Blog

Robert Reich

By Robert Reich
Former U.S. Secretary of Labor, Professor at Berkeley

Why aren’t Americans being told the truth about the economy? We’re heading in the direction of a double dip — but you’d never know it if you listened to the upbeat messages coming out of Wall Street and Washington.

Consumers are 70 percent of the American economy, and consumer confidence is plummeting. It’s weaker today on average than at the lowest point of the Great Recession.

The Reuters/University of Michigan survey shows a 10 point decline in March — the tenth largest drop on record. Part of that drop is attributable to rising fuel and food prices. A separate Conference Board’s index of consumer confidence, just released, shows consumer confidence at a five-month low — and a large part is due to expectations of fewer jobs and lower wages in the months ahead.

Pessimistic consumers buy less. And fewer sales spell economic trouble ahead.

What about the 192,000 jobs added in February? (We’ll know more Friday about how many jobs were added in March.) It’s peanuts compared to what’s needed. Remember, 125,000 new jobs are necessary just to keep up with a growing number of Americans eligible for employment. And the nation has lost so many jobs over the last three years that even at a rate of 200,000 a month we wouldn’t get back to 6 percent unemployment until 2016. (more…)

Mike Hall

By Mike Hall
AFL-CIO Senior Writer

Wisconsin Gov. Scott Walker (R) finally decided to do what most any other law-abiding  citizen would do—obey a judge’s order. Walker administration officials told the Associated Press today that he will comply with a restraining order he defied last week that puts a temporary halt on his law that guts collective bargaining rights for public employees.

Last week, Dane County Circuit Judge Maryann Sumi issued the first restraining order that halted the implementation of the law. But Walker tried to end run the ruling and published the anti-worker measure anyway and claimed that action put into effect the law that ends workers’ right to bargain for middle class jobs.

Tuesday, Sumi issued a second order and said she wanted to make “crystal clear” the law would not be implemented into legal challenges are heard.  Today’s action is a change of heart because yesterday Walker’s  Secretary of Administration Mike Huebsch, declared the law was in effect despite Sumi’s orders to block it.

Legally, that makes today a “Two-fer Thursday” for Walker.  This morning after AFL-CIO lawyers threatened legal action against Walker for using an AFL-CIO logo on his Facebook page, he removed it. Maybe he’s finally realizing he’s not above the law. The jury’s still out on that.

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Re-Posted from the AFL-CIO Now Blog

Richard (R.J.) Eskow

By Richard (RJ) Eskow
Senior Fellow, Campaign for America’s Future

If you’re a banker who bought your estate with the millions you made from mortgage fraud, relax. The Justice Department isn’t looking for you. But if you’re an illegal immigrant who’s working on that banker’s estate, look out. The Department of Justice is ignoring your boss and devoting most of its resources to catching you.

And the Justice Department’s “mortgage fraud” unit doesn’t prosecute bankers. It protects them.

Joe Nocera of the New York Times contrasts the legal treatment that was given to one high-flying borrower with that received by Angelo Mozilo, CEO of the fraudulent lender Countrywide. But if stories like this one are bad, the numbers are even worse.

If you also take a qualitative look at some of the federal government’s other well-publicized mortgage fraud efforts, like its “Stop Fraud” website, the picture becomes pretty stunning — if not downright infuriating. (more…)

Carl Davidson

By Carl Davidson
Author and writer for Beaver County Blue Blog

Is higher-priced gasoline inevitable?

Not quite, at least not with the prices we now see leaping ahead with every new Mideast crisis, and then falling back a little later, only to have the cycle repeat itself.

But there’s one sure-fire if little-known way we could bring the price of fuel at the pump down significantly and quickly. Simply raise the margin call on the cost of oil futures on Wall Street and other commodity markets from, say, about a nickel on a dollar to about 50 cents on the dollar. This drives the vast majority of pure speculators out of the market, while still allowing oil companies and refineries to buy needed future contracts.

The speculative bubble will be burst, and the price will plummet overnight—and it only requires a decision by Congress to do it. In fact, one Democratic Senator, Bill Nelson of Florida, is urging the Commodities Futures Trading Commission to do something close to that this month.

“There is strong evidence the recent surge in gas prices has little to do with the fundamental supply and demand for oil,” Sen. Nelson wrote to the CFTC and other Members of Congress on March 11, 2011. Nelson added that he was narrowing his target to speculative finance capitalists, and not saying that “we raise margin requirements on businesses that engage in the hedging of legitimate risk.” (more…)

Gilbert B. Kaplan

By Gilbert B. Kaplan
Former Deputy Assistant and Acting Assistant Secretary of the U. S. Department of Commerce

We have one trade problem in this country that so far surpasses every other one that it is almost not worth talking about any of the others. The problem is Chinese subsidy practices, and our resulting $260 billion sustained trade deficit with China. The problem has recently taken on a new, more dangerous bent. First, China has made it increasingly clear they are not going to do anything about their undervalued currency. One aspect of the currency problem has been much talked about — how it makes Chinese exports to the United States very cheap and our exports to China uncompetitive.

But it is now clear that the Chinese undervaluation has an even more nefarious and dangerous and long-term effect. It is a big driver forcing U.S. companies to leave the United States and relocate to China. This is because of the simple reason that a relatively “overvalued” dollar goes much further in China building plants and buying inputs and paying workers, than it does in the United States. This is not just a question of very low wages in China, it is about the additional accelerant of low cost renminbi making already low wages and cheap inputs even cheaper. So U. S. companies cannot afford to stay in the U. S. And once they leave it is very unlikely they will ever come back.

The other development is a Chinese government pronouncement late last year that they are pumping subsidies of $1.5 trillion into seven strategic industries. The money will be going to the same emerging industries that President Obama and substantially every governor in the United States touts as the “industries of the future” that will rescue the United States from its high unemployment and anemic growth. The industries include information technology, environmental protection, new forms of energy (read wind and solar), biology, and new materials. (more…)

For more than a quarter century after WWII the fruits of America’s productivity were shared with average working people, year in and year out. Not anymore.

Les Leopold

By Les Leopold
Author, “The Looting of America”

Do public sector workers earn more than private sector workers? Who cares? This boneheaded question has us fighting over the crumbs. (And the answer is no — all credible studies show that when you account for educational levels, the total compensation packages are about the same.)

The real question is: Why have most workers seen their standard of living stall over the last generation?

The answer is both obvious and appalling. More and more of our nation’s wealth is going to the few, while the many have seen their real wages actually decline. It’s a disgrace.

It wasn’t always so. For more than a quarter century after WWII the fruits of America’s productivity were shared with average working people, year in and year out. But what exactly was being shared?

What’s productivity and who gets its benefits?

Productivity is a crucial economic measure of the total output of goods and services in our economy per hours worked. It’s not based on pay levels, only on hours worked in the economy as a whole. In effect, it measures how much human labor power it takes to produce everything we have. It makes a real difference to our standard of living if it takes 10,000 hours rather than 1,000 to build a house.

Output per working hour, although imprecise, is the best way we have to measure our level of technique, organization, skill, effort and intellectual firepower. Sure, this measure has significant flaws because it doesn’t really measure our health or environmental quality. But it does indeed measure the material side of our standard of living. When productivity grows, a society has the means to solve many problems and the means to enhance working and living conditions…but only if the fruits of productivity are shared somewhat fairly. (more…)

Dean Baker

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

Many people might think that the country’s problems stem from the fact that too much money has been going to the very rich. Over the last three decades, the richest one percent of the population has increased its share of national income by almost 10 percentage points (Excel spreadsheet). This comes to $1.5 trillion a year, or as the deficit hawks are fond of saying, $90 trillion over the next 75 years.

To put this in context, the size of this upward redistribution to the richest one percent over the last three decades is roughly large enough to double the income of all the households in the bottom half of the income distribution. The upward redistribution amounts to an average of more than 1.2 million dollars a year for each of the families in the richest one percent of the population.

And this upward redistribution was brought about by deliberate policy. We pursued a trade and high dollar policy that was intended to put downward pressure on the wages of manufacturing workers. The Federal Reserve Board deliberately kept unemployment higher than necessary in order to weaken workers bargaining power. We extended patent monopolies to allow drug companies to jack up prices, raking in hundreds of billions a year. And, we gave the Wall Street banks the benefit of “too big to fail” status so they can borrow with a government subsidy.

These policies and others fueled this enormous upward redistribution. But the deficit hawks don’t want us talking about any of these things. (more…)

Mike Elk

By Mike Elk
Union Organizer

Last week, the New York Times reported that, despite making $14.2 billion in profits, General Electric, the largest corporation in the United States, paid zero U.S. taxes in 2010 and actually received tax credits of $3.2 billion dollars. The article noted that GE’s tax avoidance team is comprised of “former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.”

After not paying any taxes and making huge profits, ThinkProgress has learned that General Electric is expected to ask its nearly 15,000 unionized employees in the United States to make major concessions.

This year, 14 unions representing more than 15,000 workers will negotiate a new master contract with General Electric. Among the major concessions GE has signaled that it will ask of union workers is the elimination of a defined contribution benefit pension for new employees, a move the company has already implemented for its non-union salaried employees. Likewise, GE is signaling to the union that it will ask for the elimination of current health insurance plans in favor of lower quality health saving accounts, a move the company has already implemented for non-union salaried employees as well. (more…)

Sen. Bernie Sanders

By Sen. Bernie Sanders
Independent U.S. Senator from Vermont

Republicans in the House want to balance the budget by denying more than 200,000 little children the opportunity to receive an early education through Head Start; reducing or eliminating Pell Grants for 9.4 million college students; eliminating primary health care services to 11 million Americans; and delaying Social Security benefits to half a million eligible Americans, among other things.

Before Congress cuts funding for Head Start, Social Security, and financial aid for college, we have got to make sure that large, profitable corporations are paying their fair share of taxes.

At a time when we have a $14.2 trillion national debt and a $1.6 trillion federal deficit, it is unacceptable that Exxon Mobil, General Electric, Bank of America, Chevron, Boeing, and other large, profitable corporations are not only avoiding paying any federal income taxes at all but have actually received huge refund checks from the IRS.

Loopholes in the tax code, offshore tax havens, tax breaks to companies that export American jobs to China, and other tax breaks have allowed giant corporations in America to receive billions in refunds from the IRS.

Meanwhile corporations are sitting on nearly $2 trillion in cash on hand, and big banks have nearly a trillion dollars in excess reserves parked at the Federal Reserve.

In 2005, one out of four large corporations paid no income taxes at all even though they collected $1.1 trillion in revenue over that one-year period. (more…)

Leo W. Gerard

By Leo W. Gerard
United Steelworkers International President

The nightmare for far too many is Cyborgs. The public fears HAL, the 2001 Space Odyssey computer that killed astronauts rather than forfeit its objective.

So terrified of the sentient machine, citizens overlook the allegory. The soft-spoken, reasonable-sounding HAL behaves exactly like a greed-driven, multi-national corporation. The corporate mission is profit. With 29 workers massacred in a Massey mine explosion and 11 slain in the BP oil rig explosion in just one month last year, greedy corporations have shown they’re willing to kill rather than forfeit their profit objective.

In America, the UK and Europe, the entities that should be feared — greedy corporations — are pulling politicians’ strings. Reckless speculation by multi-national financial corporations took down the world economy, creating the worst recession since the Great Depression. Governments – in the UK, Europe and America – used worker tax dollars to bail out the banks. Now those big banks are granting outsized bonuses and pay packages to their executives while demanding that governments balance recession-ruined budgets with cuts to social services, education, pay and pensions for government workers and worker’s rights to collectively bargaining for better lives.

Workers, students and pensioners in the UK and Europe have protested these measures for a year, from general strikes in Greece to national strikes in France. In the U.K. students, in the largest numbers since the 1960s, protested education fee increases. Last weekend, the U.K.’s Trades Union Congress (TUC) organized the March for the Alternative in which a quarter million demonstrators walked for five hours in London to protest austerity imposed on workers while corporations get breaks.

The diamond-crusted rich on both sides of the Atlantic have determined that workers and the vulnerable will pay the consequences of the bankster-caused recession. And they’re exploiting the financial crisis to strip workers of collective bargaining rights, preventing them from ever regaining what they’ve lost.

That is what’s going on in Wisconsin — and in a half dozen other American states where right-wing legislatures and governors are passing or pressing for legislation decimating workers’ rights to collectively bargain, even after workers accepted pay cuts to help balance budgets.

The disingenuousness of these right-wing governors in blaming public employees is clear. First of all, many of the state leaders granted huge tax breaks to corporations, lowering the states’ anticipated revenues, then demanded state workers bear the brunt of filling budget deficits.

Second, many of these governors didn’t stop at demanding public workers accept pay cuts. They also insisted on terminating workers’ rights to bargain for better pay, benefits and working conditions in the future. In addition, these right-wingers are meddling in the relationship between private sector unions and corporations. They want to forbid private employers from subtracting union dues from paychecks and remitting the money to the union. And they want to pass legislation intended to bankrupt unions and to prevent them from supporting progressive candidates who would treat workers fairly and protect their rights.

This is how it played out in Wisconsin: The governor, right-winger Scott Walker, gave corporations more than $100 million in tax cuts then decreed that public workers, such as teachers, nurses and librarians, take wage and benefit concessions. And Walker threatened to send out the National Guard, a state-run militia despite the name, to quell protests. This raised the specter of the May 4, 1970 massacre at Kent State when Ohio National Guardsmen called out by the governor gunned down unarmed students protesting the Vietnam War.

Contrary to Walker’s expectations, his threat energized opposition. Repeatedly, tens of thousands of workers, students, retirees, environmentalists, religious leaders and children poured into the streets and occupied the state capitol building in Madison, Wisconsin to protest the right-wingers’ plan.

Walker’s proposal passed in the state Assembly and needed a vote in the state Senate before it could get to his desk for final signature. To prevent a quorum needed to vote on the measure, all 14 Democratic senators left the state. They became known as the “Fab 14” as they remained holed up in hotels in Illinois for weeks, trying to negotiate a less draconian measure with the governor.

Although public opinion polls showed 60 percent of Wisconsin citizens opposed cutting collective bargaining rights, although workers already had accepted the pay reductions Gov. Walker had contended were vital to balance the budget, although protestors occupied the capitol building with a sit-in and sleep-in for weeks, the right wingers devised a scheme, in a secret meeting behind doors locked to the public, to vote without a quorum to deny government workers their collective bargaining rights.

In the midst of the dispute, Gov. Walker revealed his puppet masters – the Koch brothers, owners of the Georgia-Pacific paper company, with plants in the United States and the U.K. While contending he had no time to talk to progressive leaders or union officials about his union-busting legislation, Gov. Walker jumped on the phone for 20 minutes when told the caller was billionaire David Koch. The billionaire was Walker’s second largest campaign contributor; he provided $1 million to a fund to attack Walker’s opponent, and he bankrolls the right-wing’s right-wing, the Tea Party.

Events in some other countries show it doesn’t have to be this way. Brazil just passed a law giving unions a director’s seat on each board of a state-owned company. And in Australia, progressive labor legislation has enabled unions to increase membership by 20 percent in the past two years.
There are some signs of success in U.S. workers’ struggle to stop the corporate-backed right-wing campaigns. A Wisconsin judge has halted implementation of the union-busting measure because the way conservatives passed it appears illegal. And progressives are working to recall – or remove from office – eight right-wing Wisconsin senators who voted against worker rights. They’ve pledged to mount a recall campaign against Gov. Walker as soon as it’s legally possible.

In addition, labor activists and their supports have derailed proposed anti-union legislation in Indiana and Missouri.

That’s an indication of what coordinated coalitions of citizen protesters can do. That’s an indication that organized workers with their allies can take on global capital and win.

The difference between HAL and corporations is that HAL is fictional while greedy multi-national corporations are real threats.  In the end, a human defeated HAL. In democracies, workers united with their allies can take on corporations and win as well.

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Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama recently appointed him to the President’s Advisory Committee on Trade Policy and Negotiations. He serves as co-chairman of the BlueGreen Alliance and on the boards of the Apollo Alliance, Campaign for America’s Future and the Economic Policy Institute.  He is a member of the IMF and ICEM global labor federations and was instrumental in creating Workers Uniting, the first global union.