First, Stop the Hemorrhaging

Cowritten with Leonard Greenhalgh

Chrysler has been forced into bankruptcy and GM is next in line. At the same time, many banks recently failed the "stress test" and, after already receiving tens of billions in bailout funds, will require billions of dollars in additional capital to remain solvent. We are stimulating banks, top-down; but eliminating auto and manufacturing industries, bottom-up.

Each week, new shock waves are being sent through our economic system: Chrysler announced it will shutter 25 percent, or nearly 800 of its dealerships. Some 1100 GM dealers got pink slip letters. That amounts to, as reported in the NY Times, almost 200,000 jobs, more than are employed directly in the U.S. by GM and Chrysler today.

The economic stimulus must stop the hemorrhaging as priority #1: workers are losing their jobs at a rate of 600,000 a month, as "official" unemployment approaches 10%. 2 million families are losing their homes to foreclosures each year. The shut down of industries like auto and steel and related small businesses will exacerbate the crisis.

Clearly, the hemorrhaging is outpacing the stimulus. Liken our economic crisis to a car crash: when the patients -- workers and small businesses -- come to the emergency room, the first order of business is to see if the aorta was cut, and stop the bleeding. Working families and the poor need emergency treatment now and should not be left in the waiting room. Providing a transfusion -- i.e., the stimulus -- may not be enough if we first don't stop further hemorrhaging.

Whole towns and cities are built around these industries and are now in jeopardy. We need a new, comprehensive reindustrial strategy, a bailout plan that is connected directly to reinvesting in and reindustrializing America. The bailout of industries must be linked to reinvesting in America, retention and creation of jobs. We cannot bail out industries, and then have them take the manufacturing and jobs abroad, and leave only the brand at home. Worker and trade policy must be a central part of a new, industrial reconstruction program.

GM got $15.4 billion on loans from taxpayers, with billions more to come. Yet, GM plans to move double the amount of jobs and manufacturing abroad. We didn't bail out GM so it could profit from moving more jobs to low wage markets abroad.

If we force workers to renegotiate labor agreements, we must also renegotiate trade agreements. There is a tremendous imbalance in the formula. We've globalized capital, without globalized rules, without globalizing worker's rights, environmental rights, women and children's rights.

For too long, the US has let multinational companies and banks define our trade policies. So now we import $41.5 billion in cars and light trucks from Japan. But we sell just $534 million in Japan. South Korea sells $7.5 billion in cars and trucks in the US., but the US exports only $373 million worth of cars to those two countries. They sell 700,000 cars in the U.S., we sell just 5000 US cars in Korea.

We want and demand two-way trade, not one-way trade. We want and demand trade that is not just free, but fair, reciprocal and of mutual benefit. We want economic competition where all nations compete on a level, even playing field.

We need more than stimulation for the banks, and elimination for the auto and manufacturing industries. We need a comprehensive industrial policy which projects a plan to stop the hemorrhage; a plan for a new economy for the future.

Wouldn't it make sense for the economic stimulus plan to prioritize retention of existing jobs and avoid losing the jobs NOW, while working to create new "green jobs for the future? Recent studies are alarming: automotive-related industries account for 7.2 million U.S. jobs, 3.5 million in Ohio, Michigan, Indiana, Alabama, Texas and the 11 mid-western and southern states along the bus tour route.

Five thousand auto supplier companies and automobile dealers are at risk; over half of the 631 minority supplier companies may be put out of business. GM has to cut its 6,500 dealerships down to 3,200; Chrysler from 3,200 to 2,000 -- with each dealership employing an average of 60 workers; Minority dealer reduction at GM is projected to be 60% out of 300 and at Chrysler 80% out of 150. It is projected that over 137,000 direct jobs will be lost as a result of this downsizing and projected another 200-300,000 affected indirectly.

And more economic loss is imminent and instantaneous. Consider this: at 12:15PM, Chrysler's bankruptcy was announced; by 3PM Chrysler had closed retail loans, floor plans, and access to working capital. Dealers and suppliers are being left to die: the Treasury Department has removed life support from the businesses that remain breathing.

As we confront the global economic crisis, it's time to challenge short-sighted economic "global sourcing" strategies that have decimated our manufacturing base and sent millions of Americans who had well-paying, middle class jobs, to the unemployment lines. It's time for fresh thinking and a new industrial policy to emerge from the ashes of the current economic crisis.

Every other country is devising policy based on their national interest: we must do the same.

What must be done?

First, the U.S. cannot continue to export jobs, capital and our entire manufacturing industry. Already, two thirds of the value of a modern vehicle is outsourced and manufactured overseas -- utilizing cheap labor in foreign countries, and undercutting U.S. workers at home. That trend must be reversed.

We should learn from Germany and France, who will permit the sale as long as the manufacturing industry clusters remain intact -- in Germany and France.

Secondly, the economic recovery should prioritize job retention -- saving the jobs workers have NOW, along with creating new green jobs for the future. Third, since the crisis is having a disproportionate impact on minority communities and businesses, they require "targeted" support and resources in order to survive the next era. We have to reverse the trend of "last in and first out."

Time is of the essence, and that's why Rainbow PUSH joined with Mayor Bernero of Lansing, MI, unions, religious leaders and others for a mass march and rally on June 1 to Reinvest in America and Save the American Dream. That's why auto and steel workers, employees from plastics and rubber factories, along with local auto dealers, community employers, and elected leaders led in a 11 state, 34 city "Keep it Made in America" bus tour next week. Auto and steel workers are right to protest national policy that says, "Banks are too big too fail, but auto workers and manufacturing industries are too small to matter."

It's time to march. It's time to rally. It's time to bring on the street heat to raise the voices from Main Street and be heard on Wall Street.

The hopes of the nation rest on the success of the administration's economic recovery plan. We need a new national industrial strategy. In industry after industry, we're losing national competitive advantage to overseas competitors. It's time to stem the outflow of jobs, economic opportunities, and whole industries, and think strategically about our futures. We need to save the auto industry and our manufacturing base. We need to save jobs for American workers. And we need to save small businesses, save our cities and states so linked to their survival. It's worth the investment.

Reverend Jesse L. Jackson is one of the world's foremost human rights leaders, and is founder and president of the Rainbow PUSH Coalition.

Leonard Greenhalgh, PhD, is Professor of Management, Director, Programs for Minority- and Women-Owned Businesses at the Tuck School of Business at Dartmouth

Comments

[Thirdpower]

The only thing Jackson knows about economics is how to line his own pockets. Little is more important to him than keeping his name in the papers and this is the cause de jour otherwise he wouldn't be bothered.

[JustAHumanOnEarth]

Nice fiesty speach but I don't see any ideas here....just complaining.

One thing....I don't think that there is a policy of "exporting jobs" over seas. I believe that it's a normal result of a rational person(or company) responding to incentives. As long as the cost of doing business is less somewhere else, that is were the work will be. Simple as that. Combined costs of business include some of the highest corporate taxes on earth, increasing regulation, unions, the list goes on and on.

Cities and States play the same incentive game when they offer tax incentives to new business. If you don't think that the global competition to attract business is a hardball game....well....I won't go there.

We can complain as loudly as we want, we can continue to demand expensive entitlements(as long as someone else pays...right?), but we can only blame ourselves for the policies that we enact.

[SonofLiberty1]

Just...

You must have a job don't you?

If so, will you kindly be very quiet!

Why?

BECAUSE YOU DON'T KNOW WHAT YOU ARE TALKING ABOUT THAT'S WHY!

OR IN OTHER WORDS...

TALK TO SOMEONE WHOSE JOB HAS BEEN OUTSOURCED!

[Thirdpower]

Cities like Chicago and states like CA keep jacking up fees and taxes on businesses while making these same businesses pay people more than they are worth. To compensate, they raise prices and consumers buy less. Said businesses then leave the area to somewhere they can keep their costs down hence the loss of jobs.

Why should they stay?

[doyle005]

I agreed with him until: "Third, since the crisis is having a disproportionate impact on minority communities and businesses, they require "targeted" support and resources in order to survive the next era. We have to reverse the trend of "last in and first out."' Why bring race into this? I would like some stats backing this statement.

If you look at numbers, the rural areas of Michigan have a higher unemployment rate than urban areas. The difference is 1.1%.

Here is where I got this from:
http://www.ers.usda.gov/StateFacts/MI.htm

Also, if you use the poverty line as a measure of impact, there are several counties in rural Michigan doing worse than Wayne County. Oscoda, Clare, Roscommon, Isabella, and Lake county all have a higher percent living under the poverty line and for the most part these are rural counties.

Here is where I got this data:
http://www.ers.usda.gov/Data/PovertyRates/PovListpct.asp?ST=MI&view=Percent

Unless Rev Jackson can argue that minorities have moved to the rural areas of Michigan, it seems that all, regardless of race, have been impacted by this recession. So once again Rev. Jackson injects race when he should be trying to lift us all.

[truthfulb]

His point is that minorities are affected more. When you play with statistics you need numbers actual numbers and we both know that more people tend to live in the cities than the country because of work so give me numbers how many people in these areas are you talking about compared to the people in this minorities in the urban areas and minorities are not just black folks, minorities are Hispanics, Asian, Arabs etc. etc.

[doyle005]

You want numbers, fine, I can give you numbers.

77.6% of Michigan's population is white, not of Hispanic origin.
4.0% are Latino or Hispanic
2.4% is Asian
14.3% are African American
1.7% is all other

The population of Michigan is 10,003,432. This means that there are 2,240,768 in the minority. The most urban county in Michigan is Wayne County. Wayne County has a population of 1,949,929, of which 49.9% are a minority or 973,015. Over 43% of the minority population for the entire state lives in this one county which is about 19.5% of the states total population. This one county with over 43% of the minority population for the state ranks 41st in unemployment rate by county, with 39 other Michigan counties having high unemployment rates. So it has over 43% of the minority population, but is in the median for unemployment. What do these numbers tell us? That this recession is not just hitting minorities, but everyone..­.everywher­e in the state.

But Wayne County is also 50.1% white, non-Hispanic. So over half the population of this urban area is white. Why say minority? Are the white, non-Hispanic in Wayne county not hurting as much as their minority neighbors?

These are from http://quickfacts.census.gov/qfd/states/26000.html http://data.bls.gov/map/servlet/map.servlet.MapToolServlet?state=26&datatype=unemployment&year=2009&period=M03&survey=la&map=county&seasonal=u

[JustAHumanOnEarth]

Agreed....this constant race baiting is no help at all.

[Cryostatic]

Mr. Jackson, let's have a look at a few of your key points:

1. Stop stuffing money into a failing system, it hasn't been working.
2. Start "encouraging" companies to bring jobs back to the U.S.
3. Stop importing hundreds of times what we export, so that people buy domestic goods.

Good god, man. You've become a libertarian!

[guywhocantype]

Stop using "quotes" when they aren't needed.

[MartynStrong]

Capital markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable.

By using the greater computer power of today we can have a much higher turn over of capital in the capital market. This higher turnover will make the market harder to game or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day?

So now that we have the compute power to provide for all these transactions that will smooth out the market how do we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of more than 7 days.

The likes of Yahoo, Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one's investments every 7 days (based on the specs you give the agent).

A system like this will make the financial markets work as smoothly as the local fruit market.

[Cryostatic]

So, in your proposed system, all investments would be bought and sold within a seven day period? How in the world is that supposed to stabilize the market?

[Realization]

Are you serious? It was fancy computer programs that got us into this mess. They were supposed to spread risk, remember?

[dieselis]

we need to take america back from corporate control.the problem is we've been lulled into a comfort zone that felt real secure.until about8yrs ago bush isn't all to blame.yes they could have revised things and avoided such a hard crash,his constituates wouldn't have stood for it;so to keep them happy they just let the bridge unrepaired and drove the train[our country]over the revean.this thing has been brewing for almost 35yrs.the rise in petroleum is one of the main culprits.overall greed short term profits a dollars today attitude.keep those dividens at maximum overdrive to morrow will take care of its self.well tomorrow showed up a few months ago.its not taking care of itself.i liken it to the 10virgins in the bible.5were wise5weren't ready when the grooms came at night they had no oil for their lamps.they asked the 5wise virgins to give them so oil,they said no go buy your own.to bad our government wasn't around to bail them out.if we let corporate america go back to the status quo;we deserve what we get.it won't be easy.you'd be suprised what a little ingenuity and community coops can do to big business.won't be done overnight.one little cut at a time until he bleeds enough to come to his senses.if he doesn't get sum sense keep cutting until he bleeds out in his 150,000 dollar bathroom.it can be done.

[RightWingMarine]

free trade is inherently fair.

I have money and you have a product that you are willing to sell for a certain price. If I value the product more than that amount of money I buy it and we both benefit. If I believe the price is too high and I value that amount of money more than the product, I don't buy.

[Realization]

And were, exactly, have you seen real free trade? Fact is that national like Japan, Korea, and China are neo-mercantilist - protect domestic markets, import tech on favorable terms, and support targeted industries - and play to win. If the U.S. is relatively more open, as it has been, it loses. This isn't really about consumers. It is about national wealth power and security. Competitive advantage is created.

[research]

corner the market.

[Nitalia]

During the campaign season Mr. Obama pointed out how bad NAFTA was for America but at the expense of alienating the Clintons, he backed away from the criticism. So now we see just how bad NAFTA was for America. And now as American jobs have been shipped over seas, Corporations have pocketed all of the dollars and had the audacity to ship our jobs away and the gaul to then ship their merchadise back to America for sale all in the name of paying low wages to foreigners. Now as the economy has tanked and nobody is buying anything- everyone is looking at the U.S. for solutions. I think America lost sight of the true meaning of capitalism and replaced it with greed, and making things cheaper and faster. Now capitalism is dead and we ain't making nothing. GM and Chrysler is bankrupted, the Banks need bailouts, Iraq keeps getting millions and millions of U.S. dollars for an ill-conceived war, foreclosures and bankruptcy and job lossess keep adding up and no one seems to be doing anything about it. Republicans keep saying no. DEMS keep caving in, President Obama is caught in the middle and politics is - well business as usual, American wealth has been transferred overseas and Americans just keep on paying the tab! I am tired of throwing my money away on worthless poorly made imported products. We all have been had!

[Cryostatic]

Agreed 100%. I was upset with Clinton for signing it, upset with Bush for not repealing it, and so far, Obama hasn't made a move forward with it either. Instead of focusing on whether or not we have the money to close guantanamo, why don't we end NAFTA, and start bringing jobs back to the U.S., and American-made goods back to the market?

Oh, right... we need China to keep lending us money...

[truthfulb]

Amen it seems to me everyone want the quick fix for a long term problem and it is not going to work that way. IN order to change things its going to take some drastic measures and sometimes to get people to g along with the program you have to allow them to fail or bump there heads enough time for them to see things your way.

[Flavor]

Well said.

[Rictracee]

we are in this shape by one five letter word GREED... AND ITS GREED THAT IS KEEPING US HERE.. Everyone trying to get something for nothing.. The reason there are no jobs in the US because the cost of living here has out paced the wage earners.. To live a comfortable life w/o denying things to enjoy living, you will live paycheck to paycheck in this country. You know there is somthing wrong when 70% of americans live paycheck to paycheck? Most will say its because they are living beyond their means, no its not , people want to live in a place where there are low crime , good schools, good markets, they will do anything to live there. But let the Corpatist have it their way , they want us all to be living in ghettos and working for 8 bucks an hour.

[RedneckDem]

#1- Multi-national companies based in America (i.e. former American owned and operated) are a huge problem. To them, we are just consumers and they will move on when they have exhausted us a profit tool. Do you think a mutli-national worries about patriotism? Americans, as workers not consumers?
#2- Single payer health care will allow true US Corporations to compete. Our healthcare costs are skyrocketing. Why? No reason, just short term profit gouging by the insurers. We are numbers in this system only, not human beings.
#3- Fair trade. Imaigine this, we have American economists telling us daily how great it is for the global economy to offshore our jobs (patriotic, eh?). We get called protectionists when we want an America first attitude, yet all of our trading partners use protectionism against us!!!
#4- We have a small group of banks and multi-nationals making life and death decisions for the entire world. It may have always been like this, but clearly, their ideology has changed (not for the betterment of mankind).

[Conk]

Jackson, why do you even have a public voice? Who cares? What have you EVER done for anyone? You just stir the pot, keeping the boil of discontent going.

[steamboat]

He took care of his sons.....Got Yusef and Jonathan to be given Budweiser beer distributorships. And the concessions at the United Center.......Got Jesse, Jr. into congress, where he just paid his wife $295,000 for consulting fees (LOL).....­..........­..........­..and his dumb followers don't say a word

[Cryostatic]

On issues of race, you may or may not be right. At times, it does seem race relations are further damaged by Mr. Jackson's actions, but this has nothing to do with that, and he seems to have hit the problem on the nose. This article has given me new respect for the man.

We send too many jobs overseas, and we import too many foriegn goods, produced by those very jobs that we've destroyed, all in the name of larger profits. It's a practice that needs to end, and it's a practice that the government seems all too ready and eager to continue perpetuating.

[sheilaofmiami]

This hemorrhaging of America is far from over, I think.

Rev Jackson, many of the jobs being lost are jobs that will never be filled again. To do anything that would keep people employed at the same position for the same money when REAL CHANGE is needed in what we do as well as how we do it, it just does not make sense to support jobs that are not in the best interest of the country.

Auto workers making Hummers is not what we need. So many are going to have to find a new way to live. and new life.

I have friends whose jobs have disappeared because the rich are not redecorating their homes every six months anymore. Some are still trying to decorate, some are trying to broaden the scope of what they do so they can be more valuable in their part of the industry and some are branching out and finding new talents within themselves.

My heart breaks for all the workers and their families. But this happened before, in my life time, and it is happening now. We need a new way of being America. We are not going to be car builder of the 20th century.

This is a new era and it calls for new things, new ways and new idea!!!!

[Navision]

In 2004 and 2005 my husband worked for a company that brought in a few workers from Iceland.

They received the same pay as the Americans, but the BOSS did not take out taxes. They were

working here illegally on tourist visas. Now, this same workers have received green cards and

the company fired all the Americans.

[iblogleft]

We hear the same from Obama, however his actions do not mimic the rhetoric.

The sooner Americans realize that free-market capitalism has no border, holds no loyalty, and has no conscience to humanity, the better off we will all be. Now that Capitalism is almost finished decimating America, we allow it too infect the rest of the world. Those new Capitalism destinations are already seeing massive damage (see Africa and South America) as we fail to understand the basic ideology that turns human beings into a commodity worth no more than the coal that fires the boilers.

It may be hard to understand in writing, but the people in Michigan and many parts of America are starting to see it everyday by just walking out the door.

You can define the free-market capitalist model on paper, and tell me what it is supposed to be, but we see the results of its practice, and that is the definition we should pay attention too.

We must change our economic model into something sustainable. We must define boundaries. Most of all, we should have learned from these lessons and take immediate action to stop the spread of this disease before the entire globe is infected.

Oops, too late.

[Flavor]

This mess that we are in did not occur over night and it is going to take time. President Obama was left not only finacial mess but a world of mess. Yes, we have a problem with jobs, yes there are foreclosures, yes people are suffering and I am one who is helping my friends by purchasing food ect... it is my duty to help and that is what a lot of people who still are able to help someone please do it there is reward in helping your neighbor, you don't know what hardship you can take off a family. Family, what I am saying is it will take time to see the new begining but change is coming but for those who can pay a bill for a struggling single mother or father do it, for those who are able to buy food, for a family in need do it, you may one day need help yourself. Let us call all our representatives and voice our concerns if it takes peaceful marches then we can do it. Let us not forget to help your neighbor.