Free Trade is Killing the American Middle Class

Posted by Michael A. Kamperman on January 22, 2011

President Obama has just named Jeff Immelt, the head of GE, as the new chairperson of his Whitehouse Jobs and Competitiveness Council.  In doing so the President has aligned himself firmly in the camp of Wall Street and Global Corporate Interests and against the interests of the American worker.  What’s good for GE shareholders is not necessarily what’s good for American workers.  GE considers workers as input costs and it will build its factories where-ever it can get the best deal.  GE has created far more jobs overseas in the last few years pursuing cheap labor than it has here at home.  Immelt is already pushing the President for lower corporate taxes as key to his strategy to boost GE profits and the value of his stock options under the bogus guise of creating jobs.  President Obama is so aligned with these interests that he has chosen someone to advise him with a clear conflict of interest, a person that continues to run a major corporation that was bailed out by the Fed and still has billions of dollars of yet to be repaid low interest loans backed by the Fed.  President Obama launched this intiative with a trip to a GE alternative energy plant seeking billions of dollars in federal government grants.  There the President said that the key to America’s future was being able to build things here and sell them in Shanghai.  Really, the key to restoring the American dream is to make things so cheap here that they will buy them in Shanghai ahead of products made by their own workers working for slave wages?

No, the key to restoring the American dream and creating good paying jobs for millions of Americans is to end free-but-unfair trade that gives countries unfettered access to our markets without unfettered access to theirs.  And, that allows workers making non-living wages to underprice American workers in American markets.  These policies are creating a two-tier class of citizens in the U.S.; the haves and the have-nots.  Its great that GE stock is going up if you already own a lot of it.  But its not great if you are a 99′er unable to find work, or just greatful to find a job paying far less than the job you lost.  There is actually no better example of the downside for workers created by our trade practices than the iphone and ipad, which were invented in the U.S., but are now manufactured in China where labor is much cheaper and where rare-earth-elements are no longer freely traded to the highest bidder.

The President just doesn’t get it.  We are not going to restore the American dream via exports to Shanghai.  We will restore the American dream if and when we invent things in Cupertino, California, we then make them in Indianapolis, Indiana, and we then sell them in Newark, New Jersey.  We will restore the American dream when the housing market is fixed and people can get a mortgage on reasonable terms knowing their investment will not collapse in value two years later.  We will restore the American dream when a middle class family can buy a home, buy a new car, take their kids on vacation, and still afford to send them to college.  The President can afford to do that.  Its time he focused on making it possible for the rest of us to be able to do that rather than focusing on how to make the haves have even more.  China is experiencing tremendous economic growth for two reasons.  First and foremost, China’s policies benefit China first.  Secondly, American trade policies benefit China first.  Its time we change that.