Obama to Push Bogus 'Competitiveness' Theme in State of the Union Address

Published on Tuesday, January 25, 2011 by In These Times

Boosting "American competitiveness" and creating jobs through increased exports will reportedly be the key theme of President Obama's plan for economic recovery detailed in tonight's State of the Union speech.

This familiar theme, a slickly-disguised appeal to support corporate globalization, plays upon our reflexive pride in American workmanship. It is built upon President Obama's empty claim that "we can compete with anybody in the world,"  as he put it in a speech in my unemployment-wracked hometown of Racine, Wis., last July.

What does that really mean? Most of the "foreign competition" that U.S. workers face actually comes from foreign subsidiaries of US-based corporations like GE, Ford, GM, Boeing, Microsoft, which operate in places like China and Mexico to exploit low-wage labor. You've got that right: A majority of U.S. "trade" consists of intra-firm transfers within the same corporation. For example, GE sends machinery and parts to Mexico as "exports" and then "imports" finished products.

 

Thus the entire competitiveness framework is bogus.

It merely means more NAFTA-style "free trade" agreements that already have cost millions of jobs and driven down wages. And it sets up a collision course between the White House and US labor—both the AFL-CIO and Change to Win federations— over the upcoming vote on the US-South Korea Free Trade Agreement (KORUS).

On January 19, AFL-CIO President Richard Trumka blasted the deal as a "Bush-style" agreement that fails to protect U.S. jobs from being offshored. He pledged that opposition “will be a major priority” of the AFL-CIO. In a strongly-worded statement, Change to Win denounced the motives of the pro-KORUS corporate chorus:

It’s crystal clear why the US Chamber is supporting a deal effectively shipping over 150,000 American jobs overseas: As the nation’s chief cheerleader for outsourcing, the Chamber gets to go to bat for its top corporate members (the CEOs of JP Morgan Chase, Citigroup, Boeing and GE, Chamber members and outsourcers all...) and gets a jump-start on one of its key goals for 2011: tax breaks for outsourcers.

The "competiveness" framework is essentially a call to pretend that U.S. workers and U.S. corporations share the same interest in globalization. As Nobel-Prize winning economist Paul Krugman points out,

the interests of nominally “American” corporations and the interests of the nation, which were never the same, are now less aligned than ever before.

Take the case of General Electric, whose chief executive, Jeffrey Immelt, has just been appointed to head [Obama's] advisory board [on competitiveness]. ...

But with fewer than half its workers based in the United States and less than half its revenues coming from U.S. operations, G.E.’s fortunes have very little to do with U.S. prosperity.

In particular, the South Korea deal will be a cruel new blow to American workers, despite the "increased exports" hype. The Economic Policy Institute has calculated that the South Korea FTA will cost 159,000 US jobs. Public Citizen's Global Trade Watch has pointed out numerous U.S. state and local laws that will be over-ridden by the FTA, and has documented numerous ways in which the proposed deal falls far short of the United Auto Workers' standards for the agreement (which the UAW nonetheless mysteriously endorsed anyway, as noted here, here, and here.)

A 'CORPORATE PLEDGE OF ALLEGIANCE'?

The juggernaut of corporate campaign donations and their lobbyists lined up behind the Korea free trade deal cannot be stopped by labor acting inside the Washington Beltway.