Six on History: Inside "our" Economy
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"The supply chain crisis is the universe’s way of teaching Americans about logistics. Before COVID, most Americans neither knew nor cared about the subtleties of just-in-time management. We remained largely untroubled by the tactics through which every possible efficiency had been exacted along the manufacturing journey of our trinkets, from raw materials to box on our doorstep. With prices rising by 6.2% year over year for October, we’re starting to pay attention to the architecture and management that we once took for granted.
We have learned that in order to wring every possible working moment from warehouse workers, bathroom breaks have been curtailed. Shifts have been stretched from eight to 12 hours. Healthcare plans have lost dental and vision, and premiums are higher. Unionized staff were turned into contractors, hireable and fireable at will. When the pandemic caused aggregate demand to plummet, the great engine of just-in-time logistics idled accordingly. Now, with restrictions lifted and savings ready to spend, the machine has stalled.
Climate change is making things worse. Droughts in Canada and Europe mean that the already high prices for corn and soybeans are being nudged even higher, with knock-on effects reaching your Thanksgiving table.
Increasingly, Americans are also learning about the final step, the most exquisitely crafted and then forgotten cog in the supply chain: us. It’s harder to identify how we ourselves have been schooled by the supply chain, in part because it has been happening for so long.
Consumerism is unfazed by Buy Nothing Day, if afterward we simply resume shopping as usual. But if we draw a deeper lesson from this moment of inflation and shipping delays, there is potential for lasting change. What if consumers come to see the supply chain more fully, not only as the reason we anxiously refresh the UPS delivery page, but as the long cause of social and planetary disruption? That awareness would be the foundation for an ethic of care.
To care is not to abstain from commerce, but to live with a clearer knowledge of how the meeting of our needs depends upon the web of life around us. We depend on one another, and the planet on which we live. Active care can be transformative.
For students of today’s supply chain uprisings, there are instructive lessons. In the history of the supply chain, it was the revolutionary caring for one’s fellow workers — freed and enslaved — that broke a cotton supply chain premised on white supremacy and the tradability of enslaved humans.
Workers in the 21st century are tired of being treated like animals and aren’t ready to join the ranks
The opposite of consumer culture is not abstaining from commerce, but appreciating the people and resources behind the things we buy and changing our behavior accordingly. In thinking about the people harmed by consumer choices, and the irreversible effects on the Earth, we can begin to resacralize what the supply chain has cheapened. Our fellow humans’ dignity is sacred. The land and water are sacred. The act of commerce should reflect that, not obscure it.
If we are now buying fewer things, or waiting longer to get them or paying more for them, those are invitations to reimagine the system of work and extraction that renders us complicit in acts of violence and indignity the world over. This “broken” supply chain is an opportunity to realize that the opposite of individual consumption isn’t abstinence. It is to join a collective care revolution."
Raj Patel, a research professor of public affairs at the University of Texas, is a co-author of “A History of the World in Seven Cheap Things: A Guide to Capitalism, Nature, and the Future of the Planet.”
"When Sam Bansfield first started working as a material handler at General Electric’s Lynn, Massachusetts plant in 2012, she remembers the noise—the loud clanking of her coworkers in the piece-making wing of the jet engine factory.
Nowadays, she says, the place is painfully quiet. “You can hear everybody,” she says. “There’s no machines running. There’s not any work.”
Bansfield’s experience resonates across the United States. Since 1989, GE’s domestic labor force has declined by 75%—from 277,000 to just 70,000 workers, according to a new report first reviewed by TIME from the University of Massachusetts, Boston and Cornell University. Part of that decrease can be explained by GE’s decision to sell pieces of its business, including its biopharma and transportation arms. But its manufacturing plants have been gutted too: since the 1980s, production personnel at GE’s Lynn, and Schenectady, New York plants have been cut by 90%.
But GE’s disinvestment in America’s domestic labor force is different, the UMass/Cornell report says, because of the volume of state and federal taxpayer grants, tax credits, and subsidies the company received while simultaneously disinvesting in the U.S. economy. GE has drawn roughly $1.6 billion in federal money since Fiscal Year 2000, plus $687 million in state and local awards since 1992, totaling more than $2.2 billion, according to a nonprofit’s subsidy tracker that the report uses. Over roughly the same period, the report says, three out of every four GE jobs in the U.S. disappeared.
Take, for example, a $25 billion federal program that provided tax credits to energy companies for every megawatt hour of commercial wind energy they sold between 2007 and 2016. That program had the indirect effect of increasing both the demand for and price of wind turbines, which left GE—the producer of 41% of the wind turbines operating in the U.S. in 2016—in an enviable spot.
That would seem like a public policy success story, the researchers say, except many U.S. workers have been left out of the bonanza in recent years: 13 of the 14 LM Wind power plants that GE now lists on its website are located outside the U.S., and its sole production hub of offshore wind turbines is located in Saint-Nazaire, France. Five of its six onshore wind turbine-head assembly facilities are located abroad.
GE’s approach has affected American workers. Prior to 2017, when GE acquired LM Wind Power, its Denmark-based wind turbine manufacturer, it relied more heavily on U.S. workers to make its turbine blades. GE had been putting in orders for wind turbine blades at an Aberdeen, South Dakota plant of a small American composites manufacturer called Molded Fiber Glass. GE had been the plant’s only client. So shortly after GE moved its sourcing abroad, roughly 300 Molded Fiber Glass employees lost their jobs.
GE indicates it is now scaling up its domestic renewable work. Roughly 500 U.S.-based union jobs off the coast of Martha’s Vineyard will be created to build new Haliade-X wind turbines for a major offshore wind project, says a GE spokesperson. The spokesperson also said the company is considering the “possibility” of opening a facility in New Jersey that would assemble the part of wind turbines that house their electrical generators.
But the UMass/Cornell researchers say such investments don’t begin to offset the amount of public funding GE has received over the years. “Taxpayer dollars—in the form of government contracts and subsidies,” the report says, “have bankrolled GE’s transient approach to manufacturing.”
Tough to pin downThere is no state or federal entity that tracks exactly how much a company like GE receives in public money—which can include loans, tax credits, grants, or other forms of taxpayer funds. The total dollar amount that a company amasses is not subject to mandatory disclosure and is therefore often never made public.
The $2.2 billion in public funds that the researchers say GE received is based on data compiled by Good Jobs First, a non-profit economic watchdog based in Washington, DC that lists GE’s federal subsidy awards going back to 2000. Its data is archived by the Library of Congress.
GE disputes the figure. Company spokespeople say that $2.2 billion sum included, for example, funds that state and federal governments paid to GE for products and subsidies to companies that were only later acquired by GE. For instance, the power business Alstom received at least $68 million in subsidies between 2002 and 2014, but GE did not purchase Alstom until 2015. A GE spokesperson adds that the $2.2 billion figure included $145 million that GE repaid to Massachusetts after GE scaled back its plans for its Boston headquarters. GE declined to provide another figure indicating the total amount of public funds the company has received in the last thirty years.
“While we have not been given the opportunity to review this report, we disagree with its findings based on our continued investments in our workforce and facilities across the country,” according to a statement from GE, which noted that the company has invested more than a billion dollars in expanding its U.S. facilities since 2015.
Greg LeRoy, the executive director of Good Jobs First, defended the tracker’s methods and accuracy. It always accrues past subsidy awards to the current controlling corporation because the subsidies often figure into merger and acquisition deals, he said. Alstom, for example, received federal grants totaling more than $12 million the year before GE acquired it, according to the tracker. That cash infusion can “clearly accrue to the financial benefit” of a current corporate owner, LeRoy says.
LeRoy added that, if anything, the $2.2 billion figure is likely too low, given GE’s size, geographic reach and tax maneuverability. Funds that are not disclosed by local governments, that arrived in the form of corporate income tax credits, or that were awarded outside the public application processes are nearly impossible to track. Good Jobs First’s LeRoy adds that his researchers were able to identify 68 cases in which GE and its subsidies received public funds, but the dollar value was not made public—and therefore not included in the $2.2 billion sum.
Whether GE received more or less than $2.2 billion in government funds is not as important, the researchers argue, than examining whether that public investment ultimately served U.S. goals.
In the late 2000s, for example, GE took advantage of a $5 million state grant and a series of tax breaks to announce a multi-million dollar Schenectady renovation project that brought at least 500 high-paying jobs. Half of those jobs focused on developing renewable and alternative energy sources, making Schenectady the hub of GE’s burgeoning renewable energy work. When the renovations were complete, former President Barack Obama visited the factory in 2011 and hyped domestic investment of that kind. “We want an economy that’s fueled by what we invent and what we build,” he said.
But four years later, the company stationed the headquarters of its new venture, GE Renewable Energy, in Paris rather than New York state. (GE says it invested $39 million of its own money into the Schenectady project, and that the 500-plus jobs created by the project still exist at the Schenectady plant today.)
GE’s off-shoring of manufacturing jobs is most clearly felt by U.S. workers themselves. “It’s been an ongoing joke since I’ve been there that GE will close in, like, five years,” says Bansfield, now an inspector at GE’s Lynn factory. The possibility that her job is outsourced or moved abroad now feels so imminent that she’s gone back to school, she says, “just to have a plan B.”
Kevin Smith, a former GE quality control worker in Salem, Virginia, says the problem is that communities themselves need a ‘plan B,’ too. In the two years since GE shuttered the Salem plant, which employed more than 200 workers, Smith and many of his colleagues have not been able to get new jobs with comparable pay or benefits. And that has rippled throughout the community, he says, from holiday charity drives to local spending.
It’s a similar story in Schenectady, where GE has reduced its workforce from nearly 30,000 unionized hourly production workers in 1970 to approximately 800 unionized hourly production workers now, according to the report. Christian Gonzalez, a 30-year-old castings processor in Schenectady plant’s gas turbine department, remembers a time between 2013 and 2016 when he and 40 to 50 of his colleagues would organize Friday lunches. “We would order out,” he says. “You’re talking hundreds of dollars on a weekly basis patronizing Schenectady small businesses.” Since then, Gonzalez’s team has roughly halved, he says, and they no longer do the big group lunches.
Arthur Wheaton, the report’s other primary author and the director of Western NY Labor and Environmental Programs for the Worker Institute at Cornell, says those job losses have a “multiplier effect” on community. “A dollar doesn’t just go to the employees, it goes through the community to all sorts of restaurants, nonprofits, [and] other activities,” he says, and that has “a major impact when you’re cutting thousands and thousands of jobs.”
GE says it’s investing in domestic workforce training. Earlier this month, it announced a $4.4 million grant to extend an “advanced manufacturing training” program benefitting Lynn and the Massachusetts’ North Shore, and in 2019, it invested $900,000 in an internal training program. GE remains one of the largest manufacturers in Massachusetts, employing nearly 2,450 people in the state. GE also continues to invest in manufacturing domestically, the report notes, including more than $4.3 billion in its domestic Aviation Division, versus just $1.1 billion abroad since 2010.
But the researchers maintain that directing a fire hose of public funds at GE as it simultaneously winds down domestic manufacturing represents a lost opportunity—both for fighting climate change and supporting a healthier U.S. economy. That may be especially true amidst a period in which the White House and majority-rule in Congress is prioritizing renewable energy investments.
“There’s a huge amount of growth here,” says Juravich, of the opportunities in the renewable energy market. “The question is whether it’s going to benefit American workers.”
GE’s announcement Tuesday that it will split up its businesses into three separate ones doesn’t change the researchers’ calculations. “Whether managed by one company or three, GE’s core industrial businesses rely on government contracts and subsidies and are inextricably intertwined with US industrial policy,” Juravich adds. “We hope that GE’s plan to ‘realize the full potential of each of [their] businesses’ will include re-investing in US workers and communities.”
"Billionaires like to think that they’re entitled to their wealth. But almost every time they claim they are a million times more meritorious than the plebs, they demonstrate an ignorance and petulance which upends the myth of meritocracy. No one makes the argument against billionaires like billionaires.
Elon Musk, who is probably the richest person in history, demonstrated this truth once more over the weekend, when Senator Bernie Sanders of Vermont tweeted a mild statement to his followers in support of increasing taxes on the very rich. “We must demand that the extremely wealthy pay their fair share. Period,” Sanders said. Musk responded to the 80-year-old Sanders: “I keep forgetting that you’re still alive.”
Fox News, predictably siding with the powerful, went with the headline “Elon Musk slams Bernie Sanders” and the comments filled up with Musk defenders. The rich pay most taxes, while the poor pay little, they claimed, so how can you say the rich don’t pay their fair share? Sanders is a millionaire himself, so how dare he criticize people who are much richer than he is? Musk creates jobs! Billionaires are our saviors! Bow to them!
But the truth is that the federal government creates a lot more jobs than Musk does. And Sanders, who Musk suggests is irrelevant, has been central to advancing Biden’s economic agenda. That included the massive $2 trillion Covid relief package at the beginning of the year, which sent direct payments to most taxpayers and created a massive drop in child poverty. It also includes the recent $1.2 trillion bipartisan infrastructure bill to fix roads and bridges without which Musk’s (poorly designed) electric cars would be virtually useless.
Musk benefits indirectly from the government maintaining a public highway system. But Tesla has also received more than $5 billion in government aid. In addition, people who purchase Tesla’s electric cars get tax credits; Musk relies on those to encourage sales.
In return for all this government aid, Musk pays almost nothing into the common pot. In 2018, he literally did not pay a cent on his fortune in taxes.
As a reminder, Musk was worth $287 billion as of yesterday and paid nothing in income taxes in 2018.
Most of us have never received $5 billion in aid from the government. If we had, we would probably remember it. When Musk says he forgot Sanders existed, he’s either being duplicitous or he doesn’t understand how his own company works. Either way, sneering at an elderly person’s health problems (Sanders had a heart attack in 2019) is crass and cruel. Musk doesn’t sound like a savvy, sober job creator. He sounds like a churlish and irresponsible fool.
And Musk’s ill-considered public behavior has harmed his company in the past. A 2018 podcast appearance in which he smoked cannabis and drank whiskey caused Tesla’s stock to plummet. He also caused an 8 percent drop in Bitcoin after saying on Twitter that Tesla planned to sell its holdings in May.
People who aren’t billionaires are regularly fired or imprisoned for cannabis use. An employee who irresponsibly divulged business decisions creating unplanned market fluctuations would almost certainly lose their job. Musk’s extreme wealth, though, shields him from most consequences.
Musk can wander around the public stage, insulting Senators, tanking prices, misleading people about his company’s reliance on government funding, and generally behaving in an ignorant and foolish manner. He will suffer no consequences. Indeed, he will be cheered on for that very ignorance and foolishness by people who want to identify with his wealth and power.
Which is why one important function of government is to mitigate inequities. The very wealthy, no matter how entitled they think they are, have to recognize that they are in fact accountable to the rest of us.
Musk has the right to make an ass of himself on Twitter like everyone else. But when he does so, it’s a reminder that he is not better or smarter or more virtuous than his peers. He is not entitled by superior intelligence or effort to his massive windfall. He’s just some troll who got lucky. And when people get lucky, they should share that luck, so we all flourish."
