The crash of 2008 and the Great Recession were inevitable consequences of three decades of economic policies designed by and for Wall Street and the wealthiest Americans. At the heart of the problem, says the AFL-CIO Executive Council, was:
the hollowing out of American manufacturing, the growing dysfunction of our financial sector and a rapid increase in economic inequality, all of which crippled the growth engine of the U.S. economy.
In a broad statement today at its annual winter meeting in Lake Buena Vista, Fla., on “How to Fix What Is Wrong with Our Economy,” the council details the step-by-step policy decisions by business and government and the rise of corporate power over the past decades that brought the economy to its knees.
The council says President Obama has shown he understands the problem.
He has said clearly that 'we are not going back to an economy that’s all about outsourcing and bad debt and phony profits,' we cannot return to a 'bubble and bust' economy propped up by 'fleeting bubbles and rampant speculation.'
The statement outlines several significant steps that need to be taken to build an economy that can compete with world economic powers like Germany and China and that works for all, including:
- Significant investment over the next decade in education and apprenticeship programs for young people, infrastructure, energy, manufacturing, transportation, skills training and new technologies;
- A fair share from Wall Street and the wealthiest Americans, who have benefited most from the economic policies of the past 30 years—pass a financial speculation tax, let the Bush tax cuts for the wealthy expire and tax capital gains at the same rate as ordinary income;
- Tackling the problems of wage stagnation and economic inequality by reforming labor laws so that all workers who want to form a union and bargain collectively have a fair opportunity to do so, making full employment the highest priority of our economic policy, increasing and indexing the minimum wage, shrinking the trade deficit and eliminating incentives for offshoring;
- Reviving U.S. manufacturing by bringing the trade deficit under control, enhancing Buy America safeguards, aggressively enforcing trade laws and ending incentives for offshoring;
- Once again regulating Wall Street, eliminating tax advantages for leveraged buyouts and finding other ways to favor strategic investment over short-term speculation;
- And working toward a global New Deal that establishes minimum standards for the global economy, prevents a race to the bottom, creates vibrant consumer markets in the global South and creates new markets for advanced U.S. manufacturing.
In other jobs and economy action today, the council urged Congress to reject the cynically named JOBS Act, which aims to deregulate Wall Street, and a measure (S. 1747) that would strip overtime pay protection from large numbers of high-tech workers. The Computer Professionals Update Act would affect computer systems analysts, computer programmers, software engineers and other high-tech employees and, as the Congressional Research Service says, “effectively eliminate[s] overtime protection for all IT professionals.” Instead, the council said, Congress should “update and index the overtime salary thresholds so workers do not lose overtime protection as wages and salaries rise with inflation.”