I knew candidate Barack Obama campaigned on a thematic promise to support Buy America laws, which is why I found it troubling that he wavered on the issue in the last few weeks. However, I didn’t know he made a very explicit, no-wiggle-room pledge to do so:
When asked in writing: “Do you support renegotiating trade agreements so they will allow us to use “Buy America” and “Buy Local” procurement policies? Obama answered “Yes” in a May 2008 Candidate Questionnaire (PDF) from the Oregon Fair Trade Campaign.
You know, a lot of grassroots groups are made fun of or looked at as annoying for asking candidates to fill out questionnaires on issues. It seems kinda old fashioned and archaic – but there’s a utility to it: it gets candidates to go on record with concrete promises. Now, sure, a lot of them break those promises, but getting the promise in exchange for political support is a basic function of democracy – and it serves a really valuable purpose in terms of being able to hold elected officials accountable.
In this case, the campaign pledge to change trade agreements to accommodate strengthened Buy America laws is directly at odds with the White House’s attempt to water-down those Buy America laws and its statement that the administration wants to make sure new legislation “doesn’t signal a change in our overall stance on trade.” And the fact that we have the campaign pledge in so clear a form lets us know that we’re well within our right as a movement – and we’re not being “disloyal” – in demanding that pledge be fulfilled.
Tom Friedman shills for Corporate America (shocker!) and attacks those who want American taxpayer money spent creating American rather than foreign jobs, because – dontcha know? – outsourcing American jobs is good for American workers:
While I think President Obama has been doing his best to keep the worst protectionist impulses in Congress out of his stimulus plan, the U.S. Senate unfortunately voted on Feb. 6 to restrict banks and other financial institutions that receive taxpayer bailout money from hiring high-skilled immigrants on temporary work permits known as H-1B visas.
Bad signal. In an age when attracting the first-round intellectual draft choices from around the world is the most important competitive advantage a knowledge economy can have, why would we add barriers against such brainpower – anywhere? That’s called “Old Europe.” That’s spelled: S-T-U-P-I-D.
For background, Friedman is referring to the Senate amendment passed by Bernie Sanders and Charles Grassley – an amendment so uncontroversial and bipartisan that it passed by voice vote. And really, it’s hard to know where to begin with someone like Friedman who is theocratically devoted to ignorance.
In Friedman’s world, the H-1B program does one thing and one thing only: it helps benevolent corporations attract “first-round intellectual draft choices from around the world,” which therefore makes our country and our economy stronger.
He’s aggressively uninterested in the concrete data that show the H-1B program is most often used to lower a company’s labor costs, not improve its intellectual capacity, and to offshore the very knowledge-based information sector jobs that Friedman says he wants to attact to the United States.
Paul Krugman recently warned free-market fundamentalists: “Don’t say that any theory which has good things to say about protectionism must be wrong: that’s theology, not economics.” Now, it looks like the economic crisis has put that all into relief. Check out Floyd Norris’s recent column in the New York Times:
“As the financial crisis has turned to an economic one, it appears that those running a closed economy may be in better shape to weather the storm…In contrast, the countries that opened the most to the international capital markets, and that sought to bring in business with relatively lax regulations, now are suffering the most.”
I know what you’re thinking: It’s like “newsflash – deregulation and neo-liberalism doesn’t work!!!” – as if we didn’t know that. But as we saw with the furor over the Buy America debate, lots of free-market fundamentalists simply cannot accept that reality, even if it has been reality for some time.
As Ha-Joon Chang expertly shows in his book “Bad Samaritans,” our country built its industrial strength through protections and regulation, and our country continues to be extremely protectionist when it comes to protecting intellectual property, copyrights and patents, and when it comes to massive corporate agriculture subsidies. The only thing we don’t protect in our trade policy is regular people. For every drug patent that keeps medicine prices high, there are 10 clean water protections stripped out of our globalization and regulatory policies.
From the Alliance for American Manufacturing, we get this nationwide poll, done by Harris:
WASHINGTON – Americans overwhelmingly support federal requirements for American-made materials in all federally funded infrastructure investment in the 2009 economic recovery bill, according to a random survey of 1,001 U.S. adults conducted Jan. 29 – Feb. 1 by Harris Interactive on behalf of the Alliance for American Manufacturing.
The national poll found 84 percent favor “Buy American” requirements (66 percent strongly, 18 percent somewhat). Only 4 percent strongly oppose the requirement and 7 percent somewhat oppose it. The overwhelming support was consistent regardless of gender, age, income level, education, or region.
It’s amazing that 84% of Americans support these provisions, and yet they are portrayed as “controversial” in Washington, D.C. That’s the rootsgap in action.
Remember back in in 2004 when the Bush administration issued a report trumpeting the benefits of job outsourcing? And remember how Democrats correctly went apeshit? Well, let me pose a question: What’s worse – issuing a report applauding job losses, or putting one of the biggest outsourcing advocates in America in a top government job?
Unfortunately, this isn’t a hypothetical – it’s very real. Check out this op-ed in the engineering trade journal EE Times. It’s by Rochester Institute of Technology professor Ron Hira, one of the nation’s leading progressive voices on the issue of jobs and trade:
On the very same day he was meeting with “CEOs [who] outsource American jobs”–a phrase he repeatedly and derisively used during his campaign, [Obama] named McKinsey’s & Co.’s Diana Farrell to his National Economic Council, the inner circle of economic advisors in the White House. Farrell has done more to promote outsourcing than nearly anyone else in America.
Farrell was the lead author of the infamous “Offshoring: Is it a Win-Win Game?” Now she’ll be operating at the highest levels of the Obama administration. Her phony “study” did more damage than any other in the debate over offshoring. And her propaganda was used to mislead the American public about the true impact of offshoring.
Moreover, Farrell’s firm made millions of dollars consulting with companies, advising them to accelerate their offshoring. And she publicly made the rounds to convince policymakers and the public that offshoring was good for them and the country. It’s also no coincidence that the IBM and Nasscom, the Indian IT outsourcing industry association, were major McKinsey clients. They benefited from McKinsey’s lobbying as well as its consulting services.
As I said, Hira’s a progressive, and one of the nation’s most respected (and quoted) experts on the issue of job outsourcing. He’s published terrific pieces on the issue in journals like the American Prospect that I highly recommend.
So considering the source – and the ample evidence he cites – I’d say this is a very problematic appointment, especially considering Farrell will be serving on a council headed by Larry Summers – not exactly a guy who has given a shit about reforming our trade/globalization laws.
Coming from the Financial Times – the paper of record for Big Money – this story is really an incredible sign that the progressive fair trade movement is gaining real ground and winning the broader political debate:
The most striking thing about the debate within Washington is how long the measures took to get noticed – and how little they are perceived as a protectionist act…The dwindling band of free-trade Democrats on Capitol Hill has been almost completely silent…
Looking at the political environment and Mr Obama’s own journey to the White House, perhaps that is not surprising. Along with his well-known criticisms of the effect on jobs and wages of deals such as Nafta, Mr Obama’s campaign singled out Buy American as a symbol of economic patriotism.
The Washington reaction to Buy American suggests that much of Congress and the Obama White House, while still respecting existing treaty commitments, is not going to go out of its way to placate protesting trading partners. The judgment most experts made – that free traders within the Obama administration will have to spend most of their time playing defence – has thus far been vindicated.
As with every story on this topic in the traditional media, the word “protectionist” is irresponsibly thrown around without any interest in defining the term, nor even a half-sentence noting that with corporate agriculture subsidies and massive protections for intellectual property, patents and copyrights, we already live in a protectionist economy.
It’s also not clear why any journalist would say it’s “striking” that simple procurement rules that have nothing to do with tariffs aren’t “perceived as a protectionist act.” Why is that “striking?” These rules have nothing to do with tariff protections. And, of course, the New York Times chimed in with its own story portraying an almost completely meaningless amendment as some sort of huge loss for fair traders (that’s what you get when you get the lobotomized Forest Gump character named David Sanger attempting – quite pathetically – to report on the substance of economic issues, rather than mere campaign gossip).
But that sound and fury to be expected. The real news here is that we’re winning. We’re winning votes in the Congress, and we’re winning elections on fair trade themes and we’re winning the broader debate. We’re dragging Washington – kicking and screaming – back towards the center of American public opinion.
Last week, as part of OpenLeft’s ongoing coverage of the Buy America fight, we learned that banks are using taxpayers’ bailout money not only to subsidize executive pay and Superbowl parties, but also their efforts to outsource white-collar jobs. Now, the Associated Press reports that Sens. Bernie Sanders (I-VT) and Chuck Grassley (R-IA) will introduce an amendment to the stimulus bill that would end that rip-off scheme:
Two senators on Wednesday proposed requiring bailed-out banks to hire only Americans for one year, after an investigation by The Associated Press showed that banks receiving the most federal aid had requested visas for thousands of foreign workers even as they laid off employees amid the economic collapse.
As I reported in my book, The Uprising, companies routinely use the H-1B visa program to fire domestic workers and replace them with imported workers who are often paid below market wages and who have far less leverage to unionize because their employer controls their immigration status. That’s precisely what’s happening in the financial industry, and now taxpayer dollars are subsidizing the practice.
Sanders, fresh off his victory on executive pay, is once again leading for our movement, and his ability to get a senior Republican on board augurs well for the bill’s chances. Stay tuned.
Sen. John McCain’s amendment to gut Buy America laws was soundly defeated in the U.S. Senate tonight. Additionally, Sens. Sherrod Brown (D-OH) and Byron Dorgan (D-ND) passed an amendment simply restating that the Buy America language does not violate America’s trade agreements. Here’s Brown’s statement:
“This will help ensure we are doing all we can to promote U.S. businesses and create jobs, which is the purpose of the economic recovery bill” Brown said. “I applaud Senator Dorgan’s leadership and my Senate colleagues for putting American workers first. This vote affirms that Buy America provisions do not violate trade laws. It affirms that when we can, we should use U.S. tax dollars to create U.S. jobs. The next step is to focus on implementation and enforcement of these provisions as we work to strengthen our economy and rebuild our nation’s middle class.”
Count these votes as another big win for the progressive movement, and another win for the “Make Him Do It” Dynamic. Senate Democrats, joining with progressive movement allies like organized labor, consumer groups and the blogosphere, forced President Obama – possibly against his own will – to stand by his campaign promises to support Buy America laws.
We’re 2-for-2 today, winning both the Buy America fight and forcing Obama to reverse his earlier opposition to executive pay limits. On the Buy America laws, we still have to make sure they survive the conference committee, and with the executive pay restrictions, we still have to make sure as many loopholes are eliminated as possible. But this is a big day and real progress.
Whether or not you are among the tiny minority of Americans who thinks our trade and globalization policies are good for our country, it is undeniable that Barack Obama campaigned on very explicit pledges to radically change those policies. He not only campaigned on an implicit promise to support Buy America laws, but with regards to existing trade agreements and their provisions dealing with procurement, he said he does “not support trade efforts that undermine important federal, state and local policies.”
Clearly, his move to water-down the Buy America laws he campaigned on violate the spirit – if not the letter – of his campaign promises, especially because he is justifying the move by citing the trade agreement restrictions he said he opposed. But today, the White House went even further, saying that the administration’s overarching goal is actually no wholesale change of trade policy whatsoever. Check this out from White House press secretary Robert Gibbs’ briefing today:
The lawmakers are reacting to a demand by the White House that the provisions satisfy U.S. obligations under the World Trade Organization. President Barack Obama “wants to ensure that any legislation that passes is consistent with trade agreements and doesn’t signal a change in our overall stance on trade,” White House Press Secretary Robert Gibbs said at a news briefing today.
As the AFL-CIO’s Bob Baugh notes – and as Public Citizen ably details – Buy America laws (ie. laws that let the government target its procurement to American companies) are completely consistent with our international trade agreements. Indeed, both the “protectionist” fearmongering and the “violation of trade pacts” nonsense are canards on the substance.
But that’s less important than the White House’s meta statement here. After winning free-trade-decimated swing states like Ohio, Indiana, Pennsylvania, Wisconsin on very clear promises to change America’s overall stance on trade policy, the White House has made an official declaration that one of the president’s biggest objectives in the debate over the stimulus bill is that the legislation “doesn’t signal a change in our overall stance on trade.” Yes, the administration that came in on a promise of “change” is explicitly saying it doesn’t want to even “signal a change.”
Between this, and Larry Summers’ letter insisting that the Obama administration will avoid any “industrial policy” at all cost, I don’t know how much more clear the Obama administration can really make things. It is going before cameras specifically saying its objective is to prevent change on one of the most important economic issues that Obama campaigned on.
The Wall Street Journal explains why “Buy America” provisions and domestic preferences will likely be integral to making sure the green energy revolution actually happens in our country – and isn’t outsourced:
Congress is beginning to fear that the Obama administration’s push for renewable energy will produce more jobs in Asia and Europe — where most wind turbines and solar panels are made — than in the U.S.
The proposed remedy is a provision in the economic-stimulus bill that offers tax breaks to U.S. producers of the equipment.
Sen. Jeff Bingaman (D., N.M.), chairman of the Energy and Natural Resources Committee, is urging support for a provision in the Senate version giving a 30% tax credit to companies that expand or build U.S. manufacturing facilities geared to renewable energy, clean transportation or electric-system upgrades.
“Several of us have come to recognize that we’ve outsourced the very things we’re going to need to change the nation’s energy mix, and this is a way of encouraging more manufacturing here at home,” Mr. Bingaman said.
The situation highlights a weak link in U.S. industrial policy: Although tax credits are offered to those building renewable-energy projects, there are no comparable incentives for domestic equipment makers.
Oddly, tax credits for domestic manufacturers – as opposed to Buy America laws – aren’t portrayed as “protectionism” even though they are just as much a subsidy as targeted procurement policies. I’m not quite sure why that is.
Well, if you wanted a redux of the 2008 campaign in which John McCain criticized spending taxpayer money here at home, check this out from National Journal:
Defense contractors are among the leaders of a lobbying drive by American companies not singled out for direct aid in the economic stimulus package, pushing back hard against “Buy American” provisions…
Aides said Sen. John McCain, R-Ariz., plans to offer an amendment to the stimulus bill (HR 1) on the Senate floor this week that would strike the Buy American provisions.
In a letter to Senate leaders obtained by Congressional Quarterly, 100 companies and associations warned Tuesday that the provisions “will backfire on the United States.” The letter, whose signatories include defense giants such as Lockheed Martin Corp., Northrop Grumman Corp. and United Technologies Corp.,
National elections should have consequences, and campaign promises in key swing states should be fulfilled. Call your senator and tell them to vote against the McCain amendment and stand up for Obama’s campaign promises. As Businessweek’s cover story indicates, U.S. taxpayer money needs to be spent on the U.S. economy if this stimulus bill has a chance to really lift our economy.
From the Columbus Dispatch, we get this from the same man who deregulated the economy, the same man who promised his buddy Ken Lay big favors, the same man who says unions cause unemployment, the same man, sadly, who is running economic policy in the Obama White House:
Summers questions “Buy America” provision
A top Obama economic adviser appeared to question the wisdom of placing a “Buy America” in the massive economic stimulus package winding its way through Congress.
Lawrence Summers, director of the White House National Economic Council, told regional reporters in a briefing at the Old Executive Office Building next to the White House today that the president is examining the provision in both the House-passed and Senate versions of the measure…
Summers added that Obama wants to ensure that the stimulus legislation is not an excuse for America to break existing trade commitments or embrace “any new kind of protectionism.” Asked whether that mean Obama really does oppose the “Buy America” section, Summers told The Daily Briefing that he had already answered the question and wouldn’t elaborate.
So now we have a Democratic president, who explicitly campaigned on a promise to support Buy America laws, dispatching his top economic aide to float discredited right-wing talking points about “protectionism” to undermine those very Buy America laws. Indeed, Summers sounds exactly like Senate Republican leader Mitch McConnell, who sounds (not surprisingly) exactly like one of the corporate lobbyists pushing to eliminate these laws.
A lot of the hairbrained editorializing on the Buy America provisions in the stimulus package suggests that Obama will get cross-ways with the Europeans and Canadians if he were to implement the measures, and that a trade war would be provoked.
This is ridiculous. As we pointed out last year during the Ohio primaries, the rightwing Canadian government tried to sabotage the Obama candidacy with the NAFTA-gate leaks. Now they're trying to do the same to his administration. Think of Canadian Prime Minister Stephen Harper as a little Karl Rove of the North.
As we've been pointing out, there has been a massive corporate lying campaign about the iron and steel provisions for U.S. transit projects. Now, corporations have teamed up with Canada and some of the knuckle-dragging EU governments to throw just enough fake spin to try to fool U.S. policymakers into thinking these measures are WTO-illegal. They're not.
And, as it turns out, Canadians actually want the right to invest in themselves as well. Read this from the Toronto Star:
By using “trade war” rhetoric, [Canadian International Trade Minister Stockwell] Day appears to have positioned the Conservative government with big American corporations already gunning for new President Barack Obama by attacking the package now being worked out by Congress in response to Obama's election pledges. News emerged yesterday that Canada's ambassador to the U.S., Michael Wilson, has fired off a letter to U.S. legislators warning the rules would be a disaster for business and workers in both countries.
“Unfortunately, rather than working co-operatively and practically for an exemption, Canadians politicians … have been publicly lecturing Americans about their `international obligations' and the theoretical virtues of global free trade,” wrote Erin Weir, economist with the United Steelworkers' Canadian arm, in The Progressive Economics Forum.
“This argument is not correct in the current economic context and certainly will not be very persuasive south of the border.”
Scott Sinclair, senior trade analyst with the Canadian Centre for Policy Alternatives, agrees. “As far as I can tell,” he says, “the provision included in the stimulus package will not violate U.S. international treaty obligations.” He cautions that Day “should know better,” adding: “I think there is a back story here.”,,,
“I think they want to knock Obama off balance and gain influence over his trade policy from the outset,” said Sinclair. “They are enlisting the support of foreign governments, and so you have (British Prime Minister) Gordon Brown and Stockwell Day talking about it.”…
NDP Leader Jack Layton agrees Ottawa is “failing to do what other countries are doing to ensure some of the work in government procurement has a big Canadian component.” Says Layton: “Instead of doing his homework, Day is huffing and puffing – and this isn't a house that can be blown down.”
We should work together “to ensure both of our stimulus packages work” he says, and concentrate on the dumping of cheap steel on the Canadian market from offshore.
Let’s just say you are among the very small minority of people in the world (most of whom were at Davos last week) who believes the whole concept of “protection” is bad, no matter what is being protected – kids, water, air, jobs, etc. Let’s just stipulate that, and let’s not have a debate about whether your fringe position is moral or just. Let’s for a moment ignore the verifiable fact that every economy in the world including ours is protected. Let’s even ignore the fact that supposed “free” trade agreements include all sorts of tariff protections for corporate profits (copyrights, patents, etc.) yet are still called “free” trade agreements, while anyone wanting to put minimal tariff protections for the environment or human rights in such agreements is slandered as a “protectionist.” Let’s just put all that aside for a minute and get to some basic definitions.
If you are one of those people who hates “protection,” even you will admit that when it comes to economic policy debates, “protectionism” is a term that has been used for the better part of a century as the word to describe tariffs. Smoot-Hawley tariffs, for instance, were labeled “protectionist,” and tariff proposals today have been labeled “protectionist.”
But now, suddenly, every corporate lobbyist in Washington, D.C. is claiming that Buy America laws are “protectionist,” even though they have absolutely nothing to do with protecting the economy through high tariffs. Buy America laws simply say that American taxpayer dollars – when spent specifically to stimulate the American economy – should be spent on American goods that are made with American labor. How is this “protectionism” in the way that word has been defined for the better part of a century?
The answer is that it’s not in any way shape or form.* Indeed, the definition of the term “protectionism” is being changed by the corporate outsourcers that won’t get a piece of the pie if Buy America laws are in the stimulus. Why? Because when even Businessweek says that without measures to make sure stimulus money stays in the country, the stimulus will be undermined, corporate outsourcers need to resort to trying to change the definitions of words in order to defend their profits.
* Tellingly, corporate lobbyists – when pressed on this point – resort to conjuring fantastical hypotheticals claiming that basic Buy America laws will prompt tariffs in other countries. But again, these are fantastical hypotheticals based on wild speculative fearmongering – and not rooted in anything resembling fundamental, dollars-and-cents reality. America’s economy is the largest in the world, and the dirty little secret is that because of that reality, no country can afford to shut down access to our market, Buy America laws or not.
In the intensifying fight over Buy America laws and whether to make sure U.S. taxpayer money works for U.S. taxpayers, it’s not just stimulus money that corporate lobbyists want subsidizing outsourcing, it’s also bank bailout money:
(AP) Banks collecting billions of dollars in federal bailout money sought government permission to bring thousands of foreign workers to the U.S. for high-paying jobs, according to an Associated Press review of visa applications. The dozen banks receiving the biggest rescue packages, totaling more than $150 billion, requested visas for more than 21,800 foreign workers…The figures are significant because they show that the bailed-out banks, being kept afloat with U.S. taxpayer money, actively sought to hire foreign workers instead of American workers.
As my book, The Uprising, showed in its examination of efforts to unionize high-tech workers, these companies use the H-1B program to hire workers who will take much lower wages and whose immigration status is effectively determined by their visa-holding employer (read: they can’t try to unionize, etc.), thus undercutting American workers. In the case of the banking industry, while “lower wages” still certainly means decent wages, the bottom line is that the importation of foreign workers – at a time when domestic unemployment is rising – is a way to drive down the corporate bottom line. And now, that drive is being subsidized by the very taxpayers who it is hurting.
And yet, in the face of this, we’re expected to believe that provisions ensuring taxpayer cash is used to hire American workers is somehow evil “protectionism,” while letting taxpayer cash subsidize outsourcing is Enlightened Prgamatism. What a joke.
STATE BLOGS
In the 
