Leo W. Gerard

President’s Perspective

Leo W. Gerard USW International President

Outlaw Chinese Steel

Forged with the despicable dividend of stolen trade secrets, priced with monopoly collusion, then traded with fraudulent labeling to dodge U.S. duties, steel from China violates every principle of capitalism. That’s in addition to defying both U.S. and international trade laws.

It’s outlaw steel. And last week, U.S. Steel Corp. asked the U.S. government to outlaw its import.

U.S. Steel requested this unusual intervention after China hacked into its computers, ripped off trade secrets, then used those secrets to directly compete with U.S. Steel in the American market. China is flooding the international market with excess, government-subsidized steel. That is closing mills and killing jobs from South Africa to Great Britain to North America. The United States can choose to ignore this. It can become a weakling, reliant on other nations for steel, including some, like China, that clearly are not allies. Or, the United States can act now, as U.S. Steel demands, to secure America’s industrial strength and independence. 

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The new fiduciary rule: strengths, limits, and politics

Jared Bernstein

Jared Bernstein Senior Fellow, Center on Budget and Policy Priorities

OTEers know I’ve long been concerned about economic security in retirement among aging Americans whose limited earnings and savings threaten to generate inadequate income replacement rates once they’ve aged out of the workforce.

That’s one reason for my frequent scribblings on behalf of the new “fiduciary rule,” limiting conflicts of interest among financial advisors providing investment advice for retirement savers. Jeff Sommer has a useful piece in the NYT on this and other matters, making many good points but glossing over one very important one.

First, the gloss. Thanks to some seriously stiff spines by Democrats in the White House and Congress, conservatives’ efforts to block the rule have thus far been thwarted. The rule—which basically requires retirement savings advisors to put their clients’ interests first—starts phasing in about a year from now, i.e., early in the next president’s first term.

But you notice how I keep calling this a “rule,” not legislation? Congress didn’t pass this into law, of course (that would be way too functional), so the next president can change the rule on day one. It would actually take some time to unwind it—there’s a process that would take months—but it could be stopped before it started.

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The new age or the stone age: we either deal with the costs of trade or they deal with us

Jared Bernstein

Jared Bernstein Senior Fellow, Center on Budget and Policy Priorities

Economist David Autor et al keep producing really important findings about the impact of trade on people and communities hurt by international competition. Their latest entry, on the connection between trade-induced job losses and political polarization, is written up in today’s NYT:

“Cross-referencing congressional voting records and district-by-district patterns of job losses and other economic trends between 2002 and 2010, the researchers found that areas hardest hit by trade shocks were much more likely to move to the far right or the far left politically.”

For years, it was impolite to raise the costs of trade in policy discussions, even while fully recognizing the benefits. Eventually, the implications of the models, especially “factor price equalization,”—the idea that trade with low-wage countries could lower the wages of workers in sectors that compete with imports—allowed the word “globalization” to be added to “technology” in describing inequality. (Go ahead and try this at home: ask an economist what causes inequality, and they’ll say “globalization and technology.”)

But Autor et al, along with various others (the Economic Policy Institute has been onto this since its inception in the 1980s), have helped us get beyond sweeping generalizations. They’ve done so by drilling down into the microdata to identify the impact on affected communities, with a particular emphasis on the impact on China of trade in the 2000s. Their work is creating the oxygen to recognize, even in polite company, the double-edged sword of U.S. trade dynamics, with our persistent and large deficits.

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Tired of economists’ misdirection on globalization

Lawrence Mishel

Lawrence Mishel

An interesting story in the New York Times this morning looks at the effect that job losses from trade have had on people’s political views. It’s no surprise that voters on the losing end of globalization are disenchanted with the political mainstream, as the Times puts it. They have every right to be.

But I’m tired of hearing from economists about the failure to support workers dislocated by globalization as a cause of anger and the policy action the elite somehow mistakenly forgot. Ignoring the losers was deliberate. In 1981, our vigorous trade adjustment assistance (TAA) program was one of the first things Reagan attacked, cutting its weekly compensation payments from a 70 percent replacement rate down to 50 percent. Currently, in a dozen states, unemployment insurance—the most basic safety net for workers—is being unraveled by the elites. Only about one unemployed person in four receives unemployment compensation today.

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Scamming the Country’s Veterans: Efforts to Privatize VA Health System

Dean Baker

Dean Baker Co-Director, Author, Center for Economic and Policy Research

There are few areas where there is more bipartisan support than the need to provide adequate health care for the country’s veterans. While many of us opposed the war in Iraq and other recent military adventures, we still recognize the need to provide medical services for the people who put their lives at risk.

This is why it is especially annoying to see right-wing groups invent scandals around the Veteran Administration’s hospitals in order to advance an agenda of privatizing the system. If there was a real reason to believe that the current system is badly hurting our veterans, and that they would be better cared for under a privatized system, then it would be reasonable to support the transition.

But this is the opposite of the reality. All the evidence suggests that a privatized system would make worse any problems veterans now face in getting care — and it is likely to cost more money.

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It's About Time

It's About Time

Union Matters

As CEO Dough Rises, Workers Fall as Flat as a Pancake

Pulling out may seem like a good idea in theory, but it sure as hell ain’t foolproof. In fact, sometimes it can be devastating.  

Take Indianapolis-based heating, air conditioning and refrigeration manufacturer Carrier. In February, the corporation announced to its 1,400 employees that their jobs were being sent to Mexico.

“This is strictly a business decision,” a Carrier executive told the bereaved and angry crowd of workers.

Newsflash, Carrier: This is NOT strictly business.

By pulling out of Indianapolis, the corporation guts the city’s school system of essential tax dollars, strips thousands of families of their incomes, and decimates the whole region. Carrier isn’t just shuttering a factory. It’s shuttering an entire community. And because it’s a corporation, it’s laughing all the way to the bank.

But, of course, the United States treats corporations like Carrier as royalty for behavior like this through tax breaks. CEOs also get monstrous bonus packages -- at an average of $15 million per year – for throwing Americans out of work when they can be replaced by workers paid a pittance in countries that allow environmental degradation.

Carrier gets the advantage of paying workers in Mexico the same amount per day that their workers here in America make per hour. The CEOs and shareholders reap all of the benefits.  American workers and communities suffer all of the pitfalls.

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