In the small Arkansas town in which I was born, there is an Emerson Electric plant that has been manufacturing fractional horsepower electric motors for all of my life. Many of my friends and relatives have worked there; it was at one time the towns largest employer and may still be, but over the last several years the company has been gradually moving jobs overseas, and everybody knows it’s just a matter of time before the plant closes.
It is, of course, a story that’s being repeated in small towns all over our country. It is not a new or unique phenomenon. Sadly, the loss of manufacturing jobs to overseas workers is the logical outcome of our own aggressive capitalism. It is, in fact, the continuation of a standard business practice. The pursuit of cheap labor is what brought those jobs to rural, right-to-work America in the first place. I can accept that. I don’t like it, but at least I understand it. What I don’t understand is how rabid capitalists like Emerson Electric CEO David N. Farr can continually get away with blaming the government for the results of that pursuit.
Last week, the St. Louis Post-Dispatch ran this op-ed in which Farr sounds the alarm about America’s declining standard of living. A paragraph from early in Mr. Farr’s op-ed provides a nugget of truth:
Emerson has expanded globally to diversify and ensure that it can continue to win against intense global competition. We are well positioned to grow profitably in the United States and in international markets, including China and India.
Statements backed by these numbers from a speech Farr gave a few weeks ago in Chicago:
Emerson,… will keep expanding in emerging markets, which represented 32 percent of revenue in 2009. About 36 percent of manufacturing is now in “best-cost countries” up from 21 percent in 2003,
That’s right, Mr. Farr moved 11% of his companies manufacturing overseas between 2003 and 2009. But watch how his op-ed seemingly builds a case for why this was caused retroactively by Michelle’s husband and health care reform that does not yet exist. Farr lists three reasons for his concern. He begins by blurring the line of fiscal responsibility between our new preznit and his predecessor.
Federal debt: Over two administrations, the United States has created debt that is forecast to exceed $20 trillion within 10 years.
Over two administrations? Yes. For the purposes of assigning blame, the right-wing noise-machine has created a new math in which 11 months is greater than or equal to 8 years. Farr then moves on to something of a veiled threat:
Emerson provides health coverage to employees and their families in the United States — more than 100,000 people. Emerson would like to continue to do so. However, the bill that passed the House of Representatives and the proposed Senate bill could raise costs on private-sector plans. Basic economics could force many businesses, like Emerson, to seriously consider exiting employer-sponsored plans, requiring employees to shop for coverage or move to the government-based plan.
Nice health care plan you’ve got there. Be a shame if something happened to it. The bill “could” raise costs, therefore Emerson would be “forced” to dump all their employees health care onto the taxpayers. Farr follows up with an outright lie.
Tax policy: Major competitors in the European Union and Asia are taxed at lower rates than U.S. companies. That may be hard to believe, but it’s true,…
No David, it’s not true. It’s bullshit. The top US corporate tax rate is nominally 35%, but after factoring in all the tax breaks, loopholes and exemptions in our immense tax code, the effective tax rate is 25%, which is about the same as China and lower than most of Europe. Farr continues with this:
Emerson pays a substantial tax bill every year, as it should.
Sigh. Mr. Farr relies on the ignorance of his target audience, crying about how government policies are destroying his company knowing full well the rubes are too lazy to connect the dots and realize that since taxes are only paid on profits, a company paying ”substantial” taxes must necessarily be doing very well.
Despite Mr. Farr’s attempts to distract attention from capitalists doing what capitalists have always done, the declining standard of living of which he speaks is very real. As is our country’s slip into ”second-tier economic status.” It is not, however, merely a risk. It is an inevitability. It is, in fact, a work in progress. In a world of finite resources (what us lefties like to call the real world), globalization leads mathematically to some form of wealth redistribution, a more uniform dispersal of available resources.
The world simply cannot sustain a billion or more human beings leading the middle-class lifestyle most Americans have enjoyed for the last half century. What I see in my home town is a microcosm of working class America. As manufacturing jobs steadily disappear and wages decline, complacency turns to impotent anger.
David Farr and the rest of our corporate oligarchy engage in deflecting that anger away from themselves. I write a blog post and fling it onto the intertoobz. A modern variation of howling into the wilderness.