Ron Bloom: Obama's Manufacturing Czar, 'The Proletarian Schlub' Charged With Saving American Jobs

The New Republic:

A few weeks after the 2008 presidential election, United Steelworkers President Leo Gerard got a call from an Obama transition aide frantic for advice on the collapsing auto industry. Gerard put his numbers guy on the call, a former investment banker named Ron Bloom, who proceeded to offer a detailed disquisition on the financial situations of GM and Chrysler. Unlike other experts the transition team had consulted, Bloom was refreshingly blunt about the companies' prospects, which he deemed grim. 'We were like, 'Wow, who is this guy?' recalls the aide.

Read the whole story: The New Republic

Comments

[sonoffestus]

05:03 PM on 12/09/2009

Low wages is often sited as the reason for outsourcing. Though this is certainly one of the reasons, it is not the only reason. Many companies have moved off shore simply because they want their factories located in or near the next growing economies of the world. Hint..........Those economies are not located in North America. The growing consumer societies of India,and China will be the next consumer markets to exploited.

Why invest in a declining market when largerand growing markets exist elsewhere? Corporations are way ahead of the curve and most US citizens an workers are way behind the curve.

Some wise person in the 21st century once said, "Go east young man, go east." I think he said it in Mandarin, probably why no one got it.

[invest in jobs]

03:46 PM on 12/09/2009

The Obammi cabinet & the fed is doing everything in their power to ensure the economy recovers ASAP for wall street first, while main street is neglected. We get a useless stimulus program which only ads to the deficit while yielding scant 'shovel ready' or 'green jobs'. Krugman is right in that we need a stimulus for job creation.

good articles; http://financeopinionss.blogspot.com
stock market keeps going up while ppl cant find jobs. great country.

[invest in jobs]

11:02 AM on 12/09/2009

it;s unfortunate Obama is taking advice from neoconservative, globalist economists like Bernanke, Geithner & Summers instead of being more receptive to Krugman & Volcker.

hat tip to: http://financeopinionss.blogspot.com

[TParrish]

07:13 AM on 12/09/2009

I keep seeing "This old House" type programs on TV about how houses are being built out of shipping containers. While I think this is a good idea, and their use as a basis for hurricane-proof houses in Florida is great, the fact remains that they are being used as building material because we have a huge surplus of them. We aren't using them to ship goods, because we are not manufacturing goods.

I keep seeing blue jeans commercials on TV, video montages with poetry glorifying the American pioneer spirit...commercials made by a company that shut down all American manufacturing and moved it to Mexico and Guatemala. (The company's name rhymes with Mevi's). Jeans that can be afforded by neither the factory workers they employ for a few dollars a day, or by the Americans they put out of work when they closed the plants.

As self appointed, unofficial representative of those who see things as more simplistic than they probably are, I blame NAFTA.

[john456]

01:12 PM on 12/09/2009

Unfortunately,the jeans are not made in Mexico nor Canada. If they were we might enjoy some benefit. Because NAFTA should have been about raising living standards of our neighbor to the south it could have been a good thing. I supported it because I believed it was about Mexico, whom I believe we need to be as neighbors, and thought it would also mitigate the illegal immigrant issue. However, the goods imported into this country are coming from Asian government supported manufacturing sites, mostly in China, not from this hemisphere. Meanwhile US clothing companies have discontinued direct production and contract manufacturing. Thus, they create "plausible" (sic) deny-ability of the manufacturing labor conditions

[PoliticalJunkie65]

09:00 PM on 12/08/2009

Wow, I haven't heard the word "proletarian" since Economics 101 back in 1991. Ahhhh, what memories.

[invest in jobs]

03:38 PM on 12/08/2009

This is further proof that the US government is ineffectual at everything except enabling the plundering of everything we, the American people, work for by the corporate robber barons
good articles; http://financeopinionss.blgospot.com

Government & multi-national corporations like peas in a pod

[ScapeGoat]

08:27 AM on 12/09/2009

It is called fascism. Or what we like to call Ray-gun-nomics!

[hopeca]

02:25 PM on 12/08/2009

Just a shout out of praise to the many smart, insightful posters today. Thanks for sharing your knowledge and perspective.

[Tom95134]

01:41 PM on 12/08/2009

"Every now and then, he’d climb into his beat-up Ford Taurus and drive the four-and-a-half hours from his home in Pittsburgh to Washington..."

I guess the guy never heard of Amtrak. Maybe he needs a good talking to by V.P. Biden.

[trinity]

03:29 PM on 12/09/2009

Pittsburgh is on the western end of the state, I believe only one train goes between those two points and that's the Capital Limited. Philidelphia to DC on the other hand is serviced by numerous regional trains including the Acela.

[norepublicanleftbehind]

01:20 PM on 12/08/2009

GOOD!! At least the "Schlub" has skin in the game.
About time that someone who really gives a damn gets a shot at fixing things instead of these well bred ,upper middle class "yes" folks who offer nothing but a bill for services not rendered, a pile of excuses and no results and have the audacity to call it "hard work'.

Three cheers for the "Schlub". About time.

[ILibertine]

01:01 PM on 12/08/2009

It is good to read of someone who is interested in maintaining or reinvigorating US manufacturing rather than assuming it's all gone and incontrovertible. True, much may come in the form of new industry, however, necessary incentives and tariffs to protect and expand manufacturing in the US or even "dump" products offshore as has been used with success against our interests seems unavoidable. Protectionism has recently been evidenced as protection of a corporations ability to outsource and seek the cheapest labor. At some point it must be viewed as protection of American jobs and industry. Perhaps the road to recovery, of sorts, is also a road to something other than "consumerism" of itself as a national identity. Therein lies the war, not in Afghanistan.

[Tiggy]

11:43 PM on 12/08/2009

Agreed! Thanks for the post. Years back I spoke similar words as friends in the manufacturing industry were sending their business overseas due to labor and tax breaks. To them, gone were the issues of insurance and wages what remained? Pure profit. Often I ride through the towns that once thrived with work, what is left are empty buildings. A strong and thriving country needs industry, must produce something other than customer service! No offense intended for the millions working min. wage jobs, but those jobs simply can't sustain a country our size for the duration.

[BannedNBoston]

12:45 PM on 12/08/2009

20% Tariff on imported cars and auto parts.

[tj56]

12:28 PM on 12/08/2009

It has been about five years since GM and Chrysler made the decision to pay the longshoremen and Teamsters, to import parts, instead of paying the UAW to make them. While they still assemble cars in North America, they forced component suppliers to set up shop in China (Mexico wasn't cheap enough). This has driven many suppliers into bankruptcy. Now these two divisions of Obama Motors are totally lost. One is run by a phone company retiree, and the other by the egotist from "Fix It Again Tony" (FIAT). Fiat is an also ran everywhere except Italy and Brazil, and now they will reinvent Chrysler, come on.

Regarding good paying manufacturing jobs in the US, they will continue to disappear. Why would any profit-driven company pay 10X the price for US labor? The basic education of third world countries provide workers that can match the quality, with less capital investment. But you say how can Japan and Germany do it? Well Japan allows "guest workers" from China and Brazil that live in company dormitories (glorified slave quarters), and work for next to nothing. Germany, has exported "low-skill labor" jobs to eastern Europe, and has maintained their protectionist policies to keep other jobs at home. Not PC, but PC only applies to the US.

The US can maintain a manufacturing base, and the workers can enjoy benefits of our country. But the days of assembly line workers with $250,000 houses, cottages, boats, motorcycles, snowmobiles, etc. will be over soon.

[StJames]

12:42 PM on 12/08/2009

You are so right. And soon the days of white collar workers with $250,000 houses, cottages, boats, etc. will join them in their misery. In fact, when the grand design is complete all but 1% of the population will live in minimum housing with few if any luxuries.

[norepublicanleftbehind]

01:45 PM on 12/08/2009

Right on to St. James

[Tiggy]

11:45 PM on 12/08/2009

Already the case for many as what the Fed Gov doesn't take the states do and well what is left is usurped by the mere cost of living...nothing extra at all.

[BBackSoon]

01:05 PM on 12/08/2009

I work for a major manufacturing corporation. Not automotive but I am familiar with world wide manufacturing.

My biggest question to the good business sense model of cheapest labor is why are goods and services only a few percent cheaper? If labor in China is 1 / 10th the cost why are the products we buy only a few cents on the dollar cheaper? Now I know there are other costs involved, you now have to pay to ship product halfway around the world and the cost of finished goods in your pipeline must be fairly large, where is the massive savings to consumers? Oh wait, it goes into the hands of the top 1 percent.

My other question is the age old one of who will buy your products when no one has a job? I know that the Emerging Markets are where the Business world is looking for growth but it took 50 years or 2 generations to get Americans to forget how to be frugal and embrace a ‘keeping up with the Joneses’ consumer marketplace.

We need some rational Protectionism here in the states. We have seen that the overall cost of doing business in Best Cost Countries is only marginally cheaper than the same costs here in the USA so we just need to even up the playing field a bit. But Big Business will scream we are going to put them out of business by interfering with their Free Trade.

[tj56]

01:42 PM on 12/08/2009

China's labor costs are 1/10th, but that doesn't mean the product or component is that much cheaper. In many cases, quality raw materials must be imported into China, only to be shipped back out. You are correct that a big portion of the labor savings is offset by transportation costs (hence my reference to longshoremen and Teamsters). Also, the vast majority of businesses in China are joint ventures, with the Chinese government owing 51% or more. We supply the knowledge, they run the show and keep most of the profits. Where do you think they get the $$$ to buy our T-bills? And how much of this trickles down to their workers? China's elite class is even smaller than ours.

Our leaders (not just the present ones) don't have the guts to tell the rest of the world "catch up, because we are not coming down to your level." They have fallen victim of the "lowest common denominator" theory of a one-world government. The US has too much, uses too much energy, pollutes too much, ya-da-ya-da-ya-da. Leveling of the global playing field is a must, but some of our sacred cows will die in the process. But, our leaders don't have the stomach for it, so the decline will continue.

[DebtNavigation]

11:56 AM on 12/08/2009

Protectionism is "damned if you do, damned if you don't" ... the best you can do is determine where the hidden subsidies for the foreign competition are being given by their governments and counter them with the same sorts of sneaky responses. Then if they complain to the WTO about yours, you have something to counter with.

Another Smoot Hawley Act is not going to solve our ills, only add to them.

Innovation is absolutely key. And Detroit discovered it way, way too late to avoid what happened.

[StJames]

12:52 PM on 12/08/2009

Detroit was behind the 8 ball from the day the U.S. government allowed Japan to sell cars in this country for less than it cost to produce them. It is how the Japanese gained such a big market share.
Detroit was not allowed, under US law, to do the same. That Detroit managed to stay afloat as long as it did is amazing under those circumstances. GM, Ford & Chrysler do not get enough credit for the things they did right and they take too much of the blame for the failures.

The Asians have been masters at gaming our system and our politicians have been controlled by the money interest for way too long.

Only the super investor class has benefited from what has gone on in this country over the past 40 years. Don't you even wonder why that is? How the jobs keep disappearing and the rich keep getting richer?

[therealredstateblues]

10:09 PM on 12/08/2009

There is no evidence that Smoot Hawley had any effect on the great depression - time to stop promoting this long discreditted globalist myth. that was a time of trade surplus. today is different and we have unsustainable trade deficit. a trade deficit is the guage in which jobs, wealth and technology are being drained from our country

Innovation is key, but you can not have innovation in any meaningful way without a manufaturing base - the two are interconnected

Some forms of tariffs, Vats and rebates as well as coherent industrial policy will be the absolutely appropriate method to preserve whats left of mfg - the only true wealth producer and prosperity sharing mechanism in the "real" economy

Unilateral free trade isnt working. time to start getting tougher on trade

[Tiggy]

11:51 PM on 12/08/2009

Only problem is to get tough a set of Bal*s is required and our reps lack them...maybe Santa will leave them some in a bag of coal. Oh shoot, Santa doesn't have the money this year...lost it all in the market. We are in big trouble.

[invest in jobs]

11:33 AM on 12/08/2009

It's fishy how everything now is suddenly 'better than expected' ...and to think just 9 months ago the world was going end. tax payers were duped into bailing out big banks under this premise. economy & stock market is a big joke
good articles; http://financeopinionss.blogspot.com

[BBackSoon]

01:07 PM on 12/08/2009

Site Pimp

[StJames]

10:13 AM on 12/08/2009

"The fact that rivals, backed by foreign governments, are targeting U.S. market share makes it even less likely."

"Lavin politely asked if he’d thought of opening a plant in … Singapore, This, again, was the U.S. Commerce Department. (Lavin stresses that he meant opening a new plant, not relocating.)"
**************************************************************************************************************************

This is what has destroyed the middle class, the destruction of good paying manufacturing jobs. Please reread page 4 of this article. From Reagan to Bush II, yes even Clinton, they have been on a mission to accumulate more and more wealth by robbing the middle and working class.

[bighat]

11:57 AM on 12/08/2009

Interesting that the federal government turned down T Boone Pickens for West Texas wind generators but approved a plan with the chinese govt where the generators would be produced in China instead of the U.S.

Was this an incentive to keep the chinese buying treasury bonds?

[StJames]

12:38 PM on 12/08/2009

What else could it be? I'm surprised by the lack of outrage...in fact the total lack of publicity, this received.