Two Roads Out of Recession

Unfortunately, both the Democrats and Republicans have made it clear that any increase in public spending will pale in comparison to cuts in social programs that benefit workers.  The New York Times reports:

“[Obama's] budget for the 2012 fiscal year, which starts Oct. 1, will call for greater deficit reduction [cuts] over the coming decade… the budget will reflect his midterm shift from a focus on stimulus spending and tax cuts in his first two years to budget-cutting as the economy [corporate profits] picks up steam.” (February 12, 2011).

Cuts to social programs are inevitable because the Democrats have already extended the Bush tax cuts for the rich, while also promising to lower the corporate tax rate. This is the essence of the problem.

A workers’ path to economic recovery would be the exact opposite of the above polices that the Chamber of Commerce is successfully implementing. Drastically increasing taxes on the wealthy and corporations is but the first, necessary step to increase public funding for a real jobs program.

This crucial solution is not being proposed by the big labor federations because the union leaderships have a suicidal attachment to the Democratic Party, whose favored constituency is, as always, the rich, who would rather not have their taxes raised.

Sadly, the leaders of both labor federations have done nothing of substance to show their members a worker-centered path out of the recession. They have passively attached themselves to the blatantly pro-corporate agenda pursued in Congress and the White House, while also doing nothing to fight back against the ongoing attack against public sector unions, the backbone of the American labor movement.

What we are witnessing is an attempt by the corporate class to fundamentally shift the power dynamics in American society, completely away from workers towards corporations. The project that began in earnest under Reagan has picked up steam with Obama. Bob Herbert’s editorial in The New York Times describes this dynamic well:

“While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.” (February 11, 2011).

There are only two ways out of this recession, the path sought by corporations and the one that will benefit working people.  The two roads cannot be traveled on simultaneously. Nor can working people expect leaders of national labor unions or national liberal organizations to pick the correct path, let alone make one concrete step in any progressive direction.

shamus cookeThe movement must start at the local level, from the bottom up. Local unions and labor councils should pass resolutions demanding that the rich and corporations be taxed for local and national jobs programs. Regional coalitions of community and labor groups can be formed to put on public forums, create educational material, and organize massive demonstrations.   The first real step forward will happen after we learn to detach ourselves from the above corporate mindset, relying on ourselves and acting collectively.

Shamus Cooke

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org)  He can be reached at shamuscooke@gmail.com

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Comments

  1. Spearmann says

    @ Keith…

    I don’t think there is hyper competition… the term, to me, makes little sense. You have so much money in the bank. If you have a couple of slow months, you go broke. That’s how it is for basically every business operating in the US with few exceptions. You don’t look for the most efficient way to do things because you are hypercompetitive, you do it because you don’t want to die.

    Staying alive in a screwed up economy (thank you, federal government), that accumulates debt for us faster than we can earn the money to pay it… is a challenge, and failure means lots more people on the street, including yours truly.

    My company did maintain a stateside contract manufacturer (made attractive due to the immense dangers of hiring for ourselves), but there were two problems: 1 – Their quality was not as high as overseas. 2 – Their prices were higher than overseas. 3 – Even with shipping delays, they were no faster than overseas. 4 – They did not eagerly fix problems they were responsible for.

    We could have made the choice to give our customers worse products at a higher price… keeping jobs in the US (until we went broke and out of business anyway) but that seems rather stupid.

    The people that fail NEED to fail in actual fact. The world is NOT made a better place by bailing out GM. Sure, it buys votes… and that’s the point. But that makes it just another form of corruption.

    RS

  2. says

    After reading your post and the 1st reply I have to rethink how to reply…
    I was just going to say the most new jobs are going to come from non-Union trades.

    It seems to me the rise in corporate profitabilities across most of the typical stock exchange traded firms recently has been because labor costs are down. Even when the cost of raw materials are up.

    Many of the federally funded “make work” type projects are for the big unions with the biggest overhead for stuff like building roads and other hard to hire into type union positions with big burdens to overcome before those employers hire very many new people. Bullet train… Levee construction… Airport expansion. All good things and may get a few more teamsters out of the union hall but adding jobs for hundreds of thousands of average folks is not going to happen this way.

    So, thank you Mr. Cooke the first half of your article is very good.

    However when I got to “movement must start at the local level, from the bottom up. Local unions and labor councils should …” you lost me. The multitude of out of work Americans are not part of any “labor council” to start with.

    We may have a new high as the standard for unemployment levels. But in the new America we have an era of hyper-competition. A college degree means little. What you do with whatever you got means everything. Being industrious does not mean leave it to the boss anymore.

    We are not going to run into the town square and demand Jobs. (Egypt’s events will not happen here in USA)

    This an era of hyper-competition is exacerbated by what Mr. Spearmann says above.

    Good help us all to keep our jobs and prosper.

    IMHO

  3. Spearmann says

    I don’t see this piece as especially thoughtful… quoting economists that don’t say anything about economics (instead acting in the full capacity of their OTHER job, leftist politician).

    Take for example this idea of a “jobs recession”. There is no such thing.

    The economy is in a recession, or it’s not. Further, there is no such “thing” as a “job”. A job is just a unit of work. Like a gallon, when considering milk. There is no such thing as a “gallon”. You can’t grab one. You can’t see one. It is conceptual only.

    Work, on the other hand, is all around us… but much of it is killed off or sent over seas. How do I know this? Because I’ve done it. I have sent dozens of jobs overseas, and I can tell you EXACTLY why I did it.

    1 – Threats from employees. Employees can (and do) bring suit against companies for things that are almost impossible to defend… charges of racism, sexism, harassment, hostile work place, unsubstantiated or not, are HUGE hammers that just the THREAT of use can bring small companies to their knees.

    To reduce the chance of such charges, it is safer to sent the jobs overseas.

    2 – Threats from local, state, and federal government… massive volumes of workplace rules, where common sense no longer has ANY bearing… constantly growing, constantly changing… employees must be hired FULL TIME to wade through and stay abreast of this bloated effort. Because the rules make sense? No. Sometimes they do, other times, they don’t. Usually they don’t.

    To reduce the chances of being broad-sided by violations hidden deep within the many sources of work rules, from terms of employment, hiring, firing, safety, benefits, building code, emergency procedures, environmental impact, and on and on and on… it is far easier and cheaper to send the jobs overseas.

    3 – Pay: wage laws, unions, and state and federal regulations reach deeply into the ability of people to come to agreements between each other with respect to the structure of the work and compensation. Work hours, break periods, wage limits, worker status, tax collection, pay and tax records retention, etc. etc. etc…. whatever happened to just coming to work on time to do what you agreed to do?

    To reduce the burdens of the pay regulations and tax systems, not to mention the inflated wages of a minimum wage society… it is vastly cheaper and simpler to send jobs to countries where it is all cheaper and easier to administer.

    Employees are a MASSIVE liability to any company… especially the unskilled workers… because they don’t do anything that workers anywhere else in the word can’t do with ease.

    We keep our highly skilled workers… the designers, engineers, managers… but the common worker comes with all of the liabilities, and nothing special or unique when compared to workers in the pacific rim.

    Is it a hassle to do all of this across an ocean. Yep. But because the problems imposed on trying to do work in the US are so massive due to laws, agencies and regulations (the vast bulk of which are either heavy handed or too idiotic to believe), other countries are stepping up to the plate and are saying: “Please sir, we can help you with all of this… let us show you what we can do, for much less than you are paying now.”

    And by god, they can do what they say.

    In the end, creating and growing and trading all comes down to delivering something at an agreed price. That’s all. Nothing more.

    We make it hard here. Very, very hard.

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