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Tuesday, February 9, 2010

STATE OF THE UNION – DEMYSTIFIED - PART II

As the House and Senate are still trying to cobble together a jobs bill pursuant to President Obama’s speech, consider Mr. Obama’s words and the hidden truths behind them:

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“Now, as we stabilized the financial system, we also took steps to get our economy growing again, save as many jobs as possible, and help Americans who had become unemployed. That's why we extended or increased unemployment benefits for more than 18 million Americans; made health insurance 65 percent cheaper for families who get their coverage through COBRA; and passed 25 different tax cuts.”

The real message:

We in Government figured we can pretend to toss a pittance to the flyover folks while preserving jobs and bonuses of those who have sent them to the unemployment lines or a “service industry” job for a fraction of their former wages. Now, let’s hear a “woo-hoo” now that COBRA payments are less unaffordable for the unemployed.

“Now, let me repeat: We cut taxes. We cut taxes for 95 percent of working families. (Applause.) We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college.” (Applause.)

The real message:

Yep, it looks good on paper, but cutting taxes doesn’t really create jobs – especially when NAFTA and GATT have reduced the USA to a “consumer” society with less than subsistence wages for millions of remaining “service industry” jobs. Besides, tax cuts are meaningless to the over 30 million unemployed or underemployed right now. And of course, those that are in the top 5% remain exempt from any real tax burden – plus they get to keep their secret offshore accounts, boosting employment in other lands.

“I thought I'd get some applause on that one.” (Laughter and applause.) “As a result, millions of Americans had more to spend on gas and food and other necessities, all of which helped businesses keep more workers. And we haven't raised income taxes by a single dime on a single person. Not a single dime.” (Applause.)

Of course, municipalities have had to raise sales taxes – the most regressive form of taxation – to compensate for the lack of Federal revenue sharing. And the poorest Americans get to shovel those taxes over plus the Federal tax on gasoline with all those income tax dollars they saved.

“Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed. (Applause.) Two hundred thousand work in construction and clean energy; 300,000 are teachers and other education workers. Tens of thousands are cops, firefighters, correctional officers, first responders. (Applause.) And we're on track to add another one and a half million jobs to this total by the end of the year.”

The real message:

And then the funding expires. Our municipalities and schools remain short of funds due to various unfunded Federal and State mandates as well as missing revenues from the local tax base. Trillions have been spent on a land war in Asia, securing wealth for multi-national corporations and contractors – none of whom pay US taxes. Here in the USA, these touted “recovery” jobs are disappearing as their temporary “recovery” funding expires. Those extra cops hired a couple of years ago are now getting laid off. Still waiting for Iraqi oil to pay for all this – as promised.

“…That is why jobs must be our number-one focus in 2010, and that's why I'm calling for a new jobs bill tonight.” (Applause.) “Now, the true engine of job creation in this country will always be America's businesses. (Applause.) But government can create the conditions necessary for businesses to expand and hire more workers.”

The real message:

Under the past four Administrations, millions of jobs have been shipped offshore – manufacturing, IT, financial services, leaving corresponding millions of Americans unemployed. A few have enriched themselves off the cheaper labor and lax workplace safety/environmental laws of foreign lands.

Under the present Administration, it will be “business as usual” for American and multi-national corporations. We will urge them to give an appearance of fairness to the American worker, but expect to work longer hours for less money in whatever job you are lucky enough to land.

“We should start where most new jobs do –- in small businesses, companies that begin when -- (applause) -- companies that begin when an entrepreneur -- when an entrepreneur takes a chance on a dream, or a worker decides it's time she became her own boss. Through sheer grit and determination, these companies have weathered the recession and they're ready to grow…Financing remains difficult for small businessowners across the country, even those that are making a profit. So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat. (Applause.) I'm also proposing a new small business tax credit -– one that will go to over one million small businesses who hire new workers or raise wages. (Applause.) While we're at it, let's also eliminate all capital gains taxes on small business investment, and provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment. (Applause.)

The real message:

In other words – it’s on you, the American people, to figure your way out of this one. Multinationals will continue to ship your jobs overseas and to dilute the value of your labor by hiring undocumented workers under the table. That’s not going to change. You can bet that big corporations will get tax credits for new plants in foreign lands and equipment manufactured outside the USA. We’ll toss scraps to some "small" businesses so they can stay alive long enough to be gobbled up by multi-nationals and provide pocket money for trust fund babies in the interim.

“Next, we can put Americans to work today building the infrastructure of tomorrow. (Applause.) From the first railroads to the Interstate Highway System, our nation has always been built to compete. There's no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products. Tomorrow, I'll visit Tampa, Florida, where workers will soon break ground on a new high-speed railroad funded by the Recovery Act. (Applause.) There are projects like that all across this country that will create jobs and help move our nation's goods, services, and information.” (Applause.)

The real message:

Infrastructure replacement is great, especially when the plan includes component to facilitate both union–busting and sub-standard wages, as on Florida’s bullet train project. When we’re done with our international wage-balancing activities, a construction worker in Florida will be making the same as a construction worker in Bangladesh. There’s no reason that China or Colombia should be able to acquire labor for less money than businessowners here in the USA!

“We should put more Americans to work building clean energy facilities -- (applause) -- and give rebates to Americans who make their homes more energy-efficient, which supports clean energy jobs. (Applause.) And to encourage these and other businesses to stay within our borders, it is time to finally slash the tax breaks for companies that ship our jobs overseas, and give those tax breaks to companies that create jobs right here in the United States of America.” (Applause.)

The real message:

In theory, that sounds great, but slashing tax breaks for companies with foreign operations will not bring our jobs home. As long as they can still make a profit overseas and avoid the additional costs of doing business here, don’t expect that what’s good for GM’s bottom line will be good for America.

END OF PART II

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