The battle in Wisconsin over the rights of public-sector workers holds the potential to reawaken workers across the country to demand their fair share of the economic pie. This could be an important turning point. However, if workers are to make real progress they must move to alter the rules of the game. These rules have been deliberately rigged against them over the last three decades.
The most obvious of these rules are those governing the rights to unionize, such as those that Gov. Walker directly attacked in Wisconsin. However, this is just part of the story. Unionization has become almost impossible in the private sector, since companies routinely fire workers engaged in an organizing drive.
It is illegal to fire workers for trying to organize, but the penalties are trivial, even if a fired worker presses a case before the National Labor Relations Board long enough to win. Companies will gladly pay a few dollars to the organizers they fire in order to avoid having a union.
It would be a very different world if there were real penalties for violating labor law. A woman in Minnesota got fined more than $200,000 for allowing people to download copyrighted music from her computer. Suppose companies paid the same penalty for illegally firing workers trying to organize a union as this woman had to pay for violating copyright laws. That might encourage some respect for the law.
But this is just the beginning. Over the last three decades the government has signed trade agreements like NAFTA, the major purpose of which is to put U.S. manufacturing workers in direct competition with low-paid workers in countries like Mexico and China. According to economics and common sense, workers in the United States will lose jobs or see their pay cut when they have to compete with workers in other countries earning one-tenth as much.
This situation is made even worse when the dollar is over-valued. If the dollar is over-valued by 20 percent, we are effectively giving a subsidy of 20 percent to foreign producers competing with our workers. It is not easy to overcome a 20 percent subsidy.
Therefore a lower-valued, or more competitive, dollar should be at the top of progressives' lists of demands.
The Treasury and the Federal Reserve Board can bring down the value of the dollar in international currency markets. If the current crew claims not to be smart enough, we can find people who are up to the job. A more competitive dollar would go an enormous way toward eliminating the trade deficit and generating jobs in manufacturing and other sectors that are open to trade.
The practices of the Fed more generally should be front and center in every progressive's agenda. The Fed's actions are enormously important in determining the course of the economy. If Alan Greenspan and Ben Bernanke had done their job, and reined in the housing bubble, we would not be sitting here with 25 million people who are either unemployed, under-employed, or have given up looking for work altogether.
We need the Fed to be governed by people who take its commitment to full employment seriously, not by people who see its job as serving the big banks. The Fed should be moving more aggressively now to bring down the unemployment rate.
More generally, it has to be prepared to occasionally take the risk of somewhat higher inflation if that is the cost of bringing down the unemployment rate. The world looked very different for workers back in 2000 when the unemployment rate was 4.0 percent than it does today. The Fed should be pressed to get the unemployment rate back down to a level that we reasonably call "full employment."
There are many other important "rules of the game" issues that should concern progressives. Corporate CEOs walks away with paychecks in the tens or hundreds of millions of dollars in the United States because they largely pick the board that determines their pay. Increased shareholder power should be effective in bringing CEO pay in the United States back in line with pay elsewhere in the world.
We also need to rein in our patent and copyright system which create enormous distortions in the economy while pulling hundreds of billions of dollars a year out of consumers' pockets and putting it in the hands of the pharmaceutical and entertainment industries. We pay an additional $250 billion a year from prescription drugs alone as a result of government granted patent monopolies, more than 5 times the cost of the Bush tax cuts to the wealthy.
The list of rules that need changing is long, but this is where a successful effort to rebuild the middle class must focus its efforts. As long as the economy is rigged to redistribute income upward, tax and transfer policies designed to help the middle class and poor will inevitably fail. The right knows this, if progressives can't learn this basic fact, then we are spinning our wheels no matter how angry and organized we get.
www.KPFA.org
on the "Guns and Butter" show.
It'll make your hair curl. His views on the global economy should be taken as seriously as global warming and nuclear armageddon.
Dr. Hudson's website is
www.michael-hudson.com
http://michael-hudson.com/2011/01/why-america-had-a-90-income-tax/
His latest interview (3-16-11) on 'Guns and Butter' is a must listen:
www.KPFA.org
How? The Fed Funds rate is already zero. It can't go any lower. And, really, is the reason why business isn't hiring because the 10 - year bond at 3.5% yields too much?
"The Treasury and the Federal Reserve Board can bring down the value of the dollar in international currency markets. If the current crew claims not to be smart enough, we can find people who are up to the job. A more competitive dollar would go an enormous way toward eliminating the trade deficit and generating jobs in manufacturing and other sectors that are open to trade."
The Chinese Yuan is managed by their government. There is no market mechanism to move it. The Fed and Treasury cannot intervene with the Chinese currency the way they can with, say the Japanese Yen. All we can do to the Chinese is yell at them.
Last, regarding CEO pay - do you think that if CEOs were paid less, their workers would be paid more? Honestly, I don't see that happening. So why do you care what a CEO makes?
Are you saying NAFTA did not work as expected?
http://www.nytimes.com/2008/09/11/business/worldbusiness/11iht-yuan.4.16084372.html?_r=1
http://247wallst.com/2010/06/22/chinas-unions-paint-foreign-manufacturers-into-a-corner/
http://www.chinadaily.com.cn/china/2008-01/09/content_6379854.htm
In Africa; http://www.foreignaffairs.com/articles/64599/nicolas-van-de-walle/trade-unions-and-the-coming-of-democracy-in-africa
Iraq; http://upsidedownworld.org/iraqiunions.htm
OBAMA HAS FAILED TO DELIVER - HE HAS LEFT US HANGING.
We, the real progresives, need a leader, a voice, a light in the darkness.
Rachel Maddow, please step forward.
Truth for a change
Lord knows she is way more qualified than a majority of those running for office.
I thinks she enjoys what she does however.
Unions have been made nearly powerless. All the people protesting in Wisconsin has more to do with pent up demand of workers for useful organization than it does for unions, per se. We NEED labor organization. But unions may not be the way it gets done.
More and more I'm looking for examples of how oppressed people find ways to self organize. Egypt is a great clue to how labor will organize in the new (dismantled) America.
BTW, we don't have a free market economy in the US. We have massive bail outs, subsidies, and tax breaks for Wall Street and mega-corporations--socialism for the top, serfdom for the rest. Free markets only work in a PERFECT market, with equal access to information, capital, and labor, and free movement of all three. We do not have free, equal access to capital or information. Big banks and businesses get capital cheaper and information sooner, so they have an unfair advantage over new and small business. In the present US, as a small business, I am NOT able to compete freely against Big Business. Our government has become an oligarchy run by Big Business for its benefit. This is NOT what Adam Smith had in mind. He was for the little guy--SMALL, LOCAL business, not giant global corporations.
when the euro was introduced it was set up to trade one for one with the u.s. dollar. today it takes $1.41 dollars to buy a euro. the dollar has lost nearly half its value versus the euro. historically the dollar has been loosing ground to other world currencies primarily because the u.s. citizen and the u.s. government are net borrowers in a big un sustainable way.
the writer of this article wants to further depreciate the dollar so we can compete on a wage basis with the chinese and other low wage providers. that will, if fully implemented , cause rampant hyper inflation. ye ha the value of my house will go way up. oh no my health insurance went up even more and gas now costs $7.00 a gallon.
every action has consequences. while president clinton was in office he protected american steel producers by putting a tariff on chinese steel. well intentioned and in the short term good for american steel producers. the unintended consequence u.s. producers of finished products no longer had access to cheap chinese steel and layed off or closed up shop. they could not compete.