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Stewart Acuff

By Stewart Acuff
Special Assistant to the President, AFL-CIO

It is almost 4am as I write this at the First Presbyterian Church in Little Rock, AR. We are almost halfway through our 24 hour vigil which began at the state headquarters of Senator Blanche Lincoln yesterday afternoon.

We are holding a 24 hour vigil for passage of the Employee Free Choice Act during this Memorial Day congressional recess. When we began the vigil at Senators Lincoln’s office we presented her staff with 2000 handwritten letters including 300 from small business owners across this state. Yesterday’s batch of handwritten letters brings the total of letters Senator Lincoln has received to 14,000.

This vigil is an unusual tactic in a congressional lobbying effort. But the vigil is anything but unusual in nonviolent action for social and economic justice.

During the vigil we bear witness to the injustice of corporate America, the intimidation, termination and retaliation against workers who are trying to form unions and we pray that those who have the power to make change will use that power.

Senators Lincoln and Pryor of Arkansas are pivotal in our campaign to pass the Employee Free Choice Act. Organized labor in Arkansas has run a massive legislative blitz with phone calls, handwritten letters and face to face meetings.

But the vigil takes the campaign to a different level, introducing a more spiritual element and a traditional southern Civil Rights tactic. Faith leaders and clergy led by the Interfaith Committee for Worker Justice have already been central to the campaign. Tonight faith leaders assume and even more important role.

Along with faith leaders, other elements of the Democratic Coalition and progressive movement are taking a more important and more central role in the fight for the Employee Free Choice Act. Students and young activists are outside now creating puppets for the march we will have from Senator Lincoln’s office to the State Capital.

We will break the vigil this afternoon with a march and a rally to the State Capital calling for an economy that works for all. Ministers, African American and white, young people, civil rights leaders, elected officials and union activists will all step up to increase the call for Senators Lincoln and Pryor to say no to Walmart and Tyson’s Foods and support the Employee Free Choice Act.

In a couple of hours, the sun will break over Little Rock and our vigil will be half over. We will continue to pray all day. Then we will march.

Leo W. Gerard

By Leo W. Gerard
USW International President

Judge Sonia Sotomayor would help provide balance to a U.S. Supreme Court that remains all too white and all too male.

Dismissing the effect of life experiences on decision-making is to treat judges like Vulcan characters. Some jurists may claim to be Dr. Spock clones, but they’re not. Spock was fiction. 

The Party-of-No began opposing Sotomayor even before President Obama nominated her for the Supreme Court, citing a 2001 speech she made acknowledging that the paths people walk through life may affect their accumulation of wisdom.

Here is what she said in that talk entitled “A Latina Judge’s Voice”:  “Whether born from experience or inherent physiological or cultural differences, a possibility I abhor less or discount less than my colleague Judge Cedarbaum, our gender and national origins may and will make a difference in our judging. Justice O’Connor has often been cited as saying that a wise old man and wise old woman will reach the same conclusion in deciding cases…I am not so sure that I agree with the statement. First, as Professor Martha Minnow has noted, there can never be a universal definition of wise. Second, I would hope that a wise Latina woman with the richness of her experiences would more often than not reach a better conclusion than a white male who hasn’t lived that life.”

It makes you wonder how the infamous Dred Scott case would have been decided if three or four black justices had sat on the Supreme Court in 1857. An all-white panel decided in that case that black human beings imported from Africa as slaves and their descendents were not legally people and could not, as a result, be U.S. citizens. All-male panels of justices never saw gender discrimination in a Supreme Court case until 1972.

Here’s what Judge Sotomayor also, wisely, said in that speech, “Hence, one must accept the proposition that a difference there will be by the presence of women and people of color on the bench. Personal experiences affect the facts that judges choose to see. My hope is that I will take the good from my experiences and extrapolate them further into areas with which I am unfamiliar. I simply do not know exactly what that difference will be in my judging. But I accept there will be some based on my gender and my Latina heritage.”

To do justice in a diverse society, the justices themselves must be diverse. President Obama has nominated for the Supreme Court a judge who was valedictorian of her high school class, who won a scholarship to Princeton University and who served as editor of the Yale Law Review while earning her law degree from Yale University. She was first appointed to the federal bench by former President George H.W. Bush and to her current seat on the federal appeals bench by former President Bill Clinton. She has more judicial experience than anyone currently serving on the court when appointed. In addition to all of that, she is wise and thoughtful. She acknowledges and celebrates the fact that her path to this place may affect the future.

That is telling the truth. It is also the truth that Chief Justice John Roberts’  background as a wealthy white male affects his thinking. For the workers in this country, the people of color, the women, for everyone who is not wealthy, white and male, to provide balance on the court is to improve justice.

Robert Borosage

Robert L. Borosage  
Co-Director Campaign for America’s Future

Congressional Republicans are marginally more popular and significantly less contagious than the swine flu. Even conservatives are keeping their distance. House leader John Boehner’s perpetual tan has become a presidential punch line. Senate leader Mitch Dr. No McConnell is known only for obstruction. Ideologues like Rush rush to fill the leadership vacuum, seeking to purge the party of any lingering moderates. It’s gotten so bad that neo-con Bill Kristol suggests that leading presidential candidates for 2012 might well be the oft disgraced Newt Gingrich and..gulp.. Darth Cheney himself.

Cheney and Gingrich are worth paying attention to – not as presidential contenders but as very sophisticated conservative political combatants. Both are brass knuckled politicians, steeped in the Lee Atwater school of anything goes wedge politics. And both are laying down clear markers for the debate to come.

Cheney’s torture campaign managed to spook querulous Democrats about Guantanamo and force Obama into the lists to respond to him. Cheney’s speeches were less analysis than rant, but they told a clear story:

America is at war. Evil enemies lurk in dark corners. After 911, the Bush administration took the steps necessary – some of them harsh, some unspeakable, but all necessary – to keep us safe. Now Obama is dismantling vital elements in that protection, emboldening our enemies, confusing our friends, and weakening our defenses.

In Cheney’s words, “The administration seems to pride itself on searching for some kind of middle ground in policies addressing terrorism… But in the fight against terrorism, there is no middle ground, and half-measures keep you half exposed…There is never a good time to compromise when the lives and safety of the American people are in the balance.”

Cheney is betting on failure. He has set Obama up to take the rap if there is another terrorist strike in America, or if things go badly in Iraq or Afghanistan. He’s essentially advising Republicans to forget the moderating steps of the Bush second term, and to draw a bright line in assailing any retreat, any compromise, any turn to legal or constitutional niceties.

Gingrich pursues the same strategy on the economy, only he’s willing to throw Bush under the bus. In his speech before the Conservative Political Action Convention, he lacerated Obama for ushering in the “European socialist” takeover of America’s economy. At same time, he tied Obama to Bush in what he calls “a Bush-Obama big spending program that was bipartisan in its nature. Last year the Bush Obama plan had a 180 billion stimulus package in the spring which failed. It came back with a 345 billion housing package in the summer which failed. It then had a 700 billion Wall Street bailout in October which failed. It had a 4 trillion dollar Federal Reserve guaranty which failed. The Bush-Obama plan was continued. We didn’t get real change. ..We got big spending under Bush, now we have big spending under Obama, and so we have two new failures.”

Gingrich recycles the old standards of the Reagan conservative mantra to describe the choice facing the country:

“They have shared openly and honestly with us their vision of higher taxes, bigger government, more bureaucracy, greater corruption, more political power by people unworthy of doing it, and a policy which will kill jobs, cripple the economy, trap children in schools that are disasters and weaken America’s future. They have every right to have that vision and we have every right to go to the polls and defeat it.

We should have as a goal 435 campaigns in this country of people dedicated to representative government, to lower taxes, to less power in Washington and to taking back from the bureaucracy the power it can’t possibly use over the American economy.”

In Gingrich’s speeches, there is very little on how we got into the mess we are in. Rather the focus is on the failure to get the economy going and the choice going forward.

Again, Gringrich is betting on failure. If, as is likely, unemployment keeps rising over the next year, foreclosures continue, any recovery is halting at best, Gingrich’s argument is designed to blame Obama rather than the mess that conservatives left him.

Democrats must engage on this level of analysis. That is why the mantra of not “litigating the past” is foolish. Democrats have to tell clearly the story of how we got into the hole we are in — both abroad and at home.

Obama is the best at this. His response to Cheney was compelling, but circumscribed:

Unfortunately, faced with an uncertain threat, our government made a series of hasty decisions. I believe that many of these decisions were motivated by a sincere desire to protect the American people. But I also believe that all too often our government made decisions based on fear rather than foresight; that all too often our government trimmed facts and evidence to fit ideological predispositions. Instead of strategically applying our power and our principles, too often we set those principles aside as luxuries that we could no longer afford. And during this season of fear, too many of us — Democrats and Republicans, politicians, journalists, and citizens — fell silent.

…I categorically reject the assertion that these [waterboarding and other tortures] are the most effective means of interrogation. What’s more, they undermine the rule of law. They alienate us in the world. They serve as a recruitment tool for terrorists, and increase the will of our enemies to fight us, while decreasing the will of others to work with America. They risk the lives of our troops by making it less likely that others will surrender to them in battle, and more likely that Americans will be mistreated if they are captured. In short, they did not advance our war and counterterrorism efforts — they undermined them, and that is why I ended them once and for all.

On the economy, Obama has evoked the language of biblical parable in contrasting the economy built on sand with that build on rock. The economy built on sand, begun under Reagan, with top end tax cuts, deregulation, the cult of the CEO, the myth that markets would police themselves that led to a frenzy of speculation, greed, corruption and the placing of bigger and bigger bets with more and more borrowed money until that economy collapsed on its own excess.

“We cannot rebuild this economy on the same pile of sand. We must build our house upon a rock. We must lay a new foundation for growth and prosperity – a foundation that will move us from an era of borrow and spend to one where we save and invest; where we consume less at home and send more exports abroad. “

It’s easy to scoff at Gingrich and mock Cheney. Voters weren’t buying the conservative mantra when McCain and Joe the Plumber trotted it out in the campaign. But don’t misunderestimate the right. There is no question that conservatives will learn the narratives put out by Cheney and Gingrich. The conservative movement excels at teaching their choir the lines of the hymnal. Over time, they will work hard to make Obama own the economic mess they left behind, and decry signs of weakness abroad.

It is vital that the real story be told – and not just by the president, but by neighbors to neighbors, citizen to citizen. The story on how conservative policies and follies led us into the hole we are in – and now are obstructing the efforts to get us out.

Leo W. Gerard

By Leo W. Gerard
International President

Randel K. Johnson, vice president of that esteemed group, the U.S. Chamber of Commerce, recently revealed a corporate-squelched truth in a slip of the tongue.

During a debate on May 15 with Stewart Acuff of the AFL-CIO about the Employee Free Choice Act, Johnson admitted – finally – that the act preserves secret ballot elections for unions. The act would allow workers – rather than employers – to decide whether to form a union by conducting a secret ballot election or by collecting signed membership cards from a majority of workers.

Incredibly, for as much as unearned-bonus-grubbing-CEOs have lied about secret ballots in their relentless campaign against the Employee Free Choice Act, that was not Johnson’s revelation.

No, here’s what he disclosed: If the act passes, he said, “It would be a rare union that would decide to risk a normal secret ballot election.” 

Risk. Interesting word, Mr. Johnson.

The Chamber of Commerce knows there’s a huge risk to secret ballot elections. And the Chamber likes it that way. Employers stack the deck against workers in secret ballot elections. They don’t publicly admit it though. That’s why Johnson’s use of the word “risk” was so surprising.

The Chamber and big corporations like Wal-Mart are intent on defeating the act because it would remove from employers the power to force workers to conduct secret ballot elections.  It would strip from employers that ability to generate risk, to defeat unions, and thus to further shrink wages and the American middle class.

A Cornell University professor, Kate Bronfenbrenner, who has researched labor issues for a quarter century, issued a new study last week that clearly illustrates the risk of secret ballot elections and how employers have labored long and hard to increase that risk in recent years. It’s called, “No Holds Barred: The Intensification of Employer Opposition to Organization.”

Among the tactics she documents employers using in the weeks before the “secret ballot” election to thwart unionization are firing of union organizers, threats to close the plant or cut wages and benefits, and forcing workers to meet one-on-one with supervisors who intimidate and interrogate them to determine whether they support the union.

Bronfenbrenner concluded, “This combination of threats, interrogation, surveillance, and harassment has ensured that there is no such thing as a democratic ‘secret ballot’ in the NLRB (National Labor Relations Board) certification election process. The progression of actions the employer has taken can ensure that the employer knows exactly which way every worker plans to vote long before the election takes place.”

Her study showed employers implementing these tactics more frequently than in the past. When she compared organizing campaigns in this five-year period to those in the studies over the previous 20 years, she discovered two disconcerting facts: the cases in which employers used 10 of these threatening techniques in the run-up to elections more than doubled. And employers focused much more on coercive and punitive methods rather than positive procedures such as unscheduled raises and promotions.

Not surprisingly, she also found that as employers exploited harsher tactics and intensified their attacks in the weeks before “secret balloting,” the union was more likely to lose. And, conversely, she found that in campaigns where public sector workers tried organizing and government agencies refrained from coercive and illegal tactics, the union was significantly more likely to win.

If it weren’t so easy for employers to create risk for workers, millions more could get the union protection they want. Surveys show an increasing number of American workers desire a union. In the mid 1990s, it was 40 percent. Now it’s 53 percent. Yet only 12.4 percent of American workers have that protection – and the better wages and benefits that go with it.

Bronfenbrenner addressed this issue in her report: “Our findings suggest that the aspirations for representation are being thwarted by a coercive and punitive climate for organizing that goes unrestrained due to a fundamentally flawed regulatory regime that neither protects their rights nor provides any disincentive for employers to continue disregarding the law.”

She continues: “Unless serious labor law reform with real penalties is enacted, only a fraction of the workers who seek representation under the National Labor Relations Act will be successful.”

That reform is the Employee Free Choice Act, and there’s the point of Johnson’s use of the word risk. The Chamber of Commerce intends to kill the act and leave risk fully on the shoulders of workers. As Bronfenbrenner showed, that would mean fewer will be unionized. Middle class wages and benefits would continue to decline.

It is time for American workers to stop bearing all of the risk. They’re working for less and bailing out the very people who are obstructing their ability to fairly bargain for more.

In October, Bank of America, which has received more than $45 billion in taxpayer bailout money, hosted a conference call with conservatives and business officials, including a representative of AIG, which has received more than $100 billion in taxpayer bailout money, to organize opposition to the Employee Free Choice Act. Then in March, just days after the act was introduced, Citigroup Inc., which got $50 billion in bailout money, hosted a similar conference call, this one led by Glenn Spencer of the U.S. Chamber of Commerce.

During the October call, Bernie Marcus, co-founder of Home Depot, said he should be on a 350-foot boat in the Mediterranean, but he thought fighting the Employee Free Choice Act was more important because, “This is the demise of a civilization. . . This is how a civilization disappears.”

Yes, the Employee Free Choice Act could contribute ever so slightly to dissipation of a decadent class. Unionization is how the middle class re-emerges. America could do without a few filthy-rich boys lolling on yachts in the Mediterranean. At the heart of America, however, must be a strong and broad middle class.

Robert Borosage

By Robert L. Borosage
Co-Director Campaign for America’s Future

A crisis that demands fundamental change. A president with a mandate to drive it. A Congress, controlled by Democrats, ready to act. Now comes the hard part – actually getting something real done.

These are salad days for Democratic lobbyists, because deep pocket interests – health insurance companies, Big Pharma, oil and gas and coal companies, the utilities and, of course, the banks – are buying them up to help harness the gale winds of change. Get ready to be dazzled – the strategies employed will reflect the imagination of Washington’s most clever operators.

For example, the health care lobby has employed one basic theme in trying to stop health care: scare the hell out of Americans by decrying a “government takeover” of health care. But in the age of Obama, they want to be seen as part of the solution, not simply part of the problem.

So last week, the leading health care trade associations – -the lobbies for insurance companies, doctors, hospitals, drug companies, plus a union – stood with the president to pledge dramatically to “do our part” to reduce the rate of soaring health care costs by 1.5% a year over the next decade, a promise that if fulfilled would save some $2 trillion from the cost of care. Not surprisingly, the president – eager to show that his efforts to give everyone a seat at the table were bearing fruit – was happy to hail that promise.

The lobbies got national coverage that their clients were for reform and would make a real contribution to it. This bolstered their argument that while regulation might be in order, we don’t need a public plan like Medicare to provide a choice for businesses and individuals. Give us time to fulfill our promises (and for this reform moment to pass), they argue. If we fail, then consider a public plan (when the president may be less popular and the Congress more conservative). Word was Senator Grassley, a Republican Senator actually looking for bipartisan accord, thought that the argument made a lot of sense.

Outside the photo op, however, the reality was very different. A new report released today by Health Care for America Now, a leading citizens’ coalition pushing for comprehensive health care reform, put the industry claims in sharp relief.

The HCAN report shows that after 400 mergers involving health insurers over the last 13 years, concentration has gone up in local markets across the country. The single largest provider of small group coverage (for small businesses, for example) controlled a median market share of 47% in 2008. The AMA says 94% of insurance markets in the US are highly concentrated.

The result, of course, is soaring prices – with premiums up, on average, more than 87% over the past six years. Profits at 10 of the country’s largest publicly traded health insurance companies in 2007 rose from $2.4 to 12.9 billion (428%) from 2000 to 2007. The CEOs of these companies in 2007 alone collected an average compensation of $11.9 million each. Nice work if you can get it.

As then Senator Barack Obama said in September 2007, “These changes (mergers) were supposed to make the industry more efficient, but instead premiums have skyrocketed.”

Insurers use their position to pass rising costs onto the insured. And, not surprisingly, Medicare does better. A recent study by University of California professor Jacob Hacker for the Institute for America’s Future (which I co-direct) shows that from 1997 to 2006, private health insurance spending per enrollee grew at an annual rate of 7.3% while that of Medicare was at 4.6%, or more than one-third less.

The concentration of insurance markets and the lack of private competition provide compelling reasons for the Congress to establish a public plan like Medicare as an option for those seeking insurance. Give consumers a real choice. The public plan would provide both a benchmark for private plans and much needed competition in what are now perversely concentrated markets.

That certainly offers better hope for bringing down prices than the voluntary promises of the hospital, drug and insurance company lobbies, made without detailing how they would go about fulfilling those promises. (promises that many of them began to wiggle away from two days after the press conference when the TV lights were no longer on).

HCAN and other citizen groups are scrambling to counter the calumnies, claims and cash of the health insurance lobby – but of course, they can’t match the industry’s firepower. What they do have is the best moment for serious reform since the sixties when Johnson ushered Medicare into existence. And the possibility of rousing citizens to put their legislators on notice that they are paying attention, want real reform, and aren’t going to be distracted by the health care lobby.

David Sirota

By David Sirota
Author of “The Uprising: An Unauthorized Tour of the Populists Revolt” 

The most-stunning and least-reported news about President Obama’s press conference with health-industry executives this week wasn’t those executives’ willingness to negotiate with a Democrat. It was that Democrat’s eagerness to involve those executives in a discussion about health-care reform even as they revealed their previous plans to pilfer $2 trillion from Americans.

That was the little-noticed message from the made-for-TV spectacle administration officials called a health-care “game changer”: In saying they can voluntarily slash $200 billion a year off the country’s medical bills over the next decade and still preserve their profits, health-care companies implicitly acknowledged they were plotting to fleece consumers, and have been fleecing them for years. With that acknowledgment came the tacit admission that the industry’s business is based not on respectable returns, but on grotesque profiteering and waste – the kind that can give up $2 trillion and still guarantee huge margins.

Chief among the profiteers at the White House event were insurance companies, which have raised premiums by 119 percent since 1999, and one obvious question is why – why would Obama engage those particular thieves?

It’s a difficult query to answer, because Obama is a health-care mystery, struggling to muster consistent positions on the issue.

Listening to a 2003 Obama speech, it’s hard to believe he has become such an enigma. Back then, he declared himself “a proponent of a single-payer universal health-care program” – i.e., one eliminating private insurers and their overhead costs by having government finance health care. Obama’s position was as controversial then as today – which is to say, controversial among political elites, but not among the general public. ABC’s 2003 poll showed almost two-thirds of Americans desiring a single-payer system “run by the government and financed by taxpayers,” just like CBS’s 2009 poll shows roughly the same percentage today.

In that speech six years ago, Obama said the only reason single-payer proponents should tolerate delay is “because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.”

This might explain why when Illinois contemplated a 2004 health-care proposal raising insurance lobbyists’ “fears that it would result in a single-payer system,” those lobbyists “found a sympathetic ear in Obama, who amended (read: gutted) the bill more to their liking,” according to The Boston Globe. Maybe Obama didn’t think single-payer was achievable without a Democratic Washington. And when in a 2006 interview he told me he was “not convinced that (single payer) is the best way to achieve universal health care,” perhaps he was following the same rationale, considering his insistence that he must “take into account what is possible.”

Of course, even as a senator aiming for the “possible” in a Republican Congress, Obama promised to never “shy away from a debate about single payer.” And after the 2008 election fulfilled his single-payer precondition of Democratic dominance, it was only logical to expect him to initiate that debate.

That’s why the White House’s current posture is so puzzling. As The Associated Press reports, Obama aides are trying to squelch any single-payer discussion, deploying their health-care point-person, Sen. Max Baucus, D-Mont., to announce that “everything is on the table with the single exception of single-payer.”

So it’s back to why – why Obama’s insurance-industry-coddling inconsistency? Is it a pol’s payback for campaign cash? Is it an overly cautious lawmaker’s paralysis? Is it a conciliator’s desire to appease powerful interests? Or is it something else?

For a president who spends so much time on camera answering questions, these have become the biggest unanswered questions of all.

***

 David Sirota is a fellow at the Campaign for America’s Future. Find his blog at OpenLeft.com or e-mail him at ds@davidsirota.com

Robert Kuttner

By Robert Kuttner
Co-Founder and Co-Editor of The American Prospect

Every year, the John F. Kennedy Presidential Library gives a Profile in Courage Award to one or more public officials who took a stand that took a lot of integrity and nerve.

Past winners have included Alberto Mora, then the general counsel of the United States Navy, who blew the whistle on unlawful interrogation practices on detainees at Guantanamo Bay (the 2006 winner); and Doris Voitier, school superintendent in St. Bernard Parish, Louisiana (2007) who did whatever it took to reopen public schools in her district in the face of federal and state bureaucratic indifference and hostility after Hurricane Katrina.

You get the idea. Another honoree was Viktor Yushchenko (2005), who narrowly survived a Russian-backed chemical assassination attempt that left him disfigured, to become the democratically elected president of Ukraine.

Two of the three laureates for 2009, who are being honored at a ceremony May 18, are, fittingly enough, Sheila Bair and Brooksley Born, two public servants, one still in office, whose courage has embarrassed three administrations including the incumbent one. The Kennedy Library deserves its own profile in courage award for providing the exclamation point.

Bair, a Republican appointed by George W. Bush, chairs the Federal Deposit Insurance Corporation. She has been an opponent of many aspects of the Paulson-Geithner financial bail-out program, and a supporter of a more direct approach to rescuing distressed mortgages and failed banks. The FDIC is more independent than most bank regulatory agencies, partly because its own insurance funds are at risk when a bank fails and partly because its appointees serve for fixed terms. Bair’s term expires in 2011.

When Timothy Geithner, who had been crossing swords with Bair in his previous job as president of the Federal Reserve Bank of New York, became Obama’s Treasury Secretary, Geithner reportedly sought to get Bair fired, according to credible accounts in the financial press.

He described her as not a good team player. But Bair’s allies, who include her many fans on Capitol Hill, pointedly asked, exactly which team was that? The team Bair had been challenging was team Bush, including Republican Treasury Hank Paulson, Geithner’s predecessor.

Today, Bair sits with President Obama, Geithner, Larry Summers, and the other senior economic officials debating the financial rescue. Obama has invoked Doris Goodwin’s Team of Rivals as his model of how to seek a wide range of voices. But on economic matters, Sheila Bair is often the sole voice of dissent at the grown-ups’ table. As such, she has had to walk a very delicate line offering different views without seeming disloyal.

How did a Republican come to embrace policies that are less captive to Wall Street and more supportive of public solutions? Bair is a Kansas Republican, who came to Washington with then Senator Bob Dole, and served as his senior staffer on the Senate Finance Committee. In an echo of the populist revolt, Kansas bankers complain that the bailout favors Wall Street over Main Street. On this score, there is nothing at all the matter with Kansas.

Bair’s Profile in Courage citation reads:

“Sheila Bair has been called a “lone voice in the wilderness” for her early warnings about the sub-prime lending crisis and for her dogged criticism of both Wall Street’s and the government’s management of the subsequent financial meltdown. As early as 2001, Bair was urging sub-prime lenders to agree on a set of best practices to prevent abuses. Since the onset of the current crisis, she, more than any other government official, has pushed for direct assistance to distressed homeowners as part of the overall effort to stabilize the financial system, a move fiercely resisted by many leaders in both the public and the private sectors. Recently, however, the government has begun to implement many of her mortgage-modification proposals in an effort to slow the alarming increase in foreclosures.”

Bair’s co-honoree is another lonely voice of early warning in the current financial collapse. As President Clinton’s chair of the Commodity Futures Trading Commission, Brooksley Born began raising warning that customized derivatives not traded on exchanges were a financial time bomb. Nobody knew how much risk their underwriters were taking, and there was no “price discovery” as there is on an open financial exchange where traders set prices minute to minute. Born distributed for comment a proposed regulation that would have required greater supervision of these so called over-the-counter derivatives. This was back in 1997, a full decade before the meltdown. She warned in congressional testimony that unmonitored trading in derivatives could “threaten our regulated markets or, indeed, our economy without any federal agency knowing about it.” This, of course, is precisely what occurred with AIG and its writing of trillions of dollars of credit default swaps backed by no reserves.

For her prescience, Born was excoriated by Robert Rubin, Larry Summers, Alan Greenspan, as well as by the Clinton sub-cabinet official who has been nominated to chair the same CFTC, Gary Gensler, former Treasury Undersecretary. They directed her to stop making noises about regulating derivatives on grounds that this could destabilize markets. But Rubin, Summers and company did not just pressure Born, who eventually left office in 1999. Rubin, Greenspan and then SEC chair Arthur Levitt, Jr. expressly requested Congress to prevent Ms. Born from issuing such regulations. And in 2000, Sen. Phil Gramm of Texas, then the chair of the Senate Banking Committee, pushed through legislation not only shackling the CFTC when it came to derivatives regulation but also exempting energy trades as a favor to Enron.

Born’s Profile in Courage citation reads:
“In 1998, as chair of the Commodity Futures Trading Commission (CFTC), Brooksley Born unsuccessfully tried to bring over-the-counter financial derivatives under the regulatory control of the CFTC. The government’s failure to regulate such financial deals has been widely criticized as one of the causes of the current financial crisis. In the booming economic climate of the 1990′s, Born battled other regulators in the Clinton Administration, skeptical members of Congress and lobbyists over the regulation of derivatives, warning that unregulated financial contracts such as credit default swaps could pose grave dangers to the economy. Her efforts brought fierce opposition from Wall Street and from Administration officials who believed deregulation was essential to the extraordinary economic growth that was then in full bloom. Her adversaries eventually passed legislation prohibiting the CFTC from any oversight of financial derivatives during her term. She stepped down from the CFTC in 1999 and returned to a distinguished career in public interest law.”

This past week, Treasury Secretary Geithner announced proposed legislation that would impose ground rules on derivatives through private clearing houses.

But Geithner’s plan still would not go as far as what Brooksley Born proposed long before the extent of the abuses became a full-blown catastrophe. Well placed sources have told me that Summers and Geithner embraced partial reform largely because two other brave public officials have been asking very tough questions of Treasury nominees at confirmation hearings and have threatened to block Senate action on them. These are Senators Bernie Sanders of Vermont and Maria Cantwell of Washington State. Perhaps they will be next year’s Profiles in Courage winners.

***

Robert Kuttner is co-editor of The American Prospect and a Senior Fellow at Demos www.demos.org. His best-selling book is “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.“

By Leo W. Gerard
International President

The economic structure of Jim Henson’s cartoon realm called Fraggle Rock reflects our own. In one HBO episode, the industrious, hard-hatted Doozers prepare to leave the rock, which would have quickly left the Fraggles starving. Somehow, politicians and powerbrokers in this country don’t see the simple parallel. If the U.S. continues to send its manufacturing overseas — with the latest proposal General Motors plants — the result will be hungry U.S. families.

I saw this up close and personal as I toured the U.S. last week on the 11-state, 32-city “Keep it Made in America” bus tour. I talked to unemployed manufacturing workers who are desperate. Through no fault of their own, they’ve lost their jobs, their homes, their health care. These are the people who are the strength of America, who in better times volunteered in New York City after 9-11 and in New Orleans after Katrina. Now, they’re forced to get groceries at their union hall’s food bank. They’re humiliated.

This economic crisis was inflicted on them by recklessness on Wall Street and in Washington. Over the past 40 years, politicians have eroded regulations that could have helped prevent the sub-prime mortgage bubble and bust. And Wall Street banks and investors took full advantages of that rule-free environment to behave capriciously in the market, causing stocks to tank, driving unemployment up to the current 8.9 percent, and contributing to the loss of 5.2 million manufacturing jobs since 2000.

Let me introduce you to four Steelworkers, four hard-hats struck down by the decisions so disastrous to the economy made in Washington and on Wall Street. They are Diana Arends, an aluminum can maker; Matt Dossett, a rubber worker; Andy Nirschl, a papermaker, and Kevin Vest, a copper miner.

Diana Arends’ employer, Ball Corp., shuttered its Kansas City aluminum beer can manufacturing plant March 27. Ball blamed the economy when it announced the closure that cost 150 Steelworkers their jobs. Beer sales are down. As the economy contracted, Americans had fewer coins in their pockets for every little pleasure, including throwing a few back.

Diana Arends

The plant closure was both an economic and emotional shock to Arends. She’s divorced, and supports a daughter and granddaughter. Before the plant mothballing, she routinely worked 12-hour days, with the overtime paying her mortgage and bills. Now she’s only getting unemployment.

Her house in Lees Summit, Mo., on which she has paid for 10 years, already is going to foreclosure. She doesn’t have any credit cards, but she does owe on a used car she bought a couple of years ago.

When she heard the plant was to shut, she immediately dropped her internet and cable TV services, ended trash collection and stopped eating out. She buys food in bulk at a wholesale store. But it’s just not enough.

She’s thinking about taking the remnants of her stock market-ravaged 401K and using it to support herself, her daughter and granddaughter because she has been unable to find another job. No one has called her back for a second interview, although she also has 28 years experience manufacturing grain bins for CTB, Inc. Let’s face it, she points out, who’s going to hire a 59-year-old?

She recollects, a few years ago, “I got to feeling set. I had a 401K and just a few more years to retire.” But now she’s jobless, and soon she may be homeless. “I did nothing to deserve that,” protests Arends, who went the extra mile, serving as president of USW Local 13, a position she loves, but one she’ll be forced to relinquish May 14 because she no longer is employed as a Steelworker.

Diana Arends is concerned about running up federal debt to pay for the bank bailouts and stimulus package, so she doesn’t understand anyone proposing to use one dollar of that money overseas. The stimulus is American tax dollars designated to create American jobs – not Chinese jobs or Korean jobs or Mexican jobs. So when General Motors submitted a bail out plan in which it would get American tax dollars, then use them to build fewer cars here and more cars overseas that would be sent back here to be sold, Arends just couldn’t believe it. “These are middle class jobs lost, the people who go to the grocery store and support food banks and the Little League,” she noted.

And they’re not just GM assembly line jobs. The more jobs GM sends overseas, the more support and supply jobs go overseas too. And that threatens the economic lives of millions more Americans — workers like Matt Dossett.

Matt Dossett

He’s a rubber worker from Fancy Farm, Ky., furloughed with 50 other Steelworkers from the Goodyear Tire plant in Union City on Feb. 28. Dossett, 27, who tried to get a job at the plant since he graduated from high school, had worked there just a year before the lay off. He knew it was a good job because his father and uncles had all worked there. “They had their whole careers there,” he said, “They worked 40 years and retired there. They had good lives from working there. It is one of the best paying jobs in this area.”

He worked on a balance crew in the curing department – cooking tread onto the tires, a place where it could get well over 100 degrees in the summer. Still, he longs for that call back, “I really enjoyed it down there. I enjoyed the people I worked with and the job I was doing,” he said.

But that’s all jeopardized by the sagging economy, unfair trade practices by China in supporting its tire makers which export to the U.S. and GM’s plan to move production offshore – including to China.

When he was working, Dossett paid off his car loans and saved money just in case he got furloughed. But making the mortgage payments is starting to get tough. His wife works, so that’s helping them pay the bills. And they’ve cut out all frills. They don’t visit her family in Chicago anymore. They don’t go out to eat. They don’t visit Nashville for weekends. Dossett has a credit card, but no debt because he only uses it in emergencies. “I worked hard for everything I’ve got,” he explained, “I’m trying not to lose it all now.”

He sees a clear connection between GM building cars here and his job.  Because billions of American tax dollars have already gone into bailing out GM, they shouldn’t be talking about moving jobs overseas, he says. “We gave them money to build here, to create jobs here. Let the Chinese pay if they want a plant in China,” he said.

Like Dossett, Andy Nirschl worked for an industry damaged by unfair trade. He was a process operator, controlling pulp, for the NewPage Corp. Kimberly mill in Wisconsin. It made the kind of glossy paper used in magazines and new car catalogues. The mill had operated in the town of 5,000 since 1889 and was the largest employer. Kimberly was NewPage’s largest producer, but the Ohio corporation closed it after a defeat in a trade case with China under the Bush administration.

Andy Nirschl

That was Sept. 30, 2008. Nirschl, president of USW Local 2-9, knows all the gory details: 475 Steelworkers lost their jobs, and 125 salaried guys got thrown out of theirs. When NewPage refused to sell or re-open the plant, the town considered renaming its high school teams. They are called the papermakers.

Nirschl’s wife, who had worked at home, had to switch jobs so the family could get health insurance. He’d married late in life, so he had a good start paying off his mortgage. He isn’t behind yet but knows lots of fellow Steelworkers who are. He has only one credit card and no debt on it or on his cars, so he’s in better shape than many of his friends. Still, his family has cut out vacations and eating at restaurants.

Nirschl got a new job earlier this month, a good union job with the state helping the unemployed find work. It doesn’t pay as much as the mill did but has good benefits. The pay comes from the $700 billion stimulus package, and he’s hoping the position is renewed in the state’s next budget year in June.

He says he hopes Congress gets on board to save the American auto industry. He says his friends understand that to have a strong, solid economy, America must manufacture. It’s not clear to them why politicians are willing to back struggling banks with billions but balk at supporting industry.

Like Nirschl, Kevin Vest talks about a cycle of industrial life. It’s obvious to him. The haul truck driver furloughed with 600 fellow Steelworkers Feb. 13 from Freeport McMoRan’s Chino mine in New Mexico, where they extracted copper and molybdenum, a steel hardener, offers this story:

He read in a newspaper about a $100 million wind farm to be built near his daughter’s house in Arizona. The 30 wind turbines are to be manufactured by a company from India and the huge towers are to be constructed in Mexico. Vest wants to know why GE can’t make those turbines. If the American company did the work, they’d probably buy the copper wire for the turbines from an American company. And that company might buy the ore to make the wire from his mine – or some other downed U.S. copper mine, putting some Steelworker back to work. If there’s one cent of tax breaks or stimulus money in this wind farm, then it’s doubly outrageous to employ Indian and Mexican workers.

For the same reason, Vest always buys American cars. There’s copper wire in engines and molybdenum (molly) in other steel car parts. Buying that car keeps him employed, but also fellow Americans who make the glass and axles and all the other parts.

And he’s got news for people who deride the quality of American cars. He’s owned a series of them and driven them more than 150,000 miles with no problems. Now he has a 1997 Chevy Silverado with 160,000 miles on it that he’s planning to drive 1,400 miles to Iowa to visit relatives. His father has owned nothing but American cars, and when his brother bought a Nissan, told him to park it down the street. “When I got out of the service,” Vest said, “my dad tried a Toyota Celica GT. . . He looked at me and said he felt bad to have even test driven it. He bought a Ford Ranger pick up.”

At 54, Vest is without health insurance and behind on his credit card payments. He owes $2,000, and the collector is hounding him. He is hoping to get a job at a mine in Arizona, close to where his daughter lives. But that may not be possible until copper prices rise.

Workers like Vest, Nirschl, Dossett, Arends and me are taking the message to Washington D.C. this week for a teach-in to explain how crucial manufacturing is to the economy of this country and how essential manufacturing is to construction of automobiles in this country, not just the final product, but also all those products leading up to the final car — from glass for windshields to glossy paper for brochures. We are going to try to explain that 7.2 million paychecks are dependent on U.S. autos, including health care, education, service and other jobs, so that the politicians and policy makers understand clearly that the very idea that General Motors would ask for taxpayer dollars to ship more car manufacturing overseas – and then import the cars – is an insult and an affront to American workers – as well as an economic threat to the country. We are not going to allow American manufacturing to starve for support. But that support cannot go to pay for manufacturing overseas, or ever more American families will end up stretched like Arends, Dossett, Nirschl and Vest.

Robert Borosage

By Robert L. Borosage
Co-Director Campaign for America’s Future

Is the Obama Administration saving General Motors or is it saving auto industry jobs in the US? Is it saving GM as an American brand or GM as an American manufacturer?

These aren’t academic questions. General Motors, which has been buttressed by $15.2 billion in loans from taxpayers with more to come, has been circulating a plan for its recovery which envisions it doubling the number of cars that it builds in China, Korea and Mexico and sells in the US. According to the UAW analysis, GM projects opening the equivalent of four plants abroad to build cars for the US market, while closing more than that here at home.

Labor costs in those countries are far lower. While paying a U.S. autoworker with benefits cost about $54 an hour (before the massive concessions), a South Korean worker earns about $22 an hour, a Mexican worker earns less than $10 an hour and some Chinese workers can earn as little as $3 an hour. This may make sense for GM’s bottom line, but it makes no sense for American taxpayers.

Although GM is an American brand, it is a global manufacturer. What’s good for GM is no longer necessarily good for America.

This isn’t the first time the administration’s efforts to rescue the US economy have run into the reality of globalization. The furor over the bonuses paid to AIG executives distracted from the real scandal: that $93 billion in taxpayer money was funneled not simply to Goldman Sachs, which is bad enough, but to a parade of Europe’s leading banks — Germany’s Deutsche Bank, France’s Societe Generale, UK’s Barclays. No explanation was made on why US taxpayers had to pick up the entire tab.

Knowing that the US can’t afford to lift the entire global economy, Obama went to the G-20 meetings intent on getting Europeans to adopt bold deficit-financed recovery plans like that of the US. But, led by the Germans, the Europeans pretty much stiffed the president they so admire. That left the US to do the lifting, and rack up the debts, dangerously weakening the recovery effort.

Saving good jobs in America can’t be done simply by rescuing GM or Chrysler. The Europeans get this. The Italians provided $1.7 billion in aid to Fiat, on the condition that the plants stay open in Italy. France loaned $8.5 billion to its big three automakers, but again with pledges to retain jobs in France.

The US, however, is the champion and the protector of the global market. Americans have served as the consumers of last resort for the world. We’ve largely spurned industrial policy — other than that associated with the military industrial complex, agribusiness and finance. We’ve followed — from Reagan to Rubin — a high dollar policy that made imported goods a bargain and US exports expensive. We’ve allowed our global corporations and banks to define our trade policy, while borrowing $2 billion a day to cover record trade deficits. As William Greider summarizes, we’ve assumed that aiding multinationals in the global economy served the national interest. “That is how America became a debtor nation with its steadily weakening industrial base and stagnant wages. That condition became the predicate that led to financial crisis.”

Now those days are over. Our trading partners must be put on notice that the old order isn’t coming back. The US can no longer afford to borrow unsustainable amounts to buy stuff made abroad with the jobs our companies have moved there. We need to lower the dollar and balance our trade. We need to build things in America once more.

Saving GM won’t work without broader changes. Export-led countries like Germany and China must be challenged to generate internal demand (the Chinese have done far more of this than our European allies) to help reverse the global downturn and as a first step to a new and sustainable growth model. Taxpayer dollars should be conditioned on the maintenance of good jobs here — rather than subsidize their export abroad. We should be leading, as Obama has done, global efforts to help developing nations recover and lift their own standards in the process.

Demanding that taxpayer dollars go to save jobs here will be denounced as protectionist. But it is squandering billions in public moneys on companies that then move jobs abroad that will fuel a protectionist fury.

Save General Motors or save an auto industry and jobs in America? The president and the Congress have to decide. It ain’t necessarily the same thing.

Stewart Acuff

By Stewart Acuff
Special Assistant to the President, AFL-CIO

No one knows exactly how to create a social movement. It happens when good, solid organizing meets a certain social zeitgeist. We know movement is preceded by good organizing and leadership development, but we’re not exactly sure when good organizing turns into movement.

We do, however, know many of the elements of movements: spontaneous, organic action , unengineered action; moral outrage and righteous indignation; a sense of moral superiority; broad acceptance of social change.

We are now just beginning to see these elements of movement in the right to pass the Employee Free Choice Act.

This week Karl Rove is touring the Midwest speaking at small meetings of business leaders against the Employee Free Choice Act. I wonder how much Rove’s speaking fees are to speak to 30 businessmen in Peoria, Ill. And everywhere he stops he is being met by demonstrations of rank and file union activists and leaders protesting Karl Rove and his position on the Employee Free Choice Act.

Those demonstrations in Peoria and St. Louis and other places were not called by the AFL-CIO in Washington. They arose organically, spontaneously, by local activist and leaders who know America needs the Employee Free Choice Act and who are willing to fight to pass it. Those demonstrations are fueled by moral outrage about the yawning and growing income and wealth inequality in America and the economic crisis created by 30 years of failed trickle-down economics.

The campaign to pass the Employee Free Choice Act has other elements of movement, too. Our country and our people are not only ready for change, we are demanding it. In 54 years of life I don’t think I have seen the opponents of change quite so inept, incompetent, and out of step with the American people.

And I am certain that I have never seen corporate America and the radical right wing so deaf to the kitchen-table concerns of all Americans.

So there is ample moral outrage and demand for change, spontaneous action, and moral superiority.

Democrats must understand that they cannot engineer every solution, that the most important and useful thing they can do is to free American workers to act on their own behalf, to act spontaneously and organically, to act to organize and to act freely to form unions and bargains collectively, to act not through someone else and not waiting until 2010 and not vicariously through President Obama but right now, directly, in concert with fellow workers in everyone’s interest to re-create an exit route from poverty, to attack inequality, to directly attack 30 years of failed trickle down economics, to rebuild the American middle class.

With the party change of Arlen Specter and the coming seating of Al Franken, President Obama and his Democratic Party have the power and the obligation to meet the grassroots movement and demand for change with the best kind of change — change that invites average people to move and at on their own behalf, collectively, to organize on the job for a better standard of living and a better quality of life for their own kids and families — and everyone else’s too.

Just by passing the Employee Free Choice Act.