“The greed of the John Deere company is giving President Biden the perfect opportunity to win back working-class voters. All he needs to do is put up a major fight to stop Deere from shipping U.S. jobs to Mexico.”
I wrote that on June 12, 2024, and the Democrats ignored me. Donald Trump did not. He just called for a 200% tariff on all John Deere imports if the company exports U.S. jobs to Mexico.
How have the Democrats responded to Trump? In the worst way possible. They got billionaire Mark Cuban to say that Trump’s clumsy effort to save 1,000 jobs is “insanity … ridiculously bad and destructive.” Cuban didn’t even mention the plight of the workers.
Cuban’s argument is nothing short of embarrassing. He says that since the proposed tariff on Deere is higher than the one proposed on Chinese imports, Deere will be unable to compete with Chinese tractors and farm equipment. This will potentially lead, he said, to the “destruction of one of the most historied companies in the United States of America.”
What exactly is so insane? Trump’s goal isn’t to tariff John Deere out of business. His goal is to keep Deere from exporting 1,000 jobs. Why is it insane to preserve those 1,000 decent-paying unionized U.S. jobs?
Cuban ignores the question of why Deere feels the need to ship jobs to Mexico. Deere argues that it must do so in order to stay competitive. That leads to a Catch-22 proposition: If Deere moves jobs to Mexico and faces a stiff tariff, it will go under. And, if it doesn’t move the jobs to Mexico, it will become uncompetitive and also go under. Cuban is in line with how Deere justifies layoffs to workers: If we don’t cut 1,000 jobs now and move to Mexico, more jobs will be cut later.
The big, bigger, and biggest problem is that the Democrats and Cuban are unable to put workers and their livelihoods front and center. They are unable to mouth these words: The 1,000 Deere workers should keep their jobs precisely because Deere, one of the greediest companies on Earth, is loaded with profits and is pouring billions upon billions into stock buybacks. Which is flat-out true.
Last year, Deere recorded $10 billion in profits and it’s CEO was paid $26.7 million. The company also spent $12.2 billion on stock buybacks that enriched its top officers as well as the big Wall Street funds that own loads of Deere stock. (What are stock buybacks? A way for a company to boost the price of its shares by buying them on the open market—a blatant form of stock manipulation that was illegal until deregulated by the Reagan administration.)
And here’s the simple truth: The move to Mexico is designed to cut labor costs in order to finance those stock buybacks. It has nothing to do with competition, Chinese or otherwise. As any Deere worker would tell us, it’s all about greed. The sad thing is that Cuban, a critic of stock buybacks, knows this as well, but refuses to call out Deere.
My book, “Wall Street’s War on Workers,” conclusively shows that from 1996 to 2020, as the mass layoff rate rose in any given county in Pennsylvania, Michigan and Wisconsin, the Democratic vote declined. In the rural counties, on average, one-third of the workforce suffered through mass layoffs. Losing your job in a county that has few decent employment alternatives does not lead to positive feelings about the party that is supposed to be the defender of the working class.
Trump’s intervention in 2017 to stop Carrier from moving an Indiana plant to Mexico was “wildly popular.” And yet the Democrats remain tone deaf to the plight of mass layoff victims.
The question is why?
The answer involves understanding what John Kenneth Galbraith called “the conventional wisdom.” There’s an entrenched sense within the Democratic Party of what kinds of interventions are acceptable in financialized capitalism and which are not. Here are a few of the internalized rules:
• It’s OK to tax stock buybacks, but it’s not OK to outlaw them.
• It’s OK to raise taxes on corporations, but it’s not OK to interfere with their power to lay off workers at will.
• It’s OK to provide taxpayer funds to subsidize corporations to make investments, but it’s not OK to tell corporations that they can’t use taxpayer funds to lay off taxpayers or conduct stock buybacks.
• It’s OK to regulate new technologies so consumers don’t get ripped off, but it’s not OK to protect worker livelihoods from such technologies.
• It’s OK to bail out private big banks with taxpayer funds, but it’s not OK to turn them into public banks.
• It’s OK to go after monopoly price gouging, but it’s no OK to stop monopoly mass layoffs.
• It’s OK to ask for 60-day notice for mass layoffs, but it’s not OK to stop compulsory layoffs when they are used to jack up CEO pay, service harmful leveraged buyout debts, or fund stock buybacks.
On a deeper level what ties all this together is a profound faith in corporate power and efficiency. It will be for the better for all of us if billionaire CEOs are free to run their corporations as they see fit. That faith includes protecting the right of corporations to hire and fire at will. After all, new technologies and globalization inevitably involve the churning of jobs, don’t they? Trying to stop or slow down that process would only cripple the economy, wouldn’t it? And we certainly don’t want a country where government officials tell billionaires what to do, do we?
Therefore, a sober, realistic Democratic Party, trapped in its conventional wisdom, will refuse to intervene in corporate hiring and firing. Instead, they travel down the uninspiring and unconvincing path creating an “opportunity economy,” growing new jobs for the future from taxpayer subsidies to chipmakers and the like.
Not so with Trump. He swings a wrecking ball at the conventional wisdom. He acts as if he actually believes that jobs should not be exported to lower-wage countries, and that puts him in tune with nearly every U.S. industrial worker. To be sure many Democrats believe the same. The difference is that Trump has no built-in guard rails about intervening in corporate decision-making. You move jobs to Mexico, he bellows, and we’ll slap a tariff on your butt that is so high that it will be much cheaper for you to keep the jobs here.
That has to be music to the ears of every Deere worker facing the axe, and it certainly will get the attention of millions of workers who have seen their jobs shipped abroad.
Because Trump has difficulty focusing on a coherent message, the field is still open for the Democrats to put forth a new policy that directly affects the jobs of millions of workers. I’m a broken record on this because it’s so very simple. Harris should give a primetime talk and focus on the $700 billion in tax payer money that now goes to private corporations for goods, services, and subsidies: Here’s the line she should stress:
No taxpayer money shall go to corporations that lay off taxpayers or conduct stock buybacks.
To clarify the point, she should add some pragmatic flexibility:
For those companies receiving taxpayer money, layoffs must be voluntary, not compulsory, as is already the case for many white-collar employees.
That would seem fair and just to millions of workers, even if Wall Street would find it “insane.”
The Democrats must decide, and soon, whether they really are the party of the working class. If they are then they must fight hard to save worker jobs from unabated corporate greed.
Is that really too much to ask?
Les Leopold is the executive director of the Labor Institute and author of “Wall Street’s War on Workers: How Mass Layoffs and Greed Are Destroying the Working Class and What to Do About It.” Read more of his work at substack.com/@lesleopold1. Follow him on Twitter: @ les_leopold
From The Progressive Populist, November 1, 2024
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