January 11, 2012

Good Wages, Unions and Government Regulation Are The Solutions, Not Causes, of our Economic Woes

Can we compete with China's wages? Does government interference and regulation hold us back? Are our unions keeping us from being competitive? Do we need to lower our standard of living in a race to the bottom? You might be surprised to learn that Germany pays higher wages, has strong unions, has much more government involvement and is doing better as a result. Conclusion: our wages, unions and government are not the problem, they are the solution.

Hourly manufacturing compensation (wages plus benefits) was $48 in Germany in 2008 - the most recent year surveyed by the Bureau of Labor Statistics - while it was $32 in the United States. Yet Germany is an export giant, while we are the colossus of imports.

In Germany, workers also get six weeks vacation - by law, federally mandated, a right. They get health care, university, child care and pensions and as a result they have higher productivity. In Germany, the government requires worker representatives to hold seats on the boards of directors of companies, depending on the number of workers. Government-funded research and vocational training, and policies to retain skilled workers bring another competitive advantage.

The result of all this government interference is that Germany's export-oriented manufacturing economy recovered from the recession and is doing OK, and their workers are paid well and have great benefits.

http://www.alternet.org/economy/149305/good_wages,_unions_and_government_regulation_are_the_solutions,_not_causes,_of_our_economic_woes/

January 10, 2012

In 1936 many felt that FDR had not been "progressive enough" for the times.

The Campaign and Election of 1936

FDR entered the 1936 election with a strong, but not invincible, hand. The economy remained sluggish and eight million Americans still were without jobs. Critics from various points on the political spectrum—such as Father Coughlin and Dr. Francis Townsend—had spent much of the previous two years attacking the President. (They supported Representative William Lemke of the newly formed Union Party in the 1936 election.) Likewise, by 1936 FDR had lost most of the backing he once held in the business community because of his support for the Wagner Act and the Social Security Act.

Republicans, though, had few plausible candidates to challenge FDR in 1936. They settled on Alfred "Alf" Landon, a two-term governor of Kansas who was the only Republican governor to win reelection in 1934. Nominated on the first ballot at the Republican convention in Cleveland, Landon was a moderate conservative—and notoriously lackluster public speaker—who the party hoped could take votes from FDR in the rural Midwest. Unfortunately for Landon, his moderation was often drowned out during the campaign by the conservative clamor emanating from the Republican Party, as well as from his running mate, Chicago publisher Frank Knox.

Roosevelt seemed to relish the attacks of Republicans, maintaining that he and his New Deal protected the average American against the predations of the rich and powerful, Referring to "business and financial monopoly, speculation, reckless banking," FDR crowed, "Never before have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me—and I welcome their hatred." Roosevelt's supporters believed their candidate understood and sympathized with them. As one worker put it in 1936, Roosevelt "is the first man in the White House to understand that my boss is a son of a (expletive.)" FDR won the election in a walk, amassing huge majorities in the popular vote and in the Electoral College.

What the 1936 election made most clear was that because of FDR and the New Deal, the Democratic Party was now the majority party in the nation. Roosevelt had put together what came to be called the "New Deal Coalition," an alliance of voters from different regions of the country and from racial, religious and ethnic groups. The coalition combined southern Protestants, northern Jews, Catholics and blacks from urban areas, labor union members, small farmers in the middle west and Plains states, and liberals and radicals. This diverse group, with some minor alterations, would power the Democrats for the next thirty years—and it was Roosevelt who put it together.

http://millercenter.org/president/fdroosevelt/essays/biography/3

Fr. Charles Coughlin

"After the 1936 election, Coughlin increasingly expressed sympathy for the fascist policies of Hitler and Mussolini as an antidote to Bolshevism. His weekly broadcasts became suffused with antisemitic themes. He blamed the Depression on an "international conspiracy of Jewish bankers", and also claimed that Jewish bankers were behind the Russian Revolution."

But before the 1936 election "Early in his career Coughlin was a vocal supporter of Franklin D. Roosevelt and his early New Deal proposals, before later becoming a harsh critic of Roosevelt as too friendly to bankers. In 1934 he announced a new political organization called the National Union for Social Justice. He wrote a platform calling for monetary reforms, the nationalization of major industries and railroads, and protection of the rights of labor. The membership ran into the millions, resembling the Populist movement of the 1890s."

http://en.wikipedia.org/wiki/Charles_Coughlin

Dr. Francis Townsend

"Dr. Francis Everett Townsend (January 13, 1867–September 1, 1960) was an American physician who was best known for his revolving old-age pension proposal during the Great Depression. Known as the "Townsend Plan," this proposal influenced the establishment of the Roosevelt administration's Social Security system.

In 1935, partly in response to the continued growth of the Townsend Plan, President Franklin D. Roosevelt proposed his own old-age policy, which was less generous than Townsend and Clement's proposal. The president's policy included a program for poor older people with matching payments from the federal government, known as Old Age Assistance, and a national old-age annuity program that later was called by all Social Security. The president's programs were included in the Social Security Act, which passed in August 1935.

The Townsend Plan continued to agitate for higher benefits after the Social Security Act's passage and reached its peak of support in the months after it was enacted. The Townsend organization could plausibly claim that the benefits were far less than what the American public wanted. The average Old Age Assistance benefit was about $20 per month as late as 1939, and the program known as Social Security was not due to take effect until 1942, despite the fact that opinion polls indicated that the American public thought that $40 per month was fair for the elderly.

Although the Townsend Plan was hampered by Dr. Townsend's personal control over his organization and his vendetta against Roosevelt, by continued political pressure, augmented by other pension organizations, such as California's Ham and Eggs, the Townsend Plan helped to induce amendments to the Social Security Act in 1939. These amendments greatly upgraded old-age benefits for both programs."

http://en.wikipedia.org/wiki/Francis_Townsend

Huey Long

Aware that Roosevelt had no intention to radically redistribute the country's wealth, Long became one of the few national politicians to oppose Roosevelt's New Deal policies from the left. He considered them inadequate in the face of the escalating economic crisis. Long sometimes supported Roosevelt's programs in the Senate, saying that "[W]henever this administration has gone to the left I have voted with it, and whenever it has gone to the right I have voted against it." He opposed the National Recovery Act, calling it a sellout to big business. In 1933, he was a leader of a three-week Senate filibuster against the Glass banking bill for favoring the interests of national banks over state banks.

In terms of foreign policy, Long was a firm isolationist. He argued that America's involvement in the Spanish-American War and the First World War had been deadly mistakes conducted on behalf of Wall Street. He also opposed American entry into the World Court.

In March 1933, Long offered a series of bills collectively known as "the Long plan" for the redistribution of wealth. The first bill proposed a new progressive tax code designed to cap personal fortunes at $100 million. Fortunes above $1 million would be taxed at 1 percent; fortunes above $2 million would be taxed at 2 percent, and so forth, up to a 100 percent tax on fortunes greater than $100 million. The second bill limited annual income to $1 million, and the third bill capped individual inheritances at $5 million.

With the Senate unwilling to support his proposals, in February 1934 Long formed a national political organization, the Share Our Wealth Society. A network of local clubs led by national organizer Reverend Gerald L. K. Smith, the Share Our Wealth Society was intended to operate outside of and in opposition to the Democratic Party and the Roosevelt administration. By 1935, the society had over 7.5 million members in 27,000 clubs across the country. Long's Senate office received an average of 60,000 letters a week. Some historians believe that pressure from Long and his organization contributed to Roosevelt's "turn to the left" in 1935. He enacted the Second New Deal, including the Social Security Act, the Works Progress Administration, the National Labor Relations Board, Aid to Dependent Children, the National Youth Administration, and the Wealth Tax Act of 1935. In private, Roosevelt candidly admitted to trying to "steal Long's thunder."

http://en.wikipedia.org/wiki/Huey_Long#Long_in_the_Senate_.281932.E2.80.931935.29

During his first term many on the left thought that FDR was "Obama" rather than the FDR that we remember today.

January 8, 2012

You understand that our trade with "free trade" countries is much more equal than with

the rest of the world?

We have "free trade" with 17 countries. In 2010 our total trade with the those 17 countries was $1.115 trillion. We had a deficit of $71.1 billion (6.5% of the total). Exports were 47% of the total and imports were 53%.

In 2010 our total trade with the rest of the world was $2.108 trillion. We had a deficit of $574.8 billion (27.2% of the total). Exports were 37% and imports were 63%.

January 7, 2012

Every developed country has seen manufacturing decline. Several have it worse than the US.

"One interesting tidbit: While Americans sometimes complain that the country doesn’t “make” anything anymore — a sentiment related to manufacturing’s long-term slide in this country — they should know that declines in manufacturing jobs are common in the rest of the developed world, too:

In the United States (the red line), manufacturing as a share of total employment has fallen 15.5 percentage points in recent decades, from 26.4 percent of jobs in 1970 to 10.9 percent in 2008. In some other countries the decline has been even steeper. In Britain, for example, the share of employment held by manufacturing has fallen 21.9 percentage points in the last few decades, from 33.9 percent in 1971 to 12 percent in 2008.

There are several generally accepted explanations for these trends. They include productivity growth and new technologies; the rise of the service-sector economy; and the shift of manufacturing jobs to areas of the world where labor is cheaper."

http://economix.blogs.nytimes.com/2009/11/16/manufacturing-around-the-world