Obama’s India Trip Aimed at CEOs, Not U.S. Workers

THE REAL AUDIENCE: U.S. AND INDIAN ELITE

Instead, his remarks have been aimed at US CEOs swarming around him in India and to India’s elite, which has been enriched by the increasing flow of U.S. corporations shifting their information technology and back-office operations to low-wage India. The president said in a speech to the U.S.-India Business Council:

The United States sees Asia, and especially India, as a market of the future. We don’t simply welcome your rise as a nation and people, we ardently support it. We want to invest in it.”

Along with working on political and military issues in this crisis-racked region, President Obama’s trip to India provided a chance to mend fences with corporate leaders irritated at his periodic jabs at CEO greed. The president got along swimmingly with the many CEOs accompanying him on the trip, the New York Times reported:

Mr. Obama lavished attention on American business leaders who coordinated their visit with the White House. He announced that, as part of the trip, American and Indian companies signed or are about to sign 20 deals worth about $10 billion that will help create more than 50,000 jobs at home, although many of the deals have been in negotiations for some time…

At the same time, Obama made some relatively limited efforts to repair his relationship with the American electorate. Obama proclaimed that the visit to India and other Asian nations will generate U.S. jobs as part of his National Initiative for Exports:

‘TWO-WAY RELATIONSHIP’ ON JOBS

President Obama argued strenuously that investment overseas can create jobs at home that would provide relief to the persistent high unemployment and sinking wages that have plagued America:

There still exists a caricature of India as a land of call centers and back offices that cost American jobs. That’s a real perception.

But these old stereotypes, these old concerns ignore today’s reality: In 2010, trade between our countries is not just a one-way street of American jobs and companies moving to India. It is a dynamic, two-way relationship that is creating jobs, growth, and higher living standards in both our countries.

Not quite, Mr. President: jobs and wages are heading one way, downward. A race to the bottom is not a two-way relationship. As pro-globalization Prof. Jeffrey Garten of Yale, a former Clinton undersecretary of commerce, put it in Business Week,

As US -based employers consider the costs of adding either one American or, say, one Indian to the payroll, the alternative of offshoring will put downward pressure on middle-class wages throughout the U.S.

Alliance for American Manufacturing (AAM) Executive Director Scott Paul thus argues persuasively:

India is to American office parks as China is to American factories. Unless we change course, we’re going to see higher trade deficits, more job loss, and deeper frictions, despite periodic announcements about one-off business deals.

For example, the Indian market for motorcycles will not be filled by exports from Harley-Davidson’s plants in Milwaukee or Easton, Pa. — where workers were forced to accept massive, divisive concessions—but by a new assembly plant in India. 

So Obama’s reassurances to American workers ring quite hollow.

NO CHANGE OF TRADE COURSE

But despite severe Democratic losses in states vital to his re-election in 2012 — from Pennsylvania to Wisconsin — Obama appeared more preoccupied with winning back the approval of corporate CEOS, as the Times continues with unusual bluntness in its news story:

Still, Mr. Obama seemed mostly to be aiming his message at American business leaders. Many executives during the recent political campaign accused the White House of being antibusiness and poured money into the coffers of Republican candidates and groups that aimed to defeat the Democrats.

… Mr. Obama met privately with American chief executives, among them Jeffrey R. Immelt of General Electric, who has been critical of the White House in the past. ​“It’s unprecedented,” Mr. Immelt said in an interview, praising Mr. Obama for talking up trade, a politically risky move for a Democrat.

Obama’s big prize for the CEOs is a new ​“free trade” agreement (FTA) with South Korea based on the NAFTA model that grants supremacy of investor rights over national laws, and lacks important conditions protecting Americans from the loss of jobs.

While minor modifications have recently been made to the U.S.-Korea FTA negotiated by the George W. Bush administration, AFL-CIO President Richard Trumka’s strong and fundamental objections are still valid:

Trumka said the agreement, negotiated by the Bush administration, ​“would exacerbate our already lopsided trade relationship with South Korea, putting at risk thousands of good U.S. jobs in the auto, steel and other industrial sectors.” 

Without labor’s intensive efforts on Nov. 2 and the fact that many Democrats were saved largely because of their fierce opposition to ​“free trade” agreements precisely like the one with Korea, the Democratic bloodbath would have been even worse. Yet even with labor’s all-out electoral push and the anti-trade message from the voters (incuding Republicans), Obama seems almost compulsively drawn back to his old ways.

With his trip to the Far East, Obama is once again trying to appease his enemies and neglecting the devastation that will result — especially in the industrial communities now pockmarking the Midwest.