Published on Tuesday, January 25, 2011 by In These Times

Obama to Push Bogus ‘Competitiveness’ Theme in State of the Union Address

by Roger Bybee

Boosting "American competitiveness" and creating jobs through increased exports will reportedly be the key theme of President Obama's plan for economic recovery detailed in tonight's State of the Union speech.

This familiar theme, a slickly-disguised appeal to support corporate globalization, plays upon our reflexive pride in American workmanship. It is built upon President Obama's empty claim that "we can compete with anybody in the world," as he put it in a speech in my unemployment-wracked hometown of Racine, Wis., last July.

A majority of U.S. "trade" consists of intra-firm transfers within the same corporation. For example, GE sends machinery and parts to Mexico as "exports" and then "imports" finished products. (photo by Flickr user jimw / jim Winstead)

What does that really mean? Most of the "foreign competition" that U.S. workers face actually comes from foreign subsidiaries of US-based corporations like GE, Ford, GM, Boeing, Microsoft, which operate in places like China and Mexico to exploit low-wage labor. You've got that right: A majority of U.S. "trade" consists of intra-firm transfers within the same corporation. For example, GE sends machinery and parts to Mexico as "exports" and then "imports" finished products.

Thus the entire competitiveness framework is bogus.

It merely means more NAFTA-style "free trade" agreements that already have cost millions of jobs and driven down wages. And it sets up a collision course between the White House and US labor—both the AFL-CIO and Change to Win federations— over the upcoming vote on the US-South Korea Free Trade Agreement (KORUS).

On January 19, AFL-CIO President Richard Trumka blasted the deal as a "Bush-style" agreement that fails to protect U.S. jobs from being offshored. He pledged that opposition “will be a major priority” of the AFL-CIO. In a strongly-worded statement, Change to Win denounced the motives of the pro-KORUS corporate chorus:

It’s crystal clear why the US Chamber is supporting a deal effectively shipping over 150,000 American jobs overseas: As the nation’s chief cheerleader for outsourcing, the Chamber gets to go to bat for its top corporate members (the CEOs of JP Morgan Chase, Citigroup, Boeing and GE, Chamber members and outsourcers all...) and gets a jump-start on one of its key goals for 2011: tax breaks for outsourcers.

The "competiveness" framework is essentially a call to pretend that U.S. workers and U.S. corporations share the same interest in globalization. As Nobel-Prize winning economist Paul Krugman points out,

the interests of nominally “American” corporations and the interests of the nation, which were never the same, are now less aligned than ever before.

Take the case of General Electric, whose chief executive, Jeffrey Immelt, has just been appointed to head [Obama's] advisory board [on competitiveness]. ...

But with fewer than half its workers based in the United States and less than half its revenues coming from U.S. operations, G.E.’s fortunes have very little to do with U.S. prosperity.

In particular, the South Korea deal will be a cruel new blow to American workers, despite the "increased exports" hype. The Economic Policy Institute has calculated that the South Korea FTA will cost 159,000 US jobs. Public Citizen's Global Trade Watch has pointed out numerous U.S. state and local laws that will be over-ridden by the FTA, and has documented numerous ways in which the proposed deal falls far short of the United Auto Workers' standards for the agreement (which the UAW nonetheless mysteriously endorsed anyway, as noted here, here, and here.)

A 'CORPORATE PLEDGE OF ALLEGIANCE'?

The juggernaut of corporate campaign donations and their lobbyists lined up behind the Korea free trade deal cannot be stopped by labor acting inside the Washington Beltway.

“The labor movement has learned something from the last two years about jobs and investment: We can’t count on the political process here in Washington to get the job done,” declared Trumka.

In Washington, it is as though the estimated 4.9 million job
losses, 43,000 factory closings, and falling U.S. wages flowing from
free trade deals like NAFTA and China's entry into the World Trade
Organization never happened.

Equally unimportant are the opinions of the 86% of Americans who emphatically agree "that outsourcing of manufacturing to foreign countries with lower wages was a reason the U.S. economy was struggling and more people weren't being hired."

So who really matters on the trade issue?

As the New York Times reports, the South Korea deal "is playing well" with the audience that truly counts, the U.S. Chamber of Commerce. It's apparently no problem to the White House that the Chamber hauled in millions from firms engaged in offshoring US jobs and then turned around and spent tens of millions in the 2010 mid-terms to defeat Democrats and elect pro-offshoring Republicans.

However, the drive for the job-destroying KORUS could well be met with a new grassroots approach, as suggested by Trunka's comment about the limits of Washington lobbying.

At the same time, Teamsters President James Hoffa, Jr., is promoting a "Corporate Pledge of Allegiance" that US corporate CEOs will be called upon to sign. "They’ve got their $2 trillion in profits, and now we're calling upon them to create jobs here in the US," he stated on "The Ed Show."

Ideally, the Corporate Pledge strategy could be used at the local level to visit CEOs across the United States, mobilizing labor's untapped power and reaching out to the 86% of the public worried about what corporations are doing to our economy and our futures.

Stay tuned for a major battle over KORUS.

© 2011 In These Times