The elephant in the room. What nobody is talking about.
This is Labor Day. Alan Grayson is up with a great offering, What Robert Kennedy Said.
But here's the bottom line: What the Republicans are fighting against, the reason they are pursuing a scorched earth policy that would rather see every last bit of progress in this country come to a grinding halt than give one inch to a government that might regulate them, is to ensure that what they have built over the past 30 years is never taken away.
And what they have built is a system of exclusive privilege, exclusive wealth and exclusive power and control. Of, by and for those very, very few at the very top. Ostensibly made possible by "free trade".
Free trade is put in quotes because it doesn't exist, and it isn't free.
What free trade is really all about is the freedom to build wealth beyond all imagination by exploiting people with no protection and no rights.
It is about the unfettered use of slave labor.
The very thing that tore this country apart one hundred and fifty years ago, and is destroying it again as we sit here. Only this time, the slaves are hidden from view.
The Democratic Party is facing a mid-term election with huge foreboding about how many seats they will lose in each house of Congress, and in statehouses across the land. People are fearful, insecure, and angry. They are lashing out. We watch, feeling somewhat helpless, as angry voters are systematically mislead, misinformed and their rightful anger misdirected. They are poised to vote against those who actually seek remedies, and return to power those who have worked diligently to make their lives miserable and insecure.
How did we get here?
We could fill pages with analysis of where we have fallen short, or not. There have been many dozens of diaries on this topic, and my intent is not to repeat the arguments here. We all know them.
But almost nobody is talking about the central issue, the core problem, that is destroying our middle class, that has taken away good, secure, well-paying jobs at every level and of every description, except perhaps for the very lowest paying and least secure jobs out there, that is threatening our very democracy. The issue that underlies nearly everything.
Here is the core issue: the fact that slave labor is available on this planet, in nearly unlimited quantity, and we have reconstructed a huge amount of our economy to be able to exploit slave labor.
Over the past 30 years, we have systemically dismantled a huge percentage of our manufacturing base, while at the same time there has been a concerted and largely successful effort to repeal some of the most important protections put in place during the first three-quarters of the 20th century -- most notably, Glass-Steagall -- and dramatically roll back the progressive income tax, which built our infrastructure, improved the quality of life for most Americans, and made us a great nation.
Our middle-class, well-paying, union-protected, safe, secure jobs with good benefits, are now being done by workers who have little choice but to accept slave wages, slave conditions, few if any protections, and almost no benefits -- far from our shores. We are now also offshoring an ever greater percentage of higher-end white collar jobs, and while overseas engineers and lawyers and doctors are probably not making slave wages, their salaries are dramatically less than their American counterparts.
All of this has been done with zero consequences for the owners and CEOs who have sent the jobs overseas, and this is a key point. No tax penalties, no increased tariffs, nothing. In fact, just the opposite is true:
At issue is the U.S. tax code's treatment of profits earned by foreign subsidiaries of American corporations. Profits earned in the United States are subject to the 35% corporate tax. But multinational corporations can defer paying U.S. taxes on their overseas profits until they return them to the USA — transfers that often don't happen for years. General Electric, for example, has $62 billion in "undistributed earnings" parked offshore, according to recent Securities and Exchange Commission filings. Drug giant Pfizer boasts $60 billion. ExxonMobil has $56 billion.
Chinese wages are rising amidst increasing incidences of worker unrest and labor shortages. But the gulf between the salaries and benefits of Chinese versus American labor remains huge, and it's not likely that we'll soon see any of those jobs coming back here. If they go anywhere, it will likely be to other nations in Asia or the subcontinent where labor is even cheaper.
In fact, the CEO of Nissan recognizes that as Chinese wages rise, the Chinese market for goods only explodes:
The reason, he told reporters after Nissan’s annual shareholder meeting on Wednesday, is that unlike iPhones and other Chinese-made electronics, most of the cars made by foreign manufacturers in the country are sold to local Chinese buyers. China’s booming automobile market is now the biggest in the world, and - as Henry Ford understood - richer workers mean richer customers.
Of course, that may help the shareholders and officers of Nissan. It may even be good for the development of a Chinese middle class. But it does squat for those whose jobs were shipped to China.
So, free trade? Freedom shouldn't be defined as the freedom to sell out America's middle class to slave labor.
And, to me and many others, true free trade would mean the movement not only of goods and services across borders, but of labor. The laws of supply and demand only really work if there is freedom on both sides of the equation. Of course, we have no free movement of labor at all.
A good example of how even well intended free trade can go awry is NAFTA:
Employment in virtually all U.S. manufacturing industries has declined since NAFTA went into effect. Counting jobs that actually left the United States plus those that would have been created if not for rising imports, EPI estimates that NAFTA caused a net loss of 440,000 U.S. jobs.
Perhaps devastating for Mexican farmers dependent on corn, now having to compete with heavily U.S. subsidized agribusiness:
According to Graham Purchase in Anarchism and Environmental Survival, NAFTA could cause "the destruction of the ejidos (peasant cooperative village holdings) by corporate interests, and threatens to completely reverse the gains made by rural peoples in the Mexican Revolution."
It would be sheer fancy to assume that the influx of poor and desperate Mexicans who have entered the U.S. illegally since the mid 1990s has nothing to do with the destruction of their livelihoods.
Of course, there is nothing at all resembling the free movement of labor across any borders. There is no supply and demand at work here at all. The "pure capitalists" who clamor for less government interference with their markets are often the same people who scream the loudest about the problem with immigrants.
Let me say this again: the Republicans are fighting the Civil War all over again. Slave labor largely built this country, and made many men incredibly wealthy. Slave labor is now fueling the increasingly obscene amounts of money that the tycoons of business are putting away into their absurd mansions hidden in protected compounds and all the accoutrements of wealth. Just as the wealthy land owners of the antebellum South felt entitled to their wealth, and felt entitled to their slaves, so do the tycoons of the 21st century.
And, why should the very wealthy worry about government services? Who needs them -- they can afford to pay for everything that they need.
In fact, there is even a more sinister reason to fight any increase in taxes, to bring us even back to where taxes for the wealthy were ten years ago: A defunded government that doesn't work, that seems forever incompetent to furnish even the most basic services, is a government that nobody will trust to regulate business. To guard against the kind of economic meltdown that we saw two years ago. To do anything to take away the economic incentive to ship as much labor as possible overseas, and base our domestic economy as much as possible on finance, i.e. wealth transfer -- to the very wealthiest, from everyone else.
That seems to be exactly the new Republican strategy: Defund the U.S. Government. Bring it to a stop. Make sure nothing works.
The tycoons are again fighting to the death to maintain their ability to use slave labor. These are the people who now view the American middle class as superfluous. They would rather we all just go away, and leave them to their riches, and their overseas labor -- and increasingly, their overseas markets. In short, as Michael Lind recently observed, they increasingly view the American people as obsolete.
So, on this Labor Day, let's think about where American Labor stands in September of 2010. It's not a pretty picture. A few days ago, AFL-CIO President Richard Trumka declared "this Labor Day a 'defining' one for working people." He's exactly right. What is at stake is the very future of our nation as a democracy, with a vibrant middle class, whose people are NOT obsolete.
This is what we must fight to protect. What we are fighting FOR. No less than we did 150 years ago.
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Update. I just listened to President Obama's brilliant speech that he gave today in Milwaukee. To my great joy, not only was this a call to action, a "Yes, We Can!" speech the likes of which we haven't seen since the 2008 campaign, but he addressed the very issue raised in this diary head-on. American needs to make things again, and sell them at home and abroad. We have to restore middle class jobs, and we have to get rid of the tax breaks for companies that send jobs overseas, and reward companies that create good jobs at home. He said all these things with conviction and energy. He specifically called out John Boehner. "We are not going backwards!... We do not quit! We are united, we are strong. That's why we call them unions!!!!!"
I love it.