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Finamore: Obama Recovery Plan
The Obama Recovery Plan
Save Us from Those Who Would Save Us
By Carl Finamore
WE KNOW BILLIONS of dollars are going to AIG, banks and auto companies to stabilize basic institutions of the capitalist economy. We know other billions are going to state and local governments to fund programs designed to employ some 4 million workers.
But establishment commentators fail to note that not one penny is actually being spent on increasing the standard of living of American workers.
In fact, the Obama Administration is working overtime to keep a lid on wages. This is the same administration that openly acknowledges U.S. paychecks adjusted for inflation have been flatlining since 1973.
Arguably, the main objective of the government stimulus is to stabilize banks and corporations, not regenerate the living conditions of American workers. In this the liberal Obama Administration is not so far in its thinking from that of its conservative predecessors. Both believe helping out banks and major corporations first is the key to economic revival.
If you want evidence of the profound corporate bias contained in the bailouts, read the fine print in the recent General Motors (GM) Restructuring Plan.
The $13 billion in federal funds handed over to General Motors in December 2008 has stringent provisions requiring the United Auto Workers (UAW) to agree to significant wage and benefit reductions by the end of 2009.
The Treasury Department acknowledges “negotiated changes to the Company's labor agreements in 2005 and 2007 have reduced total labor cost per vehicle by 26% from 2004 to 2008.”
“In addition,” the Treasury report continues, “GM and the UAW have agreed to improve competitive work rules, which will also significantly reduce labor costs.”
There's more. The Treasury notes with satisfaction that the UAW recently agreed “to suspend the JOBS program, which provided full income and benefit protection in lieu of layoff for an indefinite period of time.”
In the meantime, GM is doing its part. It just cancelled all health benefits for its 100,000 non-union retirees. Not to be outdone, the now very compliant UAW recently agreed to accept diluted GM stock of questionable value for half of the $10 billion owed to secure previously-negotiated union retiree health benefits.
But the government is still not satisfied with these debilitating, life-changing concessions for several hundred thousand active and retired autoworkers. “Further progress will be required to achieve the full targeted savings [of the stimulus plan],” the Treasury insists. “GM plans to report these changes to the U.S. Secretary of Labor who must certify GM's competitiveness…” [Treasury Dept. website]
This is a completely wrong-headed approach to getting America back to work and re-invigorating collapsed consumer spending. On the contrary, extending substantial wage, medical, and education benefits for the 130 million workers in this country would be the most effective economic stimulus yet proposed.
A Stimulus Plan that Actually Worked
The Servicemen's Readjustment Act of 1944 or “G.I. Bill” is a success story that should be the model for any genuine stimulus.
Fearing a revival of the Bonus Army March protests of 1932 by millions of returning World War II jobless veterans and forecasting a serious post-war recession, both chambers of Congress actually voted unanimously to fund the most extensive benefits program in the nation's history.
In fact, concerns about impending social unrest were not unfounded. When the government attempted to extend the wartime “no strike” pledge, it ignited a firestorm of protests. A national strike wave began almost immediately after Emperor Hirohito waved the white flag.
In September 1945, 43,000 petroleum workers and 200,000 coal workers struck. In October, 44,000 lumber workers, 70,000 teamsters,
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