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Political Blather About Unemployment and Outsourcing

The Plight of Labor on the Campaign Trail

by ROB URIE

With Barack Obama and Mitt Romney trading barbs over the outsourcing of jobs, the facts are that Mr. Obama has repeatedly given full-throated endorsement to the neo-liberal policies behind outsourcing. And Mr. Romney has actually outsourced jobs through his business at Bain Capital.  That both men are cynical opportunists whose actions demonstrate wanton disregard for the plight of working people is aided by the invisibility of the unemployed in the national discourse. But just because the plight of labor is missing from the conversation doesn’t mean it is missing in fact.

With no help in the works from the Federal or local governments, the question is: where will the jobs come from? As economist Jared Bernstein explains (link), small businesses never created that large a proportion of jobs in the first place—even if they did have customers they couldn’t hire enough unemployed to solve the problem. And large corporations are earning record profits without hiring more workers. With profits driving executive paychecks, count on large companies firing, not hiring, for the foreseeable future.

Any honest count of the unemployed arrives at numbers indicating serious economic depression. Demographics (aging population) aside, when those who have involuntarily left the workforce are added to the actively unemployed and underemployed, a bit over twenty-percent of working age adults stand substantially idle.

Since the economic ‘recovery’ began in 2009, all income gains have gone to the top one-percent of income earners (link). With the rich having recovered lost income and wealth thanks to the all-out efforts of the Federal government and the Federal Reserve to revive the financial economy, the rich are doing as well as they ever have. (The purposeful abandonment of the poor and working classes found theoretical support when Barack Obama proclaimed early in his tenure that people were unemployed because of ‘productivity gains.’ Louis 16th is smiling in his grave).

The bottom 99% of working Americans saw economic depression level income declines in 2008 and have seen no recovery. The jobs that have been created are largely part-time in low-wage industries and most provide few, if any, benefits. In social terms, in a society that defines its social roles by occupation, unemployment and underemployment are modern forms of exile. In macroeconomic terms, the Keynesian mechanics of the vicious circle, where economic weakness begets more economic weakness, are underway. The fact is that action, for better or worse, is in the process of being forced on to tens of millions of unemployed and poor people whose options are severely limited by current circumstance.

The political backdrop has Barack Obama and Mitt Romney trading contrived talking points over the outsourcing of jobs. The liberal response has been to reiterate endorsements of laissez-faire (neo-liberal) capitalism, such as the current system of state welfare for a tiny economic elite is called, while suggesting that said economic elite should voluntarily share their ‘good fortune’ with society’s losers for the sake of humanity (link). That neo-liberal policies have gone hand-in-glove with the abandonment of welfare state economics makes a mockery of such pleading.

Meanwhile, the actual economic policy backdrop for the economic elite hasn’t been nearly so downbeat. Following the delivery of several trillion dollars in free money to corrupt stooges in the banks in 2008, the Federal Reserve has staged six (count ‘em) full or partial efforts at salving the financial economy through asset purchases. And the banks have remained unregulated to the point where they have successfully rebuilt the cross-relationships that brought the whole system down just four short years ago. So contrary to liberal rants that the global economy is a fixed object that must be accepted for what it is, the Federal government has demonstrated just how flexible it is by reviving the fortunes of 1% of the population while leaving the rest to rot.

In the midst of the gloom, current circumstance should offer the opportunity to radically rethink what the economy and economic life should be. The Western political economy really wasn’t working for an increasing number of people before the most recent crisis. In addition to being environmentally unsustainable, the capitalist way of life—maximum consumption and social atomism, was increasingly seen lacking in polls taken of American youth. However, please take note: no one in power is asking the bottom 99% for input into the development of public policies. So much or the illusion of ‘democracy.’

A casual look around America may suggest hyperbole in these words. The West has great residual wealth that has allowed record numbers of unemployed youth to live with their families. Retirement plans (401(k)s) have been borrowed against to the extent that one-third of these retirement funds have been used for current use. Municipal finance strategies are to take from the future through privatization of public resources to provide the illusion of solvency in the present. And home delivery of unemployment benefit checks has saved politicians the embarrassment of media images of long lines of the unemployed in ‘their’ precincts. But this is all running out.

So, what to do? First, a few facts: in their minds the lot of the economic and political elite is tied to that of the 99% by the threat of revolution alone. The state has been (always was) captured and works to keep those in power who benefit from the current state of affairs. Those who look to Barack Obama’s second term, should he win one, for salvation are deluded. (How’s that first term thing going for you)? It is not an accident that the economic elite is doing well while the rest of us aren’t—it is a fundamental characteristic of capitalism. And to the one-half of America that believes that they either already are in the top 1% economically or one day will be, your politics are defined by what you don’t know about income distribution, not what you do know.

As residual wealth and options run out for increasing numbers, people may want to consider this—as scandal and history have demonstrated, the economic elites didn’t ‘earn’ their wealth, they just took it. From the taking of common lands in the enclosure movement to the use of public (military) resources to support private interests to the bank bailouts to cost-plus government contracting to the private use of public research and development (tech, pharma), the myths of capitalist enterprise don’t accurately describe history. In the land of abandoned houses and massive waste in the industrial food system, not going homeless or hungry should be a practical decision, not a moral one.

The lack of viability of the existing political economy is being demonstrated with increasing frequency and intensity. The presidential election is an irrelevant circus because a self-perpetuating economic elite runs the U.S. The only real politics that remain to most of us reside outside of the electoral system. Finally, systems of mutual aid and a retaking of the commons will be necessary steps until political resolution is achieved.

Rob Urie is an artist and political economist in New York.