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Fri Apr 05, 2013 at 01:00 PM PDT

A National Day of Contrition

by Doctor Mxyzptlk

Ten years ago the United States began the war in Iraq. At that time the war in Afghanistan had already been underway since late 2001. The cumulative costs of these wars have been staggering. The Iraq War has cost 4,488 American lives and 31,925 have been wounded. At least 100,000 Iraqis have perished, probably many more. In Afghanistan, 2,309 Americans have died with 18,285 wounded. Military suicides are an on-going tragedy.

Today, Iraq is closer to Iran and Syria than the United States. All the publicly stated rationales for the war—eradication of weapons of mass destruction, democratization, wiping out Al-Qaeda, to name a few—have faded with time. Afghanistan remains a collection of warlords as it always has been. The short term financial cost of these wars is over a trillion dollars with long-term cost estimates of $2 to $4 trillion. The single accomplishment of the Iraq war was to remove a despicable dictator from power, one of many around the world. We can’t even claim anything similar in Afghanistan.

Who’s responsible for making these horrendous blunders? Bush and Cheney and their disinformation campaign? Sure. A pliable news media running with a hot story? Sure. Weak-kneed Democrats? Sure. Each played a role but these are the easy explanations. Want to see the real culprit? Look no further than the mirror. To one degree or another, each of us, pro-war or not, bears part of the responsibility. We all could have done more.

What have we as a nation learned from our disastrous wars? From all appearances, very little. There has been no national discussion of the avoidable mistakes that have cost so many so much. The political and media voices tell us to move along, nothing to see here. Work, buy, consume, repeat. We owe it to the dead and wounded to do more.

We should not simply turn our backs on mistakes of such a huge magnitude. We’re like a hit-and-run driver desperately fleeing an accident scene. The greatest danger is that unacknowledged errors will be repeated. We should not, we cannot, let this happen again.

What can we do at this point? Here’s an idea…

I propose a national day of contrition. A day on which we would individually and publicly admit our mistakes about the wars, taking responsibility no matter how uncomfortable it makes us feel, and resolve to never repeat them again.

Specifically, we need to start a word-of-mouth movement to pick a specific date, July 4th 2013 for example, and on that day at 2:00 in the afternoon each person would walk out their front door, go out to the street, and talk and listen to our neighbors. Others could meet in town squares and churches.

Those that supported these wars should recite for all to hear how we were individually and collectively wrong, what we have learned, and then vow to never make such a mistake again. Neighbors should listen to neighbors and honor those with the courage to take responsibility for their errors. Forgiveness should be freely available to all who ask.

A day of national contrition is bound to be unpopular with those who refuse to acknowledge their misjudgments. Many would dig in and counter-protest yelling to the top of their lungs their determination to again go to war at the next opportunity. Let them. The point is to get out there the idea that we have done something that by all that is right we should deeply regret.

Confession is a time-honored tradition in the Christian and other religions. This is the foundation of personal, and national, integrity. We owe it to our kids. We owe it to ourselves. And we should do it now before there’s more forgetting. This July 4th let’s make it happen.

Discuss

Wed Feb 29, 2012 at 04:03 PM PST

The Future of American Jobs

by Doctor Mxyzptlk

In his new book The Coming Job War, Jim Clifton, Chairman and CEO of the polling firm The Gallup Organization, argues that we are at beginning stages of a worldwide war for jobs:

“A global jobs war is coming, and there's no time to waste. Cities are crumbling for lack of good jobs. Nations are in revolt because their people can't get good jobs. If countries fail at creating jobs, their societies will fall apart. Countries, and more specifically cities, will experience suffering, instability, chaos, and eventually revolution. This is the new world that leaders will confront.”

“An increasing number of people in America are hopeless, suffering, and becoming dangerously unhappy because they don’t have a job. …an increasing number of people in the world are becoming dangerously unhappy because they don’t have an almighty good job—and in most cases, no hope of getting one.”

We all know things aren’t OK and haven’t been OK for a long time. Yes, I’ve seen the “good times are back” stories on TV and in print but most rely on the statistical fluke resulting from increasing number of workers not even bothering to look for work. We get this story every few months. The mainstream media fulfils its role as our economy’s cheerleader hoping that increased consumer confidence will return things to normal.

The old world of employment doesn’t work anymore and there isn’t a new one, at least not yet.

Clifton paints a very bleak picture of the future of American, and global, jobs. Indeed, the economic aftereffects of the Great Recession are still with us and will be for some time to come. Even prior to the 2008 meltdown, the prospects of workers had already been declining for over forty years. Wages had stagnated and then fell for most. Once a job was lost a return to the workforce took longer and longer. Increasingly, workers were stranded outside the workforce permanently.

Is this the future of American jobs? Left to the economic powers-that-be who have been making the rules so far, some version of Clifton’s dreary vision is bound to occur. In fact, it’s already occurring. This diary is about a new, more hopeful, vision for the future of American jobs.

Clifton’s solutions to the jobs crisis are a repeat of the failed strategies of the past: entrepreneurship, investment, and above all, more “free enterprise.” For decades presidential speeches about the economy—by both Democrats and Republicans—have relentlessly hammered home these themes. A mythology about our economy has been created—and perpetuated by the mainstream media—that financial capital investment and technological innovation will win the day. Americans have been conditioned to believe this is the only alternative open to workers and that we might as well resign themselves to going along with the plan.

These ideas have not been enough. This mythology has worked for the few but not the many. Some in the big cities but not many living on the outside. When the poor and minorities were the only ones being hurt, most Americans were willing to look away. But now huge numbers of people are hurting, including the middle class. Now everyone’s worried. Even the top tenth percent income earners should be worried but for a different reason. Whenever wealth is so unevenly distributed the entire society is in danger. Clifton’s certainly right about that.

Where I believe he is mistaken is his prescription for what ails us. In this diary I present a mix of potential solutions to our national predicament about jobs and, indirectly, about our declining quality of life, especially outside the big cities. Some of these ideas are new. Some are not but have never really been tried long enough to see if they work. What they have in common is that each solution does not accept the status quo as the only means of going forward. Each solution also shares a need for national political action to become a reality. Not just action by the elites--they won’t help workers as they sometimes have in the past--but by everyone. We know what we’ve been doing has not been working. Let’s begin to discuss something new.

Our present system of work is centered on large, dynamic companies at the core of our economy. That’s the world Clifton is writing about. Tens, if not hundreds of thousands, of people work in each of these companies which generally offer higher-than-average wages and good health benefits. They are mostly located near large cities and are integrated into global transportation networks linking similar companies. The U.S. economy is oriented around the needs of this high-energy, high capital investment core. As the largest and most influential corporations, they are political heavyweights with enormous clout in Washington D.C.

Outside this core, the hierarchy ranges down to smaller enterprises employing hundreds to just a few workers. Down the pecking order the wages are lower and benefits vanish. Many are located in smaller cities, towns, and rural areas. Outside the core, firms and their workers struggle. These less dynamic areas, and their residents, have long been neglected in national power politics. This diary is about those smaller companies, their workers, and the communities that support them.

Usually, left-leaning writers either describe what has already gone wrong (high unemployment, for example) or react to how it might get worse (House Republicans could propose doing away with what’s left of our safety net). This diary is different because it proposes new ideas for creating working-class jobs and reinvigorating our communities. Not by re-chanting mantras about massive new capital investment in high-tech industries or college degrees for everybody but by proposing strategies that could actually work in the real world. There’s nothing inevitable about the decline of the working class but we cannot go on as we have in the past. Change is necessary and this diary is about that change.

This is a full-blown essay, not a short dairy. Please be patient. Read some then come back for more. Read it all but the Action Strategies are new thinking about the future of American work. I would really like your comments on this.

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Tue Feb 07, 2012 at 12:10 PM PST

Promises Made, Promises Broken

by Doctor Mxyzptlk

Jobs! Jobs! Jobs! That’s all we hear from politicians these days in the run-up to the 2012 election. And we’ll hear a lot more. You may understandably wonder why so little has been done about jobs if jobs really are the most important issue in American politics today (they are). Expect a lot of bold talk until November. But don’t be surprised if, after the election, the usual silence returns. After the pre-election run up in employment inspired by pre-programmed government spending and goosed-up jobs data is over in November we’ll be left where we have been for years with still high unemployment and relatively low numbers of people in the labor force.

By far, President Barack Obama is the worker’s best hope in the short-term but he has been consistently wrong about what it will take to turn around the problem of our persistently high unemployment and declining middle class. I’m not saying that the President is deliberately misleading the nation; he may legitimately still believe that we will eventually pull ourselves out of the economic doldrums. Waiting out the “bad patch” of the Great Recession has been his tact for his first three years in office. (Without loud and consistent support from American workers his room for maneuver will continue to be small.) That “strategy” has worked before, at least in normal times. But we are not in normal times. We have never experienced anything like the mess we’re in now (at least since the Great Depression) and we seem to be lacking ideas about what to do about it except to hope for the best and that time heals all wounds.

The mainstream media is vociferous on the subject of jobs (Fox is understandably soft-pedaling the GOP’s weakness on jobs). In a current ad for the Dylan Ratigan Show on MSNBC he says, “The big issue—jobs. America has the money, we have the people, what we need to do is match people, ideas, and investments to create jobs and get millions of us back to work.” He’s promoting his “30 Million Jobs” tour. (His 30 million jobs estimate is based not on the government’s flawed calculation of the unemployed based on the recently unemployed but on a more accurate calculation which includes discouraged workers no longer looking for work.) Good luck with that Dylan (really) but you don’t stand a chance at creating jobs at that level. I wish it was that easy.

Ratigan’s “30 Million Jobs” series has toured the country interviewing various authors, Chamber of Commerce types, and “jobs entrepreneurs,” all with bright hopes for bold innovation in our approach to re-employing the millions of Americans out of work. Similar interviews could have been done last year or even several decades ago but our employment problems endure because bright faces and peppy, upbeat talk won’t hack it here. Our troubles are deeply rooted in the problems of a “mature,” rigid economy and the dilemma that capitalism has with full employment and workers generally. Capital wants consumers to buy their goods but don’t want to pay workers to produce them. We don’t want to admit a “reserved army of the unemployed” made up of former workers and the poor are exactly what Wall Street and the owners of industries need to keep workers compliant and wages down. We’ll need to take a much more serious look at our economic system, and the political system it has spawned, to see the way out of this mess. (Hats off to Dylan Ratigan, though. This is very dark stuff and anyone who sheds light on the dark corners of the American economy is to be congratulated.)

Dylan harps on the need for new investment but we have gone that route already and it spectacularly failed. From 2001 through 2010, the Bush tax cuts added $2.6 trillion to the public debt. Most of this public largesse went to the private sector for investment that Bush promised would lead to a new land of milk and plenty. But our tax generosity to the 1% resulted in many more jobs being created overseas than in this country. For example, GE reports the company has cut some 25,000 jobs in the U.S. since 2001 but added 2,000 foreign jobs. In the last decade, U.S.-based multinational corporations slashed nearly 864,000 jobs in the United States but they added 2.87 million jobs outside the country (U.S. Bureau of Economic Analysis). The dirty truth is that private investment capital is mobile across borders which means money will go where it will receive the highest return. Patriotism doesn’t enter into it.

What the American public got from the Bush tax cuts for the wealthy was continued disinvestment in America. Trillions down a rat hole as the Great Recession and meltdown of our economy decisively proved. Ratigan’s “culture of investment” story is the standard presidential pitch—the same as Reagan’s, both Bush’s, Clinton’s, and Obama’s—that we just need to work hard, invest in America, and all will be well. That hasn’t been working for a long time yet presidents persist in making the same speech and we persist in believing the same comforting myths. Wall Street and the 1% are only too glad to continue to accept big tax cuts as long as we elect people who will legislate them into law.

Every president tries to do his version of the “vision thing” with the State of the Union speech. George Bush thought we should go to Mars. Newt Gingrich wants to go back to the Moon. (I think he’s right. We should send him.) Obama’s vision thing is very similar to other presidents including Reagan and Bush: America is superior among the world’s nations, we are world-beater competitors, more innovative, smarter, more everything good. But what we didn’t hear from Obama was a truly realistic assessment of what we need to do to counter the sustained decline of America’s middle class and the persistently rising unemployment that has plagued this county for 40 years now. Exhortations won’t cut it anymore.

Obama’s State of the Union (SOTU) speech last month illustrated the problem of potentially progressive leadership in an extremely adverse economic and political environment. In an election year with a dismal economy and high unemployment the president wants to make the case that America is getting back to work. His speech, perhaps his best so far, seems to deal forthrightly with the problems facing our nation. The centerpiece of his argument is that we are on the leading edge of a renaissance in manufacturing. The mainstream media is picking up on this theme, not so much as to get the president re-elected, but to bolster their ratings with optimistic themes that attract a wide audience. However, there is more than ample evidence to suggest that when the election is over our problems with the economy, manufacturing, and unemployment will still be with us. Below I will quote from his 2011 and 2012 SOTUs (with comments in parentheses):

“This blueprint (of an economy built to last) begins with American manufacturing.” (This statement is at the heart of the President’s plan to revitalize American industry and the economy.)

 “The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an Internet connection.” (He’s right. The economic impacts of productivity improvements and global trade are at the center of the changes that have led to stagnating wages and persistently high unemployment.)

“America still has the largest, most prosperous economy in the world. No workers--no worker--are more productive than ours.” (True enough but chiefly because of our use of labor-saving machines which have side-lined millions of blue-collar workers and sharply limited their access to a decent standard of living. Now, white-collar workers will be next to go.)

 “The first step in winning the future is encouraging American innovation. None of us can predict with certainty what the next big industry will be or where the new jobs will come from. Thirty years ago, we couldn’t know that something called the Internet would lead to an economic revolution.” (The next tech revolution is probably not around the corner. The Internet came into existence almost 40 years ago and the fact it’s still cited as the best example of American innovation is a testimonial to how difficult it is to come up with the “next big thing”.)

 “Long before the recession, jobs and manufacturing began leaving our shores. Technology made businesses more efficient, but also made some jobs obsolete.” (America’s furloughed factory workers already know about this.)

“We can’t bring every job back that’s left our shore. But right now, it’s getting more expensive to do business in places like China. Meanwhile, America is more productive.” (He’s right about not getting every job back, or even many of them. The price of labor in China can increase ten-fold and still be below our wages. America is more productive because of deepening automation which replaces workers.)

“No American company should be able to avoid paying its fair share of taxes by moving jobs and profits overseas.” (Jeffrey Immelt, the CEO of GE and former head of the President’s Council on Jobs and Competitiveness, leads a company with most of its workers employed in foreign countries. A company that makes 82 percent of its profits abroad and has paid no U.S. taxes in the several years. Employing Immelt was a desperate attempt to win the confidence of American business. The President should worry more about keeping the confidence of the American worker.)

I sincerely hope the President is right about all this but I seriously doubt it. I hope the U.S. can benefit from innovation and sophisticated trade policies and that middle and working class standards of living can be maintained and even raised under current policies. But American workers cannot continue to accept the assurances of national leadership which have proven to be false for the last 40 years. We need better ideas and more effective leadership.

In his SOTU addresses the President stressed manufacturing, small business, and our ability to trade in global markets but these strategies not get us American workers where we need to be. In this diary I’ll explain some of the reasons why. In a future diary I’ll suggest some ways--some old, some new—about how we might get there.

MANUFACTURING WON’T SAVE US

From the public’s point of view, manufacturing is an ideal industry. It employs both highly educated white-collar workers as managers and engineers and less well-educated blue-collar workers on the factory floor and in support positions. The sales of the products of manufacturing are evenly distributed (via wages) across the income spectrum; not concentrated in the hands of a few such as with the financial industry.

In this year’s SOTU President Obama sought to reassure those of us who can still remember a strong American economy built on manufacturing. He wanted to send a message that the old days can return but CHART 1 shows very consistent opposing trends in manufacturing sales and jobs for the past 40 years. This long-term trend will not be easily reversed by presidential decree, especially considering that global competition in manufacturing is picking up speed, not abating. The chart is very bad news for any worker who might hope manufacturing will come to the rescue to the U.S. economy as the president imagines.

As the chart shows, since 1972 manufacturing output (sales) has more than doubled while employment in the sector has decreased by 34%. While these American job losses are sobering, they are not an indication of declining U.S. competitiveness. In fact, these statistics reveal that the average American manufacturer is over three times more productive today than they were in 1972--a sure sign of some sort of economic progress, at least for owners. But those gains in productivity have substantially come from removing large numbers of workers from the factory floor and replacing them with machines. The U.S. may indeed recapture some, or even all, of its lost manufacturing sales but this is of little consequence to workers who have lost their jobs due to automation. Sales are important to Wall Street and the owners of industries but to workers jobs are everything. Listen carefully to politicians when they tell you we can be world leaders in this or that industrial sector. Beyond possible national bragging rights, that means little to American workers.

So, President Obama may be right, at least if he’s referring to expanding our manufacturing sales. We may be able to “re-shore”—bring back some manufacturing to the U.S.—but that does not mean that manufacturing employment will return. The dirty truth is that it won’t. Limited re-shoring may occur with firms returning to be close to domestic markets but most won’t return because much lower labor costs in foreign nations are why they left in the first place. America’s competitive advantage is that we may retain the engineering design of some products which is good for some professional white-collar workers but there’s really no reason for large numbers of factory flor jobs--our bedrock for blue-collar life for decades--to return to our shores.

CHART 1 strongly suggests that that if the trends of the past 40 years persist, then American manufacturing employment will continue to decline. But some promoters of U.S. manufacturing—politicians assuaging our economic concerns, industry spokespeople huckstering their wares, and our always-placating media--have noted that our productivity levels are greater than those of China and other low-cost producers in the world. In a literal sense, they’re telling the truth but here the truth is very misleading.

The reason is that automation—the real secret behind high productivity, not workers--has proceeded much further here than in China. Our advantage in productivity will vanish once China’s factories automate to the degree U.S. factories have already. Two decades ago, America’s factories were forced to automate just to try to keep up with China’s low labor costs. China had the cheap labor advantage while we had the automation advantage. Now China is investing in the same factory automation so, all things being equal, China will keep its low-cost edge for years to come because their workers will hustle for much lower wages compared to U.S. workers.

We hear plenty of feel-good stories about the comeback of American manufacturing which focus on once-closed factories now re-opening with high hopes for the future. Not to worry they say in reassuring tones. Workers, worry!

What TV doesn’t tell you is that while Chinese labor costs are increasing they will never converge to U.S. levels and, if they did, our workers would be living at the same standard of living as the Chinese. Understand that Chinese workers are coming from a history of extremely low wages and widespread poverty. Know also that the affluent lifestyles of some of the Chinese middle class that we see on TV are not at all representative of the standard of living experienced by most Chinese workers. To the Chinese the rising wages they currently enjoy are a far cry from the old days but are still well below the current wage experience of American workers.

As noted, productivity is mainly determined by the level of automation employed in the productive process. But worker wages are only a small part of the cost of most products so it’s the level of automation that sets the prices consumers pay. Once the Chinese catch up with the U.S. in terms of automation, substantial differences due to wages will still be there and their manufactured products will still be cheaper and more competitive in world markets. If not, it will be because American wages have sunk to Chinese wage levels (or Chinese wages levels have risen but that’s not likely given their more authoritarian government). Most American workers would find that intolerable. What Americans are accustomed to in terms of our standard of living would have to be downscaled drastically—smaller and fewer houses, more apartments, more crowding, fewer cars, cheaper food, and so on. Some would argue that these are changes we should be making anyway but nobody likes these changes forced on them especially if we can’t improve other areas of our lives such as more leisure or vacation time.

The economic meltdown of 2008 and the ensuing high unemployment continue to undermine the confidence of the American people in the ability of the president, and Democrats generally, to effectively manage the American economy. Any ray of hope, such as resurgence in manufacturing, sends a reassuring message to the public that our government is being competently run. No matter what doubts the President has in private his message to the American people will be a positive one. Let’s hope the current administration can navigate the country out of these turbulent waters but the tide is strongly against him, or anyone for that matter.

But if the Democratic vision of solutions to the problems facing the American workers falls short, perhaps the Republicans can do better. (Put aside for the moment the fact that Republicans got us in the mess we’re in.)

President Obama’s prescription for the economic recovery of manufacturing is a part of a rehash of old approaches that have been proven not to work. Not to be outdone, Mitch Daniels, the former Bush budget director who is still mentioned as a presidential candidate even though he declined to enter the race months ago, delivered the Republican rebuttal to the President’s State of the Union speech. He accurately credits Apple’s former CEO Steve Jobs as a job creator par excellence. The only problem is where these jobs have been created: China and not the U.S. As a recent article in the NYT details, Apple employs about 43,000 workers in the U.S. compared to China where they employ about 700,000 workers directly and through suppliers. Tens of thousands of workers in an American economy that needs over ten millions is just a small drop in the bucket. We need lots of good jobs here, not there.

Did Mr. Daniels knowingly mislead listeners to his speech? Possibly not, he’s just a politician dependent on the advice of people who are supposed to know better. For whatever reason, Daniels repeats the politically comforting story that America’s entrepreneurs can save us all (at least if freed from the “shackles” of government regulation). For both Democrats and Republicans, this convenient myth goes down well with a public that desperately wants things to get better. Unfortunately, worn-out ideas that did not work in the past are not going to work now. We urgently need some new thinking on the subject of jobs.

SMALL BUSINESSES WON’T SAVE US

In his SOTU speech, President Obama also claims that small businesses are the key to alleviating the joblessness that permeates our economy. Specifically, he stated that “Most new jobs are created in start-ups and small businesses.” He wants to “expand tax relief to small businesses that are raising wages and creating good jobs.” Both parties generally agree on these ideas.

Small businesses create more jobs than large ones, or at least that’s what we are led to believe by the politicians. While true on its face, the claim is deliberately misleading at best and outright false at the worst. A common claim by policymakers is that small businesses create two-thirds or more of net new jobs. Every president since President Reagan has included such statements in major addresses. The reality is much different.

What really counts is not the number of jobs created but the net number of jobs created: the difference in jobs created and jobs destroyed. The net jobs created by small business is relatively modest and even that claim is subject to dispute among economists for technical reasons.

In a recent paper by the Saint Louis Federal Reserve Bank, researchers found that businesses with 1-19 employees accounted for only 15.0% of average jobs gains between 1992 and 2010. Businesses with 20-99 workers were found to account for 23.6%, 100-499 workers for 23.4%, and 500 or more workers an astonishing 37.9% of all job gains. (The government says a business is small if it employs as many as 500 workers, a very large number by most people’s reckoning.) Worse yet, fringe benefits—health insurance, paid vacations and sick leave, even decent working conditions—are much less common among small firms than large ones. Big firms make more of the “good” jobs we hear so much about.

This picture is much different than that painted by politicians selling the Great American Myth of small business job creation. Why are we so often told this story? Not only does the myth take the heat off Big Business to create jobs but in a world where workers have less and less control over their world, the idea that Mr. Jones down the street, the owner of the local hardware store, is a job creator is comforting because the solution seems local and not in the hands of a faceless Wall Street bureaucrat (most bureaucrats don’t work for the government).

Young firms are more volatile and exhibit higher rates of gross job creation and destruction. Recent findings show that, contrary to conventional wisdom, small, mature firms (ten years of operation and with 50 or fewer employees) may actually be slowing job growth. In fact there is no systematic relationship between firm size and growth. The key is how old a business is, not its size, and public policy looking at size is likely to offer false hope to workers looking for a solution to persistently high unemployment.

Most small firms start small, stay small, and close just a few years after opening. Why are many small firms so ephemeral? There are many reasons including the lack of access to capital funding for operations and expansion but the biggest reason is that small businesses are often run by relatively inexperienced people who are poor managers. This uncomfortable thought may be offensive to many but just look around you. Not just the successes which are played up with great fanfare—presidential visits and air play on the evening news for some--but the risk-taking small businesspeople who lose their homes which they had mortgaged to the hilt to pursue their dream of financial and personal independence from the corporate world. While they’re open for business we should buy their goods and services and if they should fail we owe those former owners our enduring respect.

FOREIGN TRADE WON’T SAVE US

In both the 2011 and 2012 SOTUs the President was adamant that foreign trade would be a major emphasis of his administration:

“To help businesses sell more products abroad, we set a goal of doubling our exports by 2014--because the more we export, the more jobs we create at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.”

“We’re also making it easier for American businesses to sell products all over the world. Two years ago, I set a goal of doubling U.S. exports over five years. With the bipartisan trade agreements we signed into law, we’re on track to meet that goal ahead of schedule. And soon, there will be millions of new customers for American goods in Panama, Colombia, and South Korea. Soon, there will be new cars on the streets of Seoul imported from Detroit, and Toledo, and Chicago.”

The well-known criticism of free trade agreements is that some American workers lose their jobs when we buy cheaper goods from Mexico or China. True enough and much has been written about this terrible effect from trade agreements. Our textile industry in the South has been decimated by cheaper clothes from Taiwan and China and Detroit was laid waste in large part due to strong competition from Japan and Korea.

Contrary to the politician’s hype, free trade has not been a great boon to the employees of U.S. exporters. The reality has never lived up to the politician’s glowing descriptions of a huge torrent of goods flowing from us to foreign countries. The employment impacts in this country have never equaled what Presidents have promised to gain popular support for trade legislation. It’s has been this way for many years now and, beyond empty promises, there’s no reason to expect it will change. Our trade deficit (what other countries buy from us minus what we buy from them) strongly favors them, not us, and it’s not all oil either.

Overall, the U.S. is a net exporter of services. In 2010 the U.S. had a trade deficit of $646 billion in goods, including manufactured products, but a surplus of $146 billion in services. This is an incredible half a trillion dollars flowing from this country but the real tragedy for workers was that this largely came out of the hide of the nation’s manufacturing and other goods producers. The providers of services, especially financial services, came out way on the positive side. In 2009 financial services exports totaled $230 billion! This is essentially an income transfer from American goods-producers to American service-producers featuring the financial services industry. Who’s trade good for? The answer should give you a clue about one reason why the U.S. keeps signing trade agreements.

If the terrible effects of these trade agreements are so well known then why do we continue to negotiate and pass them into law? Why do even Democratic presidents seem to never get their fill of these agreements which have harmed so many American factory workers and their families?

The answer is simple. We like the cheap imports. Not just consumers but the politicians, too. The average annual income of a family shopping at Walmart is $35,000. Shopping at Walmart saves that family over $800 a year. Cheap gasoline saves even more. There you have it in a nutshell. That’s like a 2.3% pay raise to Walmart shoppers which means a lot to workers who have been hammered by stagnant or declining wages for years. It also means a lot to politicians who have not delivered a better life to workers by any other means. Walmart, and free trade generally, leaves politicians with less to explain to the workers who have suffered the most at the bottom of the economic heap.

What about all those workers who lost their jobs to free trade? Well, they don’t vote anyway think the politicians of both parties. The long-term unemployed former manufacturing workers, and the poor generally, are so discouraged in their downbound trip to the edges of American life they are despondent and completely out of touch with the political process. The people who need most to vote against this madness are the very ones that don’t. An old story, unfortunately.

Politicians promise that we will turn around our balance of trade problem but they don’t mean a word of it. They are as addicted to importing low-cost goods as much as most Americans, only in a different way. The high cost of this inaction has been the steep decline of U.S. manufacturing and our inability to develop alternative energy sources and the fundamentals are not about to change.

THE DEMOCRATIC PROMISE TO AMERICA

In his SOTU speeches President Obama forcefully described economic revitalization strategies based on a renewed emphasis on manufacturing, small business, and foreign trade. This diary has argued these are plans built on old sand. Political expediency--the appeal of old, non-challenging ideas to both voters and the elites--has won out over any new ideas which might threaten the status quo. He expects to be re-elected with the familiar promises Americans have heard for years but have never worked as presidents said they would. We live with that legacy of unfulfilled promises.

In President Obama’s 2011 SOTU he stated that “We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. By the opportunities for a better life that we pass on to our children.” In his 2012 SOTU he said that “the basic American promise that if you worked hard, you could do well enough to raise a family, own a home, send your kids to college, and put a little away for retirement. The defining issue of our time is how to keep that promise alive.” He nailed it.

The disjuncture between lofty promises and reality has never before been so abrupt and the consequences so threatening to the American quality of life as today. The President’s eloquence is unmatched but does not directly address the difficulty of the challenges before us. Nor does he mark a new way forward. This lack of fresh ideas exposes the apparent intractability of the problems we face.

Unemployment is an emergency for those experiencing it but, for the time being, most people remain comfortable in their feathered nests. Nothing works against progressive social change like a mostly comfortable public. The potential for social change in the current environment is there now precisely because so many people are currently uncomfortable. Let’s make the most of this before we become thoroughly accustomed to the dreadful “new normal” of lowered life expectations for us and our children.

Today the issue is our very standard of living. Doing something about the problem requires a thorough rethink about our capital-intensive economy and our approach to global trade. Doing something also means going up against the most reactively powerful forces in the country and all the assets they have at their disposal including the media and legal system.

But national leadership, especially Democratic leadership, should be obligated to tackle the “wicked” big socio-economic problems by all means necessary. It’s not solely the private sector’s job and we should not expect them to do it alone. The private sector is an important part of any solution but only as one player among several—labor, capital, and the government. We should expect Big Business to help where they can by being a good faith team player and to get out of the way when they can’t.

Confronting the national powers-that-be is a risky strategy. The plain and simple truth is that business interests in America are so powerful that no meaningful national conversation about persistently high joblessness has been possible since the Great Depression of the 1930s. Government has been able to make a difference but only around the edges—unemployment insurance benefits, government funded job training programs, welfare, child food and insurance programs—by not seriously challenging the economic elites. Any president that would attempt to do so, and this includes Barack Obama, would be relentlessly hounded by the corporate media and effectively driven from office. (Bill Clinton is one example and his modest goal was improved health care.) No truly progressive executive agenda, even a limited one, would escape constant criticism to the extent than even many friends of an administration would turn against them. Courage in prodigious quantities (balls of steel) would be required.

The job of being president of the United States is like riding a bucking bronco 24/7. This rambunctious, anti-social country is a tough one to manage. Like the old saying about “trying to herd cats,” the lack of clear lines of authority in the country makes it very difficult to unify us except for a war (fear is a powerful motivator; be very afraid). However, President Obama cannot escape the responsibility of leadership. In his second and last term he should be willing to go to the wall for the American worker. No less is demanded, no less is expected. This diary is a challenge to President Obama to keep the promises he has made.

Discuss

First, the good news!

From all appearances the U.S. economy is showing signs of a sustained recovery from the Great Recession of 2008. Unemployment claims are down, the stock market is up, housing starts are up, car sales healthy, and businesses are sitting on huge cash reserves ready to invest when demand improves. We haven’t had a single month of net negative job growth in over a year. Except for the recession, after-tax corporate profits have been rising since 2001.

Adding to the good economic feeling was the recent annual Christmas consumer confidence boost from the U.S. news media intended to give us the warm and fuzzies about the economy and encouraging us to spend heavily for the holidays. The mainstream media played its traditional seasonal role in our capitalist economy: promoting Christmas sales by blowing sunshine about the economic good news. (In late January the actual sales data, not a self-serving forecast, will tell a more accurate data-driven story of actual sales.)

In the rollup to the 2012 elections the Obama administration will likely shift the timing of federal spending so that within-year expenditures are maximized. Though this spending is below the radar of the American public it will still temporarily boost the economy and contribute to the public impression that the U.S. is on an up-trend with even more jobs and higher incomes just around the corner.

Word in the mainstream media is that the Great Recession is over. We hear that all is well. Move along now, nothing to see here. Workers of the world don’t believe it!

Now the bad news!

The news media constantly makes a big deal about the latest downtick in the unemployment rate. Any positive data about the labor market is published with great fanfare: unemployment is down two-tenths of a point, unemployment insurance claims are down a few percent, GDP is up a tenth, etc. The real impact of these relatively small fluctuations in the data are obscured: the economy is still terrible for many Americans and the jobless rate has decreased mainly because many more workers have dropped out of the labor force entirely and so are not included in the government calculation of the unemployment rate.

Every month this year we lost public sector jobs, more than 250,000 in total. Every month we added private sector jobs, more than 1.5 million, but that’s only a small down payment on the 12+ million jobs we need to get back to where we were before the Great Recession. Incredibly, there was no new net job creation in the first 10 years of this century. The average duration of unemployment has surged to historic highs. Many workers have been stranded outside the job market and will not get back in anytime soon, if at all. This is seldom mentioned in the news media.

Most Americans, even recent graduates, have suffered permanent damage to their earnings. Adjusted for inflation, wages have been falling for many years, especially for the middle class. Young workers have particularly been hit hard. Employment numbers for workers over 55 have improved since 2007 but for all other age groups the picture has worsened. Since 2007, workers age 55 have experienced wage growth of 7.6%. Workers aged 25-44 have seen their wages dip 7.5% since 2007 and those 16-24 have lost 13.2% (U.S. Bureau of Labor Statistics.) Because of the bad economy many older workers are not retiring but are holding on to their jobs longer and not allowing younger workers to take their place.

Some say that deleveraging—reducing the amount of debt held by consumers—will soon allow the economy to rebound. Unfortunately, the oversupply of housing and commercial real estate will continue to exert drag of the economy to a degree that demographics alone will not quickly cure the problem. We won’t grow our way out of this one for a long time.

The implosion of the U.S. economy which began in 2008 is still wreaking havoc with employment and worker wages. The businesses doing well are those selling into emerging economies which is good for multinationals and our GDP but what about most American workers? Washington has lost interest in the unemployed, replaced by misdirected concern over the deficit and austerity.

Now for the really bad news!

Recovering from our economic meltdown is not the biggest problem workers face. Prior to the current decline other forces had been at work for decades that would have eventually brought us to the same dire straits. Wall Street (and their facilitators, most aligned with the Republican Party), by driving our deregulated economic bus way too fast, ran the wheels off the financial system in 2008 but the underlying fundamentals of global labor and rising productivity would have hurt American workers sooner or later anyway. Worse than anything we have seen so far.

This is not hyperbole. How we as workers react to these economic and employment truths today will determine our way of living tomorrow. Like a frog slowly boiling to death in gradually heating water, the powers that be in this country are depending on us keeping our mouths shut and our children adapting to a permanently lowered standard of living. The Occupy Wall Street movement, and even the Tea Party, suggests the capitalists may not get away with this crime of the century. It’s up to us.

Knowledge is power and we need to know more about how we got here. There are many dirty truths that have brought us to this critical juncture in American history. Here are four:

DIRTY TRUTH NUMBER 1: EMPLOYMENT WILL TAKE YEARS TO RECOVER TO PREVIOUS LEVELS, IF EVER

It is important to realize that given no change to our system of dividing the gains of production our previous standard of living will never return to what most of us still remember as normal. Unless we radically change direction, workers are going to be suffering with the overhang of Wall Street’s financial and debt excesses for a long, long time. Estimates of the time required for a return to previous levels of employment vary depending on the assumptions made. These estimates can be like a Rorschach test for economist attitudes toward economic growth but the Hamilton Project of the Brookings Institution has bracketed the best and worst case scenarios (see CHART 1).

The Brooking projections are based not on economic models but the actual behavior of the economy in the past. (It gets a little thick here but please bear with me.) The most optimistic scenario (dashed green line) assumes we will recover at a rate equal to the maximum rate of job creation in the 2000s: 472,000 jobs in a single month. Keep in mind this rate was for a single month, not a sustained period of time, but under this assumption it would still not be until 2015 before we closed the “jobs gap” by regaining all our lost ground. Change that assumption to the best average rate of job creation in the 1990s (321,000 jobs monthly, the orange dashed line) and it will be 2017 until we get back to normal. Make that assumption 208,000 jobs per month (the red dashed line) as experienced in the best year in the 2000s and the recovery period stretches to 2024. Last month the Bureau of Labor Statistics reported job growth of 200,000 of which 42,000 were seasonal delivery jobs. In other words, the worst pre-Great Recession job creation rate was still better than December’s “rosy” recovery rate the news media cheered about so heartily. Workers, households, and communities will struggle for many years to adjust to this “new normal” to use a popular phrase.

At the current pace of recovery, consumer and business demand (and spending and employment) will come back very slowly so the jobs gap will be likely not be closed until 2020 or later. The worse news here is that we may never regain past employment levels (see Dirty Truths 2 and 3). Even if the Great Recession had never occurred, the U.S. labor market had been deteriorating alarmingly for decades. Long-term unemployment (LTU) has been rising since the 1960s—over fifty years ago (note the up swinging red trend line in CHART 2). As a nation we keep waking up to the fact that there have long been non-cyclical, structural changes occurring in the national, and now global, economy. These trends are going to take a long time to work out of our system, if they ever do.

What are the reasons a recovery will take so long, if ever? There are long-term forces at work: some national, some global. Increasing productivity due to deepening automation (see Dirty Truth 3) has sharply cut into the workforce. Also, the global price of everything, including labor wages, has tended to converge over time lowering U.S. pay levels (what economists call factor price equalization). The huge labor forces of India and China will continue to pull U.S. wages down for any occupation not involving hands-on labor such as massage therapy.

As more workers experience LTU more of them drop out of the labor force entirely. Labor force participation (LFP) has been dropping since 2000, especially for certain demographic segments of the population like white males. People have been squeezed out of the workforce by lower wages or obsoleted skills. CHART 3 shows that for the period 1967 to 1990 Americans were increasingly joining the labor force. Initially, workers were pulled into the vibrant economy of the 1960s and even more were pushed into the workforce in the 1980s when the Reagan administration began to cut back on the social safety net which had been established less than 20 years prior. During the George Bush years LFP began to plummet with the onset of the Great Recession and the decline of the housing and construction industries. Conservative economists like to imagine that former workers are sipping pina coladas by the pool or retiring earlier but the truth is that many workers have found that work is not available or does not pay a living wage. Many have accepted a lower standard of living by downsizing their previous life expectations, scraping along by the skin of their teeth. Some have turned to part-time jobs or moved into the shadow economy where a cash-based system replaces above-ground jobs with health benefits. This death by a thousand cuts has increasingly been draining workers and their families dry and is indicative of a system that no longer cares for its workers.

DIRTY TRUTH NUMBER 2: LONG-TERM LAGGING DEMAND FOR GOODS AND SERVICES

For years the U.S. economy has always had something big going. During the 1950s-60’s we were the world’s factory and middle class household and community incomes grew rapidly; in the 1970s and ‘80s women came into the workforce which sustained middle class household incomes; the 1980s and ‘90s saw rapid growth in the financial and tech sectors (though manufacturing declined) which stabilized incomes for many households; and during the 2000s construction and housing boomed while households maxed out on cheap debt sending the economy into hyperdrive.

We have lived on the demand generated from one fluky economic circumstance after another until we had no more rabbits to pull out of the hat. We had quite a ride but it could not be sustained indefinitely. At this point it’s difficult to see where the next big thing (or bubble) is coming from. The bad news is that there probably isn’t one. A push toward export-oriented manufacturing would help but there are always the Germans, Chinese, and others to moderate our success. Aside from American pride there’s really no reason other countries cannot equal any achievement we might make.

The demand for goods and services is fed by people with money to spend. In turn, employment feeds on the demand for goods and services. Economic stability requires a careful balance between the labor supply and consumer demand. In the 2000s this balance was destroyed by the disastrous deregulation policies which started during the Carter and Reagan administrations, greatly accelerated during the Clinton administration, and reached full pitch during the George W. Bush administration. On Wall Street soaring executive compensation depended on keeping the economy at a fever pitch and a compliant Congress was only too willing pave the way by tearing down the regulatory barriers which had until then somewhat moderated the “animal spirits” of the capitalist class. America spent too much and saved too little during the good times. Indeed that’s what made the party so big. Now workers are paying the price of such extravagance with depressed wages and persistently high unemployment.

DIRTY TRUTH NUMBER 3: MANY INDUSTRIES WILL NEED FEWER WORKERS IN THE FUTURE

Since WW2 the American economy has steadily grown more productive. The good news is that output—food, health care, cars, housing—has increased dramatically giving us all the potential for a much higher standard of living. The bad news is that much of this productivity increase has come from using fewer workers to produce a given level of goods and services. For those with good jobs times have been, well, good. For those without jobs times have been tough.

In the almost 70 years since WW2 American productivity has increased tremendously (see CHART 4) in large part due to the more “efficient” use of labor. In this context labor efficiency has been due to squeezing labor out of the productive process with more and better machines. In particular, automating the manufacturing process revolutionized the factory floor. Everything from computerized robots to enormously improved transportation and logistics networks have allowed American industry to produce vastly more while reducing the number of workers required.

For years white-collar workers watched passively as blue-collar employment was decimated through automation and off-shoring to low-wage countries but now their own jobs are under heavy threat. Early in this process most of the labor saved was from substituting workers with machines but the bad news now is that most of the work in the U.S. that can be replaced with machines has been replaced already.

The impacts of off-shoring are often discussed but the more significant culprit is automation. The advent of small, powerful computers in the 1980s set in motion a thorough reworking of the productive process. It took us almost 20 years to figure out how to use these technologies but the result has been a revolution in how we go about making and doing things. Labor is increasingly out and capital is in.

The next wave in automation is the replacement of traditionally white collar jobs. Increasingly, white collar jobs can now be moved off-shore with the advent of high-capacity computer and telecommunications technologies. Computers (really smart software) excel at tasks which can be made routine. More and more white collar, non-routine work tasks fit into this category: paralegals that scan reams of words on paper and report on the contents will gradually be replaced by foreign workers or computer software designed to increase profits through reducing labor content. This gradual “hollowing out” of the white-collar labor market will continue to eat away at middle class incomes shifting even more of the political balance of power to the capitalist class.

In an ideal world obsoleted workers would find new, hopefully better paying, occupations but the long-term trend of unemployment does not bear out this expectation (again, CHART 2). In an ideal world, obsolete lamp-lighters would find new jobs working for the electric power company. But what really happens is much messier. A few of the lamp-lighters adjust to new occupations but older workers, in particular, experience a steep loss in their standard of living. They make do for a while and then die never regaining their previous standard of living. Our economic system is designed to exact the cost of technological change from the individual, not the nation as a whole (that would be socialism). There is no guarantee of a new job much less one at the old wage. You get a few bucks for a while—at most about 25% of your previous earnings—and then you’re on your own. Aside from paeans about self-reliance from government leaders, the burden falls completely on the worker. The nation benefits from productivity improvements but it’s the worker that pays the price.

DIRTY TRUTH NUMBER 4: THE IDEA THAT WE CAN EDUCATE OURSELVES OUT OF A NATIONAL ECONOMIC HOLE IS WRONG

Wage statistics tell us that the more education a worker has, the higher the income the worker receives. The talking heads on TV, and our political class, tell us that all we need to do is ensure more workers graduate from college with at least a Bachelor’s degree and all will be well. The important questions here are: 1) How many workers can improve their education without significantly driving down wages for their occupation?; 2) Are there a sufficient number of these jobs requiring more education to meet the national employment challenge?; and; 3) Which jobs actually are in the highest demand and what education is required for them?

We have created a convenient mythology, supported by Democrats and Republicans alike, which promises that if workers upgrade their manual skills to “high tech” skills they will improve their living standards and those of the nation as a whole. The notion that what may work for a single individual will work for the many is an example of a logical fallacy that occurs when a truth is extended well beyond its proper scope. Ph.D.s generally do well economically but we can’t all be Ph.D.s. We can’t all be wealthy financiers selling hot paper to each other anymore than we can all be drug dealers. What works for the individual succeeds precisely because, for whatever reasons, it never comes true for most everyone else. Only in Pleasantville are we all above average. Upgrading skills cannot be the answer except for a comparative few. Beyond that, new graduates flooding the labor market will moderate or even drive down wages.

For decades industry groups have complained that supplies of engineers, nurses, accountants, and many other occupations are in such short supply as to constitute a national emergency that can only be mitigated by greatly increasing the number of students training for these professions. The unstated purpose of these press releases is to deluge the labor market with graduates so as to drive down wages. Equivalent results could be obtained simply by increasing the wages firms are willing to pay workers who have left these fields to pursue more lucrative or more rewarding work but that would unacceptably decrease industry profits (at least to Wall Street).

The idea that putting more people through college can uplift the middle class is no longer true. In the last few years college graduates have searched in vain for jobs that never materialized. Many of them accepted jobs they could have landed without a degree. Hopefully, most of these graduates will find jobs in the future but huge student loans will burden many for years to come. On the blue-collar side of the labor market many of the unemployed have done job training only to find their new skills are not in demand any more than their old skills. In the mean time even more high school graduates, fleeing a hostile labor market, will enroll in college in hopes of finding the good life at the rainbow at the end of their studies.

With deepening automation and the off-shoring of jobs to low-wage countries there are some occupations that will be in continuing high demand in the future. Most jobs in our economy—waitresses and waiters, retail counter help, cashiers--require only a high school education, if that. That’s not going to change because those jobs need to get done somehow and they have to be done locally. The bad news is that the jobs in highest demand in our economy (see TABLE 1) are not high-wage, high-skill jobs but occupations considered by many to be menial. Most work done by low-paid workers have already been eliminated or are hard to automate. Maybe you will pay for a haircut from a machine but I don’t. Foreign labor has its limits. Hands-on labor, and its exploitation, is going to continue to be a factor in the future.

Unfortunately, the idea that we can educate ourselves into economic prosperity is fallacious. I wish good things for every individual attempting to improve their lives with more schooling but the dirty truth is that education is not an answer for the nation as a whole. And if we could all magically get jobs that currently pay well, past experience suggests that Wall Street would find ways to expropriate that income cancelling any collective gains from education. The most crucial question for all workers, college-educated or not, is how we divide the earnings from the production of goods and services between labor and capital.

THE LAST DIRTY TRUTH ABOUT AMERICAN JOBS

So, what can we do about these, and other, dirty truths about American jobs? To start with what has our government done? To date the answer has been nothing.

Actions by our national government leaders show they believe that nothing can be done. For politicians of every stripe the problems of persistently high unemployment and low wages are in the “too hard” pile. Their inaction is a reflection of the groupthink of the status quo and their collective lack of imagination at devising solutions to the problem. Their fatalism is a sign of their powerlessness. Like Lord Voldemort, our seemingly intransigent unemployment problem is the one whose name cannot be spoken. To even attempt to do something meaningful would anger the most powerful reactive forces in the nation and world because it could potentially affect the split from the gains from production between the controlling owners (Wall Street and other financial centers) and the workers. Vested interests and their huge investment in the sunk costs of the existing system of production are the underlying basis for our prolonged period of conservatism. But right now, conservatism is not what this country needs.

Ronald Reagan was selected to run for the Office of the Presidency precisely because he could best lull the American public through a period of managed decline for the American worker. He played his part only too well. Far from being an inspirational figure exuding “sunny optimism”, Reagan furnished the public relations cover for the rise of the financial sector and the decline of manufacturing, a source of the good life for many blue-collar Americans for generations. Factory work, especially well-paid work, is not likely to return with the same job-creating capacity. The issue at hand now is how to make the remaining work pay enough to raise a family at a decent standard of living with adequate health care, housing, education, and community services.

For decades the American public has been distracted by nonstop stories about the resurgence of the great American entrepreneurial spirit. The truth is that most workers do not want to run their own businesses. We can’t all be and don’t want to be bosses. Most workers just want to make a good living and they see their jobs as a means of achieving that end. Most would rather spend time with their families and other personal pursuits. That’s what freedom really means to most Americans. Workers value stability in their lives and don’t want to play in a casino economy that confiscates the gains from their productivity to further enrich the already rich. There’s room for entrepreneurs, too, but it’s not all about them. Workers should not have to spend all their days on a never-ending treadmill of someone else’s idea of what they should be doing.

WHAT CAN WE DO ABOUT IT NOW?

This diary has focused on the daunting employment challenges facing the American worker; some medium-term (the Great Recession) and some longer-term (productivity improvements and increasing global competition). At the very least, digging out from this mess will require creative solutions to the problems described here. But it’s not that easy. The environment for political and economic change has radically changed for the worse over previous periods in American history and an unprecedented effort from workers and their supporters will be key to overcoming the political obstacles posed by the powerful economic status quo.

The past 35 years witnessed a dramatic transformation in the relationship of America’s political class to the financial sector. Any vestige of obligation to the middle class has been replaced by what can be called the “reign of the top tenth” percent of income earners. To an unparalleled degree the attention of America’s politicians has been focused on helping the richest tenth become even wealthier; a feedback loop gone wild where the Congress is re-elected with financial support from the richest tenth so they can further rig our regulatory and legal systems which buys politicians even more contributions from the tenth.

How can we reverse the decades-long decline of America’s working class? To counter this we need another move of the political spirit similar to that of the 1960s. Before, the issues were Civil Rights and the Vietnam War. Today the issue is our very standard of living. Despite what you hear on corporate television, the living standards of the American worker can be maintained and even improved even as some of us compete with well-trained, highly educated foreign workers. But you should understand that doing something about the problem will require a thorough rethink about our capital-intensive (read labor-squeezing) economy and our approach to global trade which flattens wages in a global race for the bottom. Doing something also means going up against the most powerful forces in the country and all the assets they have at their disposal including the media and legal system.

The myth of the “free market” has mesmerized two generations of Americans with the fictitious fatalism that nothing can be done to stem the decline of American living standards. The truth is that the continuous bargaining for the national economic pie is a political process that has always determined how big the worker’s share will be. For several decades after WW2, workers held a good poker hand when bargaining with owners but with the domination of the party of business in recent years, workers have increasingly been on the short end of the stick. A fierce and protracted political fight will be necessary to restore the bargaining power of labor.

In 1971 Lewis Powell, an Associate Justice of the U.S. Supreme Court wrote in a letter to the American Chamber of Commerce that “Strength lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.” His letter described a strategy to counter the spontaneous outburst of democracy that occurred during the 1960s with a plan for the corporate takeover of the dominant public institutions of American society but this can just as easily be turned on its head. To paraphrase a great man, “Workers of the world, unite. You have nothing to lose but your chains.” The guy was right.

Discuss

For years, the U.S. public has been conditioned by the mainstream media to reverentially treat veterans as “heroes” deserving our utmost respect and eternal gratitude. Few words are more overused in our culture than “heroes”. But if veterans have been defending our true national interests, a questionable assumption, then fairness suggests we should “make them whole” after they return. So, what do we owe them?

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Tue Dec 27, 2011 at 01:10 PM PST

No Patriot and Proud Of It

by Doctor Mxyzptlk

I’m hopelessly out of step with my fellow Americans. Don’t believe me? I’ll prove it. I’ll state unequivocally that am not a patriot. I’m not exactly sure what a patriot is but I know I am not one. In fact, people who claim to be patriots creep me out. Too righteous-sounding and definitely in a bad way. I’ll briefly explain.

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Two weeks ago, on a Sunday, the last U.S. Army ground troops left Iraq, transferring responsibility for military action to the Iraqi government and its army. The U.S. presence there is still substantial with the largest American embassy in the world (think Fort Knox without the gold) , 15,000 contractor personnel, and an unknown number of counterinsurgency forces, our newest answer to military force projection. But this is not the first time we left a country after a protracted war with a dubious outcome.  Our inability to learn our lessons from the Vietnam War led directly to the wars in Iraq and Afghanistan. Why are we so damn dumb about war?

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