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

The answer is to reform capitalism. The world’s productivity revolution is outpacing the political will of rich societies to fairly distribute its benefits. The result is widening inequality coupled with slow growth and stubbornly high unemployment.

In the United States, almost all the gains from productivity growth have been going to the top 1 percent, and the percent of the working-age population with jobs is now lower than it’s been in more than thirty years (before the vast majority of women moved into paid work).

Inequality is also growing in Europe, along with chronic joblessness. Europe is finding it can no longer afford generous safety nets to catch everyone who has fallen out of the working economy.

Consumers in China are gaining ground but consumption continues to shrink as a share of China’s increasingly productive economy, while inequality in China is soaring. China’s wealthy elites are emulating the most conspicuous consumption of the rich in the West.

At the heart of the productivity revolution are the computers, software, and the Internet that have found their way into the production of almost everything a modern economy creates. Factory workers are being replaced by computerized machine tools and robotics; office workers, by software applications; professionals, by ever more specialized apps; communications and transportation workers, by the Internet.

Some work continues to be outsourced abroad to very low-wage workers in developing nations but this is not the major cause of the present trend. This work now comprises such a tiny fraction of the costs of production that it’s becoming cheaper for companies to do more of it at home with computers and software, and even bring back some of it (“in-source”) from abroad. (more…)

In Europe, where the people embrace socialism, they get universal health care. In the United States, we get a fly over by the Blue Angels.

By Jamie West
USW Local 6500

Words are used all the time to influence our everyday decisions and opinions. Take the word “socialism” for example; right-wing politicians and their supporters have been using this word with disdain for decades.

It’s clever actually. Socialism is one of those words that most everyone has heard, but not everyone can properly define. Even better, it sounds like “socialist” – as in the “Union of Soviet Socialist Republics” (USSR), which makes most Americans think of communists and Marxists.

The majority of voting-aged Americans have been exposed to cold-war propaganda, whether it was McCarthyism, “duck and cover” during the Cuban missile crisis, or the fictional Rocky defeating the more powerful Russian boxer in the movie “Rocky IV.” Those experiences created a belief that the United States was the good guy and that Russia (USSR) was the bad guy, and, similarly, that capitalism was good and communism bad.

The problem is that communism is not the same as socialism. In addition, the United States has never been a strictly capitalistic society. Social democracy is the cornerstone of many things Americans enjoy, such as public highways, public parks and public libraries.

The next time a conservative attempts to demonize socialism, think of your public fire department. I’m not arguing the pros and cons of socialism.  I’m just trying to clarify the term and to urge Americans not to have a knee-jerk negative reaction every time a conservative Republican tries to denigrate a program or a Democrat by throwing out the word socialist.

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This is a little dated but nonetheless telling.

Fox News has reason to rejoice as President Obama marks the media-manufactured milestone of his first 100 days in office. The conservative cable network’s ratings are sky high under the new Democratic president. Yes, it looks like it couldn’t be happier serving as “the voice of [Obama's] opposition,” to paraphrase Fox News senior vice president Bill Shine.

David Sirota

By David Sirota
Political journalist, best-selling author and syndicated newspaper columnist

The Super Bowl has become a true televisual non sequitur — a bizarre “Rocky”-style montage mashing together as many divergent strands of American culture as possible. This year’s blockbuster was no exception.There was former President George W. Bush sitting next to coach John Madden, who was obsessively texting. There was actress Cameron Diaz feeding popcorn to baseball bad boy Alex Rodriguez. There was Christina Aguilera belting out a “Naked Gun”-worthy version of the national anthem. There was even a melding of hip-hop, hair metal and sci-fi, as the Black Eyed Peas joined Slash for a rendition of “Sweet Child o’ Mine” — all in front of neon “Tron” dancers.

This was a bewildering assault on the senses, to say the least — and nothing was more singularly mind-blowing than the NFL using a Ronald Reagan eulogy to kick off a sports-themed tribute to socialism.

Reagan, of course, made his political name regularly invoking the “s” word to demonize government. For such bombast, he gained many followers, most of whom nonetheless cherished the doctrinaire socialism that undergirded their communities in the form of public infrastructure and services.

This Reagan-inspired paradox of cheering anti-socialist platitudes while supporting socialism in practice was the tale of Super Bowl XLV. The game began with a jubilant Reagan biopic that approvingly flaunted his red-baiting past, including his 1964 warning about America “tak(ing) the first step into a thousand years of darkness.” The game ended with victory for professional sports’ only publicly owned nonprofit organization, the Green Bay Packers — a team whose quasi-socialist structure allows Wisconsin’s proletariat to own the means of football production. (more…)

Leo W. Gerard

By Leo W. Gerard
USW International President

Not the wars. Not greenhouse gasses. Not even the deficit. The issue most important to Americans is jobs.

Despite that, jobs failed to make an appearance in the State of the Union address.

The talk was all about business. Business was doing better. Business needed taxpayers to help pay for research and innovation. Business will get government help to eliminate pesky regulations. Business must have lower taxes.

The most telling statement was this:

“We have to make America the best place on Earth to do business.”

Especially because it wasn’t matched by a companion:

“We have to make America the best place on Earth to work.”

The speech expressed a policy in which business is the focus of government, taking precedence over workers.  The American colonists created a government for their own benefit; they did not constitute an agent to serve business. A policy giving corporations primacy is risky for American workers.

The state of the union noted that happy days are here again for corporations and banks:

“Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.”

Never mentioned, however, were the 14.5 million unemployed Americans, the sustained record rate of foreclosure, and the increasing poverty and food bank reliance among citizens of the richest nation in the world.

The state of the union outlined a plan under which the government will coddle corporations, essentially proving companies government welfare using American workers’ tax dollars. If businesses create jobs for workers as a result, fine. If they don’t, there’s no plan to exact a penalty.

For example, under the policy described in the speech, American workers will fork over tax dollars to pay for research and development for businesses that are sitting on a record $1.8 trillion in cash reserves — hoarding it rather than creating jobs.

The president said:

“Two years ago, I said that we needed to reach a level of research and development we haven’t seen since the height of the Space Race. And in a few weeks, I will be sending a budget to Congress that helps us meet that goal. We’ll invest in biomedical research, information technology, and especially clean energy technology — an investment that will strengthen our security, protect our planet, and create countless new jobs for our people.”

Maybe it will create new jobs. Hopefully. But no guarantees were offered. Mentioned as a business success story in the speech was a Michigan company, Luma Resources, which began manufacturing solar shingles with the help of a $500,000 government grant. It created 20 jobs, $25,000 a job.  American taxpayers might think that’s a little pricey, but what’s worse is the potential for Luma Resources to go the way of Evergreen Solar, squandering the corporate welfare.

Evergreen, the third largest maker of solar panels in the U.S. and recipient of at least $43 million in corporate welfare, announced earlier this month it would close its main American factory in Massachusetts and move manufacturing to China. Eight hundred Americans will lose their Evergreen jobs by April.

Evergreen officials said China will give the company even higher amounts of corporate welfare, which, of course, makes sense since China is not a capitalist country. Its economy is government controlled. And that government routinely violates international trade regulations – by providing banned subsidies to industries and by deliberately devaluing its currency.

No matter how better educated American workers get. No matter how much more innovative. No matter how much more productive. No matter how many tax dollars the government spends on research and development, if the corporations that benefit move manufacturing overseas, the American workers who paid for it will suffer.

In fact, it’s more than suffering; it’s betrayal by their government that provided tax benefits to companies for off-shoring jobs. It is betrayal by their government that fails to stop violations of trade laws by countries like China that lure away firms like Evergreen.

At the end of the State of the Union speech, the president said:

“From the earliest days of our founding, America has been the story of ordinary people who dare to dream.”

An ordinary American dreams of a family-supporting job, owning a home, saving enough to pay for a child’s college education, helping to build a safe community. Corporations aren’t Americans, no matter how often the U.S. Supreme Court grants them rights that the U.S. Constitution guarantees to human beings. Businesses aren’t citizens. Their allegiance isn’t to America. It’s to profits. They dream only of dollars. They concede no responsibility to family, community or country.

They were not included when the president said:

“Tucson reminded us that no matter who we are or where we come from, each of us is a part of something greater — something more consequential than party or political preference.  We are part of the American family.”

The top priority of the American government must be making America the best place on Earth for Americans.  If that’s good for corporations, great. The government must never place American citizens second.

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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.

Mike Lux

By Mike Lux
Author, The Progressive Revolution: How the Best in America Came to Be

I had of course heard about Dinesh D’Souza’s (and Newt Gingrich’s) pathetic arguments about Obama’s anti-colonial socialism he picked up from his almost entirely unknown father, but I get very busy close to the elections and don’t have time for reading fiction. However, I was lucky enough to see an op-ed length version of D’Souza’s argument in the WaPo yesterday, and I enjoyed the read. I think Dinesh D’Souza may be the single funniest political writer I have ever read. While his arguments are too absurd to spend much time on, I do have to stop for a moment to write a little bit about his basic theme, because the entertainment value is just too good.

Anyone following politics closely knows the basic argument D’Souza makes: that Obama is just a chip off the old third world socialist dad block. He cites dramatic, compelling evidence like the fact Obama’s first book, written in his 20s, was entitled Dreams FROM (!) My Father, not dreams of my father. Alrighty then. But clearly D’Souza’s most compelling argument, the one he features and focuses on in his op-ed, is that because Obama is in favor of a system of progressive taxation, and calls for some measure of corporate accountability, that must mean he shares the Third World socialism of his father. (more…)

Les Leopold

By Les Leopold
Author “The Looting of America”

Say goodbye to 2009, the worst economic year since the Great Depression.

Say hello to the billionaire bailout society in which the super-rich gamble, lose and get bailed out by the rest of us.

To save the system from total collapse we poured trillions of dollars into the financial sector. The result? Banks still are refusing to lend. Thirty million Americans are looking for full-time jobs and 49 million are skipping meals including one out of four children. But Wall Street again is reaping record profits and bonuses.

Not only are we richly rewarding those who wrecked our economy, but also, we have to put up with hundreds of fabrications about how the big banks got us here. Here is my biggest, fattest lies list for 2009:

1. “Government programs for low-income home buyers caused the financial crash.” Wall Street defenders were quick to blame the Community Reinvestment Act, which urges banks to loan money in minority communities. In fact, almost none of the CRA loans are sub-prime and the vast majority are doing well, thank you. Blaming government programs deflects us from the real cause: Wall Street’s incredibly reckless creation, marketing, selling and trading of “innovative” new securities that supposedly removed the risk from pools of risky debt. It didn’t work. Wall Street, not the poor, crashed our economy.

2. “Income inequality is good for everyone.” Lord Brian Griffiths, Vice-Chairman of Goldman Sachs at least had the nerve to say what so many of the super-rich really believe:

“We have to accept that inequality is a way of achieving greater opportunity and prosperity for all.”

Unfortunately, the facts suggest otherwise. There is a high correlation between the mal-distribution of income and economic crashes. The last time our wealth and income distribution was as skewed as it is today was 1929, and that’s not an accident. When too much money is in the hands of the few it runs out of real world investment and gravitates towards speculative investments. This inevitably creates asset bubbles and crashes. Record pay and bonuses on Wall Street and high unemployment are connected. (See The Looting of America Chapter 11).

3. “The rising number of billionaires is a sign of economic health.” It’s accepted media wisdom that the more billionaires the better. China with 130 billionaires now trails only the US, which has 359, according to Forbes magazine. But in our billionaire bailout society, the rising number of billionaires signals a collapsing middle class. Ponder this statistic: In 1970 the ratio of the compensation of the top 100 CEOs compared to the average production worker was 45 to 1. By 2006 it was an astounding 1,723 to one. Does that look healthy to you?

4. “Paying back TARP means banks are no longer on government welfare.” Bank after bank is rushing to repay TARP funds during the worst economic year since 1937. They want to get out from under the Pay Czar (not that he’s been sufficiently tough on the banks under his purview.) Banks that were insolvent only a few months ago now say they have the financial strength to refund tens of billions of dollars to the government. Where did all that money come from? Much of it comes from other government welfare programs for Wall Street (over $12 trillion worth) that aren’t publicized. (See Nomi Prins’s excellent accounting.) It may be the case that our banks are paying us back with our own money. Now that’s financial innovation.

5. “Wall Street’s freedom to innovate must be protected.” Congressional leaders are tripping all over themselves to say new regulations will not discourage Wall Street innovations, something they claim is vital to our economy. Oh really? Do those “innovations” add anything useful to our country other than new casino games for the super-rich? Former Federal Reserve Chairman, Paul Volker, recently blew the whistle on this fabrication:

“I hear about these wonderful innovations in the financial markets and they sure as hell need a lot of innovation. I can tell you of two – Credit Default Swaps and CDOs – which took us right to the brink of disaster: were they wonderful innovations that we want to create more of?
…. I wish that somebody would give me some shred of neutral evidence about the relationship between financial innovation recently and the growth of the economy, just one shred of information….

The most important financial innovation that I have seen in the past 20 years is the automatic teller machine… How many other innovations can you tell me of that have been as important to the individual?” (“What Has Financial Innovation Done for You?”)

6. “To retain critically needed talent, Wall Street must be free to pay top salaries and bonuses.” Where would they flee if they just got paid like normal people rather than like gods? The British are putting in place a 50 percent tax on bonuses. Also, compensation is much, much lower in the European Union. But the real lie is that we need such “talent” in the first place. That kind of “talent” just crashed our economy. That kind of “talent” is widely overpaid – no way should bond traders receive 10 to 100 times what is earned by the best neurosurgeons in the world. Something is really wrong and it starts with the lie of banking “talent.”

7. “Overpaid American workers are the real cause of unemployment.” The New York Times writers who concocted this argument didn’t think they were lying. But this is one of the most preposterous ideas put forth during 2009. (“American Wages out of Balance” New York Times November 11, 2009) Edward Hadas, Martin Huchinson and Antony Currie informed us that:

“American manufacturing workers should take average real wage cuts of as much as 20 percent to get into global balance.”

They don’t mention that the average non-supervisory worker has already taken an 18 percent cut in real wages between 1973 and 2007. What’s worse, they claim that if workers don’t take these additional cuts, these “overpaid” working stiffs will be the cause of another Great Depression. They write:

“But if American wages get stuck above global market-clearing levels, as in the 1930s, the result could well be something approaching Depression-era levels of unemployment.”

Not a word is mentioned about how Wall Street’s gambling caused all of this unemployment and how the continued failure of Wall Street banks to lend is stalling job growth, right now.

8. “I’m doing God’s Work.” Lloyd Blankfein, Chairman of Goldman Sachs said what too many Wall Street leaders truly believe: that they are so privileged and entitled that it seems as if the heavens bless their work. Why else are they earning hundreds of millions of dollars? Mr. Blankfein believes he is creating a virtuous circle by raising capital for corporations who create jobs and help our society prosper. But Goldman Sachs, JP Morgan Chase, Morgan Stanley and the rest of the apostles helped to bring the entire world economy to its knees. Does that mean God likes unemployment and widespread hunger?

9. “We’re out of money.” Who’s we? Yes, the middle class is tapped out but the super-rich haven’t even begun to pay their fair share for the mess they created. Yet the top 400 richest Americans alone are sitting on $1.27 trillion or so in wealth. Here’s a dangerous thought. What if we had a very steeply progressive wealth/income tax that reduced the net worth of the super-rich to “only” about $100 million each? You wouldn’t be suffering if you had $100 million kicking around. Now do the math: The 400 richest x $100 million each would equal $40 billion. That would leave about $1.23 trillion to help pay back the country for the Wall Street meltdown that we, our children and their children will be subsidizing.

10. “We are becoming a socialist economy.” Somewhere between 68 and 78 percent of the US GDP is private sector activity, the highest among developed nations. And much of the government expenditures go to private contractors as well. But there’s a kernel of truth in the socialist scare: What do you call a society that encourages the private accumulation of wealth without limit, and then when the super-wealthy get into serious trouble, we bail them out with taxpayer funds – largely from a declining middle-class? That’s not free-enterprise. That’s not socialism either. It’s something new and it deserves to be called the billionaire bailout society.

Here’s hoping that in 2010 we can begin to undo it.

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Les Leopold is the author of The Looting of America: How Wall Street’s Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It, Chelsea Green Publishing, June 2009.

Leo W. Gerard

By Leo W. Gerard
International President

Republican Party Chairman Michael Steele appears to be suffering philosophical identity confusion, you know, like some people experience sexual identity confusion.

He’s got an organization named United STEELE Workers Union, white hardhat emblem and all, collecting members for him on Facebook. It had 255 worldwide as of June 19.

This is disconcerting on so many levels, least of which is that I head the original, authentic United Steelworkers Union (USW). It has, by the way, 1.2 million retired and active members in North America.

Far more importantly, Steele historically has expressed hostility toward unions. When President Obama agreed to help General Motors restructure in bankruptcy, for example, Steele said it was “another handout to the union cronies who helped bankroll his presidential campaign.” Now that there’s a union created in his own image, if Steele slams labor organizations, is he criticizing himself? Has he become a “union crony?”

Steele can perch that white hard hat atop his head, but he’s going to have to labor at learning some hard philosophical lessons before becoming a real steelworker, a true union man.

A union brother or sister knows it’s all for one and one for all. Our union brothers and sisters don’t see themselves as “ownership society” islands. That’s because they know when the sun stops shining, it’s nice to have union siblings to help clean up after the hurricane.

To join, Steele must learn that a union man has his brother’s back; he doesn’t stab him in the back. This may be a tough lesson for the Republican. Consider, for example, what Mark Bergeron, the STEELE Worker Union Facebook group administrator, says on his blog about the party’s 2008 nominee for president:

“How far to the left do we as Conservatives go to satisfy some of our Moderate ( Liberal ) Republicans? What sacrifices will we make to the Moderates? Abortion? Illegal Immiration [sic], a little more Socialism? Less Fiscal Responsibility? My point is that we have already made concessions to these softies and we got John McCain.”

In addition to insulting McCain, that smacks of exclusion. It is the Republican Party wringing itself out, shedding diversity at the insistence of its most conservative, self-appointed, over-amplified leader, Rush Limbaugh. So it has been reduced to little more than wealthy white protestant males — and wannabes. A union, by contrast, is a collective. By nature, then, it is inclusive. This may be a tough one for Steele to accept, considering he refused to stand up to Limbaugh earlier this year when the talk show host insisted he, not Steele, headed the Republican Party.

The STEELE Worker Union Facebook site says the group is interested in organizing. That’s a great first step in the correct direction. An important function of an international union, like the United Steelworkers, is to help employees at individual workplaces organize their local unions. Those efforts in recent years, however, have been thwarted by corporate campaigns of intimidation against union organizers and sympathizers. This is documented in a study called, “No Holds Barred: The Intensification of Employer Opposition to Organization,” released in May by Cornell University professor, Kate Bronfenbrenner.

Bronfenbrenner, who has researched labor issues for a quarter century, documents employers obstructing unionization by firing union organizers, threatening to close down the shop, cutting wages and benefits, and forcing workers to meet one-on-one with supervisors who interrogate them to determine whether they support the union. Bronfenbrenner found employers conducted these coercive tactics, many of which are illegal, in the run-up to union elections more frequently than in the past to dissuade workers from voting for unionization.

The upshot is that organizers and union sympathizers risk their livelihoods and corporations are increasingly killing unions. The Employee Free Choice Act now before Congress would significantly reduce that. It would allow workers — rather than the employer — to decide how to form the union. It would give workers the right to choose whether to form their union by collecting signatures from a majority of the workers or by conducting a secret ballot election. The threat-filled period before balloting could be eliminated, if the workers wanted.

The United Steelworkers union actively and vociferously supports the Employee Free Choice Act. If Michael Steele wants to be a real union man, he must do so as well. I will be waiting to hear from him. If I do, I will be glad to take him under my wing and mentor him. I will make him an Associate Member of the real United Steelworkers union. We will embrace him. Of course, I will warn my male members to be careful not to actually hug him because this is a guy, so touchy about unions, that he even used the word “crazy” to describe civil unions.

Robert L. Borosage

By Robert L. Borosage

Co-Director Campaign for America’s Future

Today, in the New York Times, an Institute for America’s Future op ad calls on us to “remember who we are,” comparing the present crisis with that our parents and grandparents faced at dawn of the New Deal. To see the ad, go here.

If, as seems likely, Obama is elected and Democrats win greater majorities in both houses of Congress, will we witness a new era of bold progressive change – a 21st century Green New Deal? Certainly many of the elements are present:

.. “their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit, they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They only know the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.”

In his “closing” for the election, Obama is already issuing a similar moral indictment. He too is calling Americans to come together, to trust one another.

In one week, you can turn the page on policies that have put the greed and irresponsibility of Wall Street before the hard work and sacrifice of folks on Main Street….

I know these are difficult times for America. But I also know that we have faced difficult times before. The American story has never been about things coming easy – it’s been about rising to the moment when the moment was hard. It’s about seeing the highest mountaintop from the deepest of valleys. It’s about rejecting fear and division for unity of purpose. That’s how we’ve overcome war and depression. That’s how we’ve won great struggles for civil rights and women’s rights and worker’s rights. And that’s how we’ll emerge from this crisis stronger and more prosperous than we were before – as one nation; as one people.

Does all this add up to a new era of bold reform? Two more elements are vital.

Obama will face the same choice in the worst economic crisis since that Great Depression. Yet, today’s conditions are far less dire. Many voices will counsel caution. Many will tell him to limit his priorities. Many will warn of unsustainable debts and deficits. What he decides is needed will be telling.

The current progressive movement is neither as organized nor as grounded. Some good many are pure Obama fans. Some – including much of the best of the bloggers – grew up in opposition to the war in Iraq and the crimes and catastrophes of the Bush administration. They are scornful of compromised Democrats, suspicious of a leadership that didn’t end the war, cynical about the many corruptions of modern day politicians. Most of the organized progressive movement has spent the last years fighting to stop bad things from happening. Will a progressive movement come together that is independent enough to push Obama hard to go father than he might otherwise go, and responsible enough to help support reforms, and go after those in both parties that stand in the way? The Obama White House will clearly prefer the remarkable base that they have built during the campaign, ready to be mobilized in his support. Will they come to appreciate the benefits of an independent progressive movement demanding more than they think is possible?

Inheriting a country mired in two wars, headed into a deep and long recession, marked by Gilded Age inequality and growing insecurity, the next president will face stark challenges. If Obama is elected, he will have the moment, mandate, momentum, and moral armament to launch a new era of bold progressive reform. And in the coming months, if all goes well on Tuesday, we will learn if he has the audacity of hope to undertake it, and whether progressives can forge a force for change to propel it.