Editor's Note: The following excerpt from Obama's speech to the Chamber of Commerce on February 7 provides foundation for the essay that follows, written by Richard Taylor is a retired economics and history teacher in Minnesota. - LMB
"This brings me to the final responsibility of government: breaking down some of the barriers that stand in the way of your success. As far as exports are concerned, that means seeking new opportunities and opening new markets for your goods. ... Now, another barrier government can remove—and I hear a lot about this from many of you—is a burdensome corporate tax code with one of the highest rates in the world. ...Which brings me to the last barriers we’re trying to remove, and those are outdated and unnecessary regulations. I’ve ordered a government-wide review, and if there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them."
Right after the 2010 congressional elections, Barack Obama himself best summed up the meaning of the elections by concluding that he had failed to pay sufficient attention to the interests of Corporate America.
He promptly sought to rectify that mistake. Flying to India, he was greeted at the airport not by Prime Minister Singh, a secondary official apparently, but by that titan of American industry, Jeff Immelt, CEO of General Electric, who extended greetings to Mr. Obama from the other 240 American CEOs there to nudge the Indian government to sign contracts with American corporations.
And sign the Indian government did—and most gleefully because Mr. Obama, seeking to ingratiate himself with the Corporate America he had so callously neglected (except for the banks, “defense” contractors, auto industry, companies benefiting from the stimulus program, and all companies served by the commercial paper market), rescinded the long-standing order preventing American companies from selling “dual-use” technology to India. Dual-use technology refers to advanced technology that can be used for both civilian and military purposes. Even Cheney and Bush hadn’t repealed the ban. No doubt, the contracts will swell the coffers of GE and others, but we might question the wisdom of providing a fillip to the Indian nuclear weapons industry in a region where its arch rival, Pakistan, may come to feel even more insecure, hence prone to political extremism and military counter measures. But why worry about nuclear proliferation when there are short-term profits to be made?
Mr. Immelt and his cohorts also had good luck recently with China, as President Hu Jintao, in an effort to sooth consternation over China’s trade surplus with the U.S., announced lucrative export contracts with GE and other American multinationals.
These deals allowed Mr. Immelt to pontificate authoritatively on how the U.S. needs to be “a country that builds things” if it is to restore economic growth and high wage jobs. Duly impressed, President Obama appointed Mr. Immelt, a Republican, chairman of the new Council on Jobs and Competitiveness.
Alas, this future of affluence and full employment faces a number of impediments—including the general trends of corporate investment and job creation. While it’s true that GE and some other companies will increase employment in the U.S. due to higher export orders, the main tendency of American multinationals is not to produce in the U.S. but to move plants to emerging economies to be closer to the market and take advantage of cheaper labor. Caterpillar is expanding in Brazil, not in the U.S., and GM, rescued by the American taxpayer, is returning the favor by producing more cars in China than the U.S.
Moreover, as the Great Recession waned, Corporate America made an ostentatious show of not creating jobs in the U.S. Rather than rehire workers, business chose to work its remaining workers longer and harder. By the end of 2009, GDP had returned to its 2006 level—about $12.9 trillion in fixed 2005 dollars. However, 2009’s $12.9 trillion in goods and services was produced by 134.4 million workers compared with 138.7 million in 2006. In other words, business reaped the same value of output while paying for 18 billion fewer hours of labor. Not surprisingly, squeezing labor in this way led to corporate profit margins as a share of GDP that are postwar records. How curious that that Corporate America’s cup runneth over under an administration allegedly hostile to business.
While pointing to the bright new future of born-again manufacturing, Mr. Immelt rued that, “we all have to be concerned about the lack of love for free trade and globalization among the public.” In other words, he isn’t ignorant of the above facts and knows that outsourcing is accelerating, not slowing, in the post-recession period. Tens of thousands of more U.S. workers received assistance from the Department of Labor’s Trade Assistance Program in 2009 than in 2008 because of the expedited outflow of jobs. And venture capital is languishing in the U.S. because hundreds of billions of dollars are flowing into low wage, high profit emerging economies. Apple Corporation may be thriving on the sales of iPhones, but they’re being produced and exported from China, and while touting an American manufacturing renaissance, Mr. Immelt now employs more workers overseas than it does in the U.S. It’s not a mystery that most Americans don’t “love” free trade given that its current incarnation translates into declining median incomes and savagely high chronic unemployment.
It is crystal clear that Mr. Obama has chosen to hitch his star even more tightly to Mr. Immelt’s Corporate America wagon. Perhaps he calculates that in the wake of the Citizen’s United decision that allows corporations to make unlimited and unidentified contributions to political campaign—and did make to the tune of $400 million in the 2010 Congressional races—his only hope for 2012 is to defer to Corporate America’s unchallenged political hegemony and become an open and unabashed cheerleader for big business.
But he might consider that votes for Democratic congressional candidates fell from 65 million in 2008 to 35 million in 2010 because “hope” didn’t translate into more jobs or more rights for workers—remember card check? And he also might consider that while he is embracing Immelt and company, Americans’ distrust of business is growing with just 46 percent stating they trust business, down from 54 percent in 2010. And Obama might note that trust in government is falling as well.
That’s not the end of the story. As housing prices continue to fall, jobs remain elusive, wars drag on, and wealth is concentrated in fewer hands, 40 percent of the population no longer identifies with either the Democratic Party or the Republican Party. Whatever tactical gain he may derive from a closer embrace of Corporate America, more and more Americans are searching for an authentic progressive voice to advance their interests.
Richard Taylor is a retired economics and history teacher, writing from Minneapolis, Minnesota.
Source: Southside Pride