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America’s Real Industrial Policy: Maximize Profits at All Cost
The Occupy Wall Street movement—which has gained the support of 54 percent of Americans, according to a Time poll—has, remarkably, apparently inspired free-marketeer House Majority Leader Eric Cantor to address America’s Pakistan-level inequality in speech on Friday.
President Obama toured a GM plant in Michigan last week with South Korean President Lee Myung-bak, far right. The plant relies heavily on South Korean parts. (Photo by MANDEL NGAN/AFP/Getty Images) Cantor intends to explain how to uplift “a single working mom…a small business owner...and how we make sure the people at the top stay there.” (The last category, of course, has seemingly been the entire purpose of Cantor’s political career.)
But despite some Democrats like Nancy Pelosi embracing OWS, it's becoming clear that the movement must also directly challenge the president and leading Democrats on whether they are serious about preserving America’s productive base and raising the incomes of working families who are part of the 99 percent. Will these political leaders support a concerted “industrial policy” to achieve these critical goals, or will they side with Corporate America as jobs disappear, wages keep plunging and inequality reaches new heights?
Unfortunately, the Obama administration has come closer and closer to fully admitting the wrong thing: that it is willing to sacrifice more of the nation’s industrial base. The three NAFTA-style “free trade” agreements approved last week by Congress at Obama’s urging —illustrate how Obama’s eagerness to promote more off-shoring of jobs and capital at the expense of his working-class constituents. (U.S. corporations’ offshoring of jobs alarms fully 86% of Americans)
Obama's new stance in favor of the deceptively-labeled "free trade" doctrine turns one of his most fundamental appeals in 2008 absolutely counterfeit. "Free" does not accurately describe the repressive anti-labor conditions favored by US firms. Nor does "trade" do justice to the majority of transactions, which actually occur within the same firm, like GE "exporting" machinery and parts to Mexico and "importing" finished products.
AUTO BAILOUT CHAIR ATTACKS INDUSTRIAL POLICY
Even with this disturbing backdrop of the newly inked NAFTA-style deals, it was still stunning to read Sunday's attack on industrial policy by Wall Street tycoon Steven Rattner, whom Obama selected to head up the auto bailout Task Force, which was dominated by fellow financiers. His op-ed was titled "Let's Admit It: Globalization Has Losers."
Rattner’s New York Times commentary was an open admission that a very key Democratic player utterly rejects any systematic effort to save the U.S. industrial base.
First, Rattner’s piece illuminates the mentality that made the GM and Chrysler bailouts so much less constructive than they could have been. Progressives had envisioned the crisis at GM and Chrysler as an opportunity to link Obama’s aim of stimulating the economy with enhanced spending power for workers with building a green economy, by converting some auto factories to the production of high-speed rail vehicles and other non-gasoline powered transportation equipment.
But dominated as it was by Wall Street heavyweights like Rattner (net worth: $188 million to $688 million) and chief economic advisor Lawrence Summers, the Task Force failed even to ensure that the maximum number of jobs possible were retained in the U.S. The final version of GM's recovery plan—closely tailored to the demands of the Task Force—appallingly called for an enormous 98-percent increase in autos produced in Mexico, China, South Korea and Japan for the U.S. market.
Speaking with authority gained from this over-rated “success,” Rattner outlines a strategy for surrendering almost all of what is left of America’s still-considerable manufacturing base and settling instead on an economy built chiefly around financial and computer-based services.
Bizarrely enough, Rattner premises his economic strategy on supposedly trying to aid working families whose incomes have plummeted chiefly, he admits, as a result of corporate “globalization.” But the solution, Rattner insists, is to let go of our "nostalgic" feelings about manufacturing and allow the offshoring of jobs to continue, while focusing our efforts on service industries:
While America still leads in sectors like defense and aviation, our greatest strength, and a source of high-paying jobs, lies in service industries with high intellectual content, like education, entertainment, digital media, and yes, even financial services. Facebook, Google and Microsoft are all American creations, as are the global credit card companies American Express, Visa and MasterCard. ...
We should resist the temptation to plunge deeply into industrial policy. ... Washington is ill-equipped to pick winners and should concentrate its capital on infrastructure and other public investments that the private sector won’t make.
Rattner can imagine a limited role for continued manufacturing here:
We should follow the example of successful high-wage exporters in concentrating on products where we have an advantage, as Germany has done with products like sophisticated machine tools.
Unfortunately, Rattner doesn't know what he's talking about. Milwaukee, for example, was long proudly known as “the Machine Tool Capital of the World.” But with many of the city’s biggest firms—Briggs & Stratton, Johnson Controls, Rockwell International (formerly Allen-Bradley), AO Smith (later Tower) and MasterLock—shifting substantial portions of their production to Mexico, Milwaukee has lost 80 percent of its manufacturing jobs since 1977, according to Marc Levine of the Center on Economic Development at the University of Wisconsin-Milwaukee.
As a result, machine-tool makers requiring highly-skilled workers were no longer located in proximity to the companies they once worked with closely, and they largely went out of business or relocated.
Generally, “the machine tool industry is almost extinct across the US,” says Frank Emspak, professor emeritus at the UW-Madison School for Workers, who serves on a German government commission working on that nation’s industrial policy.
“The U.S. also used to be the leader in railroad equipment, from air brakes to signals, and all that is gone. Even in computer chip manufacturing, the U.S. is no longer number one. Steve Jobs' big innovation was not only to develop sophisticated chips, but to produce them in low-wage, high-skill corporations like FoxCom [in China] where a number of workers have committed suicide in response to the conditions there.”
In Emspak’s view, “industrial policy” is crucial to coordinating government efforts on technology, taxation, energy, and training to protect and expand America’s manufacturing base. By stressing the importance of keeping jobs within the U.S., industrial policy not only means preserving the current production jobs, it also permits U.S. engineers to observe the production process closely and make innovations.
“When you have the separation of production from engineering, once you start production of anything sophisticated, then you lose the capacity for innovation,” Emspak said. "So with General Electric moving its medical equipment headquarters from Waukesha [Wis.], Waukesha becomes just a branch plant and the innovations and advances will take place in Shanghai.”
Contrary to conventional wisdom, Emspak says, “We do have a very clear industrial policy: that is the financial industry policy of making the largest profits as quickly as possible, and everything is subordinated to that.The financial people have won the internal debates in both parties.
"The only principle is the maximization of profit, wherever it occurs, and it has little or nothing to do with the needs of the country,” he declared.
Ironically, those like Rattner who claim to be forward-looking are effectively destroying the nation’s capacity to innovate and create new types of jobs when they call for letting manufacturing jobs go offshore.
Moreover, the majority of jobs left behind are low-wage and will contribute only to further income decline, and an even bigger gap between the top 1 percent and the rest of us, says Emspak.
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34 Comments so far
Show AllThere is a way to secure the MINIMIZATION OF PROFITS, by encouraging everyone to sell their big bank stocks, close their big bank accounts, and put their money in the local Credit Union. That way, the Credit Unions can revitalize the local economy, and we are not helping the big banks. Although this may not have a big impact on the big banks, it will help the local economy. And, that is just step one.
Yes do everything you can to keep your money in your local economy. Grow local, eat local, bank local, buy local, and live where you work.
Big banks, just like Ma Bell, need to be broken up, period.
Add to that Big Media.
Both need to go back to being of/and serving local communities. It should be a vital part of OWS.
Just don't ignore them, break them up completely. Their tentacles should be cut, not just tied to later unfold again into the monsters they both are today. Big is Bad Business and Bad News.
The US definitely needs another trustbusting President like Teddy Roosevelt.
"More Koreans driving Fords and Chevys" in Obamaspeak means more Koreans driving Fords and Chevys made in China, Korea or Viet Nam.
Hear, Hear!
"Let's Admit It: Globalization Has Losers." ......Wait until the wackos come out shooting with their guns. .....Let's admit it, "when people have nothing left to lose, they lose it!" .......I sure don't want to be in the line of fire, do you?
Guns and gold won't help if you don't have a circle of friends, and neighbors. Start planning and preparing now
Note that the intellectual, service industrices Rattner points to can nearly all be outsourced to india--and it's rapidly happening. These bastards figure they don't need us as producers anymore and they don't need us as consumers either--they're looking to the rising middle classes of India and China for that. So what's the US for? The garrison--the source of the weaponry and cannon fodder to ensure that the oil and the profits keep flowing in the right directions. Our main exports now--widows and orphans in other countries. How many goddamn wars are we involved in now? It's getting hard to keep track! Think how bad it would be if not for our peace-loving, Nobel Prize winning President!
brilliant comment
Very astute comment, and you are right. OWS is starting to make the plutocrats aware of the fact, however, that the more they marginalize the '99%," the more dangerous we become. They may get what they want eventually - not needing us for anything, as they outsource all decent jobs and lower the pay of the remaining jobs in Amereicha to serf-level poverty wages. But ultimately, the end result will be that 99% rising up and doing so violently. As stated above, when a people become so poor and desperate that they have nothing left to lose, the "dark side' of human nature comes out, and violence is the result. The 1% will then need to fall back on their military and police state aparatus to put us in our places....if they can.
The bastards eliminate all small competitive producers. During the Great Depressions, they eliminated small farmers and consolidated the means of (food) production. In this "Depression", they are consolidated the means of (technology) production - and the dividend that stems from owning the means of production.
When people own no piece - no part of the production - they are employee-serfs. They are dependent. Their freedom is compromised on a number of levels. Employees have an illusion of being "producers", but they aren't. Companies create an illusion of competing cooperatively, but it is provisional and limited.
So I don't think the situation can be fully addressed by tax remedies, trade agreements or job creation programs. Both socialism and capitalism essentially separates the Individual from the means of production, and the wealth and security needed for simple survival.
OK, we all agree we are in deep dodo, and you don't see that this happened under the Democrats and the Republicans? These two bunches of bastards have done us in, there is no lesser evil. Our only hope is to change our government and first you have to internalize the fact that you been done in by the two major political parties. Year after year, vote after vote, our manufacturing, our standard of living, our democratic rights have been plundered. Those 'honored members' of the House and the Senate have no honor, ethics or morals at all. The do the bidding of the fat cats and pay absolutely no attention to the voice of the people. Stop giving these bums any legitimacy. Under democracy it is the duty of the representative to represent the people. This is not happening today under the dual headed creature running our political system. Stop voting for the Rs or the Ds. Or, if you can't do that you can damn well not vote for anyone in office now. Vote NO on all incumbents.
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Yes, down with the duopoly!
"America’s Real Industrial Policy: Maximize Profits at All Cost" is yet another disingenous equation of "America" with Capitalism. It is run-amok, gangster Capitalism that forever does what ever it can to maximize profits.
All of the major economic, ecological, political and social crises facing the U.S. and humanity worldwide, crises that are never solveable by corporate bribed, anti-laobr, pro-capitalist Democratic and Republcan parties, are rooted in the 30 year decline and now collapse of U.S. (and global) Capitalism.
The capitalist economy, that rewrds the top 1% by exploiting the bottom 99%,
is destroying the ecology of the planet for profit..
Millions will remain unemployed and increasingly impoverished because
Obama is no FDR, is incapable of creating millions of jobs like FDR, because
his capitalist masters will not permit this.
Wars tjat gemerate vast profits will continue forever until we are all consumed and destroyed.
Corporate owned mass media, corporate controlled PBS, NPR, forever
keep capitalism as the root cause of crises OFF THE AIR AND NEVER DISCUSSED BY THE THOUSANDS OF BABBLER PUNDITS WHO LIVE OFF
DISINFORMATION CAREERS.
Read Monthly Review Magazine, WSWS www.wsws.org, register Peace
and Freedom Party in California, run for political office as an independent,
seek out local union support to run independent candidates against Obama,
etc.etc.
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Forget the system. Spend all our time and energy undermining the duopoly (do not ever vote for either of them), and organize feverishly outside the establishment to force fundamental change of the system through ever larger waves of mass nonviolent direct action campaigns.
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Taking part in the current system is a waste until we are able to force fundamental change to the system (end corporate personhood, amend constitution to formally disconnect money from speech, ban lobbying with money, 100% public financing of elections). We need all of our energies focused on this endeavors because the elites aren't going to succumb without overwhelming pressure over a long period of time.
These idiots have left us more vulnerable than at any time in our history. We can no longer feed ourselves, it all comes from other countries, or at least a huge amount of it. We no longer manufacture the goods we use ever day, they all come from China. We don't even make our own computer chips, the things inside our military hardware. How smart is it to have one of your biggest rivals being the country that makes the controllers for your military vehicles?
One good war would wipe us off the face of the planet. And the worst part of this is that WE didn't want this, but those at the top did, and they profited from it massively. Now, our very existence is at stake, in a very real way, and they don't think we should do anything about it? There is something about having too much damned money that turns you into both a traitor AND a shit eating FOOL.
It's time that we stopped seeing the rich as anything but our world's biggest problem. They sure as hell aren't the answers to any of our greatest questions, other than the question, who is the biggest drain on your society? These people should be pitied for being the sick and twisted fucks they are, not emulated and worshiped. They should be shunned from society after having everything they own confiscated and used for the good of those these vermin have screwed for the last 30 years.
What going on here is, as industry has left the country for greener pastures we have seen the rise of the MIC, yes. But the current rise of the energy exploitation industry is where we are seeing the replacement for our collapsed manufacturing base. Over the past few months the NYTimes has published some articles showing not just the growth of the industry in the US but also the growth of new “discoveries” of oil and gas in the Western Hemisphere.
These new discoveries will replace the manufacturing base that has fled to “greener” pastures. But the cost of developing these reserves will be huge. The environment will suffer. The indigenous will suffer. American cities through out the hemisphere will suffer. Because as the energy is developed and sold to China and India, the nations with the biggest demand, the profits will flow into the coffers of the corporations.
This is no new game. This is the end game of the old game. The dinosaurs are dying, and good riddance.
New ideas such as the direct democracy we see practiced in the General Assemblies of Occupy is the beginning of the rise of the mammals. Long live warm blood and communities of like minded people.
Once the old world has been abandoned we can never return.
In the end, Capitalism devours all things, even itself. The End
As stated by Karl Marx. And he was absolutely correct.
IMHO The problem the USA and much of the world is suffering from is a contradiction. We uphold democracy and republics in government BUT on the business and economic side of things we tolerate the contradiction of undemocratic totalitarianism in 90%+ of the workplace.
If we are ever to achieve to achieve income and socially equality that contradiction must or be minimized by democratizing the work place into wholly Employee Owned Employee Operated democratic businesses and corporations with equal hours equal pay for everyone and profit sharing to match. This structural change can promote community self sufficiency and prevent job outsourcing while raising incomes to the point where less government services would be needed. Furthermore it prevents trickle up of wealth to the rich by keeping the money in the economy.
While the Occupy Movement has the right target to be angry with, the fact remains that the structure of the economy must change. Thusly if ever demands are to be made of Wall St. and the banks it should be that far more favorable loans and conditions be given to Employee Owned Operated Businesses.
rattner's article has nothing to do with one form or another of "industrial policy"...it is about the re-introduction of slavery.-unto death.
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"Will these political leaders support a concerted “industrial policy” to achieve these critical goals, or will they side with Corporate America as jobs disappear, wages keep plunging and inequality reaches new heights?"
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Why do so many authors on this site continue to ask inane questions that everybody with a brain cell and out from under a rock knows the answer to?
The motto of capitalism and Profit has always been Profit At Any Cost. The only point of true power that working people have left is their WORK---and PROFIT is the key point where we betray ourselves every day deeper into Profit's grasp no matter what else we do or change. And yet, WE HAVE the power to change all this as soon as we act together! Please check out this analysis and suggested plan for direct worldwide action based exactly in what we all still control---our work. It's WOOP: We the Workers of the World Walk Out On Profit. It's at---- jackdempseywriter.wordpress.com
Chris Hedges has an article and a talk on Sheldon Wolin and his insights on politics and our drift toward totalitarianism.
http://www.truthdig.com/report/item/20090202_its_not_going_to_be_ok/
http://podcast.lannan.org/2011/05/24/chris-hedges-on-the-work-of-sheldon-wolin-17-may-2011-video/
I can remember many years ago reading that some very big investor had made the comment,"that the system was almost perfect, that the only flaw was labor". If we could only rid ourselves of labor costs".
There seems to me to only one little flaw in that line of thinking. If you rid yourselves of labor, who in hell is going to buy the very products you produce?
This is where "financial capitalists" shoot all of us in the foot in long run.
Isn't the increased wealth of the 01% going to counter balance the losses of the 99%? You mean they aren't going to be purchasing more? They are not going to be falling all over themselves building bigger homes, having more kids, starting new businesses, etc.?
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No, it doesn't adequately counter-balance. The rich can only buy so much and then it becomes counter-productive. Also, of course, the rich don't spend the great majority of their income/wealth (a lot of it is sitting, or moving around in financial investments) on consumption and production, whereas average people do.
It is not a coincidence that every single major economic nation in the world also has huge industrial/manufacturing productivity. It is not a coincidence that at the peak of US economic dominance - when a booming middle class was created, becoming the envy of the world - back in the 40's-60's, the U.S. was also the global leader in industrial manufacturing. By offshoring our manufacturing at the rate of 2000 factories/year for the last 2 decades, it is no surprise that formerly 3rd-world nations and minor economic players such as China are now becoming the economic powerhouses of the globe, as they also are taking the top positions in industrial manufacturing.
What the U.S. Plutocracy fails to see - or rather, they do see it and just don't give a damn - is that the path of "globalization" they prefer will indeed generate short-term profits for the Elite 1% plutocracy here, but in the long run will bankrupt the U.S. and turn it into a 3rd-world cesspool of a TRUE 1% vs. 99%. Right now the "99%" is composed of a wide swath of poor, middle class, and even upper middle class. In the end, when all our manufacturing is gone (or what we have left is low-pay-no-benefit factory jobs), the "99%" will be literally dirt-poor serfs, with nothing in the "middle" left. Relying solely on financial "products" and "services' - i.e., rampant Wall Street casinos - as our sole "industry" is national suicide, especially since the same 1% refuse to regulate it at all, guaranteeing regular 2008-style crashes to reoccur. Countries that produce NOTHING - aka Wall Street - become NOTHING.
I hope Common Dreams will publish something on this:
"President Obama is working behind the scenes against the interest of union members by pushing to open the border to Mexican trucks."
"...for the last 17 years, forces in organized labor—led by the Teamsters—have worked to delay implementation of this rule, claiming that Mexican trucks are unsafe and the truckers are paid significantly less than American truckers.
In a few days, truck drivers will be competing with truckers from Mexico."
http://www.inthesetimes.com/working/entry/7092/while_union_support_surges_obama_allows_mexican_truckers_into_the_unit/
Hoffa is useless. He should be calling for a strike, but I guess it's easier to keep lining your pockets with union dues than to actually help the union members themselves.
"Cantor intends to explain how to uplift “a single working mom…a small business owner...and how we make sure the people at the top stay there.”
Fucking brilliant :-D "How we make sure the people at the top stay there" :-D Putting the real troubles of real people into the same hat as the fears of the power holding elite not of losing their power but simply not staying at the top, never mind that the problems of the working mom are mostly caude by those at the top. I wonder, do these fuckwits really believe this crap or are they just this cynical?
Nancy Pelosi embracing OWS - what hogwash. Take the 10-block walk between her house in Pacific Heights to Diane Feinstein's House in Presido Heights and then have the audacity to say that again. If only Pelosi would have "embraced" non-corporate politics when she was Speaker and the Dems controlled the House, the Senate and the Presidency. Come on San Francisco, get her out of there.
Anyone else notice the photo's caption:
"President Obama toured a GM plant in Michigan last week with South Korean President Lee Myung-bak, far right." ??
Being as Lee is on the left side of the photo, it must be his politics that is to the far right, an accurate representation of both himself and his host Obama.
The article is accurate. America's real industrial policy is to maximize profits at all costs. But what is also true is that the financial elite make money in the illusory world of financial manipulation. They are not generating real wealth in terms of goods and services, quality of life and quality of the environment. Their world is a giant ponzi scheme of digits on a screen. They create nothing, produce nothing, contribute to no one or serve no one. In fact one could say they are parasites on the body politic and the planet.
"Contrary to conventional wisdom, Emspak says, “We do have a very clear industrial policy: that is the financial industry policy of making the largest profits as quickly as possible, and everything is subordinated to that.The financial people have won the internal debates in both parties.
"The only principle is the maximization of profit, wherever it occurs, and it has little or nothing to do with the needs of the country,” he declared."
10 years ago, I was writing and posting articles and essays on a site called HubPages saying this exact thing in somewhat stronger language.
I'm a freakin' self-educated high school dropout and I saw this coming thirty years ago. What the hell is it with these so-called experts?
These pundits and talking heads, left, right and center (ostensibly) are all blowing hot air up our collective asses.
Belaboring the obvious is a dangerous distraction for those who can be lured into imagining that there is still some way things can be brought back to normal.
There's just one large fly in that noxious ointment. Even assuming it's possible, which it isn't, normal is the problem, not the solution.
Unless the human animal is prepared to make some real fundamental changes in the way it perceives the world, its place in it and its relationship to Life, then that relationship will end in a place called extinction.
What part of this do we not understand?
"They must find it hard to take Truth for authority who have so long mistaken Authority for Truth."
Gerald Massey