By Roz Rogoff
Play it again, BarackUploaded: Sep 22, 2011
With much fanfare, President Obama announced his new Jobs Stimulus plan, only it sounds a lot like his old Jobs Stimulus plan. You know the one where he reduced taxes on working folks and provided Federal funding for infrastructure projects and to retain municipal employees like teachers and police. Well that was so-so to begin with, but it held off the brunt of the recession for about a year. This new one is the same old song and hardly anyone finds it tuneful anymore.
Obama is a decent guy and a smart guy, but he is looking at things from the wrong direction. He keeps moving to the right to appease Republicans, but he's still trying to persuade them to behave like Democrats. Obama should have thrown the gauntlet back at the Republicans who say that the rich deserve tax breaks because they provide jobs. OK if they are not paying more in taxes, then where are those jobs they are supposed to be providing?
The wealthy and big corporations are sitting on mounds of cash right now. Yes they have it and they could be spreading it around and pulling up this economy, but they are not. So Obama should tell the Republicans in Congress, get your rich friends and supporters to start hiring and paying better than minimum wage, and stop exporting jobs to China and India for cheap, unregulated labor, and behave like loyal American Citizens, and invest the money we are not taxing them in the American economy, or else we'll slap big tax hikes on these Scrooges.
That would get their attention and throw the ball back in their court. Why aren't the rich investing their large hoards of cash in startups, small businesses, hiring more American workers at better-than-subsistence wages? Because the economy is stuck in low and nobody is buying or spending money, except the rich who can afford to buy designer brand clothes and megawatt cars. The rest are shopping at Wal-Mart where they get their goods from China and Mexico.
We need to bring back the American middle-class. Almost 100 years ago Henry Ford did an amazing thing that launched the American worker into the middle-class. There was a small middle class then of merchants, business men, and educated professionals like doctors and lawyers, but the mainstream worker was at the bottom of the economic ladder. In 1913 Ford reduced his work day from nine hours to eight and increased his workers pay to $5 a day. Everyone thought he was crazy.
Ford introduced a new automobile and manufacturing concept in 1913, the Model T and the assembly line. In order for this to be successful he needed a reliable, sober workforce. He concluded he would get the best workers by paying them a decent, livable wage.
His competitors all laughed at this crazy idea. Other bosses were angry, believing Ford was spoiling his employees and theirs would start making the same demands. In fact Ford had so many job seekers wanting to work for the Ford Motor Company the police had to be called to chase them away.
Well we know from history that Ford's Model T became the hottest selling automobile of the early 20th Century. In two years Ford had doubled his sales, and even more amazing, his employees were buying Model T's too. Yes by paying his people more, they could afford to spend more. You see money doesn't trickle down, it floats up. Being trickled on doesn't sound very pleasant either, does it?
The concept of a middle-class workforce was started by Henry Ford in 1913, and when his competitors saw how effective it was, they followed suit. Now is the time for our corporations and Harvard MBA's to realize that if they want a consumer society in the USA to buy their products they have to make them here and pay their employees a decent wage.
The gap between rich and poor is growing. The American middle-class is declining while the Chinese and Indian middle-classes are growing. Multi-national corporations are making big money selling in the countries that benefit from manufacturing there. We need more of those same benefits here.
One giant corporation that's doing this successfully is Koch Industries. The Koch brothers have been painted as bad guys because of their financial support of right-wing Republican candidates. I may not like some of the candidates they support, but Koch Industries is doing exactly what Henry Ford did. They are keeping jobs in America and hiring people right now.
I'll probably get my head handed to me by my liberal relatives for defending the Koch brothers, but they are doing what I'm recommending other capitalists and industrialists should do, hiring American workers, paying them well and treating them with respect.
So Barack are you ready to start singing a different song or are you stuck in a grove like an old 78 rpm record? I've been blaming the Republicans for holding up the government, but now you have a chance to call their bluff. Give it a try. Call the Koch brothers and see if they will join with Warren Buffett and Howard Schultz and other CEOs to break the log jam of corporate capital and bring American industry back here where it belongs.