House in disorder

The Hershey chocolate plant, Hershey, Pennsylvania. On February 15, Hershey Co. announced that it would be cutting 1,500 jobs over three years as part of a plan to scale back production lines and move some manufacturing to Mexico.-CAROLYN KASTER/AP

Even as Bush spends trillions of dollars on his `War on Terror', hundreds of thousands of Americans lose their full-time jobs annually.

ON January 31, President George W. Bush went to New York's Federal Hall to talk about the economy of the United States. He offered his typically rosy picture of the state of the economy, touting increased job growth and championing tax breaks. This was not entirely true. In 2006, the U.S. economy created 200,000 fewer jobs than it did in 2005. Since the 1980s, there has been a steady decline in manufacturing jobs. The new jobs being created are largely in the service sector. An estimated 30 million U.S. workers have lost their full-time jobs over the past two decades. Three-quarters of them either never worked again or else found jobs with limited recompense. As Iraq smouldered and as Latin America drifted away from U.S. control, Bush sought comfort among those whom he had in happier times called "my base". The moneyed set of New York welcomed him, and he gave them a cheerleaders' chant. The choice of location was curious. In 1765, delegates from the American colonies gathered at the Federal Hall to protest the Stamp Act and to declare, "No taxation without representation". With an escalating budget deficit on his hands and a population increasingly feeling disenfranchised, Bush told this Wall Street gathering that his solution for all crises is simple: a permanent extension of his tax cuts (which critics charge will cost the U.S. budget $3 trillion over the next decade). No red meat for the people. For them, only patriotic cries asking them to make sacrifices.

The circumstances of the "jobless economy" could not escape Bush. "Our growing economy is also a changing economy," he said. "The rise of new technologies, new competition and new markets abroad is bringing changes - and these changes are coming faster than ever. There was a time when most people expected they'd keep a job for life. Now the average American has 10 jobs before the age of 40." Describing the economy as "dynamic and innovative", Bush hastened to comfort those who experience the innovation adversely. "Yet the same dynamism that is driving economic growth can be unsettling for people. For many Americans, change means having to find a new job or to deal with a new boss after a merger or to go back to school to learn new skills for a new career."

The promise of job retraining has been around for more than a decade. President Bill Clinton's Treasury Secretary Robert Rubin championed "lifetime learning" as a way for laid-off workers to conceptualise their need for new skills. In a startling new book (The Disposable American: Layoffs and their Consequences), The New York Times' economic reporter, Louis Uchitelle, recounts a visit to a re-employment centre for aircraft mechanics. Each mechanic attended mandatory resum-writing and job-interviewing classes and took home a free copy of the book Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and in Your Life (by Spencer Johnson, M.D.). Two mice and two humans seek cheese, which is their source of life. "The humans," Uchitelle writes, "passively wait for the cheese to reappear somehow, while the mice quickly hunt for a new supply and find one even tastier than the last." One of the humans scribbles slogans on the wall, including, "Old Beliefs Do Not Lead You to New Cheese". This re-education enables the humans to give up on being passive and to actively seek out cheese, which is eventually found. "Be Ready to Enjoy Change Again Quickly," the book enjoins, "And Enjoy It Again."

What once was thought to be terrible is now not only ordinary, but it is what business schools prescribe. Uchitelle's emphasis on lay-offs reveals both the economic and cultural shifts in the U.S. Bush was statistically correct when he said that the average American would have 10 jobs before turning 40. Uchitelle cites a government study of 10,000 people, conducted from 1979, when "most were teenagers and the permanent lay-off was just becoming a national phenomenon. They are in their 30s and 40s now, and over the years each has held, on average, 9.6 jobs."

As manufacturing jobs disappear in the U.S. and as retraining remains more a mantra than a reality, the disposable population drifts towards service jobs. When Wal-Mart announced interviews for a new retail outlet it was opening in Chicago, 25,000 people applied for 325 poorly paid jobs. This is the underlying reality of the job market for the bulk of the U.S. population. Paul Craig Roberts, who served as Assistant Secretary of the Treasury in the Ronald Reagan administration, writes of this reality with a harsh bitterness: "The United States is the first country in history to destroy the prospects and living standards of its labour force. It is amazing to watch freedom-loving libertarians and free-market economists serve as apologists for the dismantling of the ladders of upward mobility that made the America of old an opportunity society. America is seeing a widening polarisation into rich and poor. The resulting political instability and social strife will be terrible."

After he interrupted his paean to the economy, Bush warned that the reality of lay-offs should not be met with government policy. The private sector is quite capable, he intimated, and it will produce the jobs that are necessary. "The question for America is whether we treat the changes in our economy as opportunity to help improve people's lives," Bush noted, "or as an excuse to retreat into protectionism."

The binary opposition between what is called `globalisation' and protectionism defines the mainstream discussion of the economy in the U.S. Both the Democratic Party and Republican Party are fundamentally committed to `globalisation', which to them means to defer to corporate power over economic activity and to ask their domestic workforce to be essentially experts in their careers. As Uchitelle puts it, "Faced with lay-offs, one President after another, starting with Jimmy Carter [1976] and running through George W. Bush, has either facilitated lay-offs or acquiesced to them, or both. There is no loyal opposition."

From Clinton's North American Free Trade Agreement to George W. Bush's Central American Free Trade Agreement, little has changed. Corporate interests are preponderant and criticism is deemed irrational. The one aspect that sets apart the Republicans from the Democrats is that while both talk about "fiscal responsibility", the former spend wildly and the latter preach the gospel of "deficit reduction". Republicans, who had a reputation for fiscal prudence, changed their tune in the Reagan era when the party dried up funds for social programmes and threw billions of dollars at the military. The "War on Terror" has allowed Bush to continue Reagan's policies, with the federal deficit reaching such alarming levels that even the generally loyal International Monetary Fund cautioned the U.S. government to change course (its 2004 report was entitled U.S. Fiscal Policies and Priorities for Long-Run Sustainability, with the point being that the current course is economically unsustainable and politically dangerous). Under Clinton, the government emphasised deficit reduction, which did not produce economic growth in the 1990s as much as it occasioned the stock market bubble. Excess capital did not go into the creation of new industries but towards Wall Street, whose bubble burst towards the end of the Clinton presidency.

When John Kerry ran against Bush in 2004, he once more revived the deficit reduction strategy although it was as much a pipe dream as the "supply side economics" of the Reagan years. The current U.S. debt is $9 trillion. When Bush took office, the debt was $5.6 trillion. The Iraq war is estimated to have cost $2 trillion so far.

If the Blue Dog Democrats and the Republicans are conjoined in their aversion to a consideration of the jobs problem, there are a new set of Democrats and libertarians who stoke the emotions of the U.S. public. The leading spokesperson for the displaced is CNN's anchor Lou Dobbs. Last year, Dobbs declared, "We're in a class war, and our middle class is losing and losing badly. But I do blame and have blamed the rich, corporate America and our political elites in both parties who have permitted the unabated assault on middle-class working men and women and their families." The titles of Dobbs' two recent books express his anger and his ideology: Exporting America: Why Corporate Greed Is Shipping American Jobs Overseas (2004) and War on the Middle Class: How the Government, Big Business and Special Interest Groups Are Waging War on the American Dream and How to Fight Back (2006). A section in the U.S. Congress matches the populism of Dobbs. Senator Jim Webb of Virginia wrote an opinion piece in The Wall Street Journal (November 15, 2006) entitled "Class War", in which he argued that the government had "no greater duty than to confront the growing unfairness of globalisation".

Dobbs and Webb inflame the resentment of that section of America abandoned by both its political elite and its corporations. But rather than offer a platform to "reclaim America", they recycle xenophobia. Dobbs correctly identifies corporate power for its callous indifference to U.S. workers, but he also points the finger at the "illegal alien invasion" as well as at India and China. On the U.S.-Mexico border, Dobbs is virulent with his accusations that the Mexican government is "exporting poverty. They are overcrowding the major schools in Los Angeles. They are creating a crime wave in point of fact in certa in parts of the country."

Dobbs is blind to the power differential between corporate America and the migrants, with the former playing a causative role in joblessness and the latter simply responding to the destruction of their economy by free trade agreements and to the need for cheap labour within the U.S. Dobbs goes for the most inflammatory explanation. Senator Webb is not far off from this, writing against "illegal immigration" with the grouse that "certain immigrant groups have the `right genetics' and thus are natural entrants to the `overclass'." Others, who apparently have the wrong genetics, should be stopped at the border and sent home.

In the wings, presidential aspirant John Edwards has revived his campaign with his "two Americas" theme. Edwards is travelling the country, talking about such things as the growth of poverty (roughly 37 million people), the lack of health insurance (roughly 47 million people), and the remarkable rise of hunger (9.6 million people, including three million children). "Nobody who works full-time should have to raise children in poverty or in fear that one's health emergency or pink slip will drive them over the cliff," Edwards said. He has a strong agenda for transformation, including a higher minimum wage, better labour laws, a temporary federal jobs programme and better insurance for those who cannot work.

There is no word, however, on how Edwards would handle the power of finance in U.S. affairs. Since 2006, the housing market, which gave a lift to a sagging stock market, has begun to leak. This month the sub-prime housing market bubble burst and sent a tremor through the world of finance. If foreclosures begin, this will be very bad for the delicate financial health of the U.S. New infusions of cash from China, Europe and Saudi Arabia will be needed to tend to the patient. Edwards and other progressives are loath to go toe-to-toe against the power of the financial sector. There is no talk of a tax on financial transactions, which if levied at 0.5 per cent (as suggested by the economist Robert Pollin) would net the U.S. exchequer a minimum of $100 billion. Such a challenge to finance is beyond the pale. But anything less than a consideration of the power of finance will lead into the dangerous territory of xenophobia and racism, with a dispossessed population seeking scapegoats in Mexico, India and China.