WILLIAM A NOTED REPORTER AND AUTHOR TELLS US HOW CORPORATIONS ARE DESTROYING THE AMERICAN ECONOMY AND WHAT WE CAN DO TO FIX IT.
from THE Q & A with William Greider interviewed by Mark Johnson
in HUSTLER Magazine – January 2010
William Greider is one of the experts who warned us ten years ago that our economy was headed into the shredder. A longtime observer of runaway capitalism, Greider has written several books and worked as a reporter for numerous newspapers and magazines, including the Washington Post and Rolling Stone. He is currently national affairs correspondent for The Nation.
During his 40-year career he has crossed paths with the country’s most powerful people. He has examined in detail how and why America went from a thriving democracy to a nation run by bankers. In his latest book—Come Home, America: The Rise and Fall (and Redeeming Promise) of Our Country —Greider maintains that we are at an epic turning point in our history. It is time for people to step up and reclaim their role as true citizens.
HUSTLER: How did you recognize early on that our economy was in deep trouble?
WILLIAM GREIDER: Ten years ago I wrote in my book One World Ready or Not that our [economic] system, despite all of its creative energies, was veering off-balance. The United States was playing buyer of last resort for everybody else. We had our arms wide open and accepted imports from everywhere when no one else would. Our multinational corporations were going into poorer countries, developing production there and shipping parts back into the U.S.
We now import four or five times more than we export. Because our production and jobs have been moving offshore, we don’t have the money to pay for the imports. We borrow the money from the people who are selling us stuff. There’s surplus production every year all around the world. Most countries won’t take it, either because they can’t afford it or because they just won’t let it in. The U.S., because we’re the big-hearted Goliath, says,“We’re for free trade; keep it coming.” The long-term consequences are the U.S. gets deeper and deeper in debt, and American workers suffer stagnant or falling wages because they’re competing with foreign low-wage workers.
Has this policy been pushed by the multinational corporations?
Absolutely. Both Democrats and Republicans have supported this in the belief that if our U.S. multinationals do well in the world, we’ll be okay. But it doesn’t work that way. The multinationals (whether you’re talking about General Electric or Microsoft or whomever) can do very well and actually hurt the United States in the process. As long as it was just T-shirts and cheap shoes, you could say, “That’s not going to make much difference.”
The reality is, we’re now getting some of the most advanced products and technology in the world out of places like China.We’re losing what businesspeople call “value added production.” The process of making a product produces high value added [for the producing country]. Most countries understand that they’ve got to hang on to that really valuable production and the jobs that go with it to maintain a prosperous middle class. Otherwise you sink lower and lower. Twenty years ago I talked to working guys in auto plants, and they told me this was happening to them. Blue-collar people understand this way better than the people who run the country.
How do you bring production back to the United States?
It starts in politics. You get a government and a political party that stands up and says to the American people, “We’re in a deep hole, and it’s getting deeper, and we cannot go on like this.” First, we’ve got to change our approach to the U.S. multinationals. We’re going to say to them, “Look, we’re not handing out tax breaks and other subsidies any longer. You have some obligations to the home country. We want you to be profitable, but you have to include the national interest in your business strategies.” If they don’t, we will reform the corporate income tax so that the companies that do better at retaining the jobs and keeping value added gain in our own home country will get a lower tax rate than companies simply moving it out the door.
How likely is that to happen with Congress in the pocket of Big Business?
Politicians are in line with the most powerful companies and financiers because they support globalization. However, in Congress there’s a growing nucleus of representatives who are mad because their constituents are mad. It’s just a start, but it’s not hopeless. As candidate for President, Barack Obama said that we’re going to stop rewarding the companies that simply move production overseas and start rewarding companies that do the best job of keeping it here in the U.S. with a modest tax incentive.
His idea doesn’t go far enough, but I’m encouraged he’s starting down that road. People should be banging on him right now saying, “Hey, you said this during the campaign. What are you doing about it?” The other thing we’ve got to do is say to the rest of the world, “We’ve been generously supporting the development of the global economy for years, but the whole system is going to come crashing down if the United States taps out. We’re going to put a cap on our trade deficits and gradually reduce it so we can come closer to something like a balanced trading system.”
What’s wrong with trade tariffs?
Nothing. Every country in the world uses them. I’m for a trading system that functions for poor people as well as the wealthy. When I started writing about this 20-plus years ago, a lot of people dismissed me as a fearmonger and a protectionist. Now the facts are so devastating that a lot of people who used to be cheerleaders for free trade are not so anxious to be identified with it.
I would put Obama in that category. He’s willing to acknowledge things are not working in America’s self-interest. But he’s not yet ready to step up and really forcefully address it. [He and his advisers] are blinded by the ideology that the world works better if government gets out of the way and lets business do its thing. That’s not only nonsense, it’s morally wrong. These same businesses siphon off taxpayer money, and the things they promised do not happen. When you ask Americans how they feel about corporations, an overwhelming consensus says corporations have too much power, and the government should get some control over them.
Why doesn’t the government do that?
Because those same corporations are manipulating elected politicians and financing their campaigns. The American people have a deeper understanding of this reality than they’re given credit for. I’m optimistic this is going to change, but it’s got to be bloody. The usual interests will just try to either stomp on people or brush them aside. Somebody ought to stand up and say, “I am proposing an amendment to the Constitution that clarifies once and for all: Corporations do not have the rights of people.” It would give you a fight for people to organize around.
Is our technology going overseas along with our jobs?
Yes. A good example is Boeing, which makes large-body commercial aircraft. They will contract out to scores of other countries: China, Indonesia, Europe, the Middle East, the whole list. They’ll say, “We want you to make the titanium alloy strut that holds up the engines on a 747, and we’ll show you how to make it. We’ll have guys in your plant, your foundry, monitoring you for quality because we can’t screw this up. This has got to work, because otherwise the plane will crash.” The Chinese will take instructions from the Americans, make that part, ship it to Seattle or Wichita, Kansas, where it is then installed in a Boeing assembly line and becomes part of the aircraft. They do that with hundreds of components. The most obvious reason is wages: It’s cheaper. But that’s not even the main motive for Boeing. Boeing wants to sell airplanes to those countries. China especially has a huge air-travel industry. So Boeing buys market share [meaning the ability to sell huge amounts of product in China] by trading away American jobs. I’ve had interviews with Boeing managers and strategists, and they’re pretty upfront about it. They say, “Look, if we don’t do this, they won’t buy our airplanes.”
The reason that we have to fight for both manufacturing and service jobs is because even the high-end technical, professional jobs are now being shipped overseas. Google and Microsoft are competing in China now. They’ve both opened big research centers there. The workers are cheaper, but they’re perfectly good engineers. Hundreds of big-name companies have traded technology to those developing countries in exchange for cheap labor and market access.
How did Singapore, a tiny city-state, get so good at making disc drives invented by IBM and other U.S. companies?
The answer is: IBM taught them, in return for tax subsidies and protection against wage increases [in Singapore].
How do we rein in the banks as well?
Obama should be using the government’s power to say, “Until we get out of this crisis, we’re in charge. We’re keeping you afloat with our loans. That gives us the power, and if we have to, we’ll pass a law to direct you and your behavior and cut out all the bullshit and get this credit system working again so that we can get a real economic recovery.” The banks are in trouble because they still have these huge portfolios of rotten assets. Nothing has happened to change that. The bankers know that if they do get back in trouble, the government has to come and save them again. It’s a one-way bet for them: Heads we win, and tails you lose.
How do you get out of this quickly rather than dragging it on for years?
You get these bad assets out of the banks so they can begin lending again. They didn’t do that because the bankers said, “Well, if the economy comes back, this stuff is going to be worth a lot of money again, and we don’t want to sell it cheap.” At that point, if the government had the balls, they would have grabbed these bankers by the collar and said, “You’re going to sell this stuff or we’re cutting off your water right now.” The government has them in a life-and-death situation, and Obama won’t use that.
How do we force politicians to keep their promises?
People have to create their own power and their own communication. That’s what the Internet is about. Ordinary Americans are learning to use these technologies for their own purposes. It means communicating with people they don’t even know, who may be on the other side of an issue, and spreading the word. Out of that can come organizations independent of both political parties. They have to be able to mobilize lots of people to do a jujitsu on the system. Jujitsu is when the little guy flips a big guy on his back. People can do that in the electoral arena if they’ve got the nerve.
The Democratic Party is supported by all kinds of groups—unions, environmentalists, consumer advocates, civil rights activists. But what these groups haven’t been able to do is punish the Democratic Party when it sells them out. They have to say, “You’re screwing us. We’re going to make a list of senators or House members [who are working against us].
Instead of handing over our money, we’re going to take some of it and run our own candidates against Democratic incumbents.” You can do that with a minor percentage of the vote if you’re willing to take on the big party and say we’ve had enough.
One guy I know is warning the Democrats that they’re going to have a political train wreck in the Congressional elections if they go ahead with the idea of taxing health benefits. One of the guys talking this up is Max Baucus, senator from Montana and chairman of the Senate Finance Committee. Must be a Republican, right? No, he’s a Democrat! His position goes against what Obama said during the campaign. It goes against basic fairness.
Anybody in a union knows they traded wage increases for better benefits. Along comes the government and pretends they’re getting this stuff for free.We have to say to the Democratic Party, “Don’t go down that road. If you do, you’re going to wind up where you did in 1994, when the Republicans took back the House of Representatives after 50 years.”
Ordinary people, both nonunion and union, can begin to provoke this. They can say to the unions [and other groups], “You come around and ask for money every year, but you won’t threaten the Democrats or members of Congress with retribution when they sell you out.” Nothing moves opinion in the Congress more reliably than members seeing a couple of their colleagues cut down out of the blue by something they didn’t take seriously.
People are always screaming about how influential the NRA [National Rifle Association] is. The NRA is influential because they play hardball. Every member of Congress, whether they’re far left or far right, understands that. The NRA will not forget when they’re crossed, and they’re effective. You don’t have to be a political party, you don’t have to be a labor union to play that kind of politics. I envision lots of what I call “independent formations.” Not political parties, not issue groups. They’re people together exercising their rights as citizens. It’s like guerrilla warfare. Guerrilla warfare works not because the fighters are bigger or stronger, but because they pick their spots. They’re willing to shoot for the kneecaps.
What can the average person do in terms of forcing change?
Above all, trust your guts. Have faith in your basic convictions and tune out the propaganda that’s meant to manipulate your mind. I have a lot of faith in the capacity of Americans, regardless of their status, to think for themselves. They’ve been pushed around for so many years. Yes, they’re cynical; they don’t know who to trust; and so forth. The first step is for them to uncover that good stuff in themselves. As they do that, they don’t have to ask me or anyone else what to do. They’ll figure that out for themselves. I believe that deeply.
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