Transcripts Transcript: Thom Hartmann: The Big Picture: Free Trade - POOF goes the Money & the Stimulus. 30 September '11
There’s something seriously wrong with our economy - and Federal Reserve Chairman Ben Bernanke acknowledged as much yesterday in Cleveland:
This unemployment situation we have, the jobs situation, is really a national crisis. We've had now close to 10 percent unemployment now for a number of years. And of the people who are unemployed, about 45 percent have been unemployed for six months or more. This is unheard of. This has never happened in the post-war period in the United States.
He went on to ask Congress to get to work helping the unemployed.
But what Ben Bernanke - and Speaker John Boehner - and even President Obama just don’t seem to get - is that our economy will never improve until we end our insane so-called "Free Trade" policies.
That’s why another stimulus package - while it’s better than doing nothing - won’t do nearly enough to get our economy back on track.
Take for example President Obama’s 2009 stimulus package.
While it did inject billions of dollars into the hands of working people and small businesses, the problem is that this stimulus didn't work in the classical Keynesian way, the way that it did work in the 1930s.
Back in the thirties, when the government paid workers to plant trees or build dams for the CCC or the TVA, those workers would then spend that money in local stores to buy clothes manufactured by Americans in American factories by American workers - who then took that money as pay and bought more American made stuff in stores making things... selling things... by Americans
The money kept circulating, from hand to hand, from business to business, for years, all the while staying right here in the United States.
So a dollar of stimulus back then could, over many years, produce many, many dollars of stimulation of the economy.
But with the Obama stimulus, since so many of our factories have been packed up and shipped off to Mexico, China, Vietnam and dozens of other low-wage countries over the past two decades because of so-called Free Trade, the money Americans spent buying things is not going back into American businesses anymore.
So it ends up stimulating the economies of those other countries, instead of ours.
And even when it's spent here for products ostensibly made here, the profits often end up offshore because of so-called Free Trade.
For example: If people went out and bought a new CD, 97% of that money went offshore.
If they went to a movie, 75% of that money went offshore.
Or what if they just wanted to relax and take their mind off economic troubles by purchasing a bottle of wine and a good book - in that case, 64% of the money spent purchasing the wine went offshore, and 63% of the money on the book went bye-bye. These would be the profits, anyway.
And anything anybody bought that was made of rubber - 53% of that money went outside the US.
The simple fact is - since our nation got conned into handing our sovereignty over to transnational corporations under the guise of "Free Trade" - we no longer make computers or TVs or clothes or power tools or toys or pretty much anything in the US any more, except military hardware, junk food, and burgers.
So unless you were using your stimulus money to buy a cruise missile or lunch at a 7-11, then more than likely that money was just going to a foreign business to pay taxes to foreign governments and employ foreign workers who then go out and buy foreign things.
All the while - the CEOs of what used to be American corporations - but are now transnational giants - are making more and more money pink-slipping Americans and hiring workers in Bangladesh for a tenth of the price - where, by the way, they can also pollute all they want.
Our economy used to be focused on empowering American industries - and empowering American workers - but now the focus is on paying them less and less to compete with foreign labor.
As Sir James Goldsmith - one of the richest men in the world at the time - noted in his book - "The Trap":
In the great days of the USA, Henry Ford stated that he wanted to pay high wages to his employees so that they could become his customers and buy his cars. Today we are proud of the fact that we pay low wages. We have forgotten that the economy is a tool to serve the needs of society, and not the reverse. The ultimate purpose of the economy is to create prosperity with stability.
And that purpose is best served through government policies like tariffs - and the support of labor unions - that protect American industries and make sure Americans have good wages and benefits.
But as I talk about in my book - Unequal Protection - when our government is hijacked by corporate "people", so-called "people" with huge armies of lobbyists - then the purpose of an economy shifts to serving the needs of the corporations and it no longer serves actual human people.
What Free Trade does is peel away government protections of national industries, and thus let global billionaires and transnational corporations dive in to feast on the goods.
And that's where we are today - with our economy being devoured by transnational corporations who have no allegiance whatsoever to America - but instead only to profits - to cold hard cash - and that's it.
Until our lawmakers - most of whom have either been bought off or drank the Free Trade kool aid - realize this fact - then no stimulus will every truly help our economy and therefore our economy will never improve over the long term.
Every stimulus effort will last only the few weeks or months it takes for somebody to take the wages from the stimulus jobs into a Wal-Mart and buy something made overseas.
"Poof" goes the money - "poof" goes the stimulus.
We need to wake up and ditch so-called Free Trade before it's too late.
That's The Big Picture.