THE MIDDLE CLASS HAS BECOME THE LOW CLASS UNDER NAFTA, CLINTON, OBAMA, "FREE TRADE"
Bill Moyers interview with John R. MacArthur, Harper's Magazine
BILL MOYERS: Welcome. Trade, money and politics are our issues this week and my guest is the outspoken journalist who runs the iconic Harper's Magazine, which for 164 years now has thrown open its pages to some of the most ferociously independent voices in American letters, from Mark Twain, Jack London and Herman Melville to William Styron, Joyce Carol Oates and David Foster Wallace. As the president and publisher of Harper's for the last 31 years, John R. "Rick" MacArthur has been as ferocious a champion of democracy and journalism as any of those illustrious bylines that have appeared in its pages. I've never known him to pull his punches, whether he's writing in Harper's, or in his newspaper columns, or in such books as "The Selling of 'Free Trade,'" an exposé of bipartisan collusion to enact NAFTA, the North American Free Trade Agreement, and this one, "The Outrageous Barriers to Democracy in America." MacArthur's fierce arrows of outrage are aimed at both political parties, but recently he's been especially incensed by Democrats for abandoning their progressive roots to serve Wall Street, K Street, and crony capitalists. Rick MacArthur, welcome.
JOHN R. MACARTHUR: Thank you for having me, Bill.
BILL MOYERS: You have opposed these so-called free trade agreements for as long as I have known you. Why isn't anyone listening?
JOHN R. MACARTHUR: Well, because the big money doesn't want them to listen. And the editorial pages of most American newspapers are pro-"free trade" quote-unquote. They don't know, or they don't pay attention to what the costs are. Obama himself, in the 2008 campaign, said that NAFTA, North American Free Trade Agreement, had cost the country a million jobs.
But in order to understand what's happening, you got to go to these cities that are being hollowed out and destroyed, like Fostoria, Ohio. I did a big piece about three years ago, for a foreign newspaper, because nobody wants to read it here, about the closure and the moving of the Autolite spark plug plant to Mexicali, Mexico. These--
BILL MOYERS: From Fostoria.
JOHN R. MACARTHUR: From Fostoria, Ohio.
BILL MOYERS: By the way, it was in Ohio that Obama, during the campaign of 2008, made one speech in which he claimed that NAFTA had cost a million jobs, 50,000 of them in Ohio.
JOHN R. MACARTHUR: Right. He did it to hurt Hilary Clinton. Because he wanted to hang NAFTA on the Clintons, on the Clinton couple.
BILL MOYERS: Because President Clinton, Bill Clinton--
JOHN R. MACARTHUR: Bill Clinton.
BILL MOYERS: --had sponsored it with the Republicans in 1993.
JOHN R. MACARTHUR: Because he made a tactical political decision that it would be a great thing to move the Democratic Party to the center, I would call it move it to the right, on matters concerning the working class. The working class today, thanks to what Bill Clinton did on NAFTA, is now becoming, I would call it, the lower class. And--
BILL MOYERS: So you went to this town
JOHN R. MACARTHUR: I went to this town more recently--
BILL MOYERS: Why did you pick Fostoria?
JOHN R. MACARTHUR: Well, because Larry Bossidy, who was the CEO of AlliedSignal, which owned Autolite in those days--
BILL MOYERS: Autolite makes spark plugs.
JOHN R. MACARTHUR: Autolite makes spark plugs. I actually have a spark plug that I took from the plant here.
It's one of the last ones made there. And Bossidy said, famously, in a debate on CNN that, he held up a spark plug and said--
LARRY BOSSIDY on CNN: The NAFTA Debate, December 1996: Right now, you can't sell these in Mexico because there's a 15 percent tariff. If we can, if this NAFTA's passed and that tariff is removed, we'll make these in Fostoria, Ohio. We won't have 1,100 jobs, we'll have more jobs.
JOHN R. MACARTHUR: And of course in 2007, the factory was moved to Mexicali under the ownership of Honeywell Corporation, which had merged with AlliedSignal. And Barack Obama was soon seen after that with Dave Cote, the chairman of Honeywell, promoting his business stimulus program. Barack Obama is not going to say to Dave Cote, what are you shutting down the Autolite spark plug plant for? Why are you putting Allyson Murray and Peggy Gillig and Jerry Faeth, these are people I interviewed who were production line workers, who raised their families and sent their kids to school. Jerry Faeth is a particular favorite of mine, because he got two of his daughters through college paying most of their tuition as an auto worker.
BILL MOYERS: Working--
JOHN R. MACARTHUR: --as an auto worker--
BILL MOYERS: Auto worker, right.
JOHN R. MACARTHUR: --because he was making enough money. These people are being wiped out. The statistics that you hear about, where the country is economically, don't reflect the devastation to these individuals. But the Democratic Party's not interested in those people. They don't contribute to campaigns.
BILL MOYERS: How does our political class get away with ignoring those realities?
JOHN R. MACARTHUR: Well, again, to some extent, I blame the media. They don't report on it. But in the larger political scheme, the Democratic Party, it is split. There are still a few democrats who care about the working lower class. Barack Obama, Bill Clinton see it in their political interest to ally themselves with Wall Street. Wall Street, because they can raise money from Wall Street. Wall Street loves "free trade," quote-unquote, because it equals cheap labor. All these trade agreements, and NAFTA in particular, are investment agreements that make it safer for American corporations to set up shop in cheap labor locales. Wall Street thinks that's great. It's great for the shareholders. And it's great for the corporations. The profits go up. So as long as the cash keeps coming to both parties from those interested parties, short of a revolution, short of an uprising among the working poor, you're not going to see any change.
BILL MOYERS: In 2008, Obama, he used NAFTA against Hilary Clinton, as you said, because Bill Clinton had sponsored it in 1993. And he promised that he would reform NAFTA.
JOHN R. MACARTHUR: Right.
BILL MOYERS: Has he?
JOHN R. MACARTHUR: No. As soon as he got into office, he announced, we really don't need to reform NAFTA. We'll find other ways to help people who've been hurt by NAFTA, which they, and of course, they've done nothing. In fact, he's pushed more free trade deals, Korea, Colombia, et cetera, you know, he keeps pushing, and now, the Trans-Pacific Trade Partnership, which will make things even worse.
BILL MOYERS: Yeah. You say if he wins the Trans-Pacific Partnership, he'll be giving away big chunks of our remaining manufacturing base to Japan and Vietnam and other Pacific Rim countries. Why does he want to do that?
JOHN R. MACARTHUR: Because he's the fundraiser in chief. And again, this goes back to Bill Clinton. Because Obama's really just imitating Bill Clinton. Clinton made an alliance with the Daley machine in Chicago, which Obama, he's inherited that alliance with the two Daley brothers. The people who were thriving are the people in power. Rahm Emanuel is now mayor of Chicago. Bill Daley and Rahm Emanuel were the chief lobbyists for passing NAFTA under Clinton. They're the ones who rounded up the votes. They're the ones who made the deals with the recalcitrant Democrats and Republicans who didn't want to vote for it. These people are in the saddle. They succeeded each other as--
BILL MOYERS: They're Democrats, too.
JOHN R. MACARTHUR: Democrats. But Daley succeeded Rahm Emanuel as Obama's chief of staff. These are the people Obama talks to all the time. And they're saying, free trade, great. We don't know about factories closing. But it's a great way to raise money.
BILL MOYERS: Senator Mitch McConnell, who will soon be the Senate majority leader, said that new trade agreements are one of his top priorities. Are we about to see some bipartisan cooperation between the Republicans in the Senate and Obama in the White House on passing this new trade agreement?
JOHN R. MACARTHUR: Absolutely. They've already announced that they're going to try to work together. And if history is repeated, you will see fast track passed.
BILL MOYERS: Which means…
JOHN R. MACARTHUR: Which means you give the president, you give the executive branch, the authority to negotiate the trade agreement in secret. That's what Congress gives away, which I think is unconstitutional. Because the Senate is supposed to advise and consent, right? But so far, nobody has challenged it on constitutional grounds. You give fast track authority to the president. They negotiate the deal. At the end of it, a gigantic bill, very complex, because I've read the NAFTA agreement, it's very complex language. You give it to Congress. And you say, okay, vote for it, yes or no, up or down.
No amendments allowed, no amendments allowed. And so that's when the heavy lobbying starts. And most times, at least in the past with PNTR, that's permanent normal trade relations with China, and NAFTA, the big money wins. And this is what's going to happen again with TPP if people don't stop it before it gets to the fast track stage. And I guarantee you, this is a way to send more jobs, particularly to Vietnam and Malaysia. What's happening now is that labor rates are going up slightly in China. This panics the corporations. They want other places to go. Vietnam's an even cheaper labor platform than China. And so it's cheap labor coupled with really minimal environmental protection. You can do just about anything you want to.
BILL MOYERS: I brought two headlines from the same day's edition of the "Washington Post." One says, "Obama, looking to mend fences with Congress, is reaching out. To Democrats. " The other one, in the same edition of the Washington Post, says, "Obama says he willing to defy Democrats on his support of Trans-Pacific Partnership." What do you make of that?
JOHN R. MACARTHUR: Well, it's the typical Obama. You know, during the big, it goes back. Early in his political career, there was a big fight in Chicago in 2006. The city council voted to pass a big box minimum wage bill, $13 an hour. They said there's no factory work left, thanks to NAFTA and PNTR. So if Wal-Mart wants to move into Chicago, we're going to force them to pay a living wage.
And they came up with $13 an hour, with benefits, some kind of health benefits. Mayor Daley vetoed the bill. Because he didn't want to offend his friends in business in Chicago. He was also, I think, personally offended that democracy had broken out in the City Council. You know, it's like the Soviet Union in Chicago, 49 Democrats, 1 Republican.
And so they passed the law. He vetoes it. And there's a big fight to try to override his veto. What do you think Obama does when he's a State Senator and then a Senate candidate, U.S. Senate candidate, then Senator, he kept absolutely mum on it. He didn't say a word. And nobody asked him to say anything. Because they didn't want to compromise him with Mayor Daley. They didn't want to get him in trouble with Daley and force him to make a choice.
Same thing happened at the get go in first two years of administration. That was the time to raise the minimum wage. He had a big majority in both houses. People were panicked. It would've put more money in the hands of desperate people who had lost a lot of income.
He didn't propose an increase in the minimum wage in 2009 and 2010, not again in 2011 or 2012, when his own caucus was pushing for one. He had no interest in raising the minimum wage at that point. Because it didn't conform with his fundraising and his pro-business, pro-Wall Street goals.
BILL MOYERS: President Obama appointed a new trade representative, Michael Froman, who's a disciple of Robert Rubin who's the Wall Street insider who pushed for free trade and deregulation when he was Bill Clinton's Secretary of the Treasury and then went back to Wall Street and cashed in big from deregulation and is, today, Robert Rubin, a big influence in the Hillary Clinton camp. What does that tell you?
JOHN R. MACARTHUR: Well, what it tells me is they view Obama's presidency as a success. In other words, Wall Street thinks Obama's done right by them. And if they could get Hilary Clinton in, things will stay right.
BILL MOYERS: That was a bold cover story you had recently: "Stop Hillary."
JOHN R. MACARTHUR: Yeah, well, we were, it was our effort to force a debate. And we did. I'm actually quite pleased with the outcome that all our competitors were then forced to do cover stories and commentaries on other candidates who might come into the race: Elizabeth Warren, Jim Webb has already announced an exploratory committee, Bernie Sanders, I wish that Sherrod Brown from Ohio would run. There are a lot of people who would make good candidates, but they're intimidated by the Clinton fundraising machine.
BILL MOYERS: But would she raise a big tent for a lot of Democrats to get under and reverse the Republican wave of the midterm elections?
JOHN R. MACARTHUR: There's absolutely no room, there's no tent that can hold the working class, the poor, the lower class that I'm talking about, and the Steven Rattners of Wall Street, who go around saying, oh, don't you love us? We're social liberals. We're for civil rights. We're for all the rights that you care about. We're for tolerance, and so on and so forth.
But what they're not for is worker rights. It doesn't matter if you're gay or black or an impoverished white former factory worker. You all have worker rights in common. That's the commonality. Citizens' rights, I would say also, but worker rights. They never talk about worker rights. They just talk about cultural liberalism. That's what they're interested in.
BILL MOYERS: Here's a quote from Steven Rattner, whom you mentioned. It has to do with the Obama nomination of Antonio Weiss, prominent investment banker who worked on the auto industry bailout during Obama's first term, as Steven Rattner did.
This whole thing, this opposition by Elizabeth Warren and others to Antonio Weiss, "is part of a much broader narrative of the fight for the soul of the Democratic Party and whether so-called progressives are going to capture that or whether more mainstream Democrats, who are equally progressive in their own way, are going to retain it." He said if the Weiss nomination goes down, "it will be a long time before anyone else with Wall Street experience volunteers for this kind of job."
JOHN R. MACARTHUR: Boy, what a threat. Wouldn't that be a great thing, if those people from Wall Street stopped volunteering? They don't want to stop volunteering. But that is the central problem in the Democratic Party today. Rattner speaks for a faction, a minority of people but a majority of money.
The other people that I'm referring to, I hope it's Elizabeth Warren or that she hangs in there, and people like Jim Webb are speaking for the majority. But the majority has much less money than this small minority of so-called social liberals on Wall Street.
BILL MOYERS: Elizabeth Warren, Senator Warren, made a speech this week in which she said that the fight is much more than about this nominee for the Treasury Department.
SENATOR ELIZABETH WARREN on December 9, 2014: Democratic administrations have filled an enormous number of senior economic policy positions with people who have close ties to Wall Street. Starting with Robert Rubin, a former Citigroup CEO, three of the last four Treasury secretaries under Democratic presidents have had Citigroup affiliations before or after their Treasury service […] Weiss defenders are all in, loudly defending the revolving door and telling America how lucky we are that Wall Street is willing to run the economy and the government. In fact, Weiss supporters even defend the golden parachutes like the $20 million payment that Weiss will receive from Lazard to take this government job. Why? They say it is an important tool in making sure Wall Street executives will continue to be willing to run government policy making.
BILL MOYERS: She's really hitting at the very thing you have been writing about, talking about, and advocating. But nothing is going to change--
JOHN R. MACARTHUR: But--
BILL MOYERS: --as you yourself have said and written--
JOHN R. MACARTHUR: Yeah--
BILL MOYERS: --unless the grip of the moneyed interest on our parties and on democracy is broken? How can you fight that much power? That--
JOHN R. MACARTHUR: Well--
BILL MOYERS: --much money?
JOHN R. MACARTHUR: You have to run primary campaigns, cheap primary campaigns against incumbents, like the Tea Party, in the Democratic Party, like the Tea Party does against incumbent Republicans.
You got to actually take political action and present candidates with an alternative point of view. But you also have to go to Fostoria and then come back and tell me and tell your colleagues, that their town is falling apart, they can't send their kids to school anymore. They've got to work in a fast-food place. Do you know that today there are more part-time workers than there were before the recession, before the great recession?
I think it's about seven million part-time workers. Median household income has dropped about $5,000 in the last five or six years. Where are the economists getting their information? You really have to look at the human cost.
There's a social element to this that somehow doesn't get talked about. We talk about incomes dropping, income disparity. We don't talk about the demoralization of the American lower and middle class. It's demoralizing to lose your job. It's demoralizing to feel like there's no future, that you can't pay to send your kids to college.
Things have gotten really bad in the country. There is no relief for these people who have lost their jobs. The deindustrialization of the country continues rapidly.
And every time one of these factories closes, another town drops a couple of notches sociologically. It gets poorer, you can't fund the Little League, you can't fund the public schools, you can't fund local community colleges, nobody's got work, nobody's got any hope. It gets worse and worse and worse. You can't just keep farming the laborer, the jobs out to Vietnam and China and expect things to get better at any point.
BILL MOYERS: Hillary Clinton was recently quoted as saying, quote, "I think our country kind of moves in pendulum swings. We go maybe a little bit too far in one way, and then we swing back. We are most comfortable when we have that balance in the vital center. And we are, I think, in need of getting back to that." What does that say to you?
JOHN R. MACARTHUR: Getting back to that? The vital center has moved so far right that it can't be called the "center" anymore. You might call it the "center right"-- but it's far from anything I would call the "center."
BILL MOYERS: Hardly has she said that, than NBC News and the Wall Street Journal published a poll showing the public trends left on one issue after another; raising the minimum wage, spending more for infrastructure, helping students pay off their college loans, addressing climate change and global warming. I mean, Hillary Clinton, by this account, is to the right of the American public, and particularly of the Democratic constituency.
JOHN R. MACARTHUR: Right, but more important for Hillary Clinton, she's not to the right of Steven Rattner or the Daley brothers--
BILL MOYERS: The Wall Street--
JOHN R. MACARTHUR: --or Rahm Emanuel. The Wall Street and the Chicago political machine types. She's very much in harmony with them.
BILL MOYERS: So where does a Sherrod Brown, a Jim Webb, an Elizabeth Warren, get the money to run against people who are backed by the deepest pockets in America?
JOHN R. MACARTHUR: I'm glad you asked me that because I was fascinated with the Howard Dean candidacy. I think Howard Dean was probably the best hope we had in a long time.
But whatever you thought of his politics or his, you know, his demeanor, or where he came from, and remember, he's a son of Wall Street. His meet-ups, where people would, through the internet, donate $100, scared the hell out of the Democratic and Republican Party establishments.
And I think I make a convincing case in the book that they colluded in the Iowa primaries to knock him out. 527 committees were formed, we didn't know where the money was coming from, but they were coming from Democratic money and Republican money to knock out this dissident who'd figured out how to beat the system. Lots of $100 contributions could compete with a few $100,000 contributions.
So in order to compete, you've got to rally the people and get lots of small donations. And Dean did that and he paid the price. You see, he didn't even last as Democratic National Committee chairman, because Rahm Emanuel saw him as a threat. They got rid of him as soon as they could.
BILL MOYERS: What if it's too late to change a system that is so in place, so entrenched, and so well-funded?
JOHN R. MACARTHUR: Well, there's two things can happen. You could have revolt, you could have rioting. I guess you could have open revolt in the streets. Or you could have a demoralized, lower two-thirds of the American population that doesn't benefit from the advantages of the top third or the top fifth. And people just get used to it.
I mean, up to a point, people get used to these things. They do in other countries, where things are even more inegalitarian. We in America have a higher opinion of ourselves than maybe we deserve. We've always believed that we're Democrats, we're fundamentally egalitarian. Whether or not there's inequality in society, that there's an egalitarian impulse in America that will always save us.
But I see that egalitarian impulse disappearing. I see it either being numbed or actually snuffed out. I take umbrage with the liberal elite in this country that I think has also abandoned the white, black, gay, working class across the board.
They just don't care about them anymore. They think, well, we're doing all right here in our bubble. And we're, you know, we're not going to threaten our position in society or offend certain people because on behalf of people who don't have anything. For there to be a change, the progressive elite, I guess I would call them, have got to say, we don't care what these people say about us anymore. We're breaking with them. We're going to start, we're going to join the opposition.
BILL MOYERS: Let's continue this discussion online.