The Working-Class-Jobs Candidate In The Era Of Resentment

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This is a companion discussion topic for the original entry at https://talkingpointsmemo.com/?p=1436664
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Ryan appears to be doing extremely well for a Dem in bright red Ohio. He’s not my cup of tea but if he’s elected I believe he will be a reliable vote for the Ds, unlike Manchin or Sinema.

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A nice article. And speaking as someone living in a place filled with working-class people (rural types, to be exact) who also feel ignored by Democrats more attentive to cities and better-educated voters, Ryan’s campaign rhetoric packs a lot of punch.

Fingers crossed that he wins.

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As a former resident of Youngstown, Ohio, I want to wish Rep. Ryan the best of luck and success in his bid for a Senate seat. He, more than any other elected official, best captures the hopes, aspirations, and frustrations of those in the formerly industrial region known as the Rustbelt.

Having said that…

First, the NAFTA was submitted to Congress for approval in December 1992 by President Bush, not Clinton, who immediately criticized the agreement — an outgrowth of the US-Canada trade agreement negotiated under President Reagan — for its lack of enforceable, verifiable standards on workers right, environmental protections, and workplace safety.

As president, he tried to enact these measures, but to no avail. In the end, he signed NAFTA along with two side agreements that contained standards but which were not enforceable.

Those that do blame Clinton for outsourcing don’t know history. The jobs started leaving in the 1970s, after Nixon withdrew from the Breton Woods agreement in 1971.

Under Breton Woods, there were capital controls that restricted investment into foreign economies. This was in order to not undermine foreign exchange rates because participating countries’ currencies were pegged to the dollar under Breton Woods. As a result, investors had to invest in their own country’s economy.

In the Inequality thread in TPM’s The Hive I posted a link to a New Republic column by Reagan administration economist Bruce Bartlett, who wrote about the impact of the withdrawal of the Breton Woods agreement and its system of capital controls:

One of the keys to maintaining this system was capital controls. Major nations did not permit the free flow of capital internationally because it could easily destabilize exchange rates. Businesses and individuals had to get permission to import or export capital, and access to foreign exchange by domestic investors or domestic currency by foreign investors was controlled by the central bank. As a consequence, investors were denied the opportunity to seek higher returns in other countries and were forced to invest domestically.”

Bartlett describes the moves as Nixon’s attempt to combat inflation without resorting to the politically risky move of raising taxes or interest rates, and to grease the economy to help his re-election prospects.

His passage on ending capital controls included this point ( bolding is mine for emphasis), which I think is crucial to understanding the impact:

> “Once businesses were free to invest abroad by the abolition of capital controls, which followed from the elimination of fixed exchange rates, workers lost enormous leverage. Globalization destroyed the private sector labor unions and allowed businesses to exploit workers throughout the world, creating a race to the bottom in terms of wages."

The fact is, before NAFTA was even a glimmer in the eye of President Reagan and President Bush, the private sector was engaged in a policy of active disinvestment in these kinds of facilities, which hollowed out our industrial sector:

Leveraged buyouts of manufacturers created huge amounts of corporate debt which resulted in pressure from shareholders to downsize, shift priorities and budget allocations, or otherwise trim expenses in order to maximize revenues and boost stock prices;

Private equity firms and corporate raiders acquired industrial firms only to raid pension funds, spin-off or outsource profitable divisions, and sell off valuable real estate or other assets for short-term gains;

Tax laws were enacted to provide firms with incentives to shut down factories and outsource as deductible business expenses, write off “phantom” losses that existed only on paper, take advantage of accelerated depreciation schedules, etc.

The following deals might illustrate the impact of the neoliberal policy of permitting the free flow of capital internationally – a mobility that labor does not share:

Ford had been the biggest shareholder in Japanese carmaker Mazda from 1979 – when it bought 25 percent and lifted that to a controlling 33.4 percent in 1996 – until it reduced its ownership to three percent in late 2010 to raise cash.

General Motors bought 34 percent of Isuzu in the 1970s, and in the 1980s entered into joint ventures with Toyota and Suzuki and also began to invest heavily in automation in its manufacturing.

General Motors once was the top shareholder in Fuji Heavy Industries, the maker of Suburu cars, but sold its entire 20 percent stake in 2005 as part of its efforts to raise cash.

GM also bought 50 percent of Saab in 1989 and a full 100 percent a decade later

Chrysler acquired 15 percent of Mitsubishi Motors in 1973; it wanted to acquire 35 percent but its plans were blocked by the Japanese government and stymied by its own financial weakness.

I point this out because for too long discussions about international trade have devolved into a left wing populism that consists primarily of Clinton-bashing, when there were more consequential and far-reaching influences that had already set the pace for offshoring jobs and factories to poor sweatshop countries.

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Thank you for the post randyabraham!

Here in the CA Bay Area, pre-Great Recession, I had a spirited argument on offshoring with a few of my tech-employed friends at the time. Their company was offshoring engineering and design work to Malaysia (guess what, labor includes professional workers too), and my conservative tech friends were angry about it, but not making the connection. Fast forward to the post-Great Recession and another friend in the same company was relating his recent trip to Malaysia, and his many friends in engineering there were being laid off, as the company outsourced to China this time.

Granted, this story has been going on since the start of capitalism, so not sure why anyone would be surprised at the outcome.

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This is why Vance called Ryan a “crazy, lying fraud”.
How dare someone with morals run for Senator.
Trump has no morals and look how great and wonderful he is.

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There is no company loyalty to anything except profits.

And now that the cost of doing business is rising in China, companies are moving to Vietnam and other countries that are even cheaper.

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This is an incredible article in many ways:

more aggressive government intervention to arrest regional decline

Yes and yes. That will become essential in the coming climate crises.

“We have to love each other, we have to care about each other, we have to see the best in each other, we have to forgive each other”

The foundational principle of human society. Well said.

It is us versus China and … It is time for us to fight back.

It is indeed US verses China, except “fighting back” is an unfortunate political expression, if one interprets it as oppressing Asians. We have to compete better by improving ourselves. China is teaching their children calculus.

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Yes, we are going to have to re-think our relationship with China.

China, whose economic rise has been fueled by cheap labor, credit and exports and foreign investment and technology transfers, has become an indispensable component of the investor class’s conservative world order that seeks the cheapest, most cost-efficient venue for production, and it has been credited for its pragmatism in opening itself up to foreign investment and technology as a way to modernize and lift its citizens out of extreme poverty.

But its expansionism and military aspirations are now putting it on a collision course with the international order of free nations, and it remains to be seen if its further rise will be peaceful.

And given China’s increasingly aggressive behavior, and mounting concern over the fragility of supply chains, and the wisdom of relying on the availability of foreign-sourced critical goods ranging from computer chips and rare earth metals to electronics and medical supplies from hostile dictatorships during a pandemic, perhaps now is a good time to revisit this issue that has given China’s expansionism a free hand.

It also may be time to implement an industrial policy for this country. For decades, Republicans and conservatives have decried the idea of a national industrial policy as “picking winners and losers,” preferring instead to rely on the marketplace to balance and organize supply and demand,

But we now know all too well that it is possible to be too ‘lean and mean’: it is also necessary to have adequate and robust in-house capabilities.

Under the banner of “market efficiency,” we have allowed corporate leaders to send jobs and factories overseas to poor countries in an effort to maximize profits, exploit cheap and unorganized foreign labor, undercut the interests of American workers, and evade workplace safety and environmental regulations.

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I’m okay with “fighting back” as a political expression because we’re in an economic and geopolitical contest with China, and we have to take it seriously. It can mean a lot of things besides oppressing Asians.

Speaking of which, this is flying under the radar but the Biden administration is making a massive, world-changing move in holding back China’s future dominance of AI and the global semiconductor market. I guess it’s too complicated to explain to people as an election issue, but this may turn out to be one of the most significant things Biden has accomplished.

https://www.nytimes.com/2022/10/20/opinion/biden-china-semiconductor-chip.html

Excerpts:

As with oil or aircraft carriers or nuclear weapons, the question of who controls the semiconductor industry carries geopolitical significance. Chips are crucial ingredients not just in smartphones and laptops but in just about everything in the modern world — including, importantly, weapons, surveillance technology and artificial intelligence systems. Dominance of the industry in the wrong hands could be disastrous.

That’s why I have been so impressed with the aggressive and creative way the Biden administration has gone about curtailing China’s alarming, decades-long effort to build a domestic semiconductor industry that’s independent from the rest of the world. This month, the Commerce Department announced a set of restrictions that prevent China from getting much of what it needs to establish a commanding position in the chip business. The government said the rules were meant to block “sensitive technologies with military applications” from being acquired by China’s military and security services. With few exceptions, the sanctions prohibit China from buying the best American chips and the machines to build them, and even from hiring Americans to work on them. Analysts I spoke to said the rules will devastate China’s domestic chip industry, potentially setting it back decades.

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“I want to wish Rep. Ryan the best of luck and success in his bid for a Senate seat. He, more than any other elected official, best captures the hopes, aspirations, and frustrations of those in the formerly industrial region known as the Rustbelt.”

I concur.

While you spin the narrative that the Republicans alone tore down American industry in an effort to allow capitalists giant profits, for those of us who lived in the declining midwest and absorbed the horrors of regional decline pointing fingers at Republicans provides little if any solice. During those years the Democratic party bowed to the wishes of the coastal elites who only wanted to promote their own wealth and didn’t want to pay any attention to the ravaged “rust belt.” Both Republican and Democratic hogs ate their fill at the globalization trougth. The difference between the Republicans and Democrats is the Republicans never made noises about being for the working guy. People in the midwest who used to be Democrats feel real and abiding resentment to the out of touch coastal elites who midwesterns believe abandoned them and the rest of middle America in pursuit of profits. .

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Yes, and the Brookings Institution recently released a paper about a strategy to deal with China’s aggression. A lot of it deals with Taiwan, but it also describes a broader strategy that includes supply chains and an economy more resilient to shocks from foreign pandemics and other external factors.

Here is the link: https://www.brookings.edu/wp-content/uploads/2022/09/FP_20220926_nds_china.pdf

Here is an executive summary:

Ongoing disagreement between China and Taiwan about the desirability of unification and intensified competition between the United States and China are pressurizing the three-way relationship. If the United States is to maintain a constructive role in preventing the outbreak of a cross-Strait war, it will need to implement a strategy to deter Chinese aggression against Taiwan that is consistent with U.S. interests and capabilities, and that provides clarity around the existentially important matter of preventing nuclear escalation, in the event a conflict does occur. The inclusion in the 2022 U.S. National Defense Strategy of the concept of “integrated deterrence” is a sensible approach to doing so. It can be enhanced by: reaffirmation of the U.S. One-China policy; investment in conventional capabilities suited to the geography of the Western Pacific and resilient to China’s military concept of systems warfare; clear signaling about the economic and political consequences of aggression against Taiwan; and decreasing U.S. domestic vulnerabilities to Chinese embargoes and cyber attacks.

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Point to where I said this was exclusively the fault of Republicans.

And “coastal elites”? Really?

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Nixon, Reagan, Bush and Bartlet are all featured promanently in your post which begins as a defense of Clinton.

I don’t argue with the history, but as someone who watched industry leave my own community during the last third of the 20th century blaming Republican policies alone doesn’t change the impact of the policies on Democratic working folks who saw their futures ravaged and their wealth flee to the coasts.

My point is Democrats have always made noises that they were for helping the working man. They shouldn’t be surprised when midwestern working people who have suffered through the great hollowing of the American heartland, conclude that they have been failed for decades by the Democratic politicians who claim to have the interests of working people in mind.

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I never graduated college because I was a stinking drunk. I got a job in radio in NYC - ground floor - and have worked at one of the top stations in the city for more than three decades. Even though my skills are top-notch, I’ve run up against the paper ceiling and that’s been reflected in my salary. It doesn’t matter how much skill I have nor how good I am at audio production (nor the fact that hundreds of millions of dollars of ad revenue has passed through me to get on the air), I was not given the salary a person with a piece of paper would have. It stopped me from getting a job at other radio stations compared with people with degrees.

If I sound bitter about it - I am. People who work hard and do a good job and thrive shouldn’t be beholden to a paper that just teaches you which book to open to find the answer. I already know which book.

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I have a problem with the “coastal elites” trope, which strikes me as the political fare of the right.
I have little doubt that members of the rentier class across the country (thinking of centers like Chicago, Dallas, Pittsburg and wherever the Kochs, DeVos and their ilk hail from) were happy to raise the profitability of their investments through the disinvestment in, and pillaging of, American manufacturing while outsourcing production.
I chose Pittsburg because I grew up there and have seen no sign that the skions of families like the Mellons have been forced to move to Homestead as a result of financial distress.

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That was not intended to be an exhaustive history of labor relations, but those incidents were crucial.

now, as far as bad decisions by Democrats, I can name some:

President Carter refused to support a local proposal from my area for a worker-owned takeover of a steelmaking company that announced it would be closing, even though a feasibility study said their plan was sustainable, while around the same time giving his blessing to a Chrysler Motors bailout led by
Lee Iacocca that was able to break labor contracts and undo existing salary, benefits and pension agreements.

President Clinton pushed to bring China into the World Trade Organization and make their favored nation status permanent, arguing that the PRC represented the largest untapped market. However, China has not kept its promises to open up its markets, and has resorted to stealing patents and other technological intellectual property, manipulated its currency to achieve a competitive price advantage for its exports, and dumps steel under cost onto world markets to eliminate competition.

Now, as far as your other comments, Republicans captured the South with their racialist Southern Strategy, and their anti-union Right to Work movement decimated labor union ranks in the industrial Midwest.

A declining union presence nationwide undermined Democratic electoral prospects at the same time that the party found common cause with the civil rights and women’s rights movements, progressive degreed professionals, and racial, ethnic, and sexual minorities battling discrimination. Many whites took a zero-sum approach to these efforts, feeling they would come at their own expense, and their sense of aggrievement alienated them from the Democratic Party.

Is that where your midwesterners’ “real and abiding resentment” comes from?

Heck, I’m from the Midwest — the same town as Tim Ryan — and I don’t feel resentful. And I am no elite: when I was 18 i would put on my steel-toed shoes, ear protectors, safety glasses, and asbestos gloves and go to work in a factory making doors and side panels for railroad freight cars.

I worked summers in that factory in the Midwest starting in 1974 and through to 1979. The newest overhead press there was built in 1941, and it was not even made in the U.S.A., but in the former Soviet Union. It, and all the other presses there, pre-dated OSHA safety regulations, and worker injuries were commonplace.

And some of the nearby steel mills were originally pig iron mills from the 1800s that were converted as cheaply as possible. And by the early 1980s, most of those firms already had begun the process of subcontracting out their labor operations to the non-union South, or moving overseas.

When they finally closed a few years later, management blamed greedy unions and environmental regulations — not their short-sightedness and greed, the true cause of their demise.

Because as early as the 1950s, American steelmakers who were invested in and employing the open hearth furnace process brushed off suggestions to adopt newer technologies such as basic oxygen steelmaking and the electric arc furnace.

Truth is, we were out-innovated. Just like we were in the 1970s when smaller fuel-efficient Japanese automakers challenged our Big Three and their bloated gas guzzling product.

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In America, the pastime is haterism.

Makes for good TV, but people are altogether too combative and willing to fight for rather than against oligarchs

Now that the people of OH have a viable candidate, their haterism insists on voting instead FOR the latest GOP hater

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