Leo W. Gerard

President’s Perspective

Leo W. Gerard USW International President

China: An Abusive Trade Partner

In this week when love relationships are celebrated and commemorated, the trade relationship between China and America should be denounced as destructive and exploitive.

China’s deliberate trade violations are draining America’s strength. Beijing is to America what Delilah was to Samson.

Top U.S. trade officials are in China this week in high-stakes negotiations to curb China’s illegal trade practices and restore American vigor. They are scheduled to meet Friday with Chinese President Xi Jinping. They’re talking tough, which is appropriate since no previous agreement and no previous penalties have even dinged China’s free-market-defying trade regime. But then, President Trump let slip earlier this week that he would consider postponing a tariff increase scheduled for March 1 if no deal is reached. Delay means nothing but additional strength shorn from America.

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Organizers Oust Amazon HQ2 from New York

Negin Owliaei Co-editor, Inequality.org

Amazon offered New Yorkers the best possible Valentine’s Day gift — a breakup. The union-busting, deportation-aiding company announced it wouldn’t go forward with plans to build a new headquarters in Queens, financed in part by tax breaks and capital grants, thanks to the sustained organizing efforts from New York grassroots groups.

The announcement was welcome news to the coalition of organizers who demanded the city invest in its communities instead of trying to woo the richest man in the world. The coalition was made up of local community organizations, including groups like New York Communities for Change and Queens Neighborhoods United, tenants unions, immigrant groups like Desis Rising Up and Moving and Make the Road NY, and more.

They sprang into action soon after Amazon announced it would build two new home bases in New York and Virginia. “We won by standing firm with our stance on no concessions and united with other organizations and groups across the city with this message,” Shrima Pandey, an organizer with Queens Neighborhoods United, told Inequality.org in an email. “We made sure that our electeds knew we were not looking to make deals because we know you can’t make a deal with the devil.”

“We also won by rallying our people, by making sure everyone was informed of the disastrous impacts that HQ2 could have had in our borough and our city,” Pandey said. “We won by being committed to this campaign – we took early morning calls, and day-long meetings, and hit the streets in the bitter cold even though QNU is an all-volunteer group and our members bear many other responsibilities.”

The reaction to the Amazon deal was immediate as questions popped up over the incentives package proposed by New York officials. Why offer hefty tax subsidies when the city is failing to address record-high homelessness? Why offer to “assist in securing access to a helipad” (a real thing promised by the city to Amazon) while the public transit system was melting down? And why offer all these perks and incentives under a shroud of secrecy, without community input?

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Grifting the Working Class

Marc Dann
Former Attorney General, Ohio

Since the 2016 election, pundits have pondered how a man who began his campaign by gliding down an escalator in a gaudy Manhattan skyscraper festooned with his name managed to ride working-class resentment and anxiety to the presidency. How did a billionaire steal blue-collar Democratic voters right out from under Hillary Clinton’s upturned nose in broad daylight?

The answer will be obvious to anyone who, like me, has spent a career battling consumer fraud: they were conned.

And not for the first time. Trump, like all great con men, knows when a “mark” is ripe to be taken, but we often overlook how these same voters were hoodwinked first by Bill Clinton and then by Barack Obama. Their con games left  blue-collar voters ready to fall.

Really, who could blame them? They voted for Bill Clinton because he promised to reform health care and ban the use of scabs. Instead he passed NAFTA, which destroyed hundreds of thousands of jobs across the industrial Midwest. Clinton also rolled back banking regulation (with a lot of help from his successor George W. Bush), setting the stage for near-collapse of the global economy.

Then came Obama, who promised hope and change and delivered neither for actual workers. To stop the impending meltdown of the economy he funneled hundreds of billions of dollars to banks instead of the working families who were about to lose their homes. He doled out billions more to save General Motors but didn’t force the company to preserve American jobs—a failure that’s playing out with disastrous consequences at Lordstown and other GM plants across the country. And he also failed to keep his promise to streamline the union organizing process.

The policies of the last few decades left a nation littered with the broken dreams of blue-collar and middle-class workers struggling to cope with stagnant wages, home foreclosures, disappearing pensions, and vanishing opportunity. Trump knew instinctively they could be duped.

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How Failing Capitalist System Is Allowing Amazon to Cripple America

Paul Buchheit

Paul Buchheit Author, editor, expert on income inequality

Capitalism is failing in America, and Amazon is both the cause and beneficiary of much of the breakdown. Jeff Bezos said, "We've had three big ideas at Amazon that we've stuck with for 18 years, and they're the reason we're successful: Put the customer first. Invent. And be patient." He might have added three capitalist practices familiar to his company: (1) Pay no taxes; (2) Drive competitors out of business; and (3) Exploit workers. 

Anarcho-Capitalism: The Sordid Details of Amazon's Tax Avoidance 

In 2018, according to its own SEC filings, Amazon claimed a refund on its $11 billion in U.S. profits. It did the same on nearly $6 billion in profits in 2017. The company has reportedly positioned itself to avoid even more future taxes with unspecified tax credits. 

In the most extreme form of capitalism taxes do not exist. This is called "anarcho-capitalism." Among all corporations, Amazon may be the leading advocate of this philosophy. They haven't paid federal income tax for the past two years. They set up headquarters in Luxembourg for tax breaks that are now being challenged. They claim minimal profits on hundreds of billions in revenue, resulting in one of the lowest profit margins among major corporations, and thus much less tax. Of course, Amazon claims to be using tax credits from past losses that stemmed from investment in research and development (R&D). But the company appears to overstate and obfuscate the R&D numbers. Its only 'explanation' of R&D in its annual report comes in an ambiguously all-encompassing section called "Technology and Content." Plus, that's no excuse to dodge taxes. Walmart and Google each spent nearly $12 billion on technology in 2018, almost as much as Amazon, but Walmart paid 28 percent in federal taxes, and Google 14 percent. 

We learn much more at the state level. Amazon has played one state against another for tax breaks over the years, most recently negotiating an estimated $3 billion tax credit from the state of New York before residents rebelled—as well they should have. The Economic Policy Institute found that employment levels don't significantly change in communities with new Amazon warehouses, and a recent study by The Economist concluded that the opening of a fulfillment center in a given community actually depresses warehouse wages. Furthermore, as an indication of the folly of wooing corporations with state subsidies, Upjohn research found that in the great majority of cases incentives are not even a part of a company's decision to locate in a given area.

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Trump’s economy is leaving his right-wing base stranded in poverty — and it’s only going to get worse

Robert Reich

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

You’ve heard me talk about inequalities of income and wealth and political power. But another kind of inequality needs to be addressed as well: widening inequalities of place.

On the one hand, booming mega-cities. On the other hand, an American heartland that’s becoming emptier, older, whiter, less educated, and poorer. Trump country.

To understand what’s happening you first need to see technology not as a thing but as a process of group learning – of talented people interacting with each other continuously and directly, keying off  each other’s creativity, testing new concepts, quickly discarding those that don’t work, and building cumulative knowledge.

This learning goes way beyond the confines of any individual company. It now happens in geographic clusters – mostly along the east and west coasts in places like Seattle, San Francisco, Los Angeles, New York, Boston and suburban Washington D.C.

Bright young college graduates are streaming into these places, where their talents generate more value–and higher wages–together than they would separately.

As money pours into these places, so do service jobs that cater to the new wealth – lawyers, wealth managers and management consultants, as well as cooks, baristas and pilates instructors.

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Union Matters

The Call for a General Strike

Richard Cucarese

Richard Cucarese Rapid Response Coordinator, USW Local 4889

It’s been only a few weeks since Labor pushed back against the longest, most punishing government shutdown in recent history, but sadly, over the jubilant cheers of victory, the ominous drumbeats of Congress warring in the trenches could be heard again, leaving 800,00 AFGE members pondering if they’ll be furloughed once more.

President Trump’s decided that the ‘Wall to Nowhere’ will be the hill to die on in this inane battle of attrition, government workers livelihoods be damned.  Keeping this in mind, the ominous question should be how much longer will it be before Trump and the entitled imperialists of D.C. realpolitik turn their sights towards millions of American workers, over 40% of whom, according to CBS News data, are one missed paycheck away from poverty?

As we suffer under the grim reality of decades long wage stagnation, no calls for a realistic minimum wage increase to keep the One Percent’s vulture bankers from our doors, nor a social program of Medicare For All, easing the burden of burgeoning medical costs overrunning the populous meager discretionary incomes, the powers that be seem more than willing to shutter government again, leaving scores unemployed, airport safety and security in perilous shape and costing the taxpayers $3 billion to do so.

And while Congress apparently shows no guilt spending an inconceivable $1.45 trillion dollars for 2018/19, to voluntarily spill blood in every conceivable corner of the globe promoting crony capitalism, strong armed acquisition of natural resources and the continuation of imperialistic follies, the long suffering American worker is left sifting through the rubble, limping through countless miles of crumbling infrastructure, closed factories, failing schools, bankrupting college loan payments, mass shootings and scores of broken dreams, leading to shortened life expectancy, drug overdoses and suicides.

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Let's Talk About Wealth

Let's Talk About Wealth