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Working In These Times

Friday, Apr 22, 2011, 9:12 am

As Offshoring Continues, US Public Peeved at ‘Free Market’

BY Roger Bybee

Many Americans increasingly feel like a trapdoor has suddenly dropped them into economic quicksand, with major corporations and their government allies pulling them further away from the middle-class security they once had.

These feelings have been heightened by a wave of public-sector union-busting laws in Wisconsin and Ohio that will encourage more private sector wage-cutting (already at a record level ), revelations about the extent of corporations “off-shoring” jobs while creating virtually no new jobs in the United States for the entire 1999-2009 decade and news that two-thirds of major corporations are paying no federal income taxes.

Two surveys released this week suggest an intensifying sense of impatience with the agonizingly slow recovery and a profound and growing disillusionment with Corporate America. First, a New York Times/CBS News poll shows declining faith that America is on a path to economic recovery:

Americans are more pessimistic about the nation's economic outlook and overall direction than they have been at any time since President Obama's first two months in office...

At a time of rising gas prices, stubborn unemployment and a cacophonous debate in Washington over the federal government's ability to meet its future obligations, the poll presents stark evidence that the slow, if unsteady, gains in public confidence earlier this year that a recovery was under way are now all but gone.

The poll reflects a high degree of political disorientation and confusion among voters. While 72 percent of the public—including a stunning 55 percent of Republicans—favor President Obama’s proposal to raise taxes on incomes over $250,000, a slight majority backs Rep. Paul Ryan’s (R-Wis.) plan for wrecking Medicare, which also contains relatively little-known provisions for further lowering taxes on corporations and the rich.

But Americans remain solidly clear and unified in believing that the economic recovery is not bringing meaningful benefits to folks like them, with 70 percent convinced that the country is “seriously on the wrong track.” President Obama's economic policies have a 57 percent disapproval rate, while congressional Republicans are seen even more dubiously.

BIG DROP IN SUPPORT FOR 'FREE MARKET'

Obama’s economic policies offer at least some appeal to economic fairness, but the president’s continued reliance on “private-sector job creation” seems downright absurd when corporations feel no sense of obligation to add create in the United States. “Winning the Future” for Obama’s team has meant business-friendly efforts that are utterly failing to lift decaying communities out of job loss and misery.

Prolonged unemployment—particularly high in old manufacturing towns—not only has generated understandable pessimism about the future state of the economy, but it is also propelling an increasing number of Americans to question whether the “free market” is the best economic system. Americans are growing increasingly suspicious of the giant corporations which largely shape the economy.

Thus, the polling firm Globescan found a sharp drop in the level of support for “free enterprise”:

When GlobeScan began tracking views in 2002, four in five Americans (80%) saw the free market as the best economic system for the future—the highest level of support among tracking countries. Support started to fall away in the following years and recovered slightly after the financial crisis in 2007/8, but has plummeted since 2009, falling 15 points in a year [emphasis added] so that fewer than three in five (59%) now see free market capitalism as the best system for the future.

Americans with incomes below $20,000 were particularly likely to have lost faith in the free market over the past year, with their support dropping from 76 percent to 44 percent between 2009 and 2010.

GlobeScan Chairman Doug Miller commented: "America is the last place we would have expected to see such a sharp drop in trust in the free enterprise system. This is not good news for business. He added:

The poll suggest that American business is close to losing its social contract with average American families that has enabled it to prosper in the world. Inspired leadership will be needed to reverse this trend.

The breakdown of the “social contract” is evident when you look at the radical shift in General Electric’s guiding philosophy. As Steven Greenhouse noted in The Big Squeeze, in 1962 GE’s employee benefits manager wrote,

Maximizing employer security is a prime company goal. The employee who can plan his economic future with reasonable certainty is an employer’s most productive asset.

Compare that quaint attitude with the ruthless creed of Jack Welch’s, GE’s CEO from 1981 to 2001, who showed his disregard for employee loyalty when he declared, "Ideally you'd have every plant you own on a barge."  By that, he meant a readiness to seek out at a moment's notice the lowest possible wages and most pliable governments (weak regulations, low taxes, hostile to unions, etc.) anywhere on the globe.

U.S. FIRMS GROWING ABROAD, SHRINKING AT HOME

More and more corporations are enthusiastically carrying out Welch’s strategy, as David Wessel's stunning Wall Street Journal article and chart revealed this week, generating extensive comment in progressive media (see here and here):

U.S. multinational corporations … cut their work forces in the U.S. by 2.9 million during the 2000s while increasing employment overseas by 2.4 million, new data from the U.S. Commerce Department show.

Given this callous disregard for the U.S. workers and communities that corporations have abandoned (as well as for the low-wage workers they degrade daily in Mexico, China and other sites of the relocated operations), the sharp, sudden drop in support for the “free market” is not mystifying at all.

Today, as America's prolonged and severe employment crisis continues, multinational corporations continue to unilaterally repudiate their side of the “social contract.”

The country's business leaders should hardly be surprised to hear Americans questioning the “free market” shield they use to justify their outrageous abandonment of American workers, their renewed attacks on decent wages by imposing two-tier wage structures, and their refusal to contribute their fair share of taxes to cope with the social damage that they are causing.

As suggested by the labor uprising in Wisconsin—now spreading to other states—working people have not only lost faith in corporations' ability to show any concern for fairness. Workers are increasingly moving from outrage to action.

Roger Bybee is a Milwaukee-based freelance writer and University of Illinois visiting professor in Labor Education. Roger's work has appeared in numerous national publications, including Z magazine, Dollars & Sense, The Progressive, Progressive Populist, Huffington Post, The American Prospect, Yes! and Foreign Policy in Focus. More of his work can be found at zcommunications.org/zspace/rogerdbybee.

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