Friday, January 31, 2014

Should the Unemployed just Hang Themselves?

What is the bipartisan consensus in Congress—thin the heard? Is that their Kumbaya Grand Bargain? Sign more trade agreements and offshore more jobs? With a 5-year job shortage and more cuts in food stamps, what are millions of desperate Americans left to do, hang their heads in shame before finally hanging themselves with that cheap rope they bought at Walmart?

Obama only briefly mentioned fast-tracking the Trans-Pacific Partnership (TPP) in last Tuesday's State of the Union speech, depicting the trade agreement as part of his bipartisan outreach to the GOP, while claiming it would boost U.S. exports.

Rep. Keith Ellison of Minnesota, the chair of the House Progressive Caucus, asked, "How can you say on one hand you want to address income inequality, you want to make this economy work for everyone, and on the other hand, say you want trade promotion authority so you can pass these NAFTA-style trade deals? It doesn’t make any sense."

The Republicans, on the other hand, wanted Obama to spend more time pushing it during the State of the Union. But if Obama is so enthusiastic about this proposed trade deal, then why hasn't he been touring the nation and fervently trying to pitch this snake oil to the American public?

Senate Majority Leader Harry Reid reiterated his position about fast-tracking this trade deal, suggesting the bill (introduced by Senator Max Baucus, who is now the new ambassador to China) may be DOA in the Senate.

And it's no wonder—this trade agreement has been described as NAFTA on steroids. Wikileaks has more details and updates on the TPP trade agreement.

And here's a few numbers about the NAFTA trade agreement that Rep. Keith Ellison referenced:

  • In 1993, before NAFTA, the United States had a $2.5 billion trade surplus with Mexico and a $29 billion deficit with Canada. In 2012, the combined NAFTA trade deficit was $181 billion. The average annual growth of our trade deficit has been 45 percent higher with Mexico and Canada than with countries that are not party to a NAFTA-style pact.
  • The companies that took the most advantage of NAFTA — big manufacturers like G.E., Caterpillar and Chrysler [and many others, and many who are also tax dodgers] — promised they would create more jobs at their American factories if NAFTA passed. Instead, they fired American workers and shifted production to Mexico. The average American wage has grown less than 1 percent annually in real terms since NAFTA, even as productivity grew three times faster.
  • A 1997 Cornell University study ordered by the NAFTA Commission for Labor Cooperation found that as many as 62 percent of union drives faced employer threats to relocate abroad, and the factory shutdown rate following successful union certifications tripled after NAFTA.
  • Since NAFTA’s implementation, the share of national income collected by the top 1 percent has shot up by 58 percent.
  • Consumer prices had not been sufficient to offset losses in wage levels, even accounting for the benefits of cheaper goods. This means a loss of more than $3,300 per year for a worker earning the median annual wage of $27,500 (50% of all wage earners currently take home this or less.)

But yet, even without TPP, more jobs might still be offshored—this time to Panama in Central America. We've already had the CAFTA trade agreement with Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic (and we know how well they treat and pay their workers).

Congress has already passed trade agreements with South Korea, Panama, and Colombia (made possible by both Bush and Obama). And there's also the little mentioned pending TAFTA trade agreement with our friends in Europe (full list here).

As if the unemployment rate wasn't high enough. In a memo to clients, David John Marotta (a Wall Street advisor) calculates that the actual unemployment rate of those not working is a sky-high 37.2 percent, not the 6.7 percent as advertised by the Fed—and the Misery Index is over 14, not 8 claimed by the government. 

The Bureau of Labor Statistics says the unemployment rates in 29 states are at post-recession lows --- BUT --- it was also noted that long-term unemployment is at record highs in 41 states—and that doesn't even count millions of "discouraged workers" who dropped out of the labor force and are no longer being counted in the official unemployment rate.

State economies have lost $1.76 billion after Congress let the benefits program for the long-term unemployed lapse at the end of last year. In North Carolina, after the state ended its participation in the long-term unemployment insurance program before the benefits lapsed, it has witnessed the largest labor force contraction ever.

David A. Rosenberg, formerly of Merrill Lynch in New York, says:

"The unemployment rate in the financial sector is down to 4.2%, in manufacturing down to 5.5%, in information technology down to 4.8%, in education/health down to 4%, and all the way down to 3.6% in the resource sector. This is over 40 million workers and represents a 40% chunk of private payrolls."

Officially, the Bureau of Labor Statistics reports that 92.3 million Americans are NOT in the labor force—another record high. As it's been noted before, the employment-population ratio in now at a 30 year low; and the labor force participation rate is now at a 35 year low.

The labor force includes those counted as either "employed" or "unemployed", but doesn't include all those previously counted as "discouraged workers". By some estimates, out of 92.3  million people NOT in the U.S. labor force, as many as 48 million Americans are currently involuntarily unemployed and would like a full time job paying a living wage—meaning more than Obama's proposed $10.10 an hour minimum wage, which is only $21,008 a year before taxes, but only if they are employed full time. (Fast food workers were asking for $15 an hour).

But Obama still wants to fast track TPP. Does this make any sense at all? What good will raising the minimum wage to a puny $10.10 an hour do when there aren't enough jobs?

So what will the unemployed do? The Democrats saw fit to "compromise" with the GOP again by cutting 4% of 1% (0.04%) of the federal budget in the farm bill to cut aid to 2 million poor Americans on food stamps. So is that the ultimate plan...making sure that Americans can't work AND can't eat? If it weren't for ObamaCare™, millions more would be without any health care either (obtained through the expansion of the Medicaid program).

It's too bad that The LEFT wants to hide these dismal unemployment numbers because it's an embarrassment to them (even though they didn't cause all these numbers); but The RIGHT only wants to use these numbers as a weapon again The Left —when it was The Right that primarily caused these numbers in the first place with Reaganomics, "trickle down" and "starve the best"—with a lot of help from The Left with NAFTA).

But The Left can't fix the problem because The Right has obstructed The Left, hoping to turn public sentiment against The Left so that The Right can regain control of the Senate and Presidency (so that they can give us more of these dismal numbers.)

It's all about politics, not about helping the unemployed obtain jobs, feeding the poor or fixing the country. And money in politics allows for this destruction of our nation. Taking big money out of politics will benefit the many at the expense of the few. But Congress is too corrupted to change the election and voting laws.

Vladimir Lenin said, "The Capitalists will sell us the rope with which we will hang them." But it could have been Chairman Mao who said that. The offshoring of jobs to China (and elsewhere) is responsible for China's spectacular growth over the past 30 years. American multinational corporations made the rope in China, sold it us, and we hung ourselves.

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