S.-based corporations have been shifting
This latter belief has been hardened by disclosures that since 2000 U.S.-based multinational corporations have been cutting 2.9 million jobs in the U.S. while increasing their foreign employment by 2.4 million (Wall Street Journal 4/19/11). Despite these trends, President Obama in 2010 very consciously chose to discard a well-crafted Democratic political strategy drawing exactly upon this opposition to the off-shoring of jobs, designed to preserve a Democratic Congress during the November 2 mid-terms. The result: the unprecedented loss of 63 Democratic House seats and 6 in the Senate.
Disregarding the signals sent by the public in the election, Obama has since even more fully committed himself to “free-trade” agreements that undergird the off-shoring of jobs. However, as the 2012 election draws nearer, the economy’s sluggish performance is likely to make President Obama keenly aware of the extreme dangers of embracing the CEOs and their policies that promote off-shoring jobs.
Obama and his pro-globalization advisors may finally be forced to recognize that off-shoring jobs is extremely unpopular with the electorate, widely perceived as a principal cause of ongoing economic misery, and is thus a barrier to a second term. The most recent economic figures should be setting alarm bells off in the White House: growth of just 1.8 percent in the first quarter, accompanied by mounting layoffs in the public sector, gas prices well over $4 a gallon (thanks in part to Wall Street speculators), and unemployment still just under 9 percent.
Moreover, Republican control of the House means that any stimulus proposal that Obama might contemplate, however unlikely, would be blocked both on ideological grounds and to keep Obama on the hook for economic misery extending into 2012. The “free markets” praised by President Obama have failed to provide the “private-sector job growth” in permanent, middle-class jobs that Obama counted on almost exclusively. Obama’s “Win the Future” export-expansion strategy, which includes passage of free trade agreements, seems doomed to failure.
Battles With Base?
Moreover, the Democratic Party base of labor unionists and progressives—after remaining relatively quiescent during Obama’s first two years—is suddenly showing more signs of independence from Obama and the Democrats. Labor and the left spontaneously exploded into action most notably in Wisconsin with a month-long siege of the State Capitol capped by demonstrations of 100,000 or more people (see April Z), followed by states like Indiana, Michigan, Ohio, and many others, in response to Republican governors’ efforts to revoke public-employee union rights and weaken the voice of democratic forces.
Obama’s drive for the passage of NAFTA-style trade agreements with
The battles in Congress over trade measures are likely to mobilize opposition from labor and the left, with populist right-wing groups jumping in as well, as they did in 1993 against NAFTA. Obama thus risks open conflict with labor and infuriating much of his electoral base at a time when much of labor is already disillusioned by his unwillingness to stand up to Wall Street.
But so far, Obama continues to embrace the corporate elite and their brand of economics—apart from the most extreme budget-cutting. Within a week of severe Democratic losses in manufacturing states especially vital to his re-election prospects in 2012—from
“Mr. Obama met privately with American chief executives, among them Jeffrey R. Immelt of General Electric, who has been critical of the White House in the past. ‘It’s unprecedented,’ Mr. Immelt said in an interview, praising Mr. Obama for talking up trade, a politically risky move for a Democrat.” To promote the growth of
Along with being premised on new NAFTA-style free trade agreements and no curbs on off-shoring jobs, the export program seems doomed to failure. First, much of
Finally, “It will take time for any growth of exports to add jobs in
Still, Obama is plunging ahead with an economic strategy that aligns him closely in the public view with CEOs like GE’s Immelt, who may acquire the same kind of notoriety as Wall Street’s bonus-grabbing bankers. Obama named Immelt as chair of the President’s Council on Jobs and Competitiveness, stating, “He understands what it takes for
Moreover, under Immelt, GE’s tax department, staffed by 975 accountants and tax attorneys, managed to pay no federal income taxes for 2010 despite $14.2 billion in profits. GE, in fact, succeeded in accumulating $3.2 billion in tax credits. A NY Times article on GE observed, “While G.E.’s declining tax rates have bolstered profits and helped the company continue paying dividends to shareholders during the economic downturn, some tax experts question what taxpayers are getting in return. Since 2002, the company has eliminated a fifth of its work force in the
Perhaps no corporation more than GE—which the Times called America’s largest—embodies the breakdown of the post-war “social contract” where corporations traded union recognition, high wages, and an enlarged domestic market for labor enforcing workplace discipline and holding back from questioning investment decisions.
The breakdown of the “social contract” is evident in the radical shift in General Electric’s guiding philosophy. As quoted in Steven Greenhouse’s The Big Squeeze, in 1962, GE’s employee benefits manager wrote, “Maximizing employer security is a prime company goal.” The employee who can plan his economic future with reasonable certainty is an employer’s most productive asset. Compare that quaint attitude with the ruthless credo of Jack Welch, GE’s CEO from 1981 to 2001, who showed his disregard for employee loyalty when he declared, “Ideally you’d have every plant you own on a barge.” By that, he meant a readiness to seek out at a moment’s notice the lowest possible wages and most pliable governments (weak regulations, low taxes, hostile to unions, etc.) anywhere on the globe. Immelt, in a more civilized fashion, has embodied the same strategy. Now the norm across Corporate America, it has played a crucial role in transforming
The richest 1 percent now rake in nearly a quarter of all income, with their share rising 228 percent from 1979 to 2005. This privileged 1 percent holds 40 percent of all wealth, according to Nobel laureate economist Joseph Stiglitz. Those in the top 10 percent bracket command more than 90 percent of the nation’s net worth. The top 100 CEOs earn 1,723 times as much as their workers (Les Leopold, The Looting of America). Wall Street handed out an estimated $144 billion in bonuses for 2010. Corporate profits for 2010 soared to near-record levels.
Meanwhile, real wages have been dropping for workers since 1979, with
Profound Shift Vs. Free Trade
While U.S. elites continue to embrace corporate globalization and off-shoring, a tectonic shift has been taking place about “free trade” among the public, with those who see themselves shut out of the benefits of “free trade”—the majority of American citizens—now increasingly forming a rival consensus of their own: that corporate globalization benefits and empowers only major corporations at the expense of workers, environment, and democracy across the globe.
A WSJ/“NBC News” poll reported on October 2, 2010 showed “83 percent of blue-collar workers agreed that outsourcing of manufacturing to foreign countries with lower wages was a reason the
Those results were closely paralleled by a June 2010 poll for the
Public opinion shaping the 2008 elections also displayed the same concern over the flight of jobs to low-wage nations. Similarly, Fortune (1/23/08) reported polling results in 2008 where, “The explanation for the current economic slowdown most frequently cited by respondents: ‘
Throughout the 2008 primary season, both Barack Obama and rival candidate Hillary Clinton expressed outrage against the flight of jobs off-shore, in order to keep up with Democratic voters infuriated by corporations abandoning
But since becoming president, Obama has almost entirely jettisoned his critique of government and corporate policy on jobs and trade. Obama has surrounded himself with advisors like Treasury Secretary Timothy Geithner, former Goldman Sachs executive Lawrence Summers, and Rahm Emanuel (a key player in Bill Clinton’s 1993 drive for NAFTA passage). These advisors hold “free trade” to be an unquestioned article of faith. In 2004, some of the same circle of Wall Street figures—like Robert Rubin and Roger Altman—persuaded Democratic nominee John Kerry to entirely drop his potent rhetoric about “Benedict Arnold CEOs” responsible for the export of jobs.
Carl Rosen, the Western District president of the United Electrical, Radio, and Machine workers, said, with barely-suppressed exasperation, that Obama’s corps of Wall Street-based advisors has one driving loyalty: to a system that maximizes the power of corporations to extract profit. “Obama’s economic advisors’ loyalty doesn’t lie with workers or even getting Obama reelected but with Wall Street,” Rosen concluded.
President Obama’s unwillingness to stress the off-shoring issue surely contributed heavily to the Democrats’ electoral disaster in November 2010. Obama was unwilling to depart from his pro-“free trade” script and pick up the cudgel against corporate off-shoring of
The 2010 election was dominated by the Republicans’ incessantly repeated narrative that ongoing economic troubles were the responsibility of the Democrats’ “big-government” policies. Some Republicans even wove a rightist version of the off-shoring issue into their message. Obama countered with the technically correct but much less compelling argument that the unemployment situation would have been even worse without his economic stimulus, auto bail-out efforts, and continuation of the TARP program begun under George W. Bush.
Progressive pollster and author Ruy Teixeira of the Center for
Professor Jack Metzgar of the Center for Working Class Studies has observed the stunning nature of this electoral shift in 2010 evident in Midwestern factory towns toward candidates who had consistently opposed every palliative measure Obama had proposed to ease the Great Recession’s effects. That’s a huge move toward Republicans who were against saving the American auto industry and who voted against infrastructure investments and jobs, (very) partial bailouts of state governments, extensions of unemployment insurance, and health care reform and tax policies that benefit working-class whites.
Obama’s failure to put forth a coherent economic narrative produced muddled decisions about voting among working people. For example, one retired nurse in
In general, turnout of Democratic-leaning constituencies—workers, people of color, and young people—was weak in the middle of the nation, according to Rep. Alan Grayson (D-FL), who was among the Democratic casualties. Grayson contended on “Democracy Now!” that the Obama administration had followed a “strategy of appeasement” that left the Democratic base disoriented and demoralized.
Lori Wallach, director of Public Citizen’s Global Trade Watch, makes a convincing case (CommonDreams.org, 11/3/10) that Obama cannot hope to be re-elected without taking convincing action to stem the tide of off-shoring jobs and promoting an alternative “fair trade” model that protects and restores U.S. jobs and workers’ rights and the environment around the world.
Without winning back voters in the industrial
Roger Bybee is a Milwaukee-based writer, publicity consultant, and former editor of the