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Enormous, Humongous $42.6 Billion October Trade Deficit Is Unbalanced

Wednesday, December 7th, 2016

The U.S. Census Bureau reported Friday that the October trade deficit rose to $42.6 billion from a enormous and humongous 36.2 billion in September. That’s a 17.8 percent increase.

October exports were down $3.4 billion and imports were up $3.0 billion. The goods deficit with China also increased, hitting $28.9 billion in October.

Scott Paul, President of the Alliance for American Manufacturing (AAM),

“The trade deficit is a drag on growth and jobs in the goods-producing sector. It is one signal of weakness that speaks to our challenges in global competition.

“It will take more than a Carrier deal to save jobs here and bring some home. For that, we need aggressive economic policies, including a rebalance on trade policy, a tax code friendly to manufacturing and patient capital, and investments in our infrastructure, research, and workers.”

Trade Deficit Damage Led To Trump

A trade deficit drains jobs, communities, tax revenues, and entire industrial ecosystems. A trade deficit is a deficit in people’s jobs and livelihoods. Forty straight years of trade deficits was also forty straight years of a system that treated working people like “economic units” to be used up and discarded instead of treating people like people. So the people finally reacted.

Forty straight years of trade deficits is a big part of what led to Trump.

Mike Konczal, in Learning From Trump in Retrospect, explains:

… [T]he divide among economists on trade is driven by the fact that labor economists study the real effects of unemployment on real people, where trade and macroeconomists treat people as just another commodity. …

I’d phrase it this way: are people just like a barrel of oil? In the abstract models of trade economists, commodities like oil will always get sold at some price, they will get to where they need to get to do so, and they’re largely indifferent on the process. Even when commodity markets are off, oil can sit in tankers floating in the ocean waiting out price moves, and it makes no difference to the oil.

Oil doesn’t experience unemployment as the most traumatic thing that can happen to it. Oil moves magically to new opportunities, unlike people who don’t often move at all. A barrel of oil doesn’t beat their kids, abuse drugs, commit suicide, or experiencing declining life expectancy from being battered around in the global marketplace. But people do, and they have, the consequences persist and last, and now they’ve made their voices heard. It’s the the dark side of Polanyi’s warning against viewing human being as commodities.

Balanced Trade Resolution In Congress

Representatives Dan Lipinski (D-IL) and Mo Brooks (R-AL) have filed a House Resolution (H.Con.Res.175) to make balanced trade a national goal with a special emphasis on manufacturing and goods.

The resolution states, in part:

Whereas the United States has run 40 consecutive years of trade deficits;

Whereas the trade deficit of the United States has substantially increased in the last 25 years;

Whereas the overall trade deficit of the United States in 2015 was $532 billion, including a deficit of $758 billion in trade in goods;

Whereas the manufacturing sector of the United States has suffered a disproportionate impact from such trade deficits, resulting in substantial losses of jobs and industries;

… Whereas trade imbalances are unhealthy for the global economy and stagnate economic growth in deficit countries such as the United States and especially in the manufacturing sectors of such countries;

… Whereas persistent trade deficits hinder the ability of the United States to reach full employment and increase underemployment and reliance on low-wage and often part-time service sector jobs;

… That it is the sense of Congress that Congress and the President should prioritize the reduction and elimination, over a reasonable period of time, of the overall trade deficit of the United States.

There’s nothing wrong with that.

The Coalition for a Prosperous America (CPA) is “a nonprofit organization representing the interests of 2.7 million households through our agricultural, manufacturing and labor members.” CPA focuses on trade issues and promotes balancing trade.

CPA is sending out the word to Click here to tell your Representative to sign on to the Lipinski/Brooks balanced trade resolution.

This post originally appeared on ourfuture.org on December 6, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

Politicians Keep Promising Free Trade Agreements Can Protect Workers. We Should Stop Believing Them.

Thursday, June 4th, 2015

Leo GerardIt’s all the rage now for Republican presidential candidates to spurn the Royal Romney approach and, instead, to fawn over workers.

When former U.S. Sen. Rick Santorum announced his presidential bid last week, he did it from a factory floor and called for increasing the minimum wage. Former New York Gov. George Pataki, who also launched his candidacy last week, named as his political inspiration Teddy Roosevelt, a corporate trust-buster and working class hero. U.S. Sen. Rand Paul, who entered the race in April, said that to win elections, “You’ve got to get the people who work for the people who own businesses.”

That is true—if the businesses are in America. There’s not much point in American candidates soliciting votes from workers at factories that U.S. corporations closed here and moved overseas with the help of free trade agreements (FTAs). Decade after decade of free trade, presidents promised workers that the deals set the highest standards for labor. And decade after decade, the federal government failed at enforcement, placing Americans in competition with child laborers, underpaid and overburdened foreign workers and victims of human trafficking.

On trade, Sen. Paul got it right for working people. He opposed Fast Tracking approval of the 12-country Trans-Pacific Partnership (TPP) through Congress. He was on the losing side of that vote, though. So the Fast Track plan for Congress to relinquish its responsibility to review and amend trade agreements awaits action this week in the U.S. House of Representatives. House Republicans who believe in supporting American workers, not just pandering to them, should join Sen. Paul in voting no on Fast Track.

From Bill Clinton to Barack Obama, Republican and Democratic presidents have pledged to workers that some new free trade scheme would protect Americans from unfair and immoral foreign competition.

Clinton claimed the North American Free Trade Agreement (NAFTA) was the first deal ever containing teeth to enforce labor standards. George W. Bush’s U.S. Trade Representative (USTR) contended the Central American Free Trade Agreement (CAFTA) had the strongest labor provisions ever negotiated. Obama administration officials assured Americans that the Peru, Colombia and Panama agreements, and now the TPP, have the greatest worker protections of all time.

They all swore the standards would be strictly enforced. But none of it was true. The deals did not protect American workers. And they didn’t protect foreign workers either.

Now American workers overwhelmingly oppose the free trade brand of globalization. They’ve seen its terrible results for them. They’ve suffered as corporations closed American factories, destroyed American jobs and communities, and shipped that work overseas.

Americans have found themselves competing with children coerced to work in foreign factories, trafficked and forced labor, and foreign workers so mistreated that they jump to their deaths from factory buildings. American consumers find themselves buying products made in unsafe buildings that collapse or burn, killing thousands of foreign workers.

The USTR, who is supposed to enforce the labor provisions of trade agreements, along with the U.S. Department of Labor (DOL) and Department of State, has failed. That’s according to two reviews by the U.S. Government Accountability Office (GAO). After a damning GAO report in 2009, the USTR promised action. A second GAO analysis in 2014 reported little change.

Here’s the bottom line from that report: “Since 2009, USTR and DOL, with State’s assistance, have taken steps intended to strengthen monitoring and enforcement of FTA partners’ compliance with FTA labor provisions, but their monitoring and enforcement remains limited.”

In other words, no matter what those agreements say about labor, it’s not being enforced.

For example, five years after Guatemala entered CAFTA, the International Trade Union Confederation (ITUC) named Guatemala the most dangerous country in the world for trade unionists. That’s because of the large number of union activists murdered, tortured, kidnapped and threatened there.

This was a startling development because Colombia had a lock on the inglorious title of most dangerous for years. Colombia dropped from first place even while murders of trade unionists continued there.

Since Colombia finalized a free trade agreement with the U.S. in 2011, two dozen Colombians trying to improve the lives and wages of workers through collective bargaining have been murdered every year. And these murders are committed with impunity. There are virtually never arrests or convictions for killing trade unionists in Colombia. Colombia’s trade deal with the U.S. and its “enforcement” by the USTR, DOL and the State Department have done nothing to change that.

And as in Guatemala, trade union activists in Colombia continue to be threatened, tortured and kidnapped. The free trade agreement is no shield for them. For example, a paramilitary group threatened the daughters of Martha Cecilia Suarez, the president of the Santander public servants association.

In 2013, the paramilitary group Comando Urbano de los Rastrojos sent her two dolls marked with her daughters’ names. They were covered in red paint, one missing a leg, the other an arm.

The 14 free trade agreements that the United States has signed with 20 countries contain provisions allowing groups or individuals to file complaints about such violations of the labor standards. The 2014 evaluation by the GAO suggests that only a tiny number of complaints have been filed because the Labor Department has failed to inform stakeholders of this process and few within the foreign countries know about it.

The GAO also found that the Labor Department has failed to meet its own deadlines for investigating and resolving the complaints it has accepted. Serious allegations, including human trafficking and child labor, remain unsettled for years.

In addition to the critical 2014 GAO report, U.S. Sen. Elizabeth Warren detailed the failure of the United States to implement FTA labor provisions in a report issued by her office late last month titled Broken Promises. It says, “the United States repeatedly fails to enforce or adopts unenforceable labor standards in free trade agreements.”

Admittedly, this is a titanic challenge. What the United States is trying to do is tell other countries, often ones far less wealthy, how their businesses should treat workers. The United States hardly would take kindly to Guatemala telling it that the U.S. minimum wage is so low that it amounts to forced labor.

But president after president has promised American workers that the United States will compel foreign nations to meet high labor standards established in FTAs.

They haven’t accomplished that. They probably can’t. They should stop saying it. And American workers and politicians should stop buying it. The United States can sign trade agreements with countries after they stop murdering trade unionists and countenancing child labor. Entering agreements with countries that permit these grotesque practices demeans American workers and consumers.

This blog was originally posted on In These Times on June 2, 2015. Reprinted with permission.

About the Author: The author’s name is Leo Gerard. Leo W. Gerard is the president of the United Steelworkers International union, part of the AFL-CIO. Gerard, the second Canadian to lead the union, started working at Inco’s nickel smelter in Sudbury, Ontario at age 18. For more information about Gerard, visit usw.org.

McDonald’s Urges Franchises to Open on Christmas Day … Without Overtime Pay

Wednesday, December 19th, 2012

Mark E. Andersen

In November McDonald’s saw a 2.5 percent increase in November sales. This is after the fast food giant saw a decrease in sales of 2.2 percent in October. So why was there increase in sales? Was the pork-like substitute McRib back? Was there a shortage of Ore-Ida french fries in your local grocer’s freezer causing a run on McDonald’s across the country?

Nope, none of the above; the corporate overlords at McDonald’s urged franchisees to be open on Thanksgiving day, a day that most franchise stores are closed. A Nov. 8 memo from McDonald’s USA Chief Operating Officer Jim Johannesen stated,

“Starting with Thanksgiving, ensure your restaurants are open throughout the holidays. Our largest holiday opportunity as a system is Christmas Day. Last year, [company-operated] restaurants that opened on Christmas averaged $5,500 in sales.”

On Dec. 12 Mr. Johannesen doubled down and sent out another memo to franchise owners stating that average sales for company-owned restaurants, which compose about 10 percent of its system, were “more than $6,000” this Thanksgiving. That adds up to be about $36 million in extra sales.

So with all those extra sales one must ask if employees are reaping any benefits from being open on the holidays. The answer is dependent on the franchise owner; however, in the case of company owned stores the answer is a big fat no. According to McDonald’s spokesperson Heather Oldani, “when our company-owned restaurants are open on the holidays, the staff voluntarily sign up to work. There is no regular overtime pay.”

It is bad enough that McDonald’s pays crap wages but then they turn around and refuse to pay overtime for employees who volunteer to give up their holidays so that McDonald’s can make several million dollars. I am also willing to bet that most staff does not readily volunteer to work on Christmas day. This just gives me one more reason to not eat at the Golden Arches.

This post was originally posted on December 18, 2012 at The Daily Kos. Reprinted with Permission.

About the Author: Mark E. Andersen is a 44 year old veteran, lifelong Progressive Democrat, Rabid Packer fan, Single Dad, Part-time Grad Student, and Full-time IS worker. Find me on facebook my page is “Kodiak54 (Mark Andersen)”

Women Haven’t Gained A Larger Share Of Corporate Board Seats In Seven Years

Wednesday, December 12th, 2012

In addition to grappling with a persistent pay gap, working women also have to deal with extreme difficulty ascending to powerful corporate positions, according to a report by the research organization Catalyst. As Bryce Covert explained at The Nation:

Women held just over 14 percent of executive officer positions at Fortune 500 companies this year and 16.6 percent of board seats at the same. Adding insult to injury, an even smaller percent of those female executive officers are counted among the highest earners—less than 8 percent of the top earner positions were held by women. Meanwhile, a full quarter of these companies simply had no women executive officers at all and one-tenth had no women directors on their boards. […]

Did this year represent a step forward? Not even close. Women’s share of these positions went up by a mere half of a percentage point or less last year. Even worse, 2012 was the seventh consecutive year in which we haven’t seen any growth in board seats and the third year of stagnation in the C-suite.

Overall, more than one-third of companies have no women on their board of directors. But economic evidence shows that keeping women out of the board room is a mistake. According to work by the Credit Suisse Research Institute, “companies with at least one woman on the board would have outperformed in terms of share price performance, those with no women on the board over the course of the past six years.”

This post was originally posted on Think Progress on December 11, 2012. Reprinted with Permission.

About the Author:  Pat Garofalo is the Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.

Reality? Nah, I’d Rather Not.

Monday, November 8th, 2010

Image: Bob RosnerI think I have a new favorite quote of all time. Time Warner Cable’s Chief Operating Officer, Landel Hobbs, recently said he doesn’t see evidence of people dropping cable in favor of the Internet.

Hello?

I cut the cord and so did many of the people I know. The tsunami of departures from cable might only be a trickle now, but does anyone really believe that it won’t happen over time?

Let me give you proof that this is a “when” question and not an “if” question. Do you know what generates the most traffic during peak TV viewing hours on the Internet these days? Not social networking or porn, but Netflix on-demand video service. Hint, hint.

Why isn’t this news to me? Because I’m busy watching Netflix.

Ironically we’ve seen this all happen before. Remember when phone companies thought that everyone would continue to have a landline and a cell phone? Sure there are technologies that compliment existing technologies. But when you can get what you need, and more, from a new technology most of us eventually move on.

Back to Mr. Hobbs. He has become my poster boy for denying reality. And unfortunately the people who work at his company will undoubtedly pay for this in lost opportunities and layoffs.

If you think this is too strong a statement, look no further than Blockbuster. Once a dominant player in entertainment, they whistled into the winds of change when Netflix first appeared. And ever since they’ve been satisfied to try to copy each strategic advance by Netflix. You know what happened, people figured this out. And they decided they’d rather be on board with the leader, and not the industry laggard.

No executive today can afford to write off the canaries in the coal mine any longer. Today you’ve not only got to keep your eyes open for competitors, you’ve got to assume they’re coming, like a freight train. Are you listening to me Mr. Cable Guy? Now, don’t get me wrong, I have no problem with Mr. Hobbs, a.k.a. Mr. Asleep at the Switch, getting run over by reality. But I’m sad that a lot of the people inside his company, who are awake and ready to offer alternative strategies for surviving the changes that lay ahead, have to exist under someone who is in denial.

Ever heard the phrase “that’s why he earns the big bucks?” Mr. Hobbs, using that same logic you are doing nothing short of stealing from your company and it’s people.

Sorry to be so bold, but I have this old-school belief that leaders should lead.

About The Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Check the revised edition of his Wall Street Journal best seller, “The Boss’s Survival Guide.” If you have a question for Bob, contact him via bob@workplace911.com.

The End of Enemies at Work

Monday, March 1st, 2010

Image: Bob RosnerMicrosoft and Yahoo recently received permission to move forward with their joint venture on search from both US and European regulators.

Competition makes strange bedfellows. And nary a day goes by today that Microsoft isn’t announcing a new partnership, or a partnership discussion, with a company that it formerly tried to crush. Real Networks, Palm, AOL, Apple, the list just keeps growing and growing.

Believe it or not, Microsoft’s new make-nice approach impacts each and every one of us who works today. Because it signals the end of the “enemy,” at least as we’ve known it in business for the last hundred years. Let me explain…

The “enemy” has been a great rallying cry in business. To paraphrase General Patton, your goal is to kill the other guy before he has a chance to kill you. And that is how business tended to operate.

We learned from our earliest days in the corporate corridors to identify our enemies and create a healthy disdain for them. And it was so simple to do. G.M. hated Ford. M.G.M. hated Universal. It was easy to identify your competitors and once you did then you let the hatin’ begin.

That is until today. Now, auto companies collaborate on technology to improve fuel mileage with competitors and movie studios collaborate on producing films. And the former 99-pound weakling turned monopolist, Microsoft, can’t seem to find anyone outside of Google that it doesn’t want to take a turn around the dance floor with. What a difference a few years can make.

What is becoming clear is that today’s enemy at work could very well be your company’s next strategic marketing partner, merger partner or the company that purchases your firm. So the enemy is dead, long live today’s competitor who might be tomorrow’s collaborator. Why? Because you can’t afford to alienate your next business partner. Or worse, your next boss.

How do we survive this new competitive landscape? We need to resist the temptation to bad mouth a competitor. We need to always fight fair. We need to reach out to competitors at industry conferences and trade shows. We need to resist short term thinking and learn to adopt a longer view. In short, we need to always anticipate the future where we just might be on the same side with our current competitors.

I’m looking forward to the day when I can wax nostalgically about the enemies that I did battle with at work to my child. Because it increasingly appears that the enemy’s days are numbered. And being a guy who can nurse a grudge as well as the next guy, I think this could usher in a great new environment in which to do business.

About the Author: Bob Rosner is a best-selling author and award-winning journalist. For free job and work advice, check out the award-winning workplace911.com. Also check out his newly revised best-seller “The Boss’s Survival Guide.” If you have a question for Bob, contact him via bob@workplace911.com.

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