For part 1 of this piece, including “the good” and “the bad” elements of Obama’s visit last week to Racine, Wisc., go here.
President Obama’s recent visit to my economically-distressed hometown of Racine, Wis., was seemingly designed to show concern for the plight of working people. But Obama’s visit also generated some deeply disturbing questions about the president’s position on corporate globalization.
THE VERY UGLY: BAILOUT MONEY USED TO MOVE JOBS
The picket line set up outside the Obama event by infuriated members of United Auto Workers Local 72, of the Chrysler engine plant in nearby Kenosha (10 miles south of Racine), was the most immediate reminder of how U.S. taxpayer dollars have helped ship jobs overseas.
With the help of a federal “bailout” sold to the public as helping Chrysler to stay alive and retain jobs in America, Chrysler is actually using part of the funds to relocate the last 850 automaking jobs in Wisconsin to a new plant in Saltillo, Mexico.
The Kenosha to Saltillo maneuver is a particularly appalling breach of faith with both the public and workers. Chrysler and Obama administration officials, including economic advisor Lawrence Summers, broke their pledges made in an April 30, 2009, conference call almost immediately.
The very next day, Chrysler announced the relocation to Mexico. The move also broke a longstanding, formal agreement under which Chrysler committed itself to building new engine lines in Kenosha.
But while infuriating, the Chrysler move to Mexico was typical of the overall auto bailouts. The net impact of the GM and Chrysler bailouts financed by US taxpayers — shaped largely by Wall Streeters like Summers and Treasury Secretary Timothy Geithner — has been to eliminate more U.S. auto jobs while bringing in more components and cars produced by GM and Chrysler plants in places like Mexico and China.
OBAMA’S RHETORIC, AND REALITY
So what will Obama take away from his interaction with working families desperately hoping for an end to the seemingly endless Great Recession and jobless recovery? Will he learn anything from the protests of the Chrysler workers from Kenosha and the questions from audience members worried that their jobs, too, are headed to new low-wage locations?
While Obama used much of his presidential primary race as a crusade against the North American Free Trade Agreement and other key pillars of investors-first corporate globalization (see here and here), he has become increasingly leery of challenging any aspect of globalization since taking office.
The post-election philosophy of the Obama Administration — which became clear with the auto bailouts — followed the direction urged by the NY Times editorial page. The newspaper emphatically rejected any notion that Obama should demand a commitment to U.S. jobs in exchange for the bailouts: “The decisions of GM’s new managers should not become entangled with the government’s other policy priorities — such as maximizing employment in the United States or reducing job losses in Michigan.”
Accordingly, the net impact of the GM and Chrysler bailouts financed by U.S. taxpayers—shaped largely by Wall Streeters on Obama’s team — has been to eliminate more U.S. auto jobs while bringing in more components and
cars produced by GM and Chrysler plants in places like Mexico and China.
Polling of U.S. voters — taken before the recession intensified fears about job loss — showed overwhelming opposition to the relocation of jobs outside and the U.S. and a strong belief that only a tiny minority was gaining from globalization. Yet Obama seems to be stepping further and further back from the populist anti-globalization themes that raised hopes of change among working Americans in towns like Racine.
For example, in his first State of the Union address earlier this year, Obama slipped in a quick, almost subliminal push for a NAFTA-style trade agreement with Colombia, which continues to lead the world in killings of union activists.
Although Obama has been meeting frequently with Mexican President Felipe Calderon, there has been no talk of re-structuring NAFTA to both curb the flight of U.S. jobs to ultra-low-wage plants along the border and to promote genuine social and economic development in Mexico. NAFTA thus remains merely a formula for plunder codified in a deal that protects only investor rights.
Meanwhile, the Obama administration has continued the George W. Bush policy of refusing to actively pursue blatant violations of labor law through NAFTA procedures.
PLAN TO PUSH FTA WITH SOUTH KOREA
The very latest sign that Obama is on the wrong track on globalization is the June 26 report that the Obama administration will be seeking passage in November of a new “free trade” agreement with South Korea despite knowing that “it will risk angering labor unions” right after relying on the union movement for votes in the crucial mid-term elections.
This has the ominous ring of Bill Clinton using labor’s political efforts to get elected in 1992, while promising to insert strong labor environmental protections in NAFTA. But then Clinton then devoted massive resources and political capital into ramming NAFTA through Congress.
After turning labor and environmental safeguards into meaningless “side agreements, Clinton, Al Gore, and Rahm Emanuel put together a coalition comprised mostly of Republicans to gain passage of NAFTA in November 1993.
At present, Obama and his advisors ought to remember that this less-tha-brilliant strategy created an economic disaster for cities like Racine across America, and also fueled a crushing Republican upsurge in the 2004 mid-terms when demoralized Democrats stayed at home.