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David Sirota

 

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

When they write their retrospectives about the era that ended with the 2008 election, economic historians will undoubtedly credit George W. Bush with almost single-handedly moving the country to embrace extremist conservatism. It’s a simple storyline: Cowboy president drives bewildered American herd over laissez-faire cliff. What such reductionism will ignore, though, is what we must remember now: namely, that Congress also played a decisive role in the stampede.

As former House Republican leader Tom DeLay said, he and his colleagues deliberately started “every policy initiative from as far to the political right” as possible, so as to shift “the center farther to the right.” The formula emulated Franklin D. Roosevelt’s fabled admonishment to allies: “I agree with you, I want to do it, now make me do it.”

Of course, that triumph was the country’s loss, as Republican policies thrust the political center off a conservative precipice and America into an economic freefall. And as we plummet, we are desperately groping for a lifeline.

If we are lucky and we end up snagging one that saves us – a huge if – it will be one that is strong enough to snap the center back from the conservative brink. This super-durable bungee cord must have the force of law, meaning it will be woven by Democratic legislators now exerting as much pressure on President Obama’s left as congressional Republicans focused on President Bush’s right.

When, for instance, Obama hedged on his promise to revoke $226 billion worth of Bush’s upper-income tax cuts, House Speaker Nancy Pelosi, D-San Francisco, pushed him to fulfill the pledge and put the money into programs that better guarantee job creation.

When Obama initially offered up a stimulus bill filled with discredited business tax breaks, Democratic senators forced him to back off. Reps. David Obey, D-Wis., and Jim Oberstar, D-Minn., then argued that the president’s proposed infrastructure investments were too small to boost the economy. That led House Democrats to increase Obama’s spending targets.

As stimulus negotiations continued, Rep. John Conyers, D-Mich., tried to add provisions letting courts renegotiate banks’ primary-residence mortgages so as to prevent more foreclosures. It’s a commonsense proposal: Judges already have the power to renegotiate vacation-home mortgages, and the New York Federal Reserve Bank says existing bankruptcy laws are exacerbating the foreclosure crisis. While Obama opposed the initiative out of fear that banking industry opposition might slow the underlying stimulus bill, Conyers’ effort ultimately made the president commit to supporting the reforms in future legislation.

Then there was the progressive reaction to Obama’s demand for more financial bailout money. Turning a routine committee hearing into a modern-day incarnation of the Great Depression’s Pecora Commission, Rep. Alan Grayson, D-Fla., upbraided a Federal Reserve official for refusing to disclose which banks are receiving taxpayer dollars. The spectacle was one of many that whipped the House into passing a bill attaching strings to the funds. Obama responded by committing to enact some of the restrictions by fiat.

At once complementary and adversarial, this intragovernmental squabbling probably makes the conflict-averse Obama uncomfortable. But the “make him do it” dynamic could finally bring the center of Washington’s political debate closer to the progressive center of American public opinion. Even more important, it is precisely what will help the new president avert an economic disaster.

David Sirota is the best-selling author of the books “Hostile Takeover” (2006) and “The Uprising” (2008).

Leo W. Gerard

By Leo W. Gerard
International President

In 1941, car manufacturer Willys-Overland demonstrated the strength and sturdiness of its new Army scout vehicle – the Jeep — to Congress by driving it up the U.S. Capitol steps.

Invented and manufactured in the USA, the Jeep would become an icon of American ingenuity, durability and mechanical ability. Soldiers loved the lithe little vehicle for its uncanny capacity to go anywhere. The New York Museum of Modern Art would exhibit it in 2002 and describe it as a masterpiece of functional design. Now it’s 68 and constructed by United Auto Workers for Chrysler in Toledo, Ohio.

Disregarding Jeep’s help in securing this country against fascists, conservatives like former Republican Massachusetts Gov. Mitt Romney are calling for its execution. Romney and his conservative compatriots want Congress to deny Chrysler, GM and Ford federal loans so that the Big Three go bankrupt. Using false wage information, these conservatives have persuaded the public that auto workers are overpaid. That has resulted in polls showing 61 percent of Americans oppose aid to the Big Three. And now Senate Majority Leader Harry Reed is saying he fears he can’t muster the votes necessary for a loan.

Congress cannot let the Jeep die in bankruptcy. Congress must not fail the U.S. auto industry. Doing so would be abandoning the core of the American economy – manufacturing. America is not built on Wall Street’s credit default swaps and collateralized debt obligations.  Its wealth and culture are built on and built by middle class workers who construct actual products like steel beams, tires and Jeeps, who operate and repair machines that pull oil and coal out of the ground, who log trees and man the mills that convert them into paper.

Just after the end of World War II, when the Jeep first became a civilian vehicle, 35 percent of workers belonged to labor unions. That’s significant because union members earn 30 percent higher wages than non-union workers and are 59 percent more likely to have health insurance. Those better wages and benefits helped create the great middle class in America. Workers earned enough money to buy refrigerators and homes and cars and, later, college educations for their children. The money they earned and spent churned through the economy and kept it humming.

But over the next half century, union membership declined. So it is only about 12 percent now. Business and industry groups intent on the extinction of unions can claim credit for a good part of that. These are the same organizations that are today misleading the public about auto worker wages, claiming they make $70 an hour when it’s really $28. They’re the same ones advocating auto company bankruptcy because it would allow the Big Three to renege on their contractual promises to workers and to retirees. They criticize auto workers for making a decent living, $28 an hour plus health benefits and a pension. And they denigrate the companies for being decent corporate citizens and fulfilling their health care and pension promises to retirees.

Over the past half century, multinational corporations have shipped a significant number of those good-paying union jobs overseas. With the help of wrong-headed federal policy that encouraged it, the U.S. lost an average of 12,000 manufacturing jobs per month since 1980. Since May this year, the average has been nearly 60,000. Multinational corporations sought cheap labor and lax environmental regulations in places like China and Indonesia, in what has become an international wage race to the bottom. Americans supposedly benefit from the import of cheap goods. But unemployed workers can’t afford to buy them.

Along with the decline in jobs and union membership came a reduction in the rate of personal savings and an increase in household debt. The financial situation of the typical American family became increasingly precarious even as, over the past 25 years, the very richest one tenth of one percent accrued more and more wealth. These were the kind of guys involved in short-selling – a practice through which a person owns nothing but makes money by betting that a stock will lose value – and by selling sub-prime mortgage-backed securities. These were the kind of know-it-all Wall Street risk takers who gave themselves $30 billion in bonuses last Christmas.

You know what happened next. Three months after those bonuses the initial investment bank fell. Bear Stearns got the first big federal bailout in March. Then other financial institutions and a gigantic insurance company involved in the subprime speculation toppled: AIG, Washington Mutual, Fannie Mae, Freddie Mac, and Lehman Brothers. Congress quickly offered up $700 billion to save financial institutions, and giant Citigroup took $25 billion of that in October and another $20 billion in November trying to stave off bankruptcy.

Congress used taxpayer dollars – working people’s money – to save those year-end-bonus awardees on Wall Street. Then it stiffed the working stiff. So far, there’s been talk, but no actual help for millions facing foreclosure. And while unemployment is rising, Congress is dithering over the Big Three’s request for a loan that could save millions of auto worker and support industry jobs.

Unemployment increased to 6.7 percent in November, after 533,000 people got thrown out of work in just those 30 days. Over the past 12 months, 2.7 million people lost their jobs. And finally, what every one of them already knew was officially declared earlier this week – the country has been in a recession for a year.

This nation clearly can’t survive on what is produced by Wall Street – reckless speculation. That took America down.

This country should not be spending all of its financial resources salvaging those who destroyed the economy. America needs to invest in what works – its people. Congress must provide mortgage relief. But, most urgently, it’s crucial that we re-invigorate our manufacturing base. America must be able to actually produce products. Swapping paper is not enough to sustain a strong and stable middle class that will save money and buy cars and homes.

The Jeep helped us win World War II. What has Wall Street actually done for you? Saving the Jeep – and Chrysler, GM and Ford – would be a symbol that America understands manufacturing is key to a strong economy and financially brawny workers.

Jeep owners should let Congress know they’re prepared to drive up the Capitol steps to support loans for the Big Three and investment in American manufacturing.