Merry Christmas to us: American CEOs creating jobs in China

I can't get that old Christmas spirit this year. I remember waking up many times as I progressed from year to year in my childhood immersed in a serenity that I could never feel in adulthood. Childhood, to me, left when I could no longer genuinely feel and see the words of "Silent night, holy night. All is calm, all is bright."

I have a 14-foot Christmas tree in my house this year, yet I can barely sense the smell of pine. As a child, my family's Christmas trees were no more than six feet tall, yet each morning during the Christmas season I woke up to the sweet aroma of pine. If I knew tai-chi, I probably would have gone to the nearest fog-shrouded park and practiced that serene art of kung-fu in slow motion.

I know I'm in trouble because I can't smell the pine in my house, which now has a massive 14-foot Noble tree top straight from the rain forests in Oregon.

An Internet friend forwarded this Christmas message to me, which flummoxed me. Was I supposed to be offended, or was this a genuine Christmas wish full of hope and encouragement? You be the judge:

"To My Progressive Friends:

"Please accept with no obligation, implied or implicit, my best wishes for an environmentally conscious, socially responsible, low-stress, non-addictive, gender-neutral celebration of the winter solstice holiday, practiced within the most enjoyable traditions of the religious persuasion of your choice, or secular practices of your choice, with respect for the religious/secular persuasion and/or traditions of others, or their choice not to practice religious or secular traditions at all. I also wish you a fiscally successful, personally fulfilling and medically uncomplicated recognition of the onset of the generally accepted calendar year 2011, but not without due respect for the calendars of choice of other cultures whose contributions to society have helped make America great. Nor is this to imply that America is necessarily greater than any other country nor the only America in the Western Hemisphere . Also, this wish is made without regard to the race, creed, color, age, physical ability, religious faith or sexual preference of the wishee.

"To My Traditional Friends:

"Merry Christmas and a Happy New Year"

I opened my mail this morning and lo and behold, I am getting excited again. A lifelong friend who lives in Australia emailed this piece from Huffington Post that puts into words exactly how I feel about my beloved America, only much better than I ever could.

Robert Borosage is the President of American Institute for America's Future and a regular blogger at Huffington Post. As I read his piece, which I am reprinting in my blog in two installments (with my commentary, of course) I was reminded of John F. Kennedy, who used all the moral suasion powers at his disposal to bring down the mighty U.S. steel industry to its knees. American power and hegemony was unquestioned in those days and what the President of the U.S. said was the law. No hemming and hawing, only universal respect for the Office of the Presidency.

Borosage, in his latest blog, noted that President Obama has met with the very people that he should be castigating. He led with an apology when he should be demanding one from the CEOs of the very corporations that are responsible for the gutting of American labor and the dismantling of the American middle class.

I do not believe that Obama owes any American CEO any apologies, so why did Obama apologize to them? I am an anti-conservative, yet I am being drawn closer and closer toward the conservative position that Obama is too humble. He bowed to the Emperor of Japan, to the Saudi prince, and who knows who else?

Obama must learn to project power, not humility. Especially not before the very people - the CEOs of the major multinational corporations - who have wrecked the American economy while building their multinationals. It is as though these CEOs have conspired to ruin America and partition the country into corporate serfdoms that are part and parcel of their empires which transcend national boundaries.

That's not OK by me, and should not be OK by Obama. He, after all, is the President of this country that is being partitioned by these multinationals for their personal gain and not for, by and of the American people.

From Robert Borosage"s "Obama and the CEOs: Looking for Love in all the wrong places":

The president kicked up his "corporate charm offensive," meeting for hours with 20 CEOs yesterday. Characteristically, he started with an apology for not "finding the right balance" in addressing business. "We want to be boosters," he said, because "when you do well, America does well." The president and the business leaders talked about free trade, fiscal discipline, and relief from regulation. The White House let it be known the president was considering a speaking gig at the board meeting of the Chamber of Commerce, the right-wing corporate lobby that had accused him of waging a "general attack on our free enterprise system."

You can't fault the president for showing a little love to America's corporate leaders, but there is one small problem here: The entire premise of the meeting is wrong. The reality is that the corporations are doing extraordinarily well -- and America is in trouble. US corporations recorded the highest profits on record last quarter, while more than 20 million people were in need of full-time work, and poverty is at record heights. What is good for General Motors or General Electric or IBM is no longer necessarily good for America.

In fact, these executives and their companies are more part of the problem than part of the solution for this country. They've been making out like bandits, but Americans are less and less the beneficiaries of their success. As President Obama has stated, if we are to revive an America with a vibrant middle class and a widely shared prosperity, we need fundamental reforms to build a new foundation for growth and prosperity -- an agenda the country needs and the CEOs he met with largely oppose.

Consider:

Unsustainable Trade Deficits and Massive Job Loss to Offshoring.

America was running a trade deficit of more than $2 billion a day when the economy collapsed, borrowing that sum from abroad, largely from Chinese and Japanese bankers. We've been hemorrhaging manufacturing jobs for years. Now the big companies are offshoring information technology and back office jobs in large numbers. We're running a growing deficit in high technology goods with China. The CEOs the president met with -- from General Electric, IBM, Cisco, Intel , Boeing -- have been at the front of this trend. As Andy Grove, the former head of Intel,warned, there are now fewer manufacturing jobs in the US computer business than there were when the first PC was assembled in 1975.

(Nykos2: I remember 1975. I remember when the first IBM PCs came out. They were 16 kilobytes in capacity. Now my PC has 326 gigabytes. I was one of the few lucky ones who had access to those PCs. Ninety percent of Americans were unfamiliar with the PCs, yet astonishingly, we had more employees in U.S. computer manufacturing then than we do now. These computer manufacturing companies are saturating the American market with computers made in foreign countries, using coolie labor trained by genius American trainers.)

The president rightly made balancing our trade central to his economic agenda. That requires pressure on China, Germany, Japan and the surplus nations -- not more trade accords that allow them to play by a different set of rules. And it requires making things in America once more, with companies committed to exporting goods, not jobs.

(Nykos2: Exporting jobs is almost as dastardly as the Philippine policy under former President Arroyo of exporting people.)

Yet, the CEOs the president met with have fought hard against reforms that would end tax breaks companies collect for moving jobs abroad. They champion trade accords that have helped disembowel manufacturing in this country. They support lobbies like the Chamber and Business Roundtable that oppose bold industrial initiatives that might help American manufacturing revive. Their increasing ability to run up profits while moving jobs abroad and using the threat of doing so to lower wages at home undermines America's prospects.

Gilded Age Inequality and a Declining Middle Class

In the five years before the financial collapse, when the economy was growing, the wealthiest 1 percent of Americans captured a staggering 2/3 of all income growth. Household income for the typical family actually lost ground over the course of the decade. Corporate and Wall Street executive compensation practices allowed the top executives to capture excessive rewards, while workers were facing lay-offs, wage and benefit cutbacks, and greater insecurity.

(Nykos2: The wealthiest 1 percent of Americans captured a staggering 2/3 of all income growth? How did this happen? This is like in old Europe, when the kings and the royal family, relatives and friends of the court lived lavish lifestyles while 99% of the population lived in abject poverty.)

The CEOs the president met with are perfect examples. Kenneth Chennault, the CEO and Chairman of American Express, pocketed $17.3 million during 2009 when the economy tanked, about 542 times what the average worker makes. Jeffrey Immelt, Chair and CEO of General Electric, took home about $9.8 million, 308 times a worker's pay. Paul S. Otellini, the CEO of Intel, was paid about $14.5 million, making more in a day than the average worker in a year.

(Nykos2: I remember reading this classic novel about American business in the 1950s, called The Executive Suite. The main character in the book was the CEO of a major food manufacturer whose salary was $50,000 a year. That was 10 times what the average worker in his company earned. Ten times, not 542 times, which is what the Amex Chairman and CEO makes today, compared to the average Amex employee.)

A prosperous middle class economy cannot survive if the wealthiest are capturing this proportion of the rewards. In the US, we've never done much redistribution through taxes. The only successful strategy -- the core of the post-World War II economy that built America's middle class -- has been a strong labor movement in a full-employment or near-full-employment economy. When labor was 35 percent of the private workforce, it not only lifted the wages of its members, but its wage and benefit packages set a standard that non-union employers had to respond to. And a strong labor movement provided an internal check on executive excess. A full employment economy lifts the demand for labor, making it easier for workers to make wage demands, as demonstrated most recently in the dot.com economy of Clinton's last years. Reforms are also needed to limit current executive compensation schemes, which hide the full cost of pay packages through stock options, give perverse short-term incentives that have little to do with relative performance, and rely on board compensation committees that are controlled by executives.

(Nykos2: No wonder these executives cry "socialist," "commie," "hippie" every time their outrageous compensation packages are mentioned in polite and impolite company.)

Needless to say, the CEOs that the president met with are unlikely trumpets for these reforms. Business lobbies warned that labor law reform would bring down Armageddon on the administration. Curbing excessive executive pay meets fierce resistance. But it is hard to imagine how we rebuild a broad middle class unless workers can once again capture a fair share of the productivity increases that they help to generate and executives are limited in how much they can plunder the companies that they head.

(Nykos2: I know you can absorb only so much in one sitting, so I want you to think about what you have read so far, toss it around in your head, and I will pick it up from here in my next blog. It only gets better.)