Labor Day in a Kleptocracy

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We are living through a profound global financial crisis. That crisis has many proximate causes in the governance and deregulation of Wall Street. We have seen the astounding bailout of Bear Stearns using $30 billion plus in public money—Bear Stearns – an investment bank, an enterprise that prided itself on being in the business of cowboy capitalism, business without a safety net.

But the real roots of the crisis do not lie on Wall Street. The cause of the crisis can be found in the long-term weakening of the real American economy in an era of globalization—in closed factories, outsourced high tech jobs and low wage jobs with no benefits, and in the unsustainable effort to maintain middle class living standards through borrowing. It is to be found in the reality of lives like that of Kimberly Somsel of Westland Michigan, a member of the AFL-CIO’s community affiliate Working America, an unemployed single mother of two battling breast cancer and facing foreclosure due to a ballooning “2 and 28” loan payment. She is selling the family car and her furniture just to get by. Five houses on her block are threatened with foreclosure.

Powerful voices in our country say that public resources should be there for Bear Stearns, but not for Kimberly Somsel, to keep the champagne flowing on Wall Street, but not to build a future for Michigan. But there is another way — a return to a high wage economy driven by productive investment in the United States. This way requires not that we retreat from the global economy, but that we insist that the globalized economy have real rules that work for working people. At the center of these rules must be labor market regulation, and in particular, regulation that empowers workers to speak for themselves by acting together. But rules are no enough. The United States must pursue a real national economic strategy in a globalized world economy.

For thirty years, America’s economic elites and their political allies have pursued a combination of economic and social policies designed to produce a low wage economy. These policies—our labor laws and our broader system of labor market regulation, our tax policies and our approach to globalization, have yielded decades of stagnant wages and rising economic inequality.

But at the same time, policymakers of both parties have sought, with some success, to maintain high levels of consumer spending. The pursuit of the contradiction of a low wage, high spending economy has systematically destroyed the various ways we individually and collectively save and invest. Instead of an income driven economy, we have become an economy driven by asset bubbles fueled by cheap debt. The ultimate unsustainability of this strategy has brought us to our current economic crisis.

To grasp what needs to be changed, it is necessary to review the thirty years of policy that got the United States to where we are.
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[full article]
- How a Low Wage Economy with Weak Labor Laws Brought Us the Mortgage Credit Crisis
http://www.irle.berkeley.edu/events/spring08/feller/


… In fact, they behave politically much more like Afghan and Pakistani big landlords, who pay their peasants a dollar a day and call in the army to put down any organized protests. In part, they have been offered an irresistible temptation by the destruction of organized labor; French workers wouldn't put up with a tenth of the insults visited upon us by our overlords. But it is a dead end, even for the uber-rich. Healthy, educated workers will be key to American economic competition in the world in the coming century. Our super-rich and our politicians are hollowing the country out with their ponzi schemes and their Sparta strategy of projecting military force even as the country's economic base in manufacturing and productivity sinks in comparison to rivals.

As we barbecue on imported grills and watch sports on our foreign-made LCD televisions and lament the bad economy, we should take a moment Monday to celebrate not just the individual worker but what is left of the American labor movement, since only if it is strengthened is our country likely to succeed in stepping back from the abyss. Aristotle warned us that each form of legitimate government is subject to decay. Aristocracies too easily become juntas. And democracies too easily become demogoguery and mob rule. The first eight years of the twenty-first century took us perilously close to both at once.

I celebrate today the organized workers, the ones who can push back against the crooks in pinstripe:

Bareheaded,
Shoveling,
Wrecking,
Planning,
Building, breaking, rebuilding,
Under the smoke, dust all over his mouth, laughing with
white teeth,
Under the terrible burden of destiny laughing as a young
man laughs,
Laughing even as an ignorant fighter laughs who has
never lost a battle,
Bragging and laughing that under his wrist is the pulse.
and under his ribs the heart of the people,

[full article]
Where have All the broad Shoulders Gone?
Or, Labor Day in a Kleptocracy
http://www.juancole.com/2009/09/where-have-all-broad-shoulders-gone-or.html