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Leo W. Gerard

By Leo W. Gerard
USW International President

When Herbert Hoover ran for president in 1928, the Republican party promised his victory would assure the prosperity of  “a chicken in every pot.” This week, Republicans proffered a similar pledge to America.

Hoover won, and in 1929, after a decade of GOP rule in Washington, Republicans did deliver something foul to Americans. It wasn’t the much-anticipated cooking hen. It was the Great Depression.

Now in the Great Recession, also delivered during a GOP presidency, Republicans have presented a new promise. They pledged to withdraw all unspent Recovery Act money to prevent it from employing even one more worker; kill health care reform to stop 30 million Americans from getting affordable insurance; slash $100 billion from federal programs protecting the middle class; preserve tax cuts for the rich and cut government regulation — like oversight of Gulf-oil-gusher-BP and contaminated-egg-producers Jack and Peter DeCoster.

This time, the GOP downsized the “chicken in every pot” promise. Instead they’re pledging a salmonella-poisoned egg.

In 1932, Americans wisely rejected re-electing Republican Hoover, who is regarded as one of the nation’s most inept leaders, and chose instead Democrat Franklin Delano Roosevelt, revered as one of the best. This fall, it’s crucial that Americans choose sagely again, selecting Democrats intent on reforming Washington and protecting the nation’s middle class.

Eight years of Republican rule in Washington climaxed with the worst recession since the Great Depression. Since that downturn officially began in December of 2007, poverty, unemployment and foreclosures have risen while middle class income and health insurance coverage have fallen.

The poverty rate increased to the worst level in 16 years, with 3.7 million people slipping from the middle class to the ranks of the poor in 2009. One in seven Americans now is impoverished. More than 8 million workers have lost their jobs, and 2.3 million families have lost their homes to foreclosure. Nearly one in four mortgage holders is under water, meaning they owe more on their house than it’s worth. Also, last year, the number of uninsured Americans rose by 4.4 million to 50.7 million — 16.7% of the population. It was the largest annual increase since the government began collecting comparable data in 1987.

By contrast, on Wall Street, where unrestrained and unregulated bankster recklessness caused the recession, happy days are here again. The banks that taxpayers bailed out have resumed paying million-dollar salaries and bonuses. The nation’s top 25 hedge-fund managers each took home an average of $1 billion (BILLION) last year. Those hedgers are among the nation’s richest 1 percent, those whose take home pay grew so fast between 1979 and the start of the recession in 2007 that nearly 39 percent of all income growth went to that tiny number of super-wealthy. Only 36 percent went to the bottom 90 percent of the nation’s population.

Democrats, keenly aware of the diverging experiences of the nation’s sucker-punched workers and its well-heeled elite, have worked to aid the beleaguered middle. They passed the $787 billion American Recovery and Reinvestment Act, which the Congressional Budget Office estimated created between 1.4 million and 3.3 million jobs by July.

Democrats reformed health insurance so that children with pre-existing conditions can’t be denied insurance; senior citizens won’t have to pay for “donut hole” medications; young adults up to age 26 may remain on their parents’ plans, and insurance companies can no longer choose doctors or place lifetime limits on coverage or drop the sick. On top of all that, the Democrats’ reform will lower federal deficits by $138 billion.

Now, Democrats are fighting to preserve income tax cuts for the middle class while eliminating breaks for the rich. The Democrats would continue to lower by $1,132 a year the taxes of median wage earners, those with incomes of about $50,000 a year. Under the Democrats’ plan, the super rich – those taking home more than $1 million a year — would still get a tax cut of $6,349 – six times that of the middle class. But Democrats would have the super rich pay $97,651 in taxes a year that they now pocket.

Democrats think the rich have an obligation to pay those taxes. To get where they are, in the top one percent income bracket, they’ve used tax-subsidized public services at significantly higher rates than the other 99 percent of Americans. That includes services such as roads and airports, civil courts, the U.S. patent office, the U.S. Department of Commerce and professional licensing, regulation and inspection departments.

Republicans don’t agree. They believe the middle class should pay so the rich can continue getting breaks. The GOP believes it is fine to give tax cuts to the rich that will cost nearly $1 trillion over 10 years, but not pay for them. Conversely, Republicans have refused to extend unemployment insurance for the middle class jobless unless that’s paid for. The GOP believes it’s appropriate to continue tax breaks for multi-national corporations that ship jobs overseas but it’s not to extend aid to the middle class unemployed to pay for health insurance.

In their Pledge to America, Republicans promise to take care of the rich. They said they’d change Washington by decimating the very regulation that protects middle class workers and their families and by cutting off money that is providing jobs to the unemployed.  The GOP pledges to undermine middle class America.

It might be called a turkey, but even that would inflate its value. It’s a rotten egg hurled at middle America.

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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.

Jared Bernstein

By Jared Bernstein
Chief Economist and Economic Policy Adviser to Vice President Joseph Biden

John Boehner wants a lot of people to lose their jobs.

We were awfully surprised to hear Rep. Boehner come out for killing jobs en masse in his own state and district by stopping the Recovery Act on last Sunday’s news shows.

Though we’re sure he didn’t know it, the Congressman is advocating to kill the expansion of the Butler County Community Health Center and bring some of the twenty-five highway projects across the district to a grinding halt. Across the state of Ohio, he said that approximately 4 million working families should get an unexpected cut in their paycheck as the Making Work Pay tax credit disappears, unemployed workers should go without unemployment benefits, and major Ohio road projects like the US-33 Nelsonville Bypass project and the Cleveland Innerbelt Modernization project should be stalled or stopped. Oh, and some of the more than 100 clean energy Recovery projects employing workers across the state should be shut down.

That would be the direct consequence of his suggestion that we shut down the Recovery Act: “There’s still about $400 billion or $500 billion of the stimulus plan that has not been spent. Why don’t we stop it?” Now if you have been following this blog, you know that the notion there is “$400 billion or $500 billion” in Recovery Act funding unspent couldn’t be further from the truth. In fact, we’re right on track to hit the goal set when the Recovery Act passed: that 70% of the $787 billion in funds would be “outlaid” or provided in tax benefits by September 30, 2010. But you don’t have to take our word for it — independent fact-checker Politifact.com recently rated Rep. Boehner’s claim flat-out false. As they noted:

[R]ight off the bat, Boehner’s $400 billion to $500 billion figure is much too high. (more…)

Jared Bernstein

 By Jared Bernstein
Chief Economist and Economic Policy Adviser to Vice President Joseph Biden

This episode of ‘The Recovery Act in Action’ takes place in Barre, Vermont, where SBE, Inc., an electronics firm that builds capacitors for batteries, is breaking ground on a brand new factory.

The thing is, that groundbreaking almost took place in China.

SBE’s owners were seriously considering opening this factory abroad until the Recovery Act stepped in and changed their minds. The firm received a $9 million grant from the Act’s Electric Drive Vehicle Battery and Component Manufacturing Initiative (and yes, we need to work on the names of these things) toward SBE’s $18 million new plant.

The factory is going to produce “Power Ring” capacitors, designed to increase the efficiency of hybrid and electric vehicles. SBE expects the plant to have the capacity to support 100,000 electric vehicles within three years, but this technology should also be useful in producing wind and solar energy. (Feed your inner engineer by going here — I, for one, was happy to see that these capacitors provide “extreme current pulse survival.”)

And it’s going to employ people — SBE expects to hire 100 workers for the new plant, possibly rising to 300 by 2015 depending on where demand is headed for this stuff (which, in my humble opinion, is straight up).

These are good jobs. I spoke to SBE’s CEO, Ed Sawyer, and he told me the new factory would employ technicians, machine operators, and inspectors, as well as office personnel.

Most importantly, they’re good jobs. And they’re here in this country, not somewhere else. I asked Ed about what changed SBE’s plan to build the factory in China.

“We were preparing to go to China,” he said. The problem, he told me, was that they lacked the capital they needed to build the highly automated domestic plant required to offset the labor cost advantage in China. But with the Recovery Act grant, “We were able to build a factory that would match unit costs, and that made all the difference.”

It’s a great example of the Recovery Act making the right investment at the right time. The result is an American company keeping good jobs here while partnering with private capital to build the clean energy infrastructure at the heart of President Obama’s vision to reform US energy use and production.

It’s enough to push your current pulse survival rate into extreme range.

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Before joining the Obama administration in December of 2008, Jared Bernstein served as Director of the Living Standards program at the Economic Policy Institute. His latest book is Crunch: Why Do I Feel So Squeezed? (And Other Unsolved Economic Mysteries), which follows All Together Now: Common Sense for a Fair Economy. He is the co-author of eight editions of the EPI book The State of Working America. His work has also been published in The New York Times, Washington Post, American Prospect, and Research in Economics and Statistics. He has served as a contributor to the financial news station CNBC. His areas of research include income inequality and mobility, trends in employment and earnings, low-wage labor markets and poverty, international comparisons, and the analysis of federal and state economic policies.

Leo W. Gerard

 

By Leo W. Gerard
USW International President

Taking candy from a baby: A consortium of Chinese and American companies goes to Washington and announces plans to build a $1.5 billion windmill farm in West Texas using $450 million in U.S. Stimulus funds, which will create 2,330 jobs – 2,000 of them in China.  

The baby – Washington — doesn’t cry or whine or spit in the consortium’s face. That’s what’s really wrong with this story.

So accustomed to being bought and sold, Washington simply begins processing forms so it can hand over your tax dollars to create jobs in a turbine factory in the city of Shenyang, China at a subsidy of $193,133 each. 

It’s like these bureaucrats live in Wonderland. Or an America where the unemployment rate isn’t 10.2 percent. Or where 40,000 American manufacturing facilities didn’t disappear in the past decade. Or where banks didn’t repossess nearly a quarter million American homes in the past three months. 

We’ve got a message for Washington: Hell no! We’re not giving tax dollars to China. What’s wrong with these businesses and our government? It is the $787 billion American Recovery and Reinvestment Act of 2009. It’s not the Chinese Recovery and Reinvestment Act.

It’s bad enough that we’ve off-shored our factories and technology and jobs over the past 20 years.  We’re not off-shoring our Stimulus cash too. In fact, we’re tired of serving as the schoolyard wimp of the world. We need our own industrial policy so we can stand up and compete in the world market manufacturing the likes of wind turbines. And we need it now. 

China has an industrial policy. And it uses that policy to dominate.  Here is how Keith Bradsher of the New York Times described China’s policy to become a world leader in renewable energy, which of course, would include construction of wind turbine factories:

“Calling renewable energy a strategic industry, China is trying hard to make sure that its companies dominate globally. Just as Japan and South Korea made it hard for Detroit automakers to compete in those countries – giving their own automakers time to amass economies of scale in sheltered domestic markets – China is shielding its clean energy sector while it grows to a point where it can take on the world.”

China protects its chosen industries in many ways. It provides low interest loans, some of which don’t have to be repaid. It may give free land on which to construct buildings. And there are other perks that Bradsher described:

“When the Chinese government took bids this spring for 25 large contracts to supply wind turbines, every contract was won by one of seven domestic companies. All six multinationals that submitted bids were disqualified on various technical grounds, like not providing sufficiently detailed data. . . even as Chinese companies that had never built a turbine were approved. . .”

Later, Bradsher describes European disgust at the Chinese treatment:

“European wind turbine makers have stopped even bidding for some Chinese contracts after concluding that their bids would not be seriously considered, said Jorg Wuttke, the president of the European Union Chamber of Commerce in China.”

China has a policy. It ruthlessly protects its own industries.

China was among the many countries that complained bitterly when the U.S. included “Buy American” provisions in the Stimulus Bill. In fact, Vice Commerce Minister Jiang Zengwei told a press conference in Beijing in February that China would not do such a thing, “We won’t practice a ‘Buy China’ policy,” he said. Four months later, that’s exactly what China did, instituting its own, stricter “Buy China” policy as part of its economic stimulus program.

China did what China felt was necessary for its economy. And it ignored foreign criticism.

That’s hardly the U.S. tactic. Wilting under criticism, Congress diminished the Buy American provisions before passing the Stimulus.

As a result, we’ve got a consortium — U.S. Renewable Energy Group, Cielo Wind Power and A-Power Energy Generation Systems – so bold that it believes it can get nearly half a billion dollars in American Stimulus money for 2,000 Chinese wind turbine jobs. The consortium says it would import 240 Chinese turbines to Texas where 300 temporary construction jobs would be created and another 30 permanent jobs established.

The wind turbines could easily be made in the USA. Bradsher, of the Times, says the Chinese concede that while their turbines cost slightly less initially, they have higher repair costs. He wrote, “United Nations data from trading of carbon credits shows that the Chinese-brand turbines produce less electricity because they are more frequently out of action.”

Really, is that what we want to buy with American tax dollars for a wind farm in West Texas?

If the United States put half the effort into supporting its renewable energy industry that China does, there’d be no way this consortium building windmills in Texas would be looking overseas for turbines.

China has a plan. In its strategy, it doesn’t consider America first or the remainder of the world first. And that’s what the USA must do. We need an industrial policy that makes no apologies for putting America and American workers first. And when that’s the calculus, no American official would ever countenance a request to give $450 million in American taxpayers’ dollars to a turbine factory in China. And no American consortium would consider making such a stupid request.   

In the meantime: Hell no! They don’t get our dough!

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Take action now to stop your tax dollars from going overseas!  Click on this link by Campaign for America’s Future:

      http://action.ourfuture.org/p/dia/action/public/?action_KEY=68