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Chris Hedges Arrested in Front of Goldman Sachs November 4, 2011

Posted by rogerhollander in Economic Crisis, Occupy Wall Street Movement.
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Posted on Nov 3, 2011

David Shankbone (CC-BY)
 

Chris Hedges made this statement in New York City’s Zuccotti Park on Thursday morning during the People’s Hearing on Goldman Sachs, which he chaired with Dr. Cornel West. The activist and Truthdig columnist then joined a march of several hundred protesters to the nearby corporate headquarters of Goldman Sachs, where he was arrested with 16 others.

Goldman Sachs, which received more subsidies and bailout-related funds than any other investment bank because the Federal Reserve permitted it to become a bank holding company under its “emergency situation,” has used billions in taxpayer money to enrich itself and reward its top executives. It handed its senior employees a staggering $18 billion in 2009, $16 billion in 2010 and $10 billion in 2011 in mega-bonuses. This massive transfer of wealth upwards by the Bush and Obama administrations, now estimated at $13 trillion to $14 trillion, went into the pockets of those who carried out fraud and criminal activity rather than the victims who lost their jobs, their savings and often their homes.

Goldman Sachs’ commodities index is the most heavily traded in the world. Goldman Sachs hoards rice, wheat, corn, sugar and livestock and jacks up commodity prices around the globe so that poor families can no longer afford basic staples and literally starve. Goldman Sachs is able to carry out its malfeasance at home and in global markets because it has former officials filtered throughout the government and lavishly funds compliant politicians—including Barack Obama, who received $1 million from employees at Goldman Sachs in 2008 when he ran for president. These politicians, in return, permit Goldman Sachs to ignore security laws that under a functioning judiciary system would see the firm indicted for felony fraud. Or, as in the case of Bill Clinton, these politicians pass laws such as the 2000 Commodity Futures Modernization Act that effectively removed all oversight and outside control over the speculation in commodities, one of the major reasons food prices have soared. In 2008 and again in 2010 prices for crops such as rice, wheat and corn doubled and even tripled, making life precarious for hundreds of millions of people. And it was all done so a few corporate oligarchs, the 1 percent, could make personal fortunes in the tens and hundreds of millions of dollars. Despite a damning 650-page Senate subcommittee investigation report, no individual at Goldman Sachs has been indicted, although the report accuses Goldman of defrauding its clients. 

When the government in the fall 2008 provided the firm with billions of dollars in the form of cheap loans, FDIC debt guarantees, TARP, AIG make-wholes, and a late-night label-shift from investment bank to bank holding company, giving the firm access to excessive Federal Reserve aid, access [the corporation] still has, it enabled and abetted Goldman’s criminal behavior. Goldman Sachs unloaded billions in worthless securities to its clients, decimating 401(k)s, pension and mutual funds. The firm misled investors about the true nature of these worthless securities, insisted the securities they were pushing on their clients were sound, and hid the material fact that, simultaneously, they were betting against these same securities—$2 billion against just one of their deals. The firm then had the gall to extort from its victims—us—to make good on its bets when the global economy it helped trash lost $40 trillion in worldwide wealth and huge insurance firms were unable to cover their bad debts.

The Securities Act of 1933, established in the wake of the massive fraud that pervaded the securities market before the 1929 Crash, was written to ensure that “any securities transactions are not based on fraudulent information or practices.” The act “prohibits deceit, misrepresentation, and other fraud in the sale of securities.” The subcommittee report indicates that Goldman Sachs clearly broke security laws.

As part of the political theater that has come to replace the legislative and judicial process, the Securities and Exchange Commission agreed to a $550 million settlement whereby Goldman Sachs admitted it showed “incomplete” information in marketing materials and that it was a “mistake” to not disclose the nature of its portfolio selection committee. This fine was a payoff to the SEC by Goldman Sachs of about four days’ worth of revenue, and in return they avoided going to court. CEO Lloyd Blankfein apparently not only lied to clients, but to the subcommittee itself on April 27, 2010, when he told lawmakers: “We didn’t have a massive short against the housing market, and we certainly did not bet against our clients.” Yet, they did.

 

And yet nothing has been done. No Goldman Sachs officials have gone to trial. This is because there is no way within the corporate state to vote against the interests of Goldman Sachs. There is no way through the formal mechanisms of power to restore the rule of law. There is no way to protect the ordinary citizen and the poor around the globe from the predatory activity of financial institutions such as Goldman Sachs. Since our courts refuse to put on trial the senior executives at Goldman Sachs, including Blankfein, who carried out these crimes and lied to cover them up, we will. Speculators like those in Goldman Sachs—who in the 17th century when speculation was a crime would have been hanged—must be prevented by law from again destroying our economy, preying on ordinary citizens, hoarding food so the poor starve and running our political process. We are paying for these crimes—not those who orchestrated perhaps the most massive fraud in human history. Our teachers, police, firefighters and public employees are losing their jobs so speculators like Blankfein can make an estimated $250,000 a day. Working men and women are losing their homes and going into personal bankruptcy because they cannot pay their medical bills. Our unemployed, far closer to 20 percent than the official 9 percent, are in deep distress all so a criminal class, a few blocks from where I speak, can wallow in luxury with mansions and yachts and swollen bank accounts.

What we are asking for today is simple—it is a return to the rule of law. And since the formal mechanisms of power refuse to restore the rule of law, then we, the 99 percent, will have to see that justice is done.

Shaking the System: A Greek Gift to Occupy USA November 2, 2011

Posted by rogerhollander in Democracy, Economic Crisis, Greece, Revolution.
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Published on Wednesday, November 2, 2011 by Black Agenda Report

 

 

The Greek government, after months of demonstrations by a citizenry that rejects impoverishment for the sake of the bankers, has promised to submit the bailout plan to a referendum. This should be a lesson to the Occupy Wall Street movement and the U.S. public in general: force the issue, or the issue will be forced upon you. “Americans think that backing two political parties who are both eager to work in the interests of banksters is a solution to averting a disaster despite the fact that the disaster never ends.”

The European debt crisis is but one symptom of the crisis in which the capitalist system finds itself. The years of accumulated “fictitious” capital, followed by a succession of ruptured market bubbles, were all signs that the system is like Humpty Dumpty, unlikely to be put back together again.

Greece is the current focus of attention, with American markets rising or falling based on the status of negotiations among the Eurozone leadership. Greece’s “partners” agreed to bail out that nation only on the condition that it impoverish its citizens. Yet because of sustained protest against the austerity measures, the prime minister has promised his people a referendum on the plan, which has thrown domestic politics and international finance into a state of turmoil.

“If only American politicians had to fear their people as much as their European counterparts do.”

The turmoil cannot be confined to Europe either. Former New Jersey governor Jon Corzine is in the news because the commodities firm that he heads, MF Global, was caught up in the European crisis and has now filed for bankruptcy. Corzine is a former Goldman Sachs executive who self-financed his own political campaigns for senator and governor. If there were a poster child for the unholy alliance between money and politics, Corzine should be it.

The fortunes of American firms and European politicians are not looking very promising these days, and that is a good thing. Greek Prime Minister Papandreou can’t close the rotten deal because his people won’t stand for it. As a result of popular actions such as strikes and demonstrations, he must offer a referendum which puts the entire system on notice and across the ocean MF Global and the American markets go in the tank.

“Greece’s ‘partners’ agreed to bail out that nation only on the condition that it impoverish its citizens.”

It is an important lesson for Americans. Greeks and other people around the world aren’t taken in by predictions of doom from the high and mighty. They have declared loudly and clearly that they will not pay a price because of corruption committed without their knowledge and consent.

The Occupy Wall Street movement should sit up and take notice. Their consensus organizational structure and national assemblies upon which it is based began in Europe. The OWS organizers would do well to repeat European actions taken against the 1% and the members of political class who are eager to do their bidding.

It is well and good to say that the OWS movement is finding its way, but if it doesn’t notice what happens when people take mass action, then they aren’t ready for the big leagues. Three years ago the American people were told that they would suffer if Wall Street was not bailed out with their money. The TARP deal went forward with the collusion of both Republicans and the then Democratic nominee, Barack Obama and the rest of his party.

The results of that capitulation have been calamitous. TARP was a band aid solution to a structural crisis and Americans are suffering despite the fact that their resources continue to be sucked into the bottomless pit of the federal reserve. Unemployment numbers are not improving, the housing market remains stagnant, and there is still no light at the end of the tunnel.

“Even Social Security, the erstwhile “third rail” of politics, is on the table ready to be butchered by the party that used to at least pretend to defend it.”

If only American politicians had to fear their people as much as their European counterparts do. Instead of cowering in fear when the Wall Street chieftains shout, “Your money or your life,” we might have something to show three years after the big heist. Instead, Americans think that backing two political parties who are both eager to work in the interests of banksters is a solution to averting a disaster despite the fact that the disaster never ends.

The Greeks are bearing a good gift to the people of the United States but only if Americans have the awareness to see it. It would be wonderful to witness Barack Obama and the Democrats having to undo their dirty work with the Republicans because of popular action. Instead, even Social Security, the erstwhile “third rail” of politics, is on the table ready to be butchered by the party that used to at least pretend to defend it.

Prime Minister Papandreou has risked the wrath of European leadership because the people of his country won’t stand for anything else. There is no reason to fear turmoil in the markets and firms going belly up. We ought to let American political leaders know that we too have had enough of the back room deals which never serve our interests.

If democracy wasn’t born in ancient Greece, it is certainly exemplified by the actions of its people today. Their actions have rattled cages in many parts of the globe, and not only should these events not be feared, they should be celebrated.

© 2011 Black Agenda Report

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Margaret Kimberley

Margaret Kimberley’s Freedom Rider column appears weekly in BAR. Ms. Kimberley lives in New York City, and can be reached via e-Mail at Margaret.Kimberley(at)BlackAgendaReport

Why Occupy: A Chart’s Worth A Thousand Words October 24, 2011

Posted by rogerhollander in Economic Crisis, Labor.
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10.24.11 – 11:31 AM. www.commondreams.org

 

A series of mind-boggling charts – and a handful of heartbreaking stories – document all you need to know about the current economy and what’s wrong with it. From Alternet.

1. The American Dream is imploding…  

 

Click for larger version(click for larger version)

 

The productivity/wage chart says it all. From 1947 until the mid-1970s real wages and productivity (economic output per worker hour) danced together. Both climbed year after year as did our real standard of living. If you’re old enough, you will remember seeing your parents doing just a bit better each year, year after year.  Then, our nation embarked on a grand economic experiment. Taxes were cut especially on the super-rich. Finance was deregulated and unions were crushed. Lo and behold, the two lines broke apart. Productivity continued to climb, but wages stalled and declined. So where did all that productivity money go? To the rich and to the super-rich, especially to those in finance. 

2. Our wealth is gushing to the top 1 percent…

Click for larger version(click for larger version)

Actually the top tenth of one percent. Because of financial deregulation and tax cuts for the rich, the income gap is soaring. Here’s one of my favorite indicators that we compiled for The Looting of America. In 1970 the top 100 CEOs earned $45 for every $1 earned by the average worker. By 2006, the ratio climbed to an obscene 1,723 to one. (Not a misprint!)

3. Family income is declining while the top earners flourish…

Click for larger version(click for larger version)

As women entered the workforce, family income made up for some of the wage stagnation. But now even family incomes are in trouble. Meanwhile, the incomes of the richest families continue to rise.  

4. The super-rich are paying lower and lower tax rates…

Click for larger version(click for larger version)

To add financial insult to injury, the richest of the rich pay less and less each year as a percentage of their monstrous incomes. The top 400 taxpayers during the 1950s faced a 90 percent federal tax rate. By 1995 their effective tax rate – what they really paid after all deductions as a percent of all their income – fell to 30 percent. Now it’s barely 16 percent.  

5. Too much money in the hands of the few combined with financial deregulation crashed our economy…

Click for larger version(click for larger version)

When the rich become astronomically rich, they gamble with their excess money. And when Wall Street is deregulated, it creates financial casinos for the wealthy.  When those casinos inevitably crash, we pay to cover the losses. The 2008 financial crash caused eight million American workers to lose their jobs in a matter of months due to no fault of their own. The last time we had so much money in the hands of so few was 1929! 

6.  We’re turning into a billionaire bailout society…

Click for larger version(click for larger version)

We bailed out the big Wall Street banks and protected the billionaires from ruin. Now we are being asked to make good on the debts they caused, while the super-rich get even richer, some making more than $2 million an HOUR! It would take over 47 years for the average family to make as much as the top 10 hedge fund managers make in one hour.  

7. The super-rich still control politics…

 

Join the discussion

Political spectacles cannot hide reality of deranged September 30, 2011

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Verizon workers all across the
U.S. went out on strike for 15 days to force the company to bargain in good
faith. Represented by the Communications Workers of America and the
International Brotherhood of Electrical Workers, they agreed not to strike again
for 30 days. Verizon called for draconian measures that would have destroyed the
union. The workers are ready to resume their strike when
necessary.

by Ron Kelch

www.newsandletters.org, Sept – Oct 2011

At the end of a months-long political spectacle in Washington–manufactured
over irrelevancies concerning what should have been a routine raising of the
national debt limit before the Aug. 2 deadline–reality struck with a bombshell:
the anemic “jobless” recovery in the U.S. has stalled. The economy is getting
worse and there is no solution under capitalism. Revised data revealed that the
economy grew at less than 1% in the first half of the year. The 9.1%
unemployment rate is really over 16% when you consider that at 63.9% the level
of labor participation in the economy is the lowest since the Great Recession
started in 2007.
__________

Economists worry that the global economy is poised for a double dip
recession. Most agree that, for the foreseeable future, at best there will be
low or no growth–namely, a prolonged depression in employment.
The government spared no expense in immediately rescuing the finance sector in
the face of a total meltdown in 2008. A completely inadequate stimulus package,
which is about to run out, barely made a dent in mass unemployment. Now, in the
face of a new downturn, there is the highest long-term unemployment since the
Great Depression.

FANATICAL TEA PARTY POLITICS

Republican Tea Party fanatics, who control the U.S. House of Representatives,
were willing to risk a default on the national debt by refusing to raise the
debt limit. A default would have triggered a “financial Armageddon” and pushed
the already weak U.S. and world economies into an abyss. The
mass misery this would have generated was of no consequence to the Tea Party,
for whom nothing mattered except gutting spending on all social programs and
stopping any tax increases for the wealthy.

The tax structure in the U.S. is so outrageous that billionaire Warren
Buffett pleaded with the politicians to stop “coddling” the rich like him whose
tax burden, at 17.4%, is less than half of the average 36% paid by the other 20
employees in his office. Inequality in the U.S., where the top fifth has 84% of
the national wealth while the bottom two fifths have a mere 0.3%, is one of the
most extreme in the world. One fifth of children in this richest country on
earth grow up in poverty. Thus, as the Aug. 2 deadline approached, without a
care to these facts or the consequences of their actions, the Republicans got
what they wanted. Standard & Poors (S&P) promptly lowered the U.S.
credit rating from AAA to AA+, not because of a U.S. inability to pay its debts,
but because such a deranged political system can no longer be counted on to do
so.

The religious fanatics who control the Republican Party like Michele Bachmann
and Texas governor Rick Perry adhere to “Dominionism,” which holds that certain
Christians should not let anything get in the way of fulfilling their destiny:
to run the government according to their strictures and in turn impose them
throughout society. Dominionist views are totally divorced from reality–whether
on evolution, global warming or the nature of homosexuality–but, when they
include ruining the economy, then many capitalists get scared.
Such a deranged single-minded reach for power on the part of these ideologues
can’t be dismissed, however, precisely because capitalists are still so willing
to use them to force cuts on workers’ pensions, healthcare and education to pay
for deficits from wars, tax cuts for the rich, and speculative excesses that
caused the downturn.

 

KEYNESIANISM AND AUSTERITY-INDUCED DOWNWARD SPIRAL

The capitalist dilemma is that austerity has also revealed itself as a
deranged policy that makes the deficits worse because it drives down economic
growth. In Europe, an austerity-induced downward spiral in employment and living
conditions has been met with mass strikes, riots and “Take the Square” movements
inspired by the Arab Spring and demands for “Real Democracy.” Nationalism is
tearing apart Europe’s economic union as countries like Germany, with financial
prowess due to an export-driven economy, have dictated harsh conditions for
bailouts of other countries. Bailouts became necessary after bond dealers, who
were rescued from their own speculative bubble, forced one country after another
to face exorbitant interest rates on their debt. The contagion spread from
marginal countries like Ireland, Portugal and Greece to Spain and even Italy.
Now economic growth in Germany itself has collapsed to almost nothing.
Economists fear not just another global recession but another financial meltdown
like 2008.

After S&P’s downgrade, far from fleeing from U.S. debt, investors
demanded more of it, making it even cheaper for the government to borrow. The
interest rate on ten-year Treasuries fell to historic lows of under 2%. U.S.
capitalists have a huge cash hoard of nearly $2 trillion that is not being
invested in the real economy. It gets lent to the government for almost nothing.
The near religious faith that capital creates jobs has met the reality
of stalled capital accumulation creating permanent mass
unemployment.

As economists like Paul Krugman and Robert Reich keep saying, Keynesian
economics arose in the 1930s to deal with a similar deranged moment when
capitalism kept digging itself into a deeper hole. Today is said to be akin to
1937, when President Roosevelt listened to those who wanted to cut the deficit
and the Depression returned with a vengeance.

Only when Roosevelt turned to several years of what would in today’s dollars
be $3 trillion deficits in the buildup and execution of World War II did the
U.S. exit the Depression. Krugman claims the economic impact of the war–the
massive physical destruction of capital, which left the U.S. as the lone
economic superpower–wasn’t necessary for ending the Depression and restarting
capital accumulation.

But total war was not separate from the Depression. War was preceded by the
monstrosity of Nazism arising in an advanced capitalist country. A more
thoughtful evaluation came from another renowned academic economist, Simon
Kuznets, who also saw only “transient difficulties” in the collapse in the rate
of capital accumulation, but nevertheless questioned the capitalist basis of
economic growth if it is “susceptible to such a barbaric deformation”
(Postwar Economic Growth, Harvard University Press, 1964).

CAPITALISM’S FALLING RATE OF PROFIT

Karl Marx showed that the collapse in capitalist growth is no “transient
difficulty,” but is rather a reflection, despite many countervailing tendencies,
of an overall tendency for the rate of profit to decline. (See “Deep recession, rate of profit and the supreme
commodity, labor power
“.) A financial meltdown reveals a dramatically lower
rate of profit in the real economy where capitalists balk at investment and
produce not jobs but a growing army of unemployed and mass pauperization.

Profit can only come from surplus value extracted from living labor, and the
rate of profit falls when there is relatively less living labor in proportion to
dead labor or capital. Capital’s self-contradictory motivation is to diminish
living labor as much as possible–this goose that lays their golden eggs–by
constantly revolutionizing production with new dead labor or machines. With a
given level of technological development and ratio of capital to living labor,
the only way to boost profit is to lower the cost of labor through a class war
on labor rights, wages, benefits and pensions.

The capitalist system will not collapse on its own, but will continue as long
as it can in a protracted painful decline. There are persistent new revolts on
the ground searching for a new path as when mass demonstrations and sit-ins in
Wisconsin confronted Governor Walker–not only because of his huge take-backs
but because of the repeal of public workers’ basic labor rights. The opposition
to Walker also came within one vote of taking control of the State Senate in
recall elections and effectively ended his majority for the most extreme of his
agenda items. The political arena of elections, however, is where capitalists
have infinite cash to spin facts in the media according to their inverted
reality.

President Obama, who was elected on a promise of change that inspired masses
of new people to work for his election, behaves as if he also believes fervently
in the political process that operates on a different plane than the conditions
of life and labor of those who elected him. Obama kept exclaiming that high
unemployment is unacceptable and a prime concern, but the political process,
divorced from the aspirations of those who elected him, revolved around deficit
cuts that undermined employment. His new promise to introduce a jobs program has
little credibility.

Workers experience the process of accumulating capital as an alien one, where
the object, capital in the form of a machine, dominates the subject, the living
laborer. The capitalist begins from total costs and views labor not as the
source of value but only as an expense. In this way, says Marx, “the extortion
of surplus-value loses its specific character.” For the capitalists it
always appears as though an increase in value results from technology.

New technology lowers socially necessary labor-time and makes those commodities
issuing from it temporarily sell above their value, which is determined by the
average socially necessary labor-time. The “crisis” hits when all capitalists
get the same technology (or are driven out of business) and all commodities sell
for their now lower value, the amount of labor-time “in” them. What pervades the
totally dysfunctional political system is the capitalist’s fantasy thinking that
treats capital as the generator not only of jobs but of value itself.

The appearance of creating value from nothing through speculative finance
capital is twice removed from the “specific character” of creating value in
production and greatly amplifies the hallucinatory thinking of capitalists and
their political allies. Production is the source of both profit and the
illusions of finance capital.
Under finance capital, as Marx put it,
“the way that surplus-value is transformed into the form of profit…is only
further extension of that inversion of subject and object which already occurs
in the course of the production process itself. We saw in that case how all the
subjective forces of labor present themselves as productive forces of capital”
(Capital, Vol. 3, Fernbach trans, p. 136).

DIGGING HUMANITY OUT OF A MENTAL HOLE

Ideologues never tire of projecting anew this disordered consciousness in
which humans begin from reality not as our own creative powers in metabolism
with nature, but bow to technology as capital. In Foreign Affairs
(July/August, 2011), Michael Spence warns of “structural underpinnings” driving
a divergence between “growth and employment,” which means “the United States
should brace itself for a long period of high unemployment” because of the
impending loss of even “high-value-added” jobs that revolutionize technology.
“Value-added” fantastically becomes “capital and labor that turn the inputs into
outputs.” Capital produces no new value. Only living labor, whose proportion
diminishes relative to dead labor, creates new value even as it transfers the
value of the machine over its lifetime in production.

Apple Corp. came to be the iconic center of high-tech jobs and briefly the
company with the largest market capitalization in the world based on an
abundance of alienated, sweated labor. Foxconn, which employs a million workers
in China manufacturing high-tech gadgets for Apple and others, has an
ignominious reputation for workplace injuries and a rash of suicides from long
hours and high production quotas. Workers, who make at most $200 a month, must
sign a promise to not commit suicide. Safety nets have been placed outside
factory windows. Foxconn chairman Terry Gou wants to deal with these erratic
humans by replacing as many as possible with a million robots by 2013. This is
in the name of wanting his employees to move “higher up the value chain” (“Cheap
Robots vs. Cheap Labor”, New York Times, Aug. 14, 2011) in a country
which still has 300 million peasants. Nothing will stop China, rife with worker
revolts, from a reckoning, not only with speculative excesses in finance, but
with its own internal barriers to accumulation.

New revolts, emerging outside the familiar players like political parties and
labor unions–including the mass demonstrations that forced the shutdown of an
ecologically disastrous chemical plant in Dalian, China, or the new people’s
assemblies that have filled the public squares in Europe–reveal masses of
people searching for a way out of capitalism’s upside-down thinking. It’s time
to stop digging ourselves into not only deeper economic stagnation but also the
stagnation of the mental hole that just reproduces capitalist illusions. For
Marx, the only way to wipe away those illusions is when production is run by
freely associated laborers, a conceptual guide-rail for all the new spontaneous
and self-organized revolts.

President Obama Wants You to Join the Union February 8, 2009

Posted by rogerhollander in Barack Obama, Economic Crisis, Labor.
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01 February 2009

by: Robert Kuttner, The Huffington Post

 I do not view the labor movement as part of the problem, to me it’s part of the solution.
- President Barack Obama, January 30, 2009

    The great union leader John L. Lewis, who headed the United Mine Workers from the ’30s through the ’50s and helped organize millions of workers into the CIO, used to declare in organizing drives: “President Roosevelt wants you to join the union.” Roosevelt never said that in so many words, but FDR did strongly back the Wagner Act, giving workers the clear right to organize.

    During World War II, Roosevelt’s War Labor Board made clear that corporations seeking war contracts needed to have good labor relations. In practice, that meant unions; and it meant “pattern bargaining” in which workers for different companies in the same industry got the same wages, so that companies could not play workers off against each other.

    Roosevelt’s wartime contracting policies, the Wagner Act, and the militancy of the labor movement laid the groundwork for the golden age of American unions during the postwar boom. Not coincidentally, this was also the one period in the past century when the economy became more equal, and more secure for working people.

    So, while Roosevelt’s words never quite urged workers to join unions, his deeds spoke volumes. John L. Lewis was well within the bounds of poetic license.

    On Friday, President Obama, a onetime organizer, had more words to say about unions, and they were the kind of explicit endorsement that we literally haven’t heard from a president since FDR’s day.

    

“We need to level the playing field for workers and the unions that represent their interests, because we know that you cannot have a strong middle class without a strong labor movement,” the President said. “When workers are prospering, they buy products that make businesses prosper. We can be competitive and lean and mean and still create a situation where workers are thriving in this country.”

 

    Wow!

    And Obama offered deeds to match. This stunning declaration of support came at the White House announcement of a Task Force on Middle Class Working Families headed by Vice President Biden, with Jared Bernstein as its executive director. The idea was proposed last summer by Change to Win unions, who endorsed candidate Obama early in the primary season. He embraced the concept, and it was a commitment he kept. His remarks and actions were a dazzling example of the transformative power of a president to shift public opinion and the political center of gravity.

    The task force, and the effusive and genuine embrace of the labor movement, came as a huge relief to union leaders, who have watched anxiously as nearly all the key economic posts went to centrist veterans of the Clinton administration, and the job of secretary of labor was not announced with the other senior economic officials. As it turned out, the appointment of Hilda Solis, a very pro-union member of Congress, was delayed because others had turned down the job first, but the delay sent an unfortunate signal.

    Labor activists have also been worried about whether Obama will keep his pledge not just to sign the Employee Free Choice Act (EFCA) guaranteeing the right to join a union, but to work hard on its behalf with legislators, especially in the Senate. Since the election, the US Chamber of Commerce and allied anti-union business organizations have mounted a furious publicity and lobbying offensive with one message: Mr. President, you don’t need this bruising fight right now.

    But the Chamber’s allies in the Republican House Caucus have beautifully undercut that logic. The Chamber’s premise was that EFCA would be highly divisive, at a time then the new president was seeking unity. With the wall-to-wall Republican stonewalling on the Obama recovery package, that premise is up in smoke. And the Chamber’s other allies, on Wall Street, have also done a service by inviting some salutary class warfare. Obama responded last week, calling Wall Street bonuses in the face of government bailouts “shameful,” and seems to genuinely view the growth of unions as a necessary counterweight.

    The task force itself will be a welcome counterweight to the outsized influence of Wall Street inside the Obama administration. Several weeks ago, Jared Bernstein, then a senior economist at the Economic Policy Institute, wrote a joint op-ed piece for the New York Timeswith Robert Rubin pointing out where they agreed. One issue where they pointedly disagreed was on the Employee Free Choice Act, which Rubin explicitly refused to endorse. The Biden operation now looks to be the go-to place for progressives seeing access to Obama’s priorities. The Task Force will serve as the White House center to review all proposals, legislative and administrative, for their impact on the effort to raise wages and rebuild a middle class.

    Without Obama’s strong personal engagement, EFCA will be anything but a legislative cakewalk. Democrats may have a working majority. But at least five business-oriented Democrats are not considered certain votes for EFCA, and Obama will need to let them know that the White House considers this bill a top priority.

    Our last two Democrats went out of their way not to get close to organized labor. Jimmy Carter did not lift a finger when the last big push to put some teeth back in the Wagner Act’s right to unionize went down to defeat by just two votes in the Senate in 1978.

    On Friday, announcing the Task Force, Obama signed three executive orders. One will prevent federal contractors from discouraging their employees to join unions. Another will assure that workers keep their jobs when a contract changes hands. Down the road is an executive order to promote project agreements on construction contracts.

    If Obama is serious, he can take a leaf from FDR’s book, and use government’s extensive contracting power to actively promote unions. Late in the Clinton administration, then Vice President Al Gore led an effort called the Responsible Contractor Initiative. The idea was to reward federal contractors who took the high road by providing good jobs and not standing in the way of unions.

    It remains to be seen just how much real power Obama will give Vice President Biden. But the task force is a superb beginning. If government can just use its influence to make sure employers stay neutral, it will be a new day for the labor movement – and for American progressivism.

    ———

    Robert Kuttner is co-editor of The American Prospect. His new book is “Obama’s Challenge: America’s Economic Crisis and the Power of a Transformative Presidency.”

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