Budgets, Jobs, and the Economic Narrative

We are in an economic crisis in this country, but the mortgage woes that are still plaguing millions of Americans are only a symptom of a broader issue. These are at play because of a conflict between corporations and workers. As corporate regulation, and of course the companion tax burden on the wealthy, have loosened over the past few decades, we have seen the decline in American production and of course labor jobs. Over the past few decades the narrative, however altruistic it may have been, that we could pull ourselves up by our bootstraps and that with hard work the average worker could get ahead has been nothing but that, a narrative, a sitcom like Good Times.

Although we it is just now starting to become apparent because it is now shifting burdens of taxes and public responsibility for the state of the overall job market and mortgage investment market onto upper middle class people, this is just a consequence of the disappearance of labor. It's not just a problem of 'buying American', either. It is also not just a problem of American products costing more because the production costs are higher due to salaries and benefits. That may be in part true, but that is as much an excuse as it is to blame the job loss on the 'Great Recession'.

Ultimately this is a game of redistribution of wealth, the same concept that Michelle Bachmann and the unfortunately un- and mis-educated people who believe her nonsense use to stir up fear among white middle class people nearing retirement. Wealth redistribution has been happening for decades. It has just been in the opposite direction of what Bachmann uses to spread fear. How can I justify this claim? Because the middle class isn't disappearing, it has disappeared. Meanwhile four hundred people own more wealth than more than half the rest of the population combined. CEO's of corporations who used to make around seventy times the average employee salary now make somewhere in the ballpark of a thousand times that. They are getting bonuses in the hundreds of millions, their investment friends managing hedge funds and making billion dollar salaries, meanwhile most Americans, including myself, are struggling. That's how I can say that wealth redistribution is already here and has been going strong for decades.

What does this mean for budgets? Well, since forty percent of this country, both in the lowest economic classes and among the wealthiest elites, don't pay any taxes or get all their taxes back in refunds, that means that the middle class is bearing the brunt of the majority of the tax burden. This happens precisely because of tax cuts for the wealthiest Americans and corporations that the Republicans have put in place. It is also obvious to those who can follow the logic as Republican politicians profess the same nonsense that the corporate lobbyists and CEO's are crying about, that higher taxes will kill jobs. Well tax cuts create deficits. Particularly when there are some programs, namely Medicare and Social Security, that Americans refuse to budge on and which comprise the majority of any spending our government does, and there isn't enough revenue coming in. It is also readily apparent to anyone paying attention to actually legitimate news stations who point out the consistently rising profits of major corporations. Those corporations aren't creating the kind of jobs that really pay, that's a generalization but it is generally true, and certainly not in a way that reflects a real investment when compared to those record profits.

Those manufacturing jobs are not coming back, and not because we don't buy products or because we are paid to much, but because companies that make things are too interested in profits. And, given the disastrous effect of the Recession on pension and investment plans that make up the majority of the investments of the middle class in those companies, the primary beneficiaries of their increased profits are the same wealthy who then complain that higher taxes would kill jobs. The same wealthy who also get tax breaks with the excuse that somehow they stimulate the economy by investing in companies that aren't bringing their production jobs back to the US. They instead squirrel it away in foreign banks and buy property in other countries so that they aren't taxed on income that would otherwise be circulating in and boosting the US economy.

When you have a labor force composed largely of people with lower levels of education who don't have the skills to work in mid-level management than you need jobs for them. If they don't have jobs and that is who the mortgage companies and investment banks are selling their products to, that means that they are unable to fulfill, ultimately, the financial obligation of those mortgages. That is especially true when they are walking a thin line already when they are employed. That line disappears and they fall into the abyss of debt when they lose their job.

And not only did the manufacturing jobs disappear ten years ago with the advent of NAFTA, though I would argue it started long before then as companies exported labor to China and Taiwan and other places in Asia, but in the last ten years we've seen the phenomena of the so called white-collar jobs, the call centers and customer service support jobs relied upon by a lot of middle class people, disappear as they've been exported to India and Pakistan. The US has become so semi-consciously aware of it that it has become a joke that we call customer support lines and reach people with hyper-American names but with foreign accents. Companies have even been using the fact that they have created call centers here in the US as a subtle advertising ploy to take advantage of the anxiety we have over those jobs being 'outsourced'. And what a terrible name for corporate America to use in place of calling it what it is, cutting spending on employees by contracting out good jobs to companies they pay far less in order to boost profit margins somewhat artificially.

So while it might be fair to blame the Recession and blame the investment banking industry for the woes of our economy and the job market, the jobs were disappearing a long time before then. Their greed in trying to get greater and greater profits by cutting costs exacerbated the problem, and then their even greater greed in taking advantage of a population increasingly desperate to live out the fantasy of the 'American Dream' which we have been brainwashed to buying into with bad mortgages.

This isn't all because of Republicans. Democrats were in power for two years before the crash and had greater influence in Congress even two years before that. NAFTA was also a product of the Clinton administration, and almost none of it has been dealt with under the Obama administration. And Barney Frank was intimately involved in the loosening of restrictions on mortgage investment that was partially responsible for all the faulty mortgages. It's hard for me to criticize him, though, because as a gay American and a progressive I do believe that he is a strong voice to represent both those constituencies. I'd like to think that instead it was bad decision making on his part and more political gaming than ideology.

What is abundantly clear is that Democrats have lost their way as a national party. The Wisconsin union fight has proven that. While the national Republican party backed Scott Walker within a few weeks of the fight, only a handful of national Democrats, and most of those Wisconsin Democrats, became vocal about the issue. The national party has yet to really make a strong campaign about the union busting going on in a dozen states throughout the Great Lakes region and the Midwest, and that is a problem. The labor movement is the traditional heart of the Democratic party. Progressive policies on civil rights and energy aside, labor issues are the ones that draw the most people into the fold because the majority of people in this country see jobs and labor issues like the minimum wage and employee benefits as core American values. The Republicans were able to capitalize on the anxiety people had because of the incredible losses in the job market during this past election, but those are issues central to Democrats. The fact that the Republicans were able to take that message from the Democrats during this last cycle is a clear indication that the party has gone too far away from that base.

The party, I think, is picking up on that, and is starting to wake up to the incredible political force of the labor movement. We saw some of that when the unions in Nevada stumped like mad for Harry Reid during the last election. It was because of them that he had the money, and even more importantly the 'ground game' with people canvasing and making phone calls, that he was able to pull off a win in an incredibly tough election. And this is not about 'conservative' Democrats versus 'liberal' Democrats. Labor issues are liberal issues. Even more than that the labor movement and the way they see labor rights as basically civil rights is the way to make people understand the value of civil rights in general. Conservatives have controlled the overall narrative about unions for decades and have convinced people that somehow they are better off without unions. While unions aren't blameless in this narrative, they have done things publicly that ended up pushing people against them, the questions around job creation and even more importantly salaries and benefits should be things that we are all talking about.

Unions are vital to some industries, teachers especially rely on their unions to help fight for fair wages and benefits in one of the toughest industries in the country. However, people have started seeing them as the province only of manufacturing industries and teachers rather than as representative of working people everywhere. Wisconsin, as I've described before, is a great catalyst, however. Since most of Americans, including Republicans, favor the rights of collective bargaining, and really genuinely understand the consequences of employers having all the leverage in salary and benefits discussions, it is no surprise then that there is so much push back. As I've also said before, the question shouldn't be why public employees make so much, but why the wages and benefits of the average American worker are so meager by comparison. I understand that when salaries and benefits of public employees are combined that they seem to have such a better deal than most people. But why is that? Why do people believe blowhards like the commentators on FOX News when they try and demonize public workers for it? Why aren't people instead demanding that their own compensation be better? I mean, it is obvious from the salaries and benefits of executives and the wealthy elite that there is plenty of money to go around.

But many politicians, especially in the Republican party, aren't interested in that discussion, aren't interested in people framing the debate in that way instead. They prefer to make deep cuts into the state education budgets, like in Florida, and giving away all of it in property tax cuts and corporate tax cuts. I believe their argument is that the corporate tax breaks draw in corporations and create more jobs. But what kind of jobs are they creating? And where are they? Although it is heartening that jobs are being created by the dozens and even hundreds around the country, when there are more than twenty million people in the labor force who are either unemployed or underemployed, that isn't a positive sign. It is also not a positive sign that the jobs being created aren't jobs that pay well enough to help people emerge from the debt they've incurred in the last three years or to resume anything like the lifestyles they'd had before. They're not jobs that help people get out of foreclosure. To keep their homes.

No, the economic narrative shouldn't be about union benefits or even about the tax burden on the middle class. The narrative should be about jobs and job creation. It should be about real solutions that will put millions of people back to work, not just create a few hundred jobs here or there by giving enormous tax breaks to the wealthy and to corporations while making enormous cuts in the programs that most Americans desperately need and rely on. That isn't a Democratic idea or a Republican idea, that is an American idea, and if the Democrats are the only ones who are genuinely interested in addressing it, than they need to move away from the debates about health care as related to the poor that they've been losing for three years and instead return to framing it in the context of working people, workers rights, and the core values that kept them in power for generations.