“America’s Choices: Why the Conventional Wisdom Is Wrong”
National Press Club
January 19, 2011
Good morning and thank you. I’m honored to stand beside firefighter Stan Trojanowski, who responded to a 9-1-1 call from the World Trade Center moments after the terrorist attacks in 2001. As America grieved, Stan returned to the scene day after day, first in the hopes of rescuing those trapped in the rubble, then to recover remains of those who had perished. Today, he continues to deal with the terrible aftermath of that terrible day, as he deals with the toll his bravery and commitment have taken on his health.
Last month, Stan and other firefighters, police officers and construction workers who answered the call that day—who ran into the fire and into the dust clouds—posed a question to our elected leaders: What kind of country are we?
For seven years they had pressed for a law that would do one simple thing—take care of the heroes who got sick because of their selfless acts, who suffered because they said yes, without hesitation, when America needed them. But for seven years, our leaders would not say yes in return.
Congratulations, Stan, for finally succeeding.
The question of how our political system treated our 9-11 heroes like Stan resonates still in this new year: What kind of country are we? A country of isolated individuals fending for themselves or a country with shared values and a shared vision? A country with scant resources, fading glory and no choices? Or a blessed nation with the potential to do right by its people and be a leader in the world?
The conventional wisdom in Washington and in statehouses around the nation is that we cannot afford to be the country we want to be. That could not be more wrong.
We can and should be building up the American middle class – not tearing it down. We should be honoring the heroes of 9-11, not turning them into scapegoats for a partisan political messaging operation. We should act like the wealthy, compassionate, imaginative country we are – not try to turn ourselves into a third-rate, impoverished “has-been.” The labor movement hasn’t given up on America – and we don’t expect our leaders to either.
Last Friday in Cincinnati, Ella Hopkins and a group of her co-workers went out on a frigid night to stand in front of City Hall. Ella is a child care worker and I’m so glad that she is here today. She takes care of young children when their parents are at work. She nurtures our youth so they have the support they need and are in a safe environment to learn and grow. And for doing that job, the important job of caring for our children, the state of Ohio pays her, after taxes, about $450 a week. She stood in the cold last Friday to ask her new governor, John Kasich, to respect her freedom to have a union to improve her life and those of her co-workers. Here’s what Kasich said: State workers like her are “toast.”
You see, in the same week that he increased the salaries of his senior staff by more than 30 percent, the governor has made cracking down on Ella and other home care and child care workers his first priority.
Stan and Ella are my American heroes, the hard-working everyday champions who make America great, and their lives illuminate the choices facing our nation as we enter a fourth year of economic crisis. The choice between coming together as a nation or turning on each other. The choice, as Dr. Martin Luther King once said, between chaos and community. The choice between greed and solidarity.
But most of all, Stan and Ella remind us that while our political leaders wrestle with these questions, America’s working people already know the answer. We are a nation that still has choices. We don’t need to settle for stagnation and ever-spiraling inequality. We don’t need to hunker down, dial back our expectations and surrender our children’s hope for a great education, our parents’ right to a comfortable retirement, our own health and economic security, our nation’s aspiration to make things again – or our human right to advance our situation by forming a union if we want one. All these things are within the reach of this great country.
Last week in Tucson, President Obama called upon us to build a future that “lives up to our children’s expectations.” We cannot build such a future as isolated individuals—either morally or economically. Working people know we can build that future only if we act together to put America back to work—to educate our children, to build a clean energy future, to build a 21st century America.
But here in Washington, we live in an Alice-in-Wonderland political climate. We have a jobs crisis that after three years is still raging, squeezing families, devastating our poorest communities and stunting the futures of young adults. Yet politicians of both parties tell us that we can – and should — do nothing. That is giving up on America. And as we meet here today, the Republican leaders in the House, who campaigned on the promise of jobs, are instead using their first days in office to take away health care gains from 30 million families.
We want to believe America is a generous and just country, willing to give everyone here a fair chance. How can that be squared with allowing intolerance and fear to slam shut the school house door on the DREAM Act students? I’m so glad that some of the DREAMers are here today.
We have a tax system that everyone knows is grossly unfair—allowing private equity billionaires like Pete Peterson to pay 15 percent rates while middle-class Americans pay 25 percent. We just agreed to give hundreds of billions of dollars in tax cuts to the rich. Yet Washington behaves as if record economic inequality is a force of nature, and says we cannot fund the basic functions of government—let alone invest to build the infrastructure of the future.
We are still a wealthy country, with per capita income that puts us in the very top tier internationally. But in the last 20 years, 56 percent of all income gains went to the top 1 percent of Americans, and more than a third went to the top one-tenth of one percent. That is one person out of every thousand taking a third of all income gains here in the United States. Meanwhile, the bottom 90 percent made do with only 16 percent of income gains. That is why we all feel so poor – because too much of our national income went to too few people.
In this topsy-turvy world, the same leaders who fought so valiantly to cut taxes for the wealthy turn right around and lecture us about the imminent bankruptcy of Social Security and Medicare. So let me get this straight: We need to slash retirement and health benefits for the elderly because we are on the brink of fiscal crisis. But we can afford to squander hundreds of billions of dollars in tax cuts for the super-rich. Only at the Mad Hatter’s tea party does this make sense.
The truth is Social Security is financially one of the healthiest institutions in American life, and the most essential to our families’ economic security.
When we are reduced to competing to cut spending instead of deciding how to compete in the world economy and secure our future, then we are having the wrong conversation.
Outside the looking glass, the American people would never forgive their leaders for cutting Social Security or Medicare. Sadly, the chairs of the President’s Deficit Commission urged just that, as part of a package of proposed deep spending cuts and tax changes that would hit middle-class families hard. This approach, so popular in Washington, would lock us into a Japanese-style lost decade.
We have just been through one lost decade—when America’s standard of living fell, when our wealth shrank, when millions lost their homes, when young people could not find work.
America cannot afford another lost decade. China is not having a lost decade. Germany is not having a lost decade. Because those countries have acted decisively on jobs and public investment, their economies are prosperous. Germany, with its strong unions, robust public sector, good wages and strong social protection, has an unemployment rate half ours.
What should be crystal clear right now is that the United States is falling behind in the global economy – and not because we lack the skills, the resources, the innovative drive or the entrepreneurial spirit to succeed. No, we are falling behind because we are governing from fear, not from confidence. And we have let our transnational business titans convince our politicians that our national strength lies in their profits, not our jobs.
We have failed to invest in the good-wage growth path that is essential to our survival.
We are a big country, not a niche player. We live in a world in which there are two kinds of successful big countries: big, poor countries with low wages that organize themselves for low-cost exports, like China and India, and big developed countries with high-skilled workforces that invest in their infrastructure and in their people, that protect their people’s rights on the job and have strong social protections, like Germany and Japan. A country that has combined the best of each category is Brazil, which has enjoyed phenomenal growth, increasing equality and growing stature on the world stage under the leadership of my friend and brother President Lula, whose term has just ended.
But too many of our politicians are doing the opposite of what works: destroying our public institutions, crushing working people’s rights and living standards, and failing to invest in education. We know this model, and we know where it leads—catastrophe.
This misguided and shortsighted approach is not just a Washington problem. In state capital after state capital, politicians elected to take on the jobs crisis are instead attacking the very idea of the American middle class, the idea that in America, economic security—health care, a real pension, a wage that can pay for college—is not something for a privileged few, but rather what all of us can earn in exchange for a hard day’s work.
November’s election has unleashed a coordinated effort to block the path to the middle class with an attack on workers’ rights. When I say an attack on workers’ rights, I am not talking about demands for concessions in tough times by employers. Wise or not, such demands are a normal part of collective bargaining. I am talking about the campaigns in state after state, funded by shadowy committees created in the wake of Citizens United, aimed at depriving all workers—public and private sector—of the basic human right to form strong unions and bargain collectively to lift their lives.
This attack is fueled by the enthusiasm – and the financial support — of people like Lloyd Blankfein, the CEO of Goldman Sachs, and Rupert Murdoch, the billionaire publisher behind Fox News. Both participate in a committee formed to raise business funds to attack public employees, based on the proposition that firefighters and nurses and medical orderlies are overpaid.
It’s a funny thing, when the firefighters arrived at the World Trade Center on September 11th and started that long climb up the stairs to rescue the bond traders trapped on the upper floors, it didn’t occur to any of them to call up and ask, “What’s it worth to you for us to come and get you?” So how did we come to the point where our country’s ruling class thinks that firefighters like Stan and teachers and nurses are the problem, and people like Lloyd Blankfein and Rupert Murdoch are the solution?
And in some state capitals we see not just an attack on the middle class, but an attack on economic rationality itself. What else can explain governors like Mitch Daniels in Indiana and Scott Walker in Wisconsin rejecting high-speed rail through their states? Turning their backs on jobs, turning their backs on their own state’s future. Betting on misery and anger, rather than hope and progress – and common sense.
George Orwell once said it was fashionable among the really rich to bemoan the materialism of workers. I can’t fathom what spiritual values drive billionaire Pete Peterson to make more millions by doing a leveraged buyout of Hilton Hotels and then trying to take health care away from the people who clean the rooms for $12 an hour. But I know from my own experience in the coal mines that when Hilton workers stand up for their health care it’s not about money—it’s about their families’ lives—the difference between lives dogged by fear and lives of dignity and security.
And I don’t know what deep moral force drives Lloyd Blankfein of Goldman Sachs and Jamie Dimon of J.P. Morgan Chase to fund attacks on firefighters’ pensions, but I know why firefighters and construction workers have always needed early retirement—because you can’t run into burning buildings in your sixties carrying a hundred pounds on your back. Too old to work and too young to die has real meaning when you don’t have a Goldman Sachs partnership to live off.
If it is really true that we cannot afford to make the investments we need to sustain a middle class society, then we will end up a winner-take-all society, a faded casino that pays a big jackpot now and then, but is headed inexorably downhill.
For the privileged few on the winning end of America’s explosion of inequality, inaction may be a tolerable state of affairs. But working people, our members and the vast majority of people here in America and all around the world who cannot live off their investments, face an intolerable future unless we act—a future of protracted unemployment, stagnant wages, an insecure old age, rising energy prices and environmental deterioration—a kind of 21st century peonage to the lords of finance and energy and global supply chains.
The debate about our future begins and ends concretely with the question of jobs. Last year’s election was fundamentally about jobs, and I believe the 2012 election will be fundamentally about jobs. America wants to work. One in three households has had someone out of work this past year. Those who are working are doubling up to do the jobs of those who have been fired. That’s why we have seen wild productivity gains. Those gains aren’t a measure of investment or innovation, they are a measure of injustice, of workplaces where people do more work for less money—or where the guts of the production process have been outsourced to another country.
Meanwhile, the biggest and wealthiest American companies are sitting on trillions of dollars in assets – not investing, not creating jobs, not taking risks. We see companies like the Pulte Group that received millions of dollars to build homes and create jobs. Where are those homes? Where are those jobs? Those are the questions Angel Rangel, a sheet metal worker from Phoenix, Arizona, will be asking Pulte at a conference right down the street later this morning. I’m pleased that Angel is here with us.
People who live in Wonderland may not have noticed, but there is a lot of work to be done here. While one in five construction workers is looking for work, we have a $2.2 trillion old-school infrastructure deficit. We need to invest trillions more to build the 21st century infrastructure necessary for our nation’s and our planet’s future—high-speed mass transit, smart utilities and universal high-speed broadband.
And we should be hiring more great teachers at every level, not firing them because our states are out of cash. Infrastructure is not just energy and transportation, it is a quality education for all Americans, the great inheritance of universal public education that we are squandering by attacking our teachers and defunding our schools.
And yet we can’t seem to fund simple infrastructure maintenance like the Surface Transportation Act Reauthorization, a bill with support from business and labor, from both Democrats and Republicans.
I haven’t been to China, though I hope to go soon. But I am told that when you fly to Shanghai, you land in a brand new airport, you have high-speed broadband access from the moment of your landing and you can get on a high-speed train in the arrival terminal that will take you directly to downtown Shanghai at over a hundred miles an hour. This set of experiences is simply not available in any city in the United States.
We invest less than half what Russia does in infrastructure as a percentage of GDP, less than one-third of what Western Europe does.
Nowhere do we meet today’s global standard. And that standard is not sitting still.
If we want to have a great future as a nation, we cannot sit by and watch the future happen elsewhere and not here. To join the 21st century, we need to start funding a serious and sustained public investment in infrastructure now, as President Obama called for last Labor Day. The Federal Reserve Board should allocate a portion of the bond purchasing authority under its quantitative easing program to buy job-creating infrastructure bonds. Over the medium and long term, we could pay for the public investments needed just by eliminating the Bush tax cuts for the wealthy and enacting a very small financial speculation tax of 0.05% — so small to be of no concern to any real investor, but enough to raise more than $100 billion in revenue a year.
The labor movement has learned something from the last two years about jobs and investment. We can’t count on the political process here in Washington to get the job done. So we are engaging with business, public leaders and communities around the country to develop innovative regional and local plans for infrastructure investment—using Los Angeles’ 30/10 project as a model. We are ready and eager to work more with business to make it happen. We are ready to be more innovative and enterprising. But the reality is that without federal involvement, the money simply can’t be raised at a local level at the scale needed for our major cities to compete globally.
Next week the President of the United States will give his State of the Union address. The labor movement is ready for a call to action, a call to invest in our future, to create jobs, to be the country we can and must be. We are ready for vision, and we believe in the President’s vision of a nation that is strong because we are just and true to our values. A vision for a national future founded on the profound truth that social justice and material prosperity are not competing values–they are necessary to each other. A truth that we have ignored as a country for a generation at a terrible cost.
And what is that future? Just this: In a globalized, high-tech world, when it often seems that change is the one constant in our lives, the real American dream is that if we work hard and do our part for each other, each of us can enjoy the economic security that allows us to live our lives with dignity and have hope for our future and for our children’s future. This dream must be a reality in our time, and in our children’s and grandchildren’s time.