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Dave Johnson

By Dave Johnson
Fellow with Campaign for America’s Future

When China was accepted into the World Trade Organization, they agreed that if we experienced import surges of Chinese goods that caused “market disruption,” we would be allowed to limit the import of those goods. The particular section of the agreement is called “Section 421.”

When the U.S. International Trade Commission (ITC) determines that the level of imports from China cause or threaten to cause market disruption to American producers of competitive products, it proposes a remedy that can include quotas or other relief. The President of the United States then makes a decision whether to enforce that recommendation.

President Bush repeatedly (seven times) refused to enforce Section 421 even when our own ITC found that American companies, factories and jobs were being lost. Bush claimed at the time that the destructive effects of dramatic, sudden increases in Chinese imports that Section 421 was meant to mitigate were actually good for the U.S. economy. Bush’s policy was the opposite of “protectionism” — it actually favored China‘s companies over our own! (I think we’ve seen how that has worked out.)

Very soon we will have an opportunity to see where President Obama comes down on this issue. The ITC has decided by a 4-2 vote that the U.S. tire industry has been harmed by a large increase in imports. They have recommended increasing tariffs starting at 55%, falling to 35% over three years. The Office of the U.S. Trade Representative now has to give its recommendation on this to the White House by Sept. 2.

President Obama has until Sept. 17 to make a decision. This is just one week before the upcoming G-20 summit in Pittsburgh. There is considerable pressure on him to to signal that the US will restore trade balance and help manufacturing in America, by following the rules of the WTO that China agreed to.

According to the United Steel Workers, which represents workers in the tire industry, thousands of jobs are being lost and tire plans in the US are shutting down. Also at this page is a chart from the ITC showing that the benefits of enforcing remedies “are two-and-a-half times greater than the costs” to consumers.

Mike Elk wrote the other day at the Campaign for America’s Future blog,

President Obama stands at a crossroads in the fight to rebuild the American economy.

President Obama has made a commitment in the past to uphold previously signed trade agreements. China, however, is violating these agreements by flooding the market with a massive 300 percent increase in tire imports in an attempt to wipe out American tire manufacturers. In 2004, China sent 14 million tires to the U.S. valued at $453 million. By last year, that had increased to 46 million tires valued at $1.7 billion.

Mike also points out,

Chinese importers, in conjunction with the Chinese Chamber of Commerce, have ironically formed a lobbying front group ironically named American Coalition for Free Trade in Tires. The coalition is run by Jochum, Shore & Trossevin, a Washington D.C. lobby firm run by former Bush trade officials who are cashing in on their years of U.S. government service to advise foreign competitors.

Jim Wansley, former USW Goodyear local president, testified about the impact of the closing of the Goodyear plant in Tyler, Texas where he had worked for 39 1/2 years:

The closure put hundreds of workers, many of whom had given decades of service to the plant, out of work. The closure was devastating to the workers and their families, but it is also being felt throughout the community of Tyler, Texas. Tyler has a population of about 100,000. Like many small and medium-sized towns that depend on manufacturing for middle class jobs, the loss of these jobs has taken its toll. The Goodyear plant directly benefitted the local economy by supporting local small businesses who served as its suppliers and service providers.

The plant also provided enormous indirect benefits. Jobs at the plant paid good wages and benefits, enabling workers to lead decent middle class lives, buy homes, send their kids to college, and save for retirement. These are the kind of jobs that support an entire community as families pay their doctor bills, buy new cars, and contribute to local charities. The plant and its workers were also an important source of tax revenue for the city, the county, and the state.

. . . The victims will not only be the workers and their families, but the suppliers, service providers, local businesses, and entire communities that depend on the industry. In sum, there is an enormous cost to doing nothing. If more plants like Tyler close, we can expect to suffer total additional losses of almost a billion dollars per plant, per year.

On the other hand, The Washington Post points out,

If Obama backs the tariff, he risks upsetting the Chinese at a time when the United States needs China to keep buying U.S. government debt to fund stimulus efforts.

This is not just an intellectual discussion. This, like all trade issues, is about American workers losing their livelihoods and communities losing their economic base. At the same time the policies of the Bush administration — borrowing trillions of dollars from them while allowing our manufacturing base to deteriorate — have placed China in a very strong position of economic advantage which gives them the power to demand concessions.

For more information:

USW fact sheets, background, other info related to tire trade case against China

Statements by Senators, other lawmakers supportive of USW unfair trade case claim against Chinese tires

More Members of Congress, Senate praise ITC ruling in tire trade case

A post at TradeReform.org: Trade Community Awaits President’s Decision on China Tire Safeguard

Testimony of Senator Sherrod Brown before the U.S. ITC on the tire issue.

Gilbert B. Kaplan, Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce, writing at Huffington Post on this and other trade issues with China.

ManufactureThis.org: Making the Case for Relief from Chinese Tire Imports

One group in opposition to this ruling is American tire distributors, who benefit from the low prices of Chinese imports. (Note this is published by the Chinese Xinhua News Agency.)

***

This post originally appeared at the Campaign for America’s Future (CAF) Blog for OurFuture as part of the Making It In America project.

Johnson also is a fellow at the Commonweal Institute and a Senior Fellow at the Institute for the Renewal of the California Dream.

Follow Dave Johnson on Twitter: www.twitter.com/dcjohnson

Dean Baker

 

By Dean Baker
Co-Director, Center for Economic and Policy Research

I first met Ted Kennedy in the fall of 1995. The context was truly bizarre.

Alan Greenspan had testified to the Senate Finance Committee in the fall of 1994 that the consumer price index (CPI) overstated the true rate of inflation. He told the committee that if it lowered the annual cost of living adjustment (COLA) for Social Security to correspond to the true rate of inflation, rather than the CPI, it could largely eliminate the budget deficit.

Greenspan told the committee that the gap was between 1-2 percentage points annually, so that after a decade, his plan would cut annual Social Security payments by more than 10 percent. And, the great thing was that Congress could do this cut by claiming it was just a technical adjustment.

Over the next half year, the idea of changing the COLA for Social Security gained considerable support in Congress from both parties. (Daniel Moynihan was the strongest proponent.) There was also support for the idea in the Clinton White House.

In this context, I was invited to talk to Senator Kennedy and his staff about the CPI, since I was one of the few economists who disputed the claim that the CPI overstated inflation. I was very happy when I got to his office to see 5 senior looking staffers. I assumed that these were the people that I really had to convince and I focused my attention on them, only occasionally looking back at Kennedy to avoid appearing rude.

After about 10 minutes of boring econ jargon (price indices are even boring to economists), Senator Kennedy started asking me probing questions. It was clear that he had listened carefully and understood everything I said. I then began to focus my attention directly on Kennedy and we had a very good discussion of the issues. I walked away with a very valuable ally in this fight.

I saw exactly how valuable about a month later. The scene was a meeting of an ad hoc House-Senate Democratic committee that had been established to help hammer out a balanced budget proposal that Congressional Democrats could sign onto. This was the period when the government was shut down, as President Clinton and the Republican controlled Congress could not agree on a budget.

The Congressional Democrats felt that it was important that they have their own budget to establish themselves as an independent force in the debate. The ad hoc committee was supposed to focus on the issues of the CPI adjustment and corporate welfare. The CPI adjustment was being debated because there were many Democratic members of Congress who found it an attractive way to achieve deficit reduction.

Senator Kennedy invited me to this committee meeting so that I could speak about the accuracy of the CPI. I met with him and his staff before the committee meeting. He explained that his goal was to keep corporate welfare on the agenda and the CPI adjustment off the agenda. He said that he wasn’t sure that he could succeed, but that was his plan.

The corporate welfare discussion came first. Senator Kennedy framed the issue. He noted hundreds of billions of dollars in tax breaks and subsidies that could be identified as corporate welfare. He said that the Democrats should set a target of reducing corporate welfare by some substantial amount as a major part of their program for a balanced budget.

Kennedy then shut up. He let the rest of the group spout off about all sorts of related and unrelated topics, only briefly intervening at a couple of points to keep the conversation moving forward. At the end of the discussion, corporate welfare was on the agenda.

Then we got to the CPI. He briefly, but accurately, laid out the case that the claims for an overstated CPI were weak. He then introduced me as an expert on the CPI and invited me to say a few words to the committee.

The ensuing discussion again went all over the place with Kennedy largely remaining silent. However, at the end of the debate, the CPI adjustment was off the table.

I was tremendously impressed. Kennedy had gotten exactly what he wanted on both issues and he never broke a sweat. He framed the debate and just let things run their course. It was truly masterful.

From the standpoint of the policy involved, although the details are incredibly obscure, the impact would have been very visible and quite large. If the CPI adjustment had taken effect, someone who had been receiving Social Security in 1996 would be getting about 13 percent less in their monthly check today (a cut of roughly 1 percent a year for 13 years). That would be a very painful cut for a segment of the population that doesn’t have much money to spare.

If the Democrats in the Congress had joined the chorus of those pushing for a CPI adjustment, it is very likely that it would have gone through. So, even though almost no one knows the details of this particular incident, Senator Kennedy played an enormously important role in protecting the financial security of tens of millions of current and future retirees.

***

Dean Baker is the author of the new book, “Plunder and Blunder: The Rise and Fall of the Bubble Economy.”

This piece was first published on Huffington Post.

Leo W. Gerard

By Leo W. Gerard
International President

During a webcast meeting with Organizing for America on Thursday, President Barack Obama outed the covert Republican plot to strangle Medicare to financial death.

He explained to the group that if Congress does nothing, if health care reform fails, “Medicare will run out of money in eight years.”

Obama and the Democrats are pressing for health care reform to provide people under 65 with some semblance of what those over 65 have – government-assured affordable medical insurance. At the same time, for Medicare, Obama said, “Part of what we want to do is strengthen it, so it is there over the long haul.”

“It is not as if,” he said, “if we just stand still, everything is going to be okay.” 

Immobility is exactly what Republicans want, however. “No change” is their slogan.  They’ve offered zero substantive reform for health care. In the years when they controlled Congress and the White House under former President George W. Bush, they did nothing to repair financial problems with Medicare. In fact, they falsely minimized the price tag of the new prescription drug program, Medicare Part D, and drove up the cost by forbidding government negotiation for lower medicine prices. In addition, although they failed to accomplish it, they pressed to privatize that socialist program called Social Security — just months before the stock market tanked. 

This is philosophical warfare, and for the Republicans, Medicare is an appropriate casualty. The GOP has made it clear they believe the public option being proposed in health care reform is socialism – an evil that must be eradicated at all costs. Of course, Medicare, a government-sponsored health care program for all people over 65 actually is socialist.

It’s a slippery slope. First Republicans kill the opportunity for all Americans under the age of 65 to choose their own private insurance or get government-sponsored health care under the public option. Then, by doing nothing, Republicans destroy the ability of those over 65 to retain their government-sponsored health care.

Senior citizens are more frightened about health care reform than anyone else. That may be, President Obama said, because they routinely need health care more than any other group. So lying to them about it, especially for political gain, is cruel and despicable.

It’s true, Democrats want change. They seek to reform and improve the health care system so that Medicare is strengthened and funded for the future. For example, Obama noted, under the Democrats’ plan, the “donut hole” in Medicare Part D, during which senior citizens must pay for their prescription medications, would be eliminated. President Obama got the pharmaceutical companies to step up and pay more – if Congress manages to pass reform.

A huge portion of the cost of health care reform would come from changes in the way the federal government pays for Medicaid and Medicare. What the Democrats want to change are payment methods that are just wrong. No bid contracts, for example. Introducing real capitalist competition in the system would reduce costs without affecting benefits. “No one is talking about messing with your Medicare benefits,” Obama said, attempting in a mere statement to counter screaming “tea baggers” featured continuously on Fox News. Of the Democrats he said, “We think Medicare is a sacred trust.”

On health care reform, the Republican plan to do nothing means death. Death for the public option. But also death for Medicare. 

President Obama explained: “The status quo is unsustainable. If you like what you have now, unless we make some changes, you are not going to have what you like because health care costs are rising three times faster than wages. . . If you have a private plan, you have something to worry about. If you are on Medicare, you have something to worry about because we are going to run out of money.”

Democrats are trying to resuscitate Medicare and deliver health care reform. Republicans are forming death panels to kill all of it.

Robert Borosage

By Robert Borasage
Co-Director of the Campaign for America’s Future

The editors of the Wall Street Journal say that the public option in health care reform has been “sent to the death panel.” Obama “concedes” the public option, reports the Financial Times. Even liberals seem to agree. The public option is “all but gone,” writes Bob Herbert of the New York Times. The American Prospect’s Mark Schmitt mourns its “likely death.”

Nonsense. There is no reason to exaggerate the strength of the small tong of conservative Democrats and claque of obstructionist Republicans standing in the way of reform. Here’s the reality:

Offering a public plan as a choice to compete with the private insurance companies has continued strong support in polling. President Obama favors it. The Democratic leadership in both the House and the Senate support it. More importantly, a majority of legislators in the House and a broad majority of Democrats in the Senate will vote for it. Needless to say, the activist base of the party thinks it vital.

The only question is whether a small minority of Democrats in the Senate will dig themselves into such a rabid fever that they would sabotage health care reform itself to stop the public option. Whether their animus derives from ideology or insurance company contributions, it is inconceivable that a handful of Blue Dogs in the House or conservative Dems in the Senate would block the president’s key reform to make their point. It would also be suicidal, for if 1994 is any indication, Democrats particularly those from more conservative districts will pay a harsh price at the polls in 2010 if they fail to pass reform.

Citizens can help concentrate their minds. Legislators have heard from the screamers in the town meetings. They’ve been besieged by legions of insurance company lobbyists. They’ve comforted seniors terrified by the lies being peddled. Now it is time for them to hear from the majority of citizens, and the vast majority of Democratic voters who want health care reform that works, one that includes both a public plan as an option to compete with the insurance companies, and the lower drug prices that will result from enabling Medicare to use its buying power to gain discounts for patients.

There are a lot of talking heads out arguing that the “left” shouldn’t be so extreme as to risk health care reform by insisting on the public option or the lifting of the absurd ban on negotiating lower drug prices. The reality is exactly the reverse. It is the handful of Blue Dogs and conservative Democrats in the House and Senate that are standing in the way of the majority in favor of a comprehensive plan. The question isn’t whether the progressive majority is unreasonably resisting reform to save the public option. The question is whether a small minority of conservative Democrats will sabotage reform simply to stop the public option.

Substantively, passing health care reform without a public plan to compete with the insurance companies makes no sense. As Jonathan Walker details, it would be an insurance company bonanza, as the government requires the uninsured to get health insurance – supplying the companies with millions of young and healthy customers – while eliminating the option of a competing government run plan that, in Obama’s words, can “keep the insurance companies honest.” For a country that must get health care costs under control, reform without the government plan as an option is irresponsible.

Similarly, President Obama and virtually every Democrat in Congress were right to campaign against the obscene provision in the prescription drug plan, the iconic symbol of the corrupt Republican Congress, that actually prohibits Medicare from negotiating lower prices for drugs. Democrats cannot pass reform without erasing that folly, and gaining lower drug prices for seniors on Medicare and for taxpayers paying much of the tab.

Politically, comprehensive reform can pass only if Democrats unite. The effort to gain bipartisan support was torpedoed by the leading Republican negotiator, Senator Charles Grassley, when he revealed his is true colors by embracing the vicious inanity about “death panels.” He aligned himself with the wingnuts, and there is simply no reason or way to negotiate with lunacy. The only thing Senator Max Baucus has achieved with his supposed negotiations is endless delay. The only thing he promises is more delay. Conservative Dems now are trotting out an ill-defined national co-op as an alternative to the public option. Most experts dismiss this as unworkable. More to the point, the Republican National Committee scorns it as a “government take over of health care.” Negotiations and concessions have produced zero Republican commitments to join reform.

Instead it is time for Democrats to unite and move. Pass a bill out of the House and put it before the Senate with the president behind it. Push the minority of Democrats standing in the way to join the majority. Then let Republicans try to filibuster it. Even if against parts of the bill, no Democrat with a working frontal lobe will vote for the filibuster and join Republicans to deny the president a majority vote on this critical reform. If Kennedy and Byrd are unable to vote, then we’ll need two Republicans. The few that haven’t gone over to pure obstruction will have to decide if they are prepared to stop a vote on reform. If the filibuster is defeated, then we just need 50 votes to pass the bill – and there is no reason why a bill with a robust public option and lower prescription drug prices can’t gain 50 votes from Democrats in the Senate.

Admittedly this is still a heavy lift. But the reality is that a plan without a public option cannot and should not get through the Congress. Over 60 House Progressives have made it clear that they won’t vote for a plan without a robust public option. That isn’t not a minority standing against reform; it is a minority expressing the majority opinion in the House, the party, and the country. (To support the progressive legislators that are leading this go here.)

Why would a handful of Blue Dogs get in the way of a unified position? A government plan as an option isn’t a difficult political vote. The hard choice is voting for any comprehensive reform and they will pay a much higher political price for failing to produce than for voting for a public option. The only reason to block a plan is either ideological rigidity, or the corrupting influence of insurance company contributions. In this circumstance, citizen mobilization can help educate the recalcitrant on the need to join the president and the majority of the party.

Less than a Full Loaf

Some reporters suggest that Obama is signaling that he’s ready to abandon the public plan. In fact, Obama has been consistent. He has argued for the public option, while stating that he’s prepared to negotiate any part of the deal to get majority support for something that works. He’s for a public option, but it isn’t a deal breaker for him.

Former President Bill Clinton came to the Netroots Nation convention last week. He was in his full glory – smart, funny, wounded, a repository of policy and politics. His core message was that it is “imperative for the Democrats to pass a health care bill now,” telling bloggers that “the president needs your help and the cause needs your help.” Since we need reform to pass, he argued, we can’t let the perfect be enemy of the good. So Clinton urged the liberal activists to keep fighting for what they want, but be ready to accept “less than a full loaf.” This is a message better delivered by the former president to his old Blue Dog and New Dem gang – to the handful of conservative Dems standing in the way, not to folks supporting the broad majority in agreement with the president.

And Clinton inadvertently sent the bloggers a very different message. Lane Hudson interrupted his speech to challenge him on the unconscionable “don’t ask, don’t tell” policy on gays in the military. Clinton’s famed temper flared as he defended himself:

“You wanna talk about “Don’t Ask, Don’t Tell.” I’ll tell you exactly what happened. You couldn’t deliver me any support in the Congress and they voted by a veto-proof majority in both houses against my attempt to let gays serve in the military, and the media supported them. They raised all kinds of devilment. And all most of you did was to attack me instead of getting some support in the congress. Now, that’s the truth.”

Well, not quite, since many of the bloggers in the audience were teenagers or younger when this debate took place. But the former president provided clear strategic insight for the current moment. We don’t want a former President Obama to say, a decade from now, that the reason we didn’t get a public option was that we “couldn’t deliver” any support for him in the Congress. It’s time to deliver that support.

So no surrender; no retreat. Don’t start embracing “half a loaf,” or thumb-sucking about the reasons for the demise of the public option. Real reform has the support in the country, the Democratic Party, the House of Representatives and the White House. It has support of a majority of Democrats in the Senate. Now it is time to deliver the president the votes he needs for the public option he favors. Full court press on the handful of Democrats that are standing in the way, and then real pressure on the two or three Republicans who have yet to surrender to the obstructionist extremes of their party.

Pull out the stops. Do whatever you can think about doing to weigh in at this time – and then enlist your friends to join you. We are very close. We don’t have to overcome a presidential veto, or the opposition of the congressional leadership. All we need to do is to get Democrats and a couple Republicans to commit to giving the president a majority vote on this critical reform, and then get 50 members of the Senate to join the majority of the House in supporting it. Forget the naysayers. This is in reach. Let’s make it happen.< >< >< >< ><–>

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

In the months following the Wall Street meltdown, we’ve seen a stealth marketing campaign that is profound for its boldness — a marketing campaign designed to make us believe that very wealthy people are suffering the most.

We’ve seen this campaign in Wall Street spokespeople insisting that a $500,000-a-year salary isn’t very big, in a New York Times style section that asserts that it’s impossible to live in the city on a half million dollars; in a punditburo that says millionaires are oppressed and can’t afford to pay $9,000 a year more in taxes for universal health care; and in a national press corps that seeks to portray any effort to raise taxes on the richest 1 percent as unfair; and a business press that threatens a class war if President Obama moves forward with his promise to make the payroll tax more progressive. As I said, this is a marketing campaign, and a fairly well coordinated one.

That’s why I wasn’t surprised to see this audacious Washington Post piece over the weekend which reports — with a straight face — that those making $300,000 a year are “barely squeaking by” in this economy. I s*** you not:

Laura Steins doesn’t mind saying that she is barely squeaking by on $300,000 a year… As a vice president at MasterCard’s corporate office in Purchase, N.Y., she earns a base pay of $150,000 plus a bonus. This year she’ll take home 10 percent less because of a smaller bonus. She receives $75,000 a year in child support from her ex-husband. She figures she will pull an additional $50,000 from a personal investment account to “pick up the slack.”

The nanny and property taxes take $75,000 right off the top, but Steins considers both non-negotiable facts of her life and not discretionary. When she bought out her husband’s share of the house after their 2006 divorce, she assumed the costs of keeping it afloat — $8,000 to $10,000 a month. There’s a pool man, a gardener and someone to plow the snow from the quarter-mile-long driveway.

As tight as money is, she has decided that living in a 4,000-square-foot house on three acres is the practical thing to do.

I’m not going to take up text space going off about how absurd this all is, except to say (as I have before) that in a country where the recession is obviously most crushing the middle-class, I’m playing the smallest violin in the world for those making $300,000 a year (ie. the top 5 percent of the country) — especially those who whine about their plight while refusing to cut back on their nannys and gardeners.

What’s fascinating here is not how incredibly out of touch with Middle American reality the super wealthy are, but how willing the media are to promote the super wealthy’s whines as legitimate and justified. The entire economic narrative on Main Street is about how the average family making $50,000 a year is going to put food on the table — and the entire economic narrative in the elite media is about the top 5 percent’s concerns that they might have to cut back on mansion expenses.

This is the real “Two Americas” — the elites and the media outlets they control, and the Rest of Us. And clearly, the former doesn’t give a s*** about the latter. David Sirota is the bestselling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008). Find his blog at OpenLeft.com or e-mail him at ds@davidsirota.com

Mike Elk

By Mike Elk
Of Campaign for America’s Future

As the International Trade Commission considers comments on its recommendation to impose tariffs on Chinese tire imports, President Obama stands at a crossroads in the fight to rebuild the American economy.

President Obama has made a commitment in the past to uphold previously signed trade agreements. China, however, is violating these agreements by flooding the market with a massive 300 percent increase in tire imports in an attempt to wipe out American tire manufacturers. In 2004, China sent 14 million tires to the U.S. valued at $453 million. By last year, that had increased to 46 million tires valued at $1.7 billion.

The Chinese are shipping cheaply made tires in an effort that isn’t just killing American manufacturing, but also killing people. So far, two people have died as a result of the low quality of some of these Chinese import tires. The U.S. Government has launched a massive of recall of the tire in question, but so far the Chinese manufacturer has refused to cooperate fully with the recall.

So far over 8,000 people have lost their jobs, and over 20,000 more jobs are at risk if the Chinese are allowed to continue with this strategy of not obeying trade laws.

Next month Obama will be challenged to uphold his campaign pledge to enforce current trade laws when a decision on illegal Chinese tire imports came to his desk. Last month, a majority of the U.S. International Trade Commission (ITC) found that tariff relief was needed to urgently reduce tire imports because of market disruption. According to the United Steelworkers, between 2004 and the end of this year, more than 8,100 workers in the tire industry have lost or will lose their jobs and another 20,000 jobs are threatened.

Speaking last week, USW President Leo Gerard said that this will “prove to be a test of enforcement of trade laws that China agreed to.” A ruling to enforce current U.S. trade laws would mark a clear break with Bush era economic policy. During the Bush Administration the United State International Trade Commission ruled four separate times that China had violated trade law and recommended measures to stop the flow. However, each time Bush refused to obey these recommendations.

If President Obama follows the commission recommendations, it would send a stern message to China that the Obama administration, unlike the Bush administration, intends to enforce U.S. trade law. He is expected to decide on September 17, one week before the G-20 summit in Pittsburgh. If Obama chooses to enforce tariffs on illegal Chinese competition, that would send a message throughout the world that U.S. intends to enforce trade law.

Unfortunately, corporate lobbyists paid for by the Chinese Chamber of Commerce, like former Bush official and Ohio U.S. Senate candidate Robert Portman, are running an aggressive misinformation campaign in attempt to thwart U.S. trade law. These groups have been claiming that limiting tire imports would cost Americans jobs and raise the costs of tires for consumers. However, the United States Commission on Trade found that the total benefits exceed the costs by $884 million.

Chinese importers, in conjunction with the Chinese Chamber of Commerce, have ironically formed a lobbying front group ironically named American Coalition for Free Trade in Tires. The coalition is run by Jochum, Shore & Trossevin, a Washington D.C. lobby firm run by former Bush trade officials who are cashing in on their years of U.S. government service to advise foreign competitors. The law firm has used its ties to power to advise Chinese manufacturers on how to get around loopholes in the law. As a result, eight members of Congress wrote a letter this past June calling on the Government Accountability Office to investigate.

Congressman Michael Michaud of Maine said ” “Many of these individuals appear to be repaying the investment that the American taxpayers made in them with their hard-earned tax dollars by using the knowledge, expertise and contacts they gained while on the federal payroll in ways that are adverse to the interests of our workers and our producers.”

Speaking last week at a factory in Indiana, President Obama said that rebuilding American manufacturing was the key to build a vibrant economy. As President Obama has said previously many times we can’t go back to an economy, where 45 percent of our profits come from the financial sector. As Dave Johnson pointed out last week we in his piece “Manufacture or Borrow (Until We Can’t)”:

“When it comes down to it you can’t have a healthy service sector unless you are manufacturing items to sell and trade because you can’t pay for the restaurant bill or insurance or hotel room or lawyer or even the doctor if you don’t make something to sell and trade. And mostly you can’t keep buying the things made elsewhere. You can only borrow for so long.”

President Obama has announced bold new initiatives to invest billions of dollars into new green energy initiatives. However, if we don’t have to even enforce the current trade laws that we have, American manufacturing will be wiped out by low-wage Chinese manufacturing. As I highlighted previously, companies such as GE have already begun to move so-called green jobs to China already.

The fight over whether to enforce trade laws against illegal Chinese tire imports will set a precedent that the U.S. will enforce previous trade agreements. President Obama has a choice of whether he will side with American workers or corporate lobbyists paid off by China.

Leo W. Gerard

By Leo W. Gerard
International President

They came first for the Communists,
And I didn’t speak up because I wasn’t a Communist.
Then they came for the Jews,
And I didn’t speak up because I wasn’t a Jew.
Then they came for the trade unionists,
And I didn’t speak up because I wasn’t a trade unionist.
Then they came for the Catholics,
And I didn’t speak up because I was Protestant.
Then they came for me,
And by that time no one was left to speak up.
–Martin Niemoeller

China is attacking the U.S. with a stealth weapon of mass economic destruction – unfair trade. U.S. corporations – and China – that profiteer from it prefer to label this “free trade.”

But industrial carnage is the only way to describe the devastation done to the U.S. economy by an accumulated trillion dollar trade deficit with China, the destruction of U.S. jobs by off-shoring them to China, and the disintegration of the U.S. industrial sector that is foreclosing America’s ability to support itself or to manufacture weapons to defend itself.

The United Steelworkers union is challenging China and the profiteers. It has demanded imposition of duties and tariffs on imported Chinese products – not because the U.S. can’t compete but because China cheats.

We’ve watched our members lose their jobs as steel mills idled, paper plants closed, and tire factories shuttered. In this war, China came for our jobs. Virtually no one spoke up for displaced blue collar workers. Perhaps you don’t wear a blue collar. A white one will prove no special shield. The Chinese will come for your job too.

In this struggle, it is crucial to understand that so-called free trade isn’t some lofty capitalist ideal. The U.S. engages in “free trade” with the Chinese because they hold $1 trillion in debt over our heads, an obligation they know we can’t pay. We shrink in fear of them. They’re world class bullies. They can do whatever they please. And they do. They violate international trade laws by which we abide. That’s why their stuff is so cheap. The one factor on which the price difference always is blamed – labor costs – is only the tiniest fraction of it.

Labor violations are part of the cheating. The National Labor Committee and others, including reporters from the New York Times, have documented exploitation of Chinese workers that can only be described as modern slavery. We stand in solidarity with these workers and condemn these atrocities that include very young teenagers kept in locked buildings with caged windows where they are forced to labor 14-hour shifts under grueling conditions, but find it impossible to make money or to amass the “exit fee” required to leave. They include children, women, and occasionally men kidnapped and forced to work in brick kilns, coal mines, and sweatshops in the Chinese hinterlands, with no payment other than gruel and a sleeping mat. When Chinese companies treat humans this way, they realize a competitive advantage over American firms that routinely obey humanitarian laws.

China is also one of the most dangerous places in the world to work and live because corporations fail to provide safety equipment for workers, such as dust control devices, and refuse to protect the environment with pollution control equipment. Both practices are profitable for Chinese corporations, particularly when competing with U.S. firms, which must abide by environmental and worker health and safety regulations.

Much more significant, however, are other deliberate Chinese interventions in the market, such as the undervaluation of its currency, subsidization of its manufacturing, counterfeiting, forced transfer of American technology, and refusal to give American companies access to Chinese markets with licensing restrictions, complex regulations and local content rules.

China gives breaks to manufacturers on land, rent, energy and water. Manufacturers may receive bank “loans” they know they’re not required to repay.  China also exempts certain industries from income taxes and gives tax rebates on exports.

China’s deliberate currency undervaluation works as a subsidy as well. The U.S.-China Economic and Security Review Commission explains it this way: “China’s undervalued currency encourages undervalued Chinese exports to the U.S. and discourages U.S. exports because U.S. exports are artificially overvalued. As a result, undervalued Chinese exports have been highly disruptive to the U.S.”

China cheats. Free trade is a myth. The American worker doesn’t need special treatment. We’re the most productive in the world. We just seek fair competition. We want fair trade. The USW wants trade rules enforced.

So the union demands it. Repeatedly, we’ve won cases seeking imposition of anti-dumping and anti-subsidy duties on unfairly traded imports from China to protect our members. There was the glossy paper case in 2007 and the lightweight thermal paper case in 2008. The USW and four U.S. stainless pipe producers won a final order from the U.S. International Trade Commission in February on dumped Chinese welded austenitic stainless steel pressure pipe. Just two months later, the USW joined seven U.S. companies in seeking duties on  imported Chinese welded and stainless steel pipes used in oil and gas extraction because of massive Chinese government subsidies.

But it’s the tire case that’s causing the commotion. That’s because the USW filed it under “Section 421,” which is supposed to allow the U.S. to combat unfair and damaging surges of particular Chinese imports. China agreed to abide by Section 421 until 2013 in exchange for support from the U.S. when it sought to join the World Trade Organization in 2001.The advantage of Section 421 is that the process is quicker that a typical trade case.

U.S. companies won four Section 421 cases previously, including the McWane Inc. ductile iron waterworks fittings case in 2003, in which the USW testified. The International Trade Commission recommended in the McWane case and the three others that former President George W. Bush penalize Chinese imports. He did nothing – refusing to protect U.S. industry.

But it’s a new day, with a new president. Thus the ruckus. If President Barack Obama adopts the recommendations of the International Trade Commission to use Section 421 to shield American tire manufacturers from unfair trade and preserve American jobs, more cases will quickly follow. That is what China and the corporate profiteers fear.

The USW filed the Section 421 tire case to defend the 15,000 rubber workers who we represented across North America. And we stood alone. No one spoke up for the tire workers. These U.S. workers watched during the past five years as Chinese tire imports increased 215 percent, making China the single largest source of consumer tire imports in the U.S.  In that time, 5,000 U.S. rubber workers lost their jobs. Another 3,000 know they’ll get the boot by year’s end.

America’s increased trade deficits with China since it entered the World Trade Organization have cost 2.3 million workers their jobs or job displacements, according to The China Trade Toll by Robert E. Scott of the Economic Policy Institute.

Most were manufacturing jobs, but, among them, Scott reports, were 127,710 professional, scientific and technical services workers. There were 66,986 managers of companies and enterprises. They even included 13,141 arts, entertainment and recreation workers.

Those, by any definition, are white collar jobs.

Who will speak up for you?

Dean Baker

By Dean Baker 
Co-Director, Center for Economic and Policy Research

As a basic rule, politicians will say anything they can get away with. If an effective politician thinks that he can call his opponent a drug-dealing, serial-murdering gangster, and have the charge taken seriously by the media, then he will do it, even if there is no reality whatsoever to the allegation. The reason that most politicians don’t describe their opponents this way is because the media will denounce them as liars, who are unfit for responsible public office.

This basic truth must be kept in mind in understanding the health care debate. The debate has trailed off into loon tune land, and it’s the media’s fault.

The lunacy was most clearly in evidence in former Gov. Sarah Palin’s claim that President Obama’s plan would force her to stand in front of a “death panel” to argue for the life of her baby with Down Syndrome. This “death panel” is a complete invention by Governor Palin. There is no twist or turn or contorted permutation of President Obama’s plan that would prevent Ms. Palin from providing as much health care as she wants to her baby.

It would have made as much sense to claim that the transportation bill will deny medical care to her baby. After all, if the roads in front of her home are not properly maintained, and her baby has a medical emergency, then the transportation bill would have effectively sentenced her baby to death because she won’t be able to get medical attention in a timely manner.

The reason that Governor Palin thought she could make up stories about President Obama’s death panels is that the media have treated all sorts of other absurd inventions about his health care plan with respect. At the most basic level, opponents have repeatedly said that President Obama’s plan will lead to rationing of health care.

Of course, there is absolutely nothing in President Obama’s plan that resembles rationing. He certainly intends to limit the type of medical procedures that the government would fund, but opponents of the plan don’t want the government to fund any procedures. So, how is restricting the procedures funded through a government plan rationing? Anyone who wants to is entirely free to buy as much health care as they want outside of the government-subsidized plan. Where is the rationing?

Using Governor Palin’s story, there may be mothers who are less wealthy than her who will be able to care for a baby with Down Syndrome or other serious affliction as a result of President Obama’s plan. These mothers might not otherwise have this option because they could not afford the health care. It is easy to see how President Obama’s plan can lead to life compared with the current situation. It’s virtually impossible to see how it leads to death.

The media have allowed the politicians to turn life into death and night into day when it comes to the health care debate because they decided that anything said against President Obama’s plan should be treated with respect, no matter how absurd it might be.

The line about rationing isn’t the only place where the media have fallen down on the job in the health care debate. Instead of telling us that the cost of the plan was “huge,” as the have often done, the media could have put the cost in a context that would make it understandable to people who are not policy wonks. They could have told us that the projected $1 trillion cost over the next decade is equal to about 0.5 percent of GDP, less than half of the cost of Iraq-Afghanistan wars at their peak.

The $250 billion ten-year shortfall that Congress is struggling to fill is a bit more than 0.1 percent of GDP, rounding error in the total budget. But the media only assured the public that this gap was a big hole in the budget; they didn’t try to tell us how big.

The media have the job of informing the public. They have the time and the resources to know that when opponents of President Obama’s plan talk about rationing, they are not telling the truth (i.e. they are lying). If the media just pass these assertions on to the public without comment, then they are giving them credibility.

And if the opponents of health reform think they can get away with one really big lie, then why shouldn’t they start moving forward with even bigger ones. It was only a matter of time before someone came up with Governor Palin’s death panel line. For this we owe our thanks to The Washington Post and the rest of the mainstream media.

***

Dean Baker is the author of the new book, “Plunder and Blunder: The Rise and Fall of the Bubble Economy.”

This piece was first published on Huffington Post.

Stewart Acuff

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

The dog days of August have arrive, Washington has mostly cleared out and neither health care reform nor the Employee Free Choice Act have been passed. The Republicans, the Hard Right, and Corporate America are doing all they can to defeat them both. And they are being more than ably assisted by a small group of moderate Democratic Senators who for some reason think the status quo is just fine that having 50 million Americans without health care is OK and that more people should continue to work harder and longer for less and less, that growing poverty is OK, and that corporations should get all the benefits of our work.

The chattering class and punditocracy are clucking their tongues, wrinkling their brows to look smart, and aping Rush and Grover and others that now is not the time. The economy is too fragile for real change. They are discussing what the Senate will do to both health care reform and the Employee Free Choice Act.

Our nation did not become great because generation after generation of Americans feared change. Our country did not become great because Americans refused to face the country’s challenges and ignored their responsibilities.

We are at an historic moment in American history. We have a huge economic crisis which has caused untold suffering and a decline in the standard of living and quality of life for the majority of Americans with take home pay less than in 1973 and more families working more hours to try to stay afloat. Our health care system is designed to make insurance companies and others vastly wealthy at the expense of the American people. We get less value for every health care dollar spent than anywhere else in the world. We already have at least four highly functioning popular public health care delivery systems but we’re told we can’t have a public plan in health care reform because that would be turning health care over to the government or socialism.

So we are at an incredibly important moment in American history. We can take advantage of the opportunities we have a President and Congress which essentially share progressive values to push through the kind of change that changes the quality of people’s lives and puts America on the right track to an economy that works for all, that values work and respects workers, an America that knows that what is good for workers is good for America or we can sit back and squander the moment, refuse our duty and responsibility and make believe someone else can do it.

Every generation in American history faced the same kind of challenges and opportunities that we face. And those generations which understood collective power moved the country forward toward a more perfect union:

The mechanics in the Philadelphia guilds with Tom Paine and the worker organizations in Boston with Sam Adams who laid the groundwork for our independence and provided the troops.
The abolitionists with Frederick Douglass and William Lloyd Garrison who built a movement to end slavery that led to the greatest freedom struggle in our hsitory at the cost of 600,000 lives.
The women’s suffragists with Elizabeth Cady Stanton and Susan B. Anthony who won the right for women to vote and forever changed our politics.
The populists and progressives who mounted an aggressive and effective campaign against unfettered, unregulated monopoly capitalism.
Our forebears in labor who ended poverty for millions of workers and created the middle class and the American Dream.
The modern civil rights movement which ended legal peonage, enfranchised millions of Black Americans and unleashed a movement and passion for social justice.

So it is now our time. It is time we understand the dynamics of power,use our opportunities to develop more power and mobilize to wield that power to win the kind of change that changes thw quality of people’s lives, that will turn around America.

Our forebears understood that power is how we get things done, change things, make things happen, make change and the only power available to us workers is collecting power.

We build our power by organizing.

We exercise our power by mobilization

We leverage our power through coalitions.

So now it is our time and our opportunity to build and exercise our power to change America. This is organizing to build worker power so that we are not waiting on politicians in Washington to deliver change. We are mobilizing workers to create change from the ground up.

We will never again in this generation get this kind of opportunity and if we fail to take advantage, our labor movement will fail and our country will be unrecognizable. Our children and grandchildren will lose any access to the American Dream. The stakes could hardly be higher. Time to fight.<–>

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

I know I should be mortified by the lobbyist-organized mobs of angry Brooks Brothers mannequins who are now making headlines by shutting down congressional town hall meetings. I know I should be despondent during this, the Khaki Pants Offensive in the Great American Health Care and Tax War. And yet, I’m euphorically repeating one word over and over again with a big grin on my face.

Finally.

Finally, there’s no pretense. Finally, the Me-First, Forget-Everyone-Else Crowd’s ugliest traits are there for all to behold.

The group’s core gripe is summarized in a letter I received that denounces a proposed surtax on the wealthy and corporations to pay for universal health care:

“Until recently, my family was in the top 3 percent of wage earners,” the affluent businessperson fumed in response to my July column on taxes. “We are in the group that pays close to 60 percent of this nation’s taxes … Think for a second how you would feel if you built a business and contributed more than your share to this country only to be treated like a pariah.”

This sob story about the persecuted rich fuels today’s “Tea Parties” – and I’m sure you’ve heard some version of it in your community.

I’m also fairly certain that when many of you run into the Me-First, Forget-Everyone-Else Crowd, you don’t feel like confronting the faux outrage. But on the off chance you do muster the masochistic impulse to engage, here’s a guide to navigating the conversation:

What They Will Scream: We can’t raise business taxes, because American businesses already pay excessively high taxes!

What You Should Say: Here’s the smallest violin in the world playing for the businesses. The Government Accountability Office reports that most U.S. corporations pay zero federal income tax. Additionally, as even the Bush Treasury Department admitted, America’s effective corporate tax rate is the third lowest in the industrialized world.

What They Will Scream: But the rich still “pay close to 60 percent of this nation’s taxes!”

What You Should Say: Such statistics refer only to the federal income tax. When considering all of “this nation’s taxes” including payroll, state and local levies, the top 5 percent pay just 38.5 percent of the taxes.

What They Will Scream: But 38.5 percent is disproportionately high! See? You’ve proved that the rich “contribute more than their share” of taxes!

What You Should Say: Actually, they are paying almost exactly “their share.” According to the data, the wealthiest 5 percent of America pays 38.5 percent of the total taxes precisely because they make just about that share – a whopping 36.5 percent! – of total national income. Asking these folks to pay slightly more in taxes – and still less than they did during the go-go 1990s – is hardly extreme.

Stripped of facts, your conversation partner will soon turn to unscientific terrain, claiming it is immoral to “steal” and “redistribute” income via taxes. Of course, he will be specifically railing on “stealing” for stuff like health care, which he insists gets “redistributed” only to the undeserving and the “lazy” (a classic codeword for “minorities”). But he will also say it’s OK that government sent trillions of dollars to Wall Streeters.

And that’s when you should stop wasting your breath.

What you’ve discovered is that the Me-First, Forget-Everyone-Else Crowd isn’t interested in fairness, empiricism or morality.

With 22,000 of their fellow countrymen dying annually for lack of health insurance and with Warren Buffett paying a lower effective tax rate than his secretary, the Me-First, Forget-Everyone-Else Crowd is merely using the argot of fairness, empiricism and morality to hide its real motive: selfish greed.

No argument, however rational, is going to cure these narcissists of that grotesque disease.

***

David Sirota is the bestselling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008). Find his blog at OpenLeft.com or e-mail him at ds@davidsirota.com<–>