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Heather Boushey: Obama pointed to the success of GM and put rebuilding US manufacturing as the highest priority

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Washington. Now joining us to talk about President Obama’s State of the Union is Heather Boushey. Heather is at the Center for American Progress. She’s also on the editorial board of WorkingUSA and The Journal of Poverty. Thanks for joining us.

HEATHER BOUSHEY, CENTER FOR AMERICAN PROGRESS: Thank you. It’s a pleasure to be here.

JAY: So give us your—. What did you like, what didn’t you like about this speech?

BOUSHEY: Well, you know, what I liked was that he—in terms of the economics, he started off by talking about U.S. manufacturing and the successes that we’ve seen in terms of how we—I think, in his words, we took a chance on American workers and invested in the auto companies. And that’s turned out to be quite a success. It was really great to see him highlighting that example and what America can do when we put our minds to it and we try to create jobs and make sure that industries thrive here in the United States. So that seemed like a really fantastic place to start this speech.

It was also good to hear him talk about the importance of addressing inequality. You know, there were a couple of points during the speech where he talked about making sure that everybody had a fair shot, making sure that everybody pays their fair share of taxes. And that certainly was an encouraging sign that he’s going to continue on a theme that he’d been talking about the past couple of months, that inequality has a pernicious and negative impact on the U.S. economy. It’s not just something that is bad for American families, but it’s also something that really has a profound effect on our economy and has really dragged our economy down. So I think those were some of the highlights.

JAY: Now, are you not a bit concerned that the model of what happened in the auto industry, which—I mean, one of the reasons the auto industry has come back is because there’s been such a lowering of workers’ wages. You know, new workers are making about $14 an hour, something like half what they used to be, a much smaller work force, and it’s been happening across the country with these two-tier contracts, where new workers are making so much less. And, you know, if American exports and the rebound or re-creating of American manufacturing is going to be based on lower American wages, I’m not sure that’s a model people should be so happy about.

BOUSHEY: Well, I think that’s an excellent point and certainly something to keep in mind. You know, the fact that there are these two-tiered wage structures is a real problem, especially for those junior, those new workers who are subject to those lower wages, to the extent to which they’re not able to work their way up or the extent to which that contracts that happen in the future aren’t able to address that.

But I think the reality is is that, you know, we saw declining manufacturing for quite some time prior to this great recession and during the great recession, and seeing that come back really is important—not just for those workers in those plants, while that is of critical importance; it’s also important to make sure that we have a manufacturing sector here in the United States and you have those sort of—those clusters of different suppliers and folks working together in regions of the country that create the vitality that creates a U.S. manufacturing sector. I agree with you that keeping an eye on those salaries and making sure that those two-tier structures are the best that we workers can get, but I do think it is important to keep our eyes on the prize that we do need a U.S. manufacturing [crosstalk] in America.

JAY: Yeah, ’cause one of the pieces of legislation unions were pushing for and I know your center was pushing for, you know, was this EFCA, the Employee Free Choice Act, which no one hears a word of anymore, which was supposed to make it easier for unions to organize unorganized workers, which in theory would have raised wages instead of lowering them and dealt with something on the demand side. I mean, I don’t think it’d be a great model to switch places with China. You know, America could become the cheap labor exporters of the world, and maybe China starts consuming American products.

BOUSHEY: Well, I think we have quite a ways to go before we get to that. But, I mean, certainly on both fronts, the Employee Free Choice Act, an important piece of legislation, it is important that workers have the right to have their voice heard, that they have the right to organize, and that the federal government is doing its part to make sure that they’re creating something closer to a level playing field between workers who want to organize and their bosses, who are oftentimes making it very difficult for them to have a democratic process. So that is an important piece of legislation. It’s a real tragedy that that didn’t happen already, and certainly this Congress is not interested in even talking about that, let alone moving it forward. And that is a real problem.

JAY: So what were weaknesses, or what didn’t you like about the speech?

BOUSHEY: Well, I think I wanted to hear more about the kinds of jobs that we’d be creating. I also thought it was interesting that while the president did talk about extending the payroll tax cut, which—I’ll note, the TV show I was watching then panned to Eric Cantor, who actually smiled and clapped. So that was great, ’cause that tax cut now has only been extended through February. And so we need to extend it for the rest of the year. What I didn’t hear, however, was him talking about the unemployment benefits for the long-term unemployed that also expire at the same time that the payroll tax credit does. I think one of the stories that’s gotten a little bit lost in terms of how the labor market is or is not progressing is that we still have record high numbers of long-term unemployed who’ve been unable to find work, and we need to make sure that we’re keeping those benefits flowing to those workers and their families.

JAY: Does it concern you at all that, you know, this is a speech that really launches the Obama election campaign? I suppose it kind of started before, but this is the big public launch. And so if everybody runs from the left, more or less, when they run—especially Democrats, but even Newt Gingrich is running on some kind of weird anticapitalist platform here, ’cause that’s the mood of people. But in terms of what actually would likely get implemented after—assuming President Obama’s reelected, is there any reason to think it isn’t kind of be more of the same, unless you start to actually see that he’s really rallying people to really fight for something more bold? But I didn’t get that tonight.

BOUSHEY: Well, you know, elections matter, and this—we are at a moment in American history where you have, you know, this Democratic president who is talking about inequality in a way that we have not seen people talk about it in recent decades. We’ve seen this rise in inequality, you know, since the late 1970s. We’ve seen a lot of politicians come and say, well, that’s just fine for America and we just need to give those rich people tax cuts, and then that growth will trickle down to the rest of us. And what we know now is not only did that not happen, but that that is part of what laid the foundations for the economic crisis that we are still struggling to work ourselves out of. I think it is fantastic that he’s talking about that. Will that lead to the kinds of policy change that will actually address the inequality and the pernicious impact that it’s having on our equality? I think that remains to be seen. But you can’t move forward unless you—you know, if you don’t start talking about it.

And I think that you hit the nail on the head there when—what matters is what the American people say. Are they going to send to Washington the kind of congress that is going to be so difficult and so challenging and is going to not focus on job creation but is going to manufacture crises in terms of bringing the economy to the brink over the debt-ceiling debacle last summer and things of that nature? Or are they going to come together and try to implement policies to actually create good jobs here in the United States? So, you know, a lot of it depends on what folks do. But having a president who’s actually talking about inequality and its impact, I think, is a step in the right direction.

JAY: Does it—he seems so wedded that the jobs program, all the solutions have to be private sector solutions, market solutions. You know, he was very clear that on health care, he says, we didn’t have a government insurance, we had a market solution. But economists I’m talking to, everybody seems to think if you’re really going to have any serious drop in unemployment, there needs to be a direct public jobs program. And he’s always been against it. It’s not a new position. And, you know, so—and with the state of the global economy—and he didn’t even mention what’s going on in Europe. I mean, we could be on the edge of another major crash. He doesn’t—he kind of just ignored that whole situation. It seemed a little unrealistic, this whole thing. It’s just more about how to position himself in the elections.

BOUSHEY: Well, you have to remember he was talking to Congress, so he’s talking to the people who he’s trying to get to pass legislation. And I think that, you know, when the president goes and does a State of the Union and speaks to Congress, tries to focus on things that Congress will do or, you know, slapping them on the wrist for things they haven’t done. It seemed very tweaked to that particular audience. And so, you know, the focus, I think, was on things that have some sort of snowball’s chance of moving forward in this Congress and things that he could really say, hey, you all need to do this, and things that he thought that they could work on. We have a very, very conservative House right now being run by Republicans, who, again, have not let anything happen over the past year that would move us towards the kind of job creation that we need to see. So it seemed like, you know, he was playing to that audience.

JAY: So, quickly, just to sum up, if there’s one thing you wish he would have said, what would it have been?

BOUSHEY: Well, you know, I really—I mean, again, I’m going to come back to my point that I started with, which is that I was really quite pleased to see him talk first and foremost about U.S. manufacturing and green energy issues. You know, he did say some things on that that I’m less in favor of, but I do think that that’s a great place to start. If we want to fix the U.S. economy, refocusing to say that manufacturing matters and producing stuff here in the United States matters is a really important place to start. So I really did like that bit of it.

JAY: Alright. Well, thanks very much for joining us.

BOUSHEY: Thank you.

JAY: Thank you for joining us on The Real News Network.


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Heather Boushey is a senior economist at the Center for American Progress.
She formerly was a Senior Economist with the United States Congress Joint Economic Committee and before that, with the Center for Economic and Policy Research and the Economic Policy Institute. She is a research affiliate with the National Poverty Center at the Gerald R. Ford School of Public Policy, and she is on the editorial review board of WorkingUSA and the Journal of Poverty.