Last Thursday President-elect Donald Trump triumphantly celebrated Carrier’s
decision to reverse its plan to close a furnace plant and move jobs to Mexico.
Some 800 jobs will remain in Indianapolis.
“Corporate America is going to have to understand that
we have to take care of our workers,” Trump toldThe New York Times. “The free
market has been sorting it out and America’s been losing,” Vice President-elect
Michael Pence added, as Trump interjected, “Every time, every time.”
So what’s the Trump alternative to the free market? Bribe giant corporations to keep jobs in America.
Carrier’s move to Mexico would have saved the company
$65 million a year in wages. Trump promised bigger benefits. The state of Indiana will throw in $7 million, but that’s just the start.
Carrier’s parent company, United Technology, has military contracts that just last year generated $6.8 billion of its $57 billion in revenue – creating a yuge Trump
card that makes $65 million look like peanuts. If Trump comes through with the military
buildup he’s promising, United Technologies could reap a bonanza. You can bet that figured into the deal.
In addition, United Technologies has more than $6
billion parked abroad where tax rates are low. It will make a
bundle if Trump follows through with a plan to allow global corporations to
bring that money home and pay a rock-bottom tax rate.
In other words, Trump will get corporate America to take care of “our workers” by bribing them with government contracts, tax cuts, and relief from
regulations. The art of the deal is to Increase corporate profits, and assume that corporations will reciprocate with good American jobs.
It’s “trickle-down” economics dressed in populist garb.
But it won’t work. As long Wall Street continues to push corporations to maximize shareholder returns,
American workers will continue to lose good-paying jobs to foreign workers or
to homegrown robots.
Payrolls are the biggest single cost on most
companies’ balance sheets, so cutting jobs and wages will continue to be the easiest way to boost profits
and share prices.
If Donald Trump were serious about reviving good jobs in America, he’d give workers more bargaining power by strengthening trade unions, upgrading lifelong education and training, and simultaneously making it harder for Wall Street to demand that companies shed workers.
This was the way the American economy functioned from the end of
World War II through the early 1980s, when jobs and paychecks rose in tandem with corporate profits. Large corporations weren’t just responsible to
their shareholders; they were also responsible to their workers.
workers as assets to be developed – retraining them with higher skills as the
companies moved to higher value-added production, or for new jobs as the companies
expanded – and resorting to layoffs only as a last resort.
But starting in the 1980s, workers became costs to be cut. Corporate raiders mounted hostile takeovers – using high-yield junk bonds,
leveraged buyouts, and proxy fights to gain control of companies – and then squeezed payrolls to get higher profits. They busted unions, outsourced jobs abroad, and installed automated equipment.
employment peaked in 1979 at nearly 20 million jobs. Since then, about 8 million of those
jobs have been lost to cheaper foreign labor or to automation.
Trump won’t change these economic fundamentals. How do I know? Because his cabinet choices for key
economic posts were among the ring leaders in the changes I’m talking about.
Steven Mnuckin, his Treasury pick, is a former Goldman Sachs partner who made
billions over the past decades buying up companies and slashing payrolls. Wilbur
L. Ross Jr., Trump’s pick for Commerce Secretary, made
his billions using bankruptcy to protect wealthy owners while leaving workers
and communities holding the bag. (Example in point: the collapse of Trump’s
These men exemplify the financialization of the American economy that’s
focused only on high profits and rising share prices, and shafted American workers.
Trickle-down economics dressed in populist garb is still trickle-down
“Today, the richest 400 Americans have more wealth than the bottom 150 million of us put together. Now, think about it. 400 people have more wealth than half the population of the United States.” — Robert Reich, Inequality For All
There are now four grounds to impeach Donald Trump and a fifth is “on its way”, according to former Labour Secretary Robert Reich. Posting on Twitter, Mr Reich outlined the four reasons he thinks Mr Trump could be impeached. The practical question is whether there is the political will,“ Mr Reich concluded.
At Stake in 2016: Ending the Vicious Cycle of Wealth and Power
What’s at stake this election
year? Let me put as directly as I can.
America has succumbed to a
vicious cycle in which great wealth translates into political power, which
generates even more wealth, and even more power.
This spiral is most apparent is declining
tax rates on corporations and on top personal incomes (much in the form of wider tax loopholes), along with
a profusion of government bailouts and subsidies (to Wall Street bankers,
hedge-fund partners, oil companies, casino tycoons, and giant agribusiness
owners, among others).
The vicious cycle of wealth and power is less apparent, but even more
significant, in economic rules that now favor the wealthy.
Billionaires like Donald Trump
can use bankruptcy to escape debts but average people can’t get relief from
burdensome mortgage or student debt payments.
Giant corporations can amass
market power without facing antitrust lawsuits (think Internet cable companies,
Monsanto, Big Pharma, consolidations of health insurers and of health care
corporations, Dow and DuPont, and the growing dominance of Amazon, Apple, and
Google, for example).
But average workers have lost the market power that came
from joining together in unions.
It’s now easier for Wall Street
insiders to profit from confidential information unavailable to small investors.
It’s also easier for giant firms to
extend the length of patents and copyrights, thereby pushing up prices on everything
from pharmaceuticals to Walt Disney merchandise.
And easier for big corporations to
wangle trade treaties that protect their foreign assets but not the jobs or incomes
of American workers.
It’s easier for giant military
contractors to secure huge appropriations for unnecessary weapons, and to keep
the war machine going.
The result of this vicious cycle is
a disenfranchisement of most Americans, and a giant upward distribution of
income from the middle class and poor to the wealthy and powerful.
Another consequence is growing
anger and frustration felt by people who are working harder than ever but
getting nowhere, accompanied by deepening cynicism about our democracy.
The way to end this vicious cycle
is to reduce the huge accumulations of wealth that fuel it, and get big money
out of politics.
But it’s chicken-and-egg problem.
How can this be accomplished when wealth and power are compounding at the top?
Only through a political movement
such as America had a century ago when progressives reclaimed our economy and
democracy from the robber barons of the first Gilded Age.
That was when Wisconsin’s
“fighting Bob” La Follette instituted the nation’s
first minimum wage law; presidential candidate William
Jennings Bryan attacked the big railroads, giant
banks, and insurance companies; and President Teddy Roosevelt busted up the giant trusts.
When suffragettes like Susan B.
Anthony secured women the right to vote, reformers like Jane Addams got laws
protecting children and the public’s health, and organizers like Mary Harris
“Mother” Jones spearheaded labor unions.
America enacted a progressive
income tax, limited corporate campaign contributions, ensured the safety and
purity of food and drugs, and even invented the public high school.
The progressive era welled up in
the last decade of the nineteenth century because millions of Americans saw
that wealth and power at the top were undermining American democracy and stacking
the economic deck. Millions of Americans overcame their cynicism and began to
We may have reached that tipping point
Both the Occupy Movement and
the Tea Party grew out of revulsion at the Wall Street bailout. Consider, more recently, the fight for a higher minimum wage (“Fight for 15”).
presidential campaign is part of this mobilization. (Donald Trump bastardized version draws on the same
anger and frustration but has descended into bigotry and xenophobia.)
Surely 2016 is a critical year.
But, as the reformers of the Progressive Era understood more than a century ago, no single president
or any other politician can accomplish what’s needed because a system caught in the
spiral of wealth and power cannot be reformed from within. It can be changed only
by a mass movement of citizens pushing from the outside.
So regardless of who wins the
presidency in November and which party dominates the next Congress, it is up to
the rest of us to continue to organize and mobilize. Real reform will require
many years of hard work from millions of us.
As we learned in the last progressive era, this
is the only way the vicious cycle of wealth and power can be reversed.
I continue to hear from many of you who say you won’t vote for Hillary Clinton because, you claim (1) she’s no better than Donald Trump, or (2) even if she’s better, she’s still corrupt, and you refuse to vote for the “lesser of two evils,” or (3) you don’t want to reward the Democratic Party for corrupt primaries that gave the nomination to Hillary instead of Bernie Sanders.
Please allow me to respond.
1. Anyone who equates Donald Trump with Hillary Clinton hasn’t been paying attention. Trump is a dangerous, bigoted, narcissistic megalomaniac with fascist tendencies who could wreak huge damage on America and the world. Hillary isn’t perfect but she’s able and experienced. There is simply no comparison.
2. Even if you see Hillary Clinton as the “lesser of two evils,” the greater of two evils in this case is seriously evil. Voting for someone who doesn’t meet your ideals – when the alternative is someone who falls much further from those ideals – doesn’t mean you’ve sold out or compromised your principles. You’re just being realistic and practical. Realism and practicality are critically important now.
3. I understand your frustration with the Democratic Party, and your reluctance to “reward” it for its bias against Bernie in the primaries. But anything you do that increases the odds of a Trump presidency isn’t just penalizing the Democratic Party; it’s jeopardizing our future and that of our children and their children.
All of us have to continue to work hard for a political system and an economy responsive to the needs of ordinary Americans. The movement Bernie energized must not and will not end. But Donald Trump, were he to become president, would set back that cause for decades.
There are fewer than 5 weeks until Election Day. My request to those of you who still don’t want to vote for Hillary Clinton: Please reconsider. It is no exaggeration to say the fate of the nation and the world are at stake.
Senator Bernie Sanders is making waves with a big idea to reinvent education: Making public colleges and universities tuition-free.
I couldn’t agree more. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens. Every year, we spend nearly $100 billion on corporate welfare, and more than $500 billion on defense spending. Surely ensuring the next generation can compete in the global economy is at least as important as subsidies for big business and military adventures around the globe.
In fact, I think we can and must go further — not just making public higher education tuition-free, but reinventing education in America as we know it. (That’s the subject of this latest video in my partnership with MoveOn, “The Big Picture: Ten Ideas to Save the Economy.” Please take a moment to watch now.)
In the big picture, much of our education system — from the bells that ring to separate classes to memorization drills — was built to mirror the assembly lines that powered the American economy for the last century. As educators know, what we need today is a system of education that cultivates the critical thinking skills necessary for the economy of tomorrow.
We have to reinvent education because it’s not working for too many of our kids – who are either dropping out of high school because they aren’t engaged, or not getting the skills they need, or paying a fortune for college and ending up with crushing student debt.
How do we get there?
First, stop the wall-to-wall testing that’s destroying the love of teaching and learning. Let’s get back to a curriculum that builds curiosity, problem solving, teamwork and perseverance, and away from teaching to the test. Give teachers space to teach, and give students freedom to learn. Limit classrooms to 20 children so teachers can give students the individual attention they need.
Increase federal funding for education. The majority of U.S. public school students today live in poverty. That’s a staggering figure. Our schools and educators aren’t equipped to deal with this harsh reality but we know ways to change that. High-quality early childhood education, for starters. Community schools to serve the whole child, with health services, counselors, and after school activities.
Offer high school seniors the option of a year of technical education, followed by two years of free technical education at a community college. The route into the middle class shouldn’t always require a four-year college degree. America needs technicians who can install, service, repair, and upgrade complex equipment in offices, laboratories, hospitals, and factories.
And Senator Sanders has proposed, make public higher education free — from community college to state universities — completely free, as it was in many states in the 1950s and 1960s. Higher education isn’t just a personal investment. It’s a public good that pays off in a more competitive workforce and better-informed and engaged citizens.
And critically, we must increase pay and improve conditions for the men and women who power our schools—teachers and school staff who educate our kids, clean our classrooms, and keep our schools safe.
The law of supply and demand isn’t repealed at the schoolhouse door. We’re paying investment bankers hundreds of thousands if not millions of dollars a year to make money for Wall Street. We ought to be paying educators and staff a decent wage to develop and guide the nation’s human capital – an investment that would benefit everyone.
By reinventing education in these sensible ways, we all gain.