Your tax dollars at work fighting unemployment – in the Philippines

If you’re among the millions in the U.S. who are unemployed and need retraining for new work, you are, increasingly, out of luck.

But if you’re a major financial institution that wants to outsource jobs to the Philippines, until a couple of days ago, the Obama administration was spending about $36 million a year to improve the English language skills of your future workers.

Among those taking advantage of outsourced labor in the Philippines, in call centers and IT, are  a couple too-big-to-fail, bailed-out financial institutions, Citibank and JPMorgan Chase.

Last week, after a couple of congressmen got riled up about the outsourcing training, the U.S. Agency for International Development said it would “suspend” the program “pending further review of the facts.”

The program was set to expire at the end of the year in any case.

But the fact is that USAID has been offering training for future outsourcing workers for several years, from South Asia to Armenia, Information Week reported. In the Philippines, the U.S. contended it wasn’t just spending the money to subsidize Citibank and other would-be outsourcers; the government said it was actually using your tax dollars as part of an antiterrorism effort in a section of the country with a Muslim minority unhappy with its treatment by the central government.

According to the USAID scheme,  the would-be terrorists would be a lot happier once they learned a little English and were able to land a job in a Citibank call center.

Meanwhile the U.S. has been suffering through a staggering economic downturn and the highest unemployment since the Great Depression, as President Obama and other politicians promise to stem outsourcing and bring jobs back to this country.

Since 2007, 500,000 call center jobs have been outsourced from the United States, according to Rep. Tim Bishop, a New York Democrat, and Rep. Walter Jones, a North Carolina Republican, the congressmen who demanded a halt to the program. In 2010, USAID had suspended a similar $10 million initiative to train Sri Lankan workers after Bishop and Jones complained about it.

Despite high unemployment, job training programs and community colleges in the U.S., which also offer the opportunity for workers to learn new skills, have had to go begging. As the New York Times reported last week, “work force centers that assist the unemployed are being asked to do more with less as federal funds dwindle for job training and related services.”

Federal money available for retraining workers is 18 percent lower, in today’s dollars, than it was in 2006, even though there are 6 million more people unemployed, the Times reported.

While the debate over cuts to unemployment benefits has received wide attention, the cuts to the retraining programs have gone largely unnoticed.

While the president has proposed a $2.8 billion increase for job training over the next 10 years, Republicans’ budget proposals have suggested that federal funds for job training should be cut even further.

The USAID program is obviously at odds with the Obama administration’s stated intent to discourage outsourcing. Given all the other benefits  and bailouts that this administration has already showered on Citibank and AIG, would it be too much to demand that the administration stop using our tax dollars to pay for these companies’ job training when they want to move more employment from the U.S.?

 

How Mitt Could Win

Why doesn’t Republican presidential contender Mitt Romney’s free-market gospel include a ringing call to break up the too big to fail banks?

Over at the conservative American Enterprise Institute blog, James Pethokoukis suggests Romney could benefit if he did just that.

After all, this is no longer a position favored only by Occupy Wall Street.

All kinds of establishment figures now acknowledge that breaking up the big banks is needed to heal our financial system, and that as long as we don’t, taxpayers could be on the hook for another bailout.

The most recent public official to reach this conclusion is none other than Richard Fisher, the president of the Dallas branch of the Federal Reserve, who last week issued a report in which he concluded: “The too big to fail institutions that amplified and prolonged the recent financial crisis remain a hindrance to full economic recovery and to the very ideal of American capitalism.”

This should be catnip for Romney, who professes to be all about ending government interference in the free market.

What the Dallas Fed’s report makes clear is that the Dodd-Frank financial reform legislation and the policies of the Obama administration haven’t lessened the power of the too big to fail banks, or made them healthier – it’s helped them gain market share while doing little to force them to reduce the same risky business practices that led to the 2008 financial collapse.

While Dodd-Frank theoretically sets up a process to deal with too big to fail institutions when they get in trouble, our politicians and regulators by their actions have signaled to the big banks that they don’t have the guts to break them up or get them to change how they do business.

For a politician in Romney’s position, staking out a position against the big banks would give him the high ground against the president, who claims to be reining in the banks’ bad behavior but isn’t.

It would help him with the Tea Party activists, who rail against the bank bailouts and crony capitalism. Promising tough action on the banks would also help him with independents who understandably don’t trust all the political double-talk they hear.

But Romney doesn’t have the  guts to do it. His free market rhetoric stops right at the bankers’ door, where he must appear meekly with hat in hand, asking for donations, just like the president of the United States, from bankers who continue to prosper only because of the trillions of dollars worth of favors done for them by politicians using taxpayers’ money.

The top 5 donors to Romney’s campaign are people associated with bailed out banks, according to the Center For Responsive Politics. The president raised an unprecedented $15.8 million from the financial sector in 2008, while his administration was in the midst of bailing them out. Though Romney has the edge in Wall Street fundraising now, the president has vowed to fight back ­– including a pledge not to demonize Wall Street.

The big media and the politicians all talk about these policies as though they’re great intellectual debates about clashing views of the role of government. But when it comes to the too big to fail banks, all Romney’s free market preaching is just so much hot air.

This is the dishonest heart of our politics. What neither Romney nor the president, nor apparently the American Enterprise Institute, can acknowledge is that it’s all about the money.

 

Occupy Washington

Emboldened by the U.S. Supreme Court, big corporations have been busy exercising their newly granted First Amendment rights. Now a growing number of Americans are exercising theirs, assembling in cities throughout the nation to protest the bailouts, budget cuts and other artifacts of the Wall Street financial debacle three years ago this month.

Americans are notoriously slow to rouse, even when they are hurting. And we are certainly hurting: nine percent of Americans are “officially” unemployed; count those who have given up looking or have taken jobs far beneath their skill and ability, and one in five are struggling to stay afloat. Those fortunate enough to hang on to their jobs have to worry about the cost of health insurance, gas and groceries. 81% of Americans say the country is on the wrong track. The other twenty percent are presumably among those who lay claim to most of the wealth of our country.

Eighteen days ago, a few hundred citizens rallied in New York City, inspired by a call to “Occupy Wall Street” proposed by a magazine article. At first, the protestors – largely young people - got a snide blow-off from the New York Times. But thanks in part to some gratuitous pepper spray from the police, media coverage grew along with the protestors’ numbers. Last weekend, thousands marched in New York, while citizens in Los Angeles, Chicago, St. Louis, Philadelphia, Denver, Madison, Atlanta and Boston have turned out. The list is growing. Participants defy categorization or caricature: they come from all walks of life, all age groups, all ideologies. All share the view that the country has run off the rails.

Europeans have been protesting for months, their economies suffering severe collateral damage from the economic contagion unleashed by the Great Recession here at home. In Iran, Egypt and other Middle East nations, anger at poverty and political oppression boiled over earlier this year; dictators were overthrown.

But until now, most Americans have occupied nothing more than their living rooms – odd, since America’s own citizen revolution has been the beacon of democracy for the rest of the world. Many no doubt are simply too busy and too tired: two wage earner families, with some parents holding two jobs each. Some have lost so much confidence in government and in themselves that their sense of powerlessness has led to personal paralysis. No one can challenge the decision to stay home.

But the choice to stand in protest is the one singular act of political power left to the silent majority of the American people. A radical United States Supreme Court has concluded that corporate donations to politicians – a.k.a. bribery – are a form of “expression” that is protected by the First Amendment. The multinational conglomerates have used their vast wealth to seize control of our country. This has to change, and it has to be done by an amendment to the U.S. Constitution specifying that the right to support candidates and causes in elections belongs only to human beings - you can start the process right here. In the meantime, powerful as they are, corporations cannot march down our streets. Only human beings can do that.

Inevitably, the defenders of the intolerable status quo try to brand protests and protestors as insubordinate. They know that a citizenry, aroused, is a fearsome force. In recent days, as more Americans stand up to denounce the virulently destructive disparity in incomes and opportunities between the corporate elites and everyone else, the corporate hacks on Capitol Hill and the talk radio commentariat indicted the discussion as “class warfare.” Apparently that’s impermissible in our democracy because it challenges the core concept that “we the people” rule, and “we” is supposed to mean all of us. That’s precisely what’s at stake, of course, and the people demanding that it be addressed are nothing short of patriots.

Warren Buffet, the world’s second richest person according to Forbes, told CNN last week: “Actually, there’s been class warfare going on for the last 20 years, and my class has won.”

As we reported back in 2009, Wall Street has occupied Washington for too long. Now it’s up to us to take it back.

 

Want a Job? Go to Prison

American workers find themselves in an increasingly uncomfortable squeeze.

On one hand, public officials demonize organized labor, as seen in Wisconsin and several other midwestern states.

On the other hand, the growing trend in outsourcing keeps jobs closer to home, but with equally disastrous results, paying prisoners an average of less than a dollar an hour for work once done by decently paid workers on the outside.

Prisoners aren’t just making license plates anymore. They do everything from manufacturing plastic cups and furniture to operating call centers.

In the most recent example of this disturbing trend, prisoners are apparently building electronic parts for Patriot missiles.

The story was laid out by Jason Rorhlich on Minyanville, where he displays all of the promotional material by the firm, which obtained the contract to have the prisoners do the work. The firm, called Unicor, is a giant, wholly-owned subsidiary of the federal government originally formed during the Depression. It operates more than 100 factories in federal prisons and employs about 17,000 inmates, or about 11 percent of the federal prison population.

Unicor even received nearly $1 million in stimulus money, earning the ire of some on the outside who said they could have used the work.

After Rohrlich’s piece appeared, and it was picked up by Wired, Lockheed’s PR machine spun into action, denying that prisoner labor was used in building the Patriot, acknowledging for Wired that prisoners only worked on Raytheon’s ignition system for the missile. Which left Rohrlich and readers scratching their heads, given how hard Unicor has been bragging about its work on the missiles themselves. Does Unicor, an arm of the federal government, not know what its employees/prisoners are up to? Or is Lockheed working on some pretty lame damage control? I hope the missiles work better than the public relations does.

As Wired points out, the Patriot is just one in a long string of weapons work that Unicor has done, including work on F-15 and F-16 fighter jets and Cobra helicopters.
This week, Unicor scored a $20 million, no-bid contract to build bulletproof vests. All I can is say is they must have connections, since the last time they built body armor for the Army, it didn’t work so well. Last year the Army had to recall 44,000 Unicor-built helmets because they failed ballistics testing.

This is not about trashing prison training and rehabilitation efforts, which should be continued because the evidence shows that they work in reducing recidivism. But can’t our public officials find a way to do it without undermining the middle class, which they all claim to be so devoted to?

 

 

 

 

Obama Visits the Nasty Neighbor

President Obama paid a call on the U.S. Chamber of Commerce a few days ago. No organization has done more to obstruct and derail the president's policy agenda: on behalf of the massive industries that fund its $200 million budget, the Chamber fiercely opposed health care reform, financial reform, the Consumer Financial Protection Bureau, environmental protection, and consumer access to the courts, often at the expense of small businesses.  Last year, it killed a bill in the Senate that would have stripped big business of tax breaks when they outsource American jobs to other countries. Its litigation shop, lavishly supported by a who's who of corporate defendants in civil and criminal matters, has been remarkably successful in protecting big business in cases before the U.S. Supreme Court.  The U.S. Chamber is a highly partisan operation that will never cede an inch of ground to the President or his party.

Still, it wasn’t so much that Obama went to Chamber, or what he said when he got there, that bothered me. It was that he walked there from the White House.

The Chamber's headquarters is only three tenths of a mile from 1600 Pennsylvania Avenue, a five minute stroll across Lafayette Park. Most Americans would never consider taking the car (except maybe Angelenos).

But when the President rolls, dozens of vehicles, from ambulances and TV trucks to communications and heavily armed Secret Service vans, go with him. It's spectacle, but, as President Reagan understood, the motorcade is a potent symbol of the power and majesty of the presidency.

Going on foot to the headquarters of corporate America, Obama surrendered not merely the trappings of power but, inescapably, a measure of the dignity of his office.

A year ago, Obama hoofed it back to the White House from a speech at the Chamber. That was right after his annual physical, and Obama joked that he needed to walk off some of his cholesterol. More importantly, that was before the mid-term elections, when the President’s party got walloped, thanks in no small part to the $31.7 million the Chamber spent around the nation, 93% of which went to elect Republicans.

His latest visit wasn't exactly "hat in hand," but by the President's own reckoning it was pretty close: “I'm here in the interest of being more neighborly," Obama told his hosts. "Maybe if we had brought over a fruitcake when I first moved in, we would have gotten off to a better start.”

"I'm going to make up for it," the President promised. Some of us think he's already done plenty for big business, and not quite so much for average Americans, most of whom are struggling to survive the aftermath of the debacle on Wall Street.

Mr. Obama was careful not to completely prostrate himself before the Chamber's bigwigs. But every remark that could be considered a point of disagreement was tempered with a nod to the Chamber’s ideology. The President defended health care reform, but instead of discussing the human toll of the private insurance mess, explained that it “made our entire economy less competitive.” He warned that “the perils of too much regulation are matched by the dangers of too little,” referring to the financial crisis, but did not discuss lost jobs or homes. Instead he said, “the absence of sound rules of the road was hardly good for business.” Invoking one of John F. Kennedy’s most memorable speeches, Obama said, “as we work with you to make America a better place to do business, ask yourselves what you can do for America.” But the man who appeared before the Chamber conceived of his job far differently than he did when he asked Americans for it in 2008:  “the final responsibility of government,” President Obama told the Chamber audience, is “breaking down barriers that stand in the way of your success.”

This week’s stroll was part of the President’s Chamber charm campaign, which began in earnest with the State of the Union speech in January, when the President seemed to declare the recession over because  “the stock market has come roaring back” and “corporate profits are up.”

For one in five Americans still out of work, for the one in four homeowners whose homes are worth less than the amount they owe on their mortgages, that was a painful moment reminiscent of George Bush’s “mission accomplished” speech back in 2003 about the Iraq War. Obama spent the rest of the State of the Union on a combination of platitudes and pandering to his opponents, pledging among other things to get rid of unnecessary government regulations - one of the Chamber's perennial priorities.

There are plenty of other places the president could have gone if he was in the mood for an outing. The national headquarters of the AFL-CIO is only a few steps away from the Chamber, but he has never made that trip, as the California Nurses Association pointed out. Sadly, that would not be as controversial a venue as the President might fear: the AFL issued a joint press release with the Chamber praising the president’s State of the Union speech. Still, a visit from the president would have made a statement to the nation about the role working women and men play in what is known as the "real" economy (as opposed to Wall Street and the Money Industry). A fairly straightforward jog down Pennsylvania Avenue would have taken Mr. Obama to Consumer Watchdog's office on Capitol Hill.

We'll be watching where the President wanders to next. If you know what you are doing, and are clear about where you want to go, navigating the nation's capital isn't hard. But for newcomers who don't, it's very easy to get lost in D.C.

Around the Web: Tweak Show

Rather than providing a terrifying wakeup call to reshape our financial system, the economic meltdown turned out to be a boon to bank lobbyists.

The fight for financial reform looks like it will be a long war.

Who won the first battle? The too-big-to-fail bankers, who spared no expense in protecting their interests. Now they’re stronger than ever, and the job of regulating them has largely been turned over to the same regulators who failed to protect the country from the recent debacle.

House and Senate conferees are still haggling over the final details. In the latest “compromise” to emerge, Rep. Barney Frank has given up fighting for an independent consumer financial protection agency, agreeing with the Senate proposal to house consumer protection within the Federal Reserve.

It hasn’t helped that the man who was supposed to lead the charge  – President Obama – ­ has largely been missing in action. An independent consumer financial agency was once a linchpin of President Obama’s financial reform package. But it’s gone the way of other provisions that the big banks opposed. The president also once threatened to veto reform if it didn’t contain strong derivatives regulation, now the administration is actually working to undermine it.

One of the most articulate advocates of a stronger overhaul of the financial system isn’t waiting around to see the final bill to declare a verdict. Baseline Scenario’s Simon Johnson declares the reform effort a failure. Rather than joining with a handful of congressman and senators fighting for a more robust overhaul, Johnson concludes that the White House “punted, repeatedly, and elected instead for a veneer of superficial tweaking.”

Now the focus of financial industry lobbying will shift to the regulators, who will have the task of writing the new rules the administration and Congress balked at providing. The conference committee is televising its proceedings. It’s not a pretty picture, as when Texas Republican congressman Jeb Hensarling argued to gut some controls on bankers’ compensation out of concern that the federal government would be setting bank tellers’ pay.

If you have a strong stomach, you can view the remaining sessions here. The Democrats want the negotiations wrapped up by July 4.

Good Riddance to a Bipartisan

Let's take a closer look at one of the most overhyped buzzwords in politicspeak: bipartisanship.

Especially as it relates to the battle for financial reform, the call for bipartisanship threatens to drown the entire debate in meaningless twaddle.

Take for example the retirement announcement by Evan Bayh, who said he was calling it quits because he just couldn’t take how politically divided the Senate had become. Nearly the entirely Washington establishment, including the press corps went into a mad swoon over Bayh, lamenting the sad lack of bipartisanship.

I shed no tears for Bayh, a member of the Senate Banking Committee who was MIA in the debate over financial reform, and was among those moderate Democrats who was expected to oppose one of the most important proposals: creation of a stand-alone financial consumer protection agency.

Bayh did lead a group of Democrats whose idea of leadership was compromising with Republicans during the Bush Administration. What really got Bayh’s juices going was fiscal discipline and budget-cutting. Now that the Republicans have shown that they have no interest in reciprocating Bayh’s spirit of compromise, he’s got no one to play with in the Senate.

It was left to the astute cable TV comedian, Bill Maher, and a lone blogger on the Huffington Post to identify Bayh, for what he really is: A Democrat who represents corporate interests in the U.S. Senate.

During his 20-year political career, Bayh was a fundraising juggernaut. As far as I can tell, no one in the mainstream media dwelled on the $26.6 million in campaign contributions Bayh garnered, as reported by the Center for Responsive Politics. His top contributor was not from Indiana. That would be the financial giant Goldman-Sachs, which ponied up more than $165,000, edging out the drug company Eli Lily for the top spot. The third top contributor was Indiana-based Conseco Inc. an insurance company. Another bailout beneficiary, Morgan Stanley, was right up there too, with more than $81,000 in contributions.

Finance and securities was the second largest industry in contributions to Bayh, outdone only by corporate law firms.

Freed from the constraints of politics, Bayh’s first act after announcing he wouldn’t run again was to stick up for one of his beleaguered constituents – the student loan industry. The administration is proposing to stop subsidizing that industry and loan directly to students. Bayh’s against that, concerned that Indiana-based student loan servicer Sallie Mae will lose jobs.

If this is bipartisanship, it’s exactly what’s wrong with the Senate, where health care and financial reform are now gasping for life, in the stranglehold of supposed centrists like Bayh and another retiring Democratic senator, Chris Dodd of Connecticut. Dodd is also a top recipient of contributions from the financial sector. You have to wonder whether Bayh and Dodd’s next stop will be top lobbying firms, where they can continue to earn top dollar from Wall Street.

We don’t need more compromise with Goldman-Sachs and Sallie Mae under the guise of bipartisanship. Let’s retire all the blather about it along with Bayh. We don’t need more senators like him who do Goldman Sach’s bidding and then piously whine about the poisonous atmosphere in Washington. We need real reform and we shouldn’t settle for politicians who don’t have the guts to fight for it.

The real story behind "make him do it"

By now it’s a familiar story: when the legendary labor and civil rights leader A. Philip Randolph met with FDR before World War II to get the president to take action against discrimination, the president boomed back: “I agree with you, now go out and make me do it.”

Lots of people have been retelling the story as a call to action, comparing Obama to the wise, liberal Roosevelt. It urges supporters of everything from Middle East peace to health care and financial reform to keep the pressure on in order to get President Obama to do what he essentially wants to do, but cannot do—on his own because he’s being forced into unpalatable compromises by political pressures.