Government Versus Corporate Power

By: inoljt,

The twentieth century featured a great debate in the world between the communist system and the capitalist system. This was a debate over whether private enterprise ought to exist in the world. Today most countries believe in the answer posed by the capitalist system; they believe that private enterprise ought to exist and is generally more efficient than the government.

Nowadays private enterprise and corporations are thriving. Very few countries even speak of “nationalization,” in which the government takes over private enterprises, anymore. Most people in the country work in the private sector. This speaks to its power.

Nevertheless, the world’s biggest employers are in fact not private. Take a look at this fascinating graphic by the Economist:

The world’s biggest employers are dominated by the government. Seven out of ten of the entities here are government-run; the two biggest are the militaries of the United States and China.

The three private employers are Walmart, McDonalds, and the Hon Hai Precision Industry. The Hon Hai Precision Industry, also known as FoxConn, is a Taiwanese electronics manufacturer.

By country, four of these employers are Chinese, three are American, and one each are British, Indian, and Taiwanese. It’s interesting that while a Taiwanese company makes the list, a Japanese corporation or government employer does not. Europe also seems to punch below its economic weight in this graphic.

For all its love of private enterprise, the biggest employer by far in the United States is government-run. The same holds true for China, the United Kingdom, India, and probably many other countries as well. All in all, despite the strength of the private sector, government still packs quite a punch.



Genuine Investment in Jobs .. and Infrastructure

The U.S. unemployment rate remains dangerously high, and in some communities, rivals the rates of the Great Depression. Clearly, there is a jobs crisis in this country.  While the temptation for those who are employed might be to be thankful and exhort one another “not to rock the boat,” there is a plethora of reasons why that would be a Very Bad Idea. Ok, the thankful part is probably a good idea.

On the other hand, the boat needs to be rocked. At least a little.  On both sides of the partisan divide, talking heads are beginning to posture. “I stand for job creation.” says one. “No – I stand against all job-killing legislation.” boasts another. “I’m pivoting to focus on jobs.” “I will work tirelessly to focus on what the American people need – jobs.”  If we could create jobs out of hot air, the unemployment rate would be 0.0 percent.

People want and need jobs. Good jobs - that offer a living wage, necessary benefits, and the ability to conceive of a future beyond where you are today. An essential element of the American Dream is a belief in the ability that hard work should be rewarded. But what happens when large groups of our fellow Americans are encountering some of the longest-term and most intractable unemployment seen in decades?  It’s not a problem only for the unemployed, although the point can be made that even if the effects were only felt by the unemployed, it would still be a problem that each of us would be responsible for. However, even in an argument based entirely on self-interest, the current unemployment rates cannot stand.

First, people out of work, unable to find work, and losing hope of finding work, are not spending money. People out of work are losing their homes. People depleting their savings are unable to plan for their children’s education.  Thus, your neighbor’s unemployment may: 1) lower consumer confidence; 2) lower the value of real estate in your neighborhood; and 3) decrease the number of students attending college and/or raise the number of students competing for increasingly limited financial aid.  These are relatively simple examples.  There are more nuanced arguments to be made – for example, herehere, or here.

The solution seems simple. Invest in jobs. After all, it’s become a widely accepted truism that our infrastructure is crumbling. Pay our unemployed to rebuild our crumbling infrastructure.  In the words of Aziz Ansari, “Jay-Z has vodka he makes. Jay-Z signs the tab, money goes back into his own pocket!” We need planners, construction workers, architects, clerical workers, lawyers, accountants, and numerous other job titles. They need work. Again, there are more nuanced arguments to be made – for example, herehere, or here.  It may be complicated to figure out how to actually implement and maximize our investment in our future. But it’s not just necessary. It’s imperative.

Progressives Taking Charge

The President has shown a talent for slowly but surely moving public opinion in the right direction on crucial policy points, then inexplicably giving those points away to his political opponents for little or nothing in return. According to last month’s Gallup poll, for example, only 20% of Americans want Congress to reduce the deficit solely through spending cuts, while the overwhelming majority favor some mix of taxes and cuts, and an additional 7% support tax cuts alone. This was President Obama’s stated position, the one thing he said he would stand by, yet the deal he ultimately signed off on included zero revenue increases.

The President long ago convinced Americans that the Bush-era tax cuts should be allowed to expire, either for those making more than $250,000 per year, or for all taxpayers. Yet the President caved on this proposition during the lame duck session of Congress, and again in the debt ceiling debate.

So now we’re waiting on a deficit “Super Commission” likely to be packed with conservative hardliners, and a process in which the President promises, once again, that increased taxes for the wealthiest among us must be part of the mix. But the stakes are high. And the default outcome—in the likely event that the commission cannot agree—is across the board cuts that would devastate Americans hardest hit by the recession and bury the prospects for job creation and recovery.

We can hope that the third time will be the charm. We can wring our hands and expect to be sold down the river. Or we can take action to make sure it’s a real fight, with or without the President’s resolve. That course, the right course, will require innovative ideas, aggressive organizing, and a powerful narrative that has been lacking from the debate so far.

Fortunately, progressives have already launched several efforts that are crucial to winning the fight. The Congressional Progressive Caucus (many of whose members opposed the debt deal) led a jobs tour around the country, proposed a Progressive Budget, and is calling for job creation as a top priority, including in budget negotiations. The Congressional Black Caucus has its own jobs initiative and has vowed to push back against harsh, cuts-only approaches.

From the Rebuilding the American Dream movement, to the Home for Good Campaign, and beyond, activists are taking to the streets, to Facebook, and to the halls of power in their call for an opportunity society, including an opportunity budget.

Just as crucial will be telling our story, a story that inspires the base, persuades the undecided, and marginalizes our opposition. It must be a story rooted in shared values of opportunity, and economic security, and the idea that we’re all in it together. It must identify corporate misconduct, inadequate regulation, and wrongheaded economics as the forces that got us into this crisis. But it must focus overwhelmingly on positive, pragmatic solutions that enable Americans to get back to work and rebuild their dreams, as well as their assets. Hardly a fringe message, research and experience show this fits well with what everyday Americans already believe.

Armed with ideas, organizing, and a compelling American narrative, we can win not only the budget and deficit fights, but the fight to restore our economy and expand opportunity into the future. It would be nice to have the President in the lead in this fight, but we may have to pull him along behind us.

Why Conservatives Can't Afford Government Default

As the deadline nears for national default if Congress does not raise the debt ceiling, the two parties appear deadlocked over ending tax breaks for the wealthiest Americans, which Republicans oppose, and deep cuts to Social Security and Medicare, which Democrats reject.  In our current political environment, and with Tea Partiers and pending Republican primaries in the mix, it is conceivable that leaders may allow the country to default for the first time in our history, with catastrophic results.  But doing so would be Armageddon not only for our economy, but for conservatives in America.

In order for conservatives to sell their world view of limited government, unregulated financial markets, and ever-lower taxes, they need government’s positive role in our daily lives, and in the economy, to remain invisible to the public.  When government’s image is as a giant, lumbering ogre—good for military defense, but too clumsy for any other purpose—the conservative take has resonance.  But when Americans are reminded that our federal government is about airline safety and mail delivery, healthy food and safe workplaces, Coast Guard and Internet, a different picture emerges. 

That’s why the last government shut-down worked so powerfully in President Clinton’s favor back in the 1990s.  Americans value the federal government’s role as protector of fair rules, opportunity, and the public interest, even as they are often skeptical about its competence.

Economists agree that national default would be devastating, with consequences ranging from collapsing financial markets to plummeting pension funds and 401(k) savings to the disappearance of loans Americans need to get a mortgage, buy a car, start or expand a business.  Unemployment would rise, and the economy could slip into another Great Depression.  Think of the financial chaos around the possibility of default by Greece, then multiply that by ten thousand.

If conservatives are irresponsible enough to let default happen, its dire consequences will dispel their depiction of the private economy as an efficient and independent actor that suffers when government gets involved.  It will remind Americans that the economy needs government, including government debt, to operate.

Independent Action on Jobs

Conservatives in Congress and their echo chamber have backed President Obama, and the American people, into a dangerous corner.  Private sector job creation is desperately needed for our national recovery and to begin rebuilding the economic security of our people.  

Yet for a mix of political and ideological reasons, conservatives are blocking two of the critical steps necessary to achieve that goal: federal investment in private sector job creation and increased tax contributions from the wealthiest and most privileged Americans.  Both are needed in order to get Americans back to work and grow the economy while beginning to reduce the deficit.

The President, however, still has some cards to play.  His constitutional power includes the ability to expend existing federal resources in ways that best meet our national challenges, while calling on Congress to do the same.  Specifically, the President should issue an executive order directing federal agencies to prioritize job creation in transportation, housing, and other programs already funded by Congress.  He should focus those efforts on states and communities with the highest unemployment rates, and through the lens of equal opportunity.  And he should separately urge Congress to prioritize employment in pending legislation like the Surface Transportation Reauthorization Act that both parties agree must be passed soon.  As I’ve recommended before, federal agencies should begin using an Opportunity Impact Statement and requiring Opportunity Action Plans to ensure that federal funds are used most effectively to create greater and more equal opportunity.

These tools should be used to amplify the kind of strategies proposed by the President's jobs council, led by CEOs like American Express's Kenneth Chenault, who have called for measures to cut red tape, provide more loans, invest in energy efficiency and attract more tourists to the United States, among other things.

These efforts, most of which the President can take on his own, should be part of a broader narrative on what government can and cannot do to spur private job growth, and why doing all it can right now is crucial to getting our country on the right track.


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