(2 pm. – promoted by ek hornbeck)
Former Clinton Labor Secretary Robert Reich explains whether President Barack Obama’s new approach will create more jobs or send those jobs overseas.
Rough transcript
President Obama is expected to talk about his pro-business agenda in the SOTU. Thisis supposed to be about his effort to create more jobs here, but does that make sense? According to the American Policy Institute, American companies created more than 2 million jobs in 2010. Fantastic , right? But it turns out fewer than half of them were created here in the United States. I actually don’t blame the companies they’re not American companies. They’re multi-national. They’re going where there is cheap labor and lower costs Some are going where the new consumers are, China in this case. Tis year GM sold more cars in China than the US. But it was US tax payers that bailed them. That’s my point. Helping so-called US companies doesn’t help the average American. They are noe multi-national corporations with no obligation to the American people whatsoever. The Republican s say if we give big business everything they demand, they will help American workers, but a great piece in The National Journal shows that’s not true at all. Look, quote, here is waht thye say:
Rapid advancements in technologies and the opening of new international markets paid dividends for American companies but not for American workers.
It’s been good for business but bad for you. Here’s what happened with jobs while multi-nationals were making profits:
Job growth in the 2000’s was the lowest of any decade ever recorded by the Federal Government
Real middle class income fell from 2007 to 2010. Another first in US record keeping.
That amazing. We were told that if we just gave big business what they want, they would hire here and we would be better off. That proved to be untrue.
So, why is the President getting ready ti make the same case tomorrow night? And A democratic President at that? These are important questions.
Joining me now is Professor Robert Reich. He’s a professor at UC Berkley and the author of “After Shock, the Next Economy in America’s Future“.
Let me start by asking about this concept of US business. Is there really any such a thing left?
Robert Reich: Well, not many. There are small businesses that are US businesses. I mean they are employees, shareholder, if they have any. Certainly there are US customers, but increasingly, large American companies are going global. They’re international entities. They get their supplies from all over the world. Their customers are all over the world. Their investors are all over the world. They may have head quarters here in the United States but that’s not necessarily where they make their money. and the question you raise is going to be very central in the next decade. Why is it that we should defer to the needs and wants and wishes of American business, when in fact their gaol is to make money, particularly for their shareholders, may not have anything to do, oreven the remotest linkage to the wages, to the well being and certainly the job growth of Americans back here in the United States.
CU: Ao, we were told fro the last 30 years, but certainly for the Bush years, 2000, 2008, if we just gave them more tax breaks if we gave them subsidies, if we gave them x, y and z, they would create jobs here. Now, that did not happen. And if that didn’t happen, did any – have any of our politicians learned that lesson?
RR: Cenk, that did not happen. More important to understand this, American companies, big American companies are making a lot of money. In fact, they are sitting on about one trillion dollars of cash. The problem is that they’re making by selling abroad. They’re also making a lot of money by reducing their costs here in the United States. The biggest cost they have in the United States. So they have been fighting unions. They’ve been out-sourcing abroad. They’ve been replacing workers in the United States with automated machinery. I’m not blaming them because as you said before companies exist to make money. We’ve got to keep that distinction very, very clear. Do politicians understand that distinction? Good question. I don’t think a lot of them do. A lot of them are still mesmerized by the idea that somehow American competitiveness is the same as the profitability of american companies.
CU: Secretary Reich, I know about the Republicans. You know, you follow it day in and day out and they vote for these guys and the tax breaks every single time, right? I view them as subsidiaries of multi-national corporations. The question is, we have a Democratic president who is about to give the SOTU, it seems like he is going to say, “all right, I give all in to big business. We’re going to do all the same thins the Republicans said.” Doesn’t that sound like just not a bad policy idea, but a bad idea politically, basically saying the other side is right.
RR: Politically it is important for any president to hold out the welcoming mat to big business to make sure he is not perceived as anti-business, but at the same time you’re right, there is a danger here that a president, a Democratic president that has a constituency that is different than the Republicans’ constituency, that is the working people of America, says over and over again that the interest of big business is the same as the working people of America, a lot of people are going to get confused by that message. And particularly if that president starts believing it. We must not be seduced. I hope the president is not seduced. We must not be seduced that the interest of big business, which is global, and making money is the same thing as the average American working people or people out of jobs. It’s no longer the same thing. It might have been the same thing, you know, when Engine Charlie Wilson, the head of General Motors, who came into the Truman administration and said the interest of GM is the same as the American people. It’s not the same thing any longer.
CC: You know, one last thing real quick. If President Obama keeps going down this same path which has proven not to work over the last ten years, where you just give ti big business and they don’t create jobs here, are we going to be able to create any jobs here over the next two years? And if we don’t, is the president in massive trouble for his re-election?
RR: This is the critical political piece, that the president understands. I’ve met the president a few times. I’ve met the people around him. I’m in contact with him. I know he and his advisers understand they’ve got to bring down unemployment. They’ve got to show by the election, by 2012, they’re going in the right direction and we’re going in the right direction in a fast way, that the jobs are being created in the United States. The president’s got to use whatever leverage he has with the business community to create jobs here. That means, every tax break he gives to big business means he has got to get reassurance back from business they’re going to use those tax breaks to give jobs here.
CU: It’s one thing to give them money and another thing to say spend it wherever you like. If you’re going to give them breaks, they’ve got to spend it here.
RR: It’s got to be quid pro quo. That’s the deal.
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