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…)

Jon Geenen

By Jon Geenen
International Vice President, United Steelworkers

By now anyone who had not yet heard of the Koch brothers has been introduced to them. Every major newspaper and magazine has run an article about the brothers who until recently lived largely under the radar while advancing a political vision via political action committees and think tanks funded by their fortunes.

In the advent of the Supreme Court’s decision in the Citizens United case, journalists and others have made a clear connection between the Koch brothers and their role and influence in the advancement of the agenda of the far political right. Indeed, it is important, in fact essential, that Americans know who is driving the agenda and what the agenda is about, although the Citizens United decision and federal law allow the Koch brothers and other wealthy funders of the far right to donate in secret.

The groups that generally operate in the middle and to the left of the center of the political spectrum who identify themselves as moderate, progressives, trade unionists and other like-minded people are outraged by this dirty little secret. It has led to a progressive uprising in some areas, with protests that are said to eclipse the anti-war protests of the 1960s. These groups have also launched various efforts to pressure the financiers and architects of this agenda into rethinking their positions.

Therein lies at least one problem.

A number of organizations are advocating a boycott of the products that come from companies owned by the Koch family. This is problematic for a number of reasons, not the least of which is that it could potentially hurt the wrong people.

The Koch brothers own Georgia Pacific. It is an American consumer goods company that makes everyday products like facial tissue, napkins, paper towels, paper cups and the like. Their plants are great examples of American advanced manufacturing. Incidentally,

GP makes most of its products here in America. The company’s workforce is highly unionized. In fact, 80 percent of its mills are under contract with one or more labor union.  It is not inaccurate to say that these are among the best-paid manufacturing jobs in America.

This presents a dilemma and a paradox. While the Koch brothers are credited with advocating an agenda and groups that are clearly hostile to labor and labor’s agenda, the brothers’ company in practice and in general has positive and productive collective bargaining relationships with its unions.

While some companies are running from investment in American jobs, The Koch brothers’ Georgia Pacific just reached agreements with its primary union in the paper industry to invest more than a half a billion dollars in capital to essentially create two state-of-the-art machines that conserve fiber and energy at two separate union mills.

While certainly there are disagreements from time to time on what the right pension program is, or right wage increases and incentives, or the right formula for health care cost sharing, ultimately we end up with negotiated solutions.

So the problem for the advocates of a boycott against Koch is that it can only marginally hurt Koch, and the workers who are the epitome of what advanced manufacturing jobs in the United States ought to look like, would be the first casualties of a boycott. Of course, this will eventually drive a wedge between groups that are otherwise in political alignment.

If consumers pick alternate products (because people will still use toilet paper), in many cases, the substitute will be from a company with a track record that is much less friendly to the values of the workers who would, as a result of the boycott, become the collateral damage. The Koch brothers’ lifestyle will not dramatically change; there are no shareholders that will become concerned; the company is privately owned. The stock won’t plummet either — there is none.

To be sure, I personally have grave concerns about the agenda and influence being wielded by private wealth into our political system. Who doesn’t? I too agree that the Koch brothers are an ideal example of a very broken system.  They undoubtedly know that many see them as pariahs, and undoubtedly they don’t care — no more than I care if someone attaches a label to me for my political views.

So the question is: Can you hurt the Koch brothers through this kind of boycott? Or are you inadvertently becoming the bully that is kicking the Koch dog. There is no doubt that the events in my home state of Wisconsin and elsewhere have become an ignition point for action, and thank God that they have.

Arguably we have been rescued from the social hospice overseeing our demise. It is fair to keep the Koch brothers at the center of the debate. There have been fewer clear examples in our lifetime of the corruption of our system. If “Citizens United” gave corporations First Amendment rights, then too it gives them First Amendment responsibility and accountability. It is fair to find a way to make the Koch brothers responsible for promoting an agenda that ultimately hurts workers, but we should not make union workers collateral damage in this contest with Koch.

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Jon Geenen is responsible for USW paper bargaining. He began his career in 1977 as an industrial apprentice at the International Paper mill in Kaukauna, Wis. There he joined Local 20 of the United Paperworkers International Union (PACE) and served as bargaining committee chair, vice president and president. During the nine-year period he was active in his local, he assisted in the development of the union’s IP strategic bargaining program. After he was appointed to an international representative position for a Pace region in 1993, Mr. Geenen serviced numerous paper facilities and organized workers at CBC Coating in Appleton, Wis. and  Stora Enso in Wisconsin Rapids, Wis. From 2003 to 2005, Mr. Geenen served as the national director of paper bargaining and head of the PACE Rapid Response Education Network. He helped set in motion coordinated bargaining within the paper industry and organized the first National Paper Bargaining conference in 2004. After the merger of PACE and the USW, the USW executive board appointed him to serve as Region 2 Director in July of 2005.

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…)