By Robert L. Borosage
Co-Director Campaign for America’s Future

So much for the $700 billion bailout of Wall Street. Clearly, once the bailout passed, investors took a good look at the real economy and went to the mattresses. We’re headed into a great reckoning. And at the heart of that, as illustrated in the new Institute for America’s Future op ad in the New York Times – “Even the Rope we’re Hanging Ourselves with is made in China”: — is this country’s unsustainable global strategy. To see the ad and supporting charts go here.
This is a result, as Barack Obama has stated, of a failed economic philosophy – the “market fundamentalism” that dominated Washington over the last thirty years, the notion that markets are efficient and self-correcting and, as Sarah Palin repeated in the last debate, governments should just get out of the way.
What that meant in practice was the worst forms of crony capitalism. Abroad, global corporations and banks essentially wrote the constitution of the new global economy, protecting property rights but not workers, consumers or the environment. Financial flows were deregulated opening the casino up for business. Banks were favored; the military industries protected; agribusiness subsidized.
At home, Reagan launched the war on unions, and rolled back government and regulation. The minimum wage was frozen for a decade. Undocumented workers exploited to undermine wages and standards. Banks got rid of the protections built during the Great Depression. Companies used globalization as a club against workers. Pensions and health care benefits were rolled back… Over the last eight years, productivity and profits rose, but wages lost ground. We lost one in five manufacturing jobs. Now some 15 million service jobs are at risk of off-shoring.

Global economy

Yet this global economy depends on American consumers as the buyers of last resort. Sustaining a low wage, high consumption economy is no mean trick. The gulf was bridged by mountains of debt and successive asset bubbles. Household debt soared to unprecedented levels, as Americans loaded up on credit cards and cashed out their homes. And the US is now the world’s largest debtor, having added over $4.4 trillion in foreign debt since 2001. We must borrow or sell off assets with $2 billion a day simply to cover our trade deficits. We now run a high tech trade deficit with China. Mexico exports 50% more cars to the US than the US exports to the rest of the world.
What can’t go on indefinitely, won’t. And with the bursting of the housing bubble, the reckoning is here.
Clearly we need to change course. We need a national economic strategy for a global economy, a strategy for the nation, not for the multinationals that have very different interests.
Yet our political debate is still frozen into a silly spit ball fight about “free trade” and “protectionism.” Barack Obama questions NAFTA-type accords and is charged with “protectionism” in editorials across the country. John McCain, a stalwart of the failed policies of the last two decades, still intones the old “free trade” mantras, denouncing critics as lacking “faith in the American worker.”
This mindless debate has been going on for three decades, as the country has sunk deeper and deeper in debt. Surely in the wake of the current crisis, it is time for an adult conversation about a strategy that would sustain a prosperous middle class in a global economy.
That means deciding if America will remain a center of innovative manufacture. A concerted drive for energy independence will not only reduce the half of our trade deficits that go to oil, but could capture the green technologies that will drive the markets of the future.

Broad middle class

It means deciding if we are going to sustain a broad middle class. That would require forcing business to compete within the framework of a high wage economy – not by tearing that framework down. Empower workers to organize, raise the minimum wage, and build a public social contract starting with health care and pensions to replace the promises the corporations are shredding.
Then we’ve got to change our federal priorities from policing the globe and top end tax cuts to making the vital investments here at home — in education and life long learning, in R and D, in the most efficient infrastructure.
Finally we’ll need to dispel the myth that the mercantilist nations like China are playing by the same set of rules. With China now our leading creditor, this won’t be easy. But we must find ways to bring our trade with that country into balance – either by currency adjustment, by managing our trade, or by a surcharge on imports that will force the change.
These aren’t the only answers; they may not be the best ones. But surely the question of our national strategy in the global economy can’t be put off. That’s why McCain’s decision to turn his campaign over to the Karl Rove’s protégés in character assassination is so dishonorable. We deserve a debate worthy of a great nation in trouble. Brickbats about Bill Ayers or Palin’s Alaskan separatist husband are simply insults. Americans deserve better. And McCain and Palin may find out that they just may demand it.

By Leo W. Gerard
International President

Republicans in the House contend that critical words by Speaker Nancy Pelosi compelled them to vote against the initial $700 billion Wall Street bailout bill that their GOP President had asserted was essential to save the country from certain economic doom.
But, really, they were pressured by something far less ethereal than Pelosi’s commentary, something far more grassroots: livid constituents calling and e-mailing so fast and furious — with furious being the operative word — that they nearly shut down networks.
It was an uprising. It showed that under the right set of circumstances –  like  impending balloting on their re-election — they would respond to public outcry. That occurred just as a filmmaker Stuart Townsend’s new movie, “Battle in Seattle” debuted around the country, highlighting an uprising that changed the course of global events.
“Battle in Seattle” recounts the massive protests in 1999 that shut down the World Trade Organization talks scheduled to occur in that Washington city, the first time the ministers were to meet in the U.S. The movie depicts the diverse group of protestors — idealist college kids, environmentalists, endangered species activists, and trade unionists concerned about so-called free trade — who converged on the city for five days of mostly peaceful demonstrations only to be met by tear gas, rubber bullets, police batons and concussion bombs.
Stopping these talks forced the all-powerful WTO to recognize the deep layers of opposition to its secretive actions that created trade deals disregarding the human condition, the environment and endangered species while favoring global corporations and large nations. And, in the case of the U.S., these agreements could circumvent the will of Congress.

Marginalized nations empowered

In addition, the protest and shutdown empowered small, marginalized nations to stand up and object to the process that enabled global corporations to profiteer from their national resources as cheap raw materials and their people as cheap labor. This recovery of rights by small nations contributed to the disintegration of the Doha Round of WTO talks that broke off in July without resolution.
Mark Engler, a senior analyst with Foreign Policy in Focus and author of “How to Rule the World: The Coming Battle Over the Global Economy,” wrote about it in an essay entitled, “The Impact of the Battle in Seattle.” He describes the insurrection in Seattle by ministers for some small countries and quotes Sir Shridath Ramphal, chief negotiator for the Caribbean: “This should not be a game about enhancing corporate profits. This should not be a time when big countries, strong countries, the world’s wealthiest countries, are setting about a process designed to enrich themselves.”
Engler goes on to say:

“Given that less powerful countries had typically been bullied into compliance at trade ministerials, this was highly unusual stuff. Yet it would become increasingly normal. Seattle launched a series of setbacks for the WTO and, to this day, the institution has yet to recover. Efforts to expand the reach of the WTO have repeatedly failed.”

The two events – the collective uprising in Seattle that shut down the WTO talks and the angry public uprising that prompted the initial House vote rejecting the bailout bill — share another important connection.
In both cases, the protestors believed the governing agency was kowtowing to corporate interests at the expense of individuals. In Seattle, the protestors felt that the WTO would make any deal to increase trade between nations for the profit and pleasure of global corporations, no matter what indigenous people, fragile eco-system, endangered Queen Alexandra’s Birdwing Butterfly or threatened Knysna Banana Frog stood in the way. The wealth created by this increased commerce was supposed to create economic growth and stability within nations and trickle down to the poor. But, as small nations in particular experienced, that didn’t seem to occur.  The rich corporations and rich countries just got richer – at the expense of the small.

Angry constituents called

Similarly, with the initial House vote on the bailout bill, a thin majority of U.S. representatives opposed it after angry constituents called demanding to know why their tax dollars should be used to salvage giant banks that would never forgive a depositor an overdraft, that paid executives obscene salaries while the rest of America increasingly got layoff notices, and that had taken the risks that resulted in pulling the American economy down.
At the same time, these taxpayers knew the federal government had tightened bankruptcy regulations to make it more difficult for citizens like them to get a bailout. They could recite the Reagan Republican economic mantra that government should deregulate so that corporations could do whatever they wanted, and, eventually, the resulting massive profits were supposed to trickle down to the great unwashed. It had never worked for the American middle class as corporations shipped jobs oversees to exploit labor there. And now a new Republican president was telling them to begin paying for a reverse philosophy –  their tax dollars would trickle up into the pockets of reckless corporations. This time, the public revolted.
Again, there’s a connection between Seattle and Washington, D.C.  Engler writes, “Privatization, deregulation and corporate market access have failed to reduce inequality or create sustained growth. . .”  He finishes that sentence with “in developing countries” because he is writing about the WTO. But if it changes to: “Privatization, deregulation and corporate market access have failed to reduce inequality or create sustained growth. . .in the United States,” it remains true.
Those who feel defeated by the events on Wall Street and in Washington or feel depressed by the prospect that nothing they do can change that, should go take a dose of “Battle in Seattle.” It’s a tonic because it shows people still have power.

By Leo W. Gerard
International President

Kosher abuse
In May, when immigration officials raided the kosher meatpacking plant in Postville, Iowa and hauled out 389 undocumented workers, the news was all about immigration violations, but now the focus is on the employer, Agriprocessors Inc.
That’s because it turns out that while purportedly giving ritual consideration to the animals to be slaughtered, Agriprocessors failed to treat with dignity, or legality, the teenagers, and children, some as young as 13, in its employ. The 57 adolescents, some working 17-hour shifts, six days a week, testified to wielding knives and other dangerous tools prohibited for young workers.
The Agriprocessors incident raises difficult questions in the Jewish community. If meat is denied the kosher label because the animal does not die within seconds of precise slitting, is it kosher when the 13-year-old child who processed it was illegally hired, worked a 17 hour day and was refused overtime pay? What if a 16-year-old undocumented youth, who put in 17-hour shifts, six days a week, leaving no time for anything but work and sleep, said in an affidavit, “I felt like I was a slave?”
These violations happened in Iowa, but they occur elsewhere as well, for a simple reason: the Wal-Mart mentality.

Soulless corporate mindset

We have allowed that soulless, unpatriotic global-corporate mindset to control government policy. As a result, the rich have gotten richer while the middle class has paid the bill and gone bankrupt. The great builder and protector of the middle class, collective bargaining, has been eroded by deliberate corporate actions over the past quarter century. Meanwhile, the national debt has increased; inflation and unemployment are up, and foreclosure signs mar every neighborhood.
Corporate lobbyists secured from compliant politicians so-called free trade agreements that have resulted in the loss of millions of good paying, often unionized manufacturing jobs. Those jobs have gone to third-world countries where investigations have shown workers often labor long, grueling hours and are not even paid their own countries’ minimum wage. Then their products are shipped back to the U.S. to be sold at cheap prices at Wal-Mart by workers who are paid less than a living wage and are denied full-time status and health insurance.
What comes around, goes around in the Wal-Mart world. When uninsured Wal-Mart workers get sick, American taxpayers foot the bill. They pay for coverage through Medicaid, the health insurance plan for the poor. That’s what the Walton family, which owns Wal-Mart, banks on. Literally banks on. When American taxpayers step up and pay for half of all Wal-Mart employees’ health care, that certainly helps the Waltons stay among the 25 wealthiest families in the world.
Wal-Mart workers would benefit tremendously from forming a union. Workers who belong to unions earn 30 percent more than nonunion workers, and they are 59 percent more likely to have employer-provided health insurance. The same goes for those workers at Agriprocessors. If they had a union, it could file grievances over the hiring of children, against unpaid overtime and about unsafe working conditions.
In surveys, more than half of U.S. workers, nearly 60 million, say they would join a union immediately if they could. But they don’t get that opportunity under the current Wal-Mart mentality global-corporate system. The political system has been stacked against collective bargaining. Global corporations hire “union busters” to intimidate, harass and fire workers who try to organize unions. Workers are fired in a quarter of the campaigns where workers try to organize unions at private companies. Even when workers successfully form unions, they can’t get a first contract 44 percent of the time because companies refuse to bargain meaningfully.

Employee Free Choice

There is a solution for this problem. It’s called the Employee Free Choice Act. It would restore workers’ freedom to form unions and bargain. It would allow workers to create unions by collecting signatures from a majority of workers. As it is now, a company can demand an election for a union. Under the Employee Free Choice Act, workers may have an election if they want one, but the signatures are sufficient in most cases. This puts the workers in control of their union instead of the company.
The Employee Free Choice Act also would increase penalties for companies that intimidate and fire employees trying to form unions. And it would establish mediation and binding arbitration when the employer and the workers cannot agree on a first contract.
The Employee Free Choice Act has bipartisan support in Congress and polls show it is backed by two-thirds of the American public, including Republicans. It passed easily in the House last year, but in the Senate got only 51 votes, not the 60 needed to stop a Republican filibuster.
Fearing the Employee Free Choice Act could win in the Senate if a few more Democrats secure seats there in the fall elections, Wal-Mart took action in recent weeks. Obviously, Wal-Mart fears that Employee Free Choice means less money for the Waltons, and more free choice for its employees.
The Wall Street Journal reported last week that Wal-Mart executives began indoctrinating thousands of store managers and department heads about what the company claims are the evils of unionization in an attempt to get them to vote Republican. These managers told reporters that the executives informed them that workers would be forced to pay large amounts of union dues and get nothing in return and be obliged to go on strike and get no compensation.

Contracts like CEOs

Apparently the nation’s largest private employer failed to mention that a portion of union dues goes into a strike fund to provide money for workers who vote to strike. In addition, what workers get for union dues is a contract, guaranteeing them certain salaries and benefits – like the contracts CEOs demand when they are hired by boards of directors.
All of this from a company that flies rapid response teams out to any of its more than 5,000 Wal-Mart stores worldwide to quash brewing union activity.
Global corporations like Wal-Mart have hired the likes of Coalition for a Democratic Workplace and Employee Freedom Action Committee, run by former tobacco lobbyist Rick Berman, to blockade the Employee Free Choice Act. They are trying to make big business out to be David in this David and Goliath struggle, although it is union membership that has shrunk to David size over the past half century. Since its height in 1953, when 35 percent of workers belonged to unions, membership has now fallen to 12.1 percent.
A big part of the reason for that is constant harassment by big business. Let’s go back to Agriprocessors. Three years ago, Human Rights Watch investigated working conditions in the meatpacking business and found, among other things, that companies often use illegal tactics to crush union organizing efforts. The report, “Blood, Sweat, and Fear: Workers’ Rights in U.S. Meat and Poultry Plants,” says that when workers tried to defend themselves against harsh working conditions by forming unions, employers used fear and intimidation to stop them. “U.S. law does little to protect workers who try to organize. Enforcement efforts drag on for years, and even decisions that favor workers are usually too little, too late,” report author Lance Compa wrote.
He offered this example: At the Smithfield Foods pork processing plant in Tar Heel, N.C., management fired union supporters, threatened plant closure, stationed police at plant gates to intimidate workers and orchestrated an assault on union activists. When the National Labor Relations Board ordered a new election, Smithfield immediately appealed. In 2000, Smithfield created a company security force that under North Carolina law had public police powers. In 2003, it used trumped-up charges, Compa said, to arrest workers who were active union supporters.

Human rights

The meatpacking industry chooses to use undocumented workers, Human Watch found, because they are easily intimidated. As in Agriprocessor, immigration officials will swoop in and take away a large chunk of a meat packing work force at the drop of a quarter in a pay phone. Human Rights Watch found that some employers use this ability as a threat against undocumented workers who are trying to organize unions.
In addition, what employers like Smithfield and Agriprocessor have up their sleeve is a 2002 U.S. Supreme Court ruling saying that undocumented workers who are illegally fired for union organizing are not entitled to back pay for lost wages.
Despite all of Wal-Mart’s money and conniving, on rare occasions, a union organizing effort wins. And then, the global giant responds by shutting them down.
In 2000, when the United Food and Commercial Workers finally organized a small number of butchers in East Texas, Wal-Mart immediately phased out butchers at all of its stores and stocked prepackaged meat. Similarly, when a store in Canada voted to unionize, Wal-Mart closed the whole store, contending it had been unprofitable.
This really comes down to a moral issue, just like it does for Jews who question whether meat processed by child laborers in abusive, illegal conditions is really kosher. The question for this country is whether it is moral to allow continued rule by Wal-Mart mentality, with its cheap imported wares of dubious safety manufactured under questionable conditions in foreign countries, then imported and sold in stores by American workers paid less than a living wage and denied health care and the right to organize a union.
Restoring workers’ freedom to organize and bargain collectively would protect them against the kinds of abuses alleged Agriprocessors. And it would begin to rebuild America’s great middle class as well as re-establish one of our country’s fundamental liberties: the right of free association.

By Leo W. Gerard
International President

Nobody’s second class citizens

In Las Vegas, a town infamous for carelessly bankrupting the naïve, members of the United Steelworkers voted Tuesday to pay a little more forward out of each paycheck to ensure they won’t be duped, overpowered or taken for anybody’s second class citizens.
All of the additional pennies-per-hour steelworkers decided to invest into our strike and defense fund will provide added protection. From 850,000 steelworkers, that will build the account into a formidable force, one to stand up to the kind of power that comes from the boundless capital multinational corporations command, the very multinationals that unions now must reckon with. (more…)

By Leo W. Gerard
International President

Rich get richer

After a year in which the majority of Americans suffered the effects of recession, including tens of thousands who lost jobs because of rising unemployment, hundreds of thousands who lost homes in the subprime mortgage crisis and millions who lost their shirts because of unrelenting gas price hikes, Merrill Lynch & Co. informed us last week that, by contrast, the rich still got richer.
Merrill found that the number of dollars in millionaires’ bank accounts grew faster than the number of millionaires did, a trend expected to continue. The average wealth of the world’s richest was more than $4 million, the highest it has ever been, according to Merrill. They’re an elite club — one-fifth of one percent of the globe’s 6.7 billion people. (more…)