Fiorina offers bizarre claim that an increase in federal jobs, as opposed to outsourcing, is to blame for demise of middle class

As third party candidates protest exclusion, only a single Oakland TV station provided live coverage...

Ernest A. Canning Byon 9/2/2010, 9:26pm PT

Guest blogged by Ernest A. Canning

After months of electoral politics conducted exclusively by way of dueling, 30 second propaganda slots (aka paid-for political ads), incumbent Senator Barbara Boxer (D-CA) and her Republican challenger, former Hewlett-Packard CEO Carly Fiorina conducted what excluded Green Party candidate Duane Roberts derided as "a sham debate between two multi-millionaires backed by big business interests."

While there is some merit in Roberts' complaint, the debate proved of vital importance, especially since it exposed the extreme views of the lesser known Fiorina on a variety of issues ranging from her opposition to environmental protection, opposition to marital equality for same sex couples, and her outright call to reverse Roe v. Wade. But the most telling aspect was that the debate exposed Fiorina to be an unapologetic proponent of outsourcing and corporate globalization, which, since the passage of NAFTA, has proved to be the bane of the American middle-class.

That made this a debate of manifest importance to the people of California. Yet the corporate media, whose financial interest is served by failing to provide meaningful news coverage, thereby forcing candidates into the paid-for propaganda slots, proved true to form. Live coverage was limited to Cox Communications' Oakland, CA, affiliate, KTVU...

Boxer pounces on Fiorina's opening "jobs creation" gaffe

During her opening statement, Fiorina went beyond touting her credentials as the former CEO of Hewlett-Packard. She said, "I have created jobs." That opened the door not only to Boxer but to both moderator and viewer questions which suggested that it would have been more accurate for Fiorina to say, "I have transferred domestic jobs elsewhere."

Boxer: Jobs are my focus. That’s why I’m working to make California the hub of the new clean energy economy. That’s why I’m working to make sure small business gets access to credit, and that’s why I’m working to stop tax breaks to companies who ship jobs overseas. And when I talk about shipping jobs overseas I’m reminded of my opponent. When she was CEO of Hewlett-Packard, before she was terminated actually, she shipped 30,000 jobs overseas…And through all that pain, what did she do to show any sacrifice? She took $100 million dollars. So that reminds me of Wall Street. That’s what happened on Wall Street: bonuses at the top, pain for everyone else. I want to see the words ‘made in America’ again…

Republican viewer Tom Watson, a retired Hewlett Packard employee asked:

Carly, while you were at H-P you sent thousands of jobs offshore. In defense of your actions you coined the phrase “right shoring.” Also in a keynote speech in 2004, you said, ‘there’s no job that is America’s God-given right, anymore.’ Do you still feel that way? What are your plans to create jobs in California?

Fiorina's Global Jobs Scam

In The Great American Job Scam, Greg LeRoy documents how, over the past fifty years, corporations have obtained massive subsidies, outright gifts of land and property, and enormous tax breaks from city, county, state, and regional governmental entities by enticing bidding wars between them through empty promises of job creation that are most often never fulfilled and which, from a national perspective, do not create jobs but instead merely shift them from one region to another.

Fiorina's response to Watson revealed that she is typical of the millionaire/billionaire class of sociopaths who do not believe they bear any allegiance whatsoever to this nation or to working-class Americans.

This is the 21st Century. Any job can go anywhere. What worries me deeply is that the jobs we lose now may not come back…The truth is that California has higher than average unemployment rate because we are destroying jobs and others are fighting harder for our job…I know precisely why those jobs go, and I’ll tell you why. Because China…gives companies huge tax credits. They help them cut through regulations. They reward R & D. They provide access to credit. That’s what we need to do…To use the power of the federal government to create special economic zones, just as the Chinese have...

While she took care not to mention the principle reason why the billionaire class, starting with NAFTA, have outsourced America's manufacturing base, the reasons she did list --- deregulation, tax credits, "special economic zones" --- typify the demands long made by corporations upon state and local governments in order for those regions to enjoy the "privilege" of private sector jobs.

Perhaps the most telling example Leroy provides entails the instance in which former FL Gov. Jeb Bush provided the Scripps Research Institute with $369 million in state subsidies atop the $667 million given by Palm Beach County to create a new biomedical research facility and 545 new jobs --- "a subsidy of more than $1.9 million" per job.

Another was Sykes Enterprises, Inc., a Tampa-based operator of call centers, which, like a roving band of gypsies, entered small town America, promising jobs if the country bumpkins would just fork over land and incentives, only to run off with the loot. A Sykes vice president was even so bold as to declare: "If a community is inviting Sykes to build a call center, they are expected to deed the land for two call centers to us, and give incentives worth at least $2.5 million."

LeRoy sets forth no less than thirteen small towns which had fallen victim to Sykes’s hit-and-run tactics. Here is one classic example:

The farm town of Milton-Freewater, Oregon, borrowed $2.2 million in 1998 to make a $2.7 million cash grant to Sykes for 400 projected jobs. The city also provided free land, utility services and tax credits, plus $1 million in state funds for road improvements. Businesses just across the state line in Washington even chipped in private funds. The facility eventually employed almost 500 people, but by May 2004 Sykes closed it and terminated the 264 remaining jobs.

Sykes did go on to create workstations, some 10,000 of them in low-wage overseas countries, at the same time it closed and abandoned its facilities and workers in small town U.S.A.

That brings us to the real reason why the titans at the top of the corporate food chain outsource --- the availability of sweatshop labor in China, India, and elsewhere at the slave wage of $2/day, which permits unscrupulous corporations like Wal*Mart to maintain their "always low prices." Those low prices translate into "always huge profits --- $7 billion per year, profits that have placed five members of the Walton family amongst the world’s top ten richest people, with a combined personal worth in excess of $100 billion.

So when Carly Fiorina says that Americans must compete for jobs, she is saying that we should join a race to the bottom in order to secure the "privilege" of private sector employment --- typical of the short-term greed of the billionaire class which ignores that, as they destroyed middle-class jobs and wages, these sociopaths eliminated the ability of the American people to buy their products.

To understand just how twisted this is, one has to go back to the words of the first Republican President, Abraham Lincoln:

Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is superior to capital, and deserves much higher consideration.

Fiorina is a poster child for the 21st CEO sense of entitlement

We now have the entitlement generation as CEOs. They just plain feel entitled to being wealthy as Croesus with no responsibility, no accountability. They have become literal sociopaths. - William K. Black on Bill Moyers’ Journal

A debate question posed by Randy Shandobill of KTVU triggered an interesting colloquy:

Shandobill: You in the past have said that school teacher should have they pay connected to their performance…When you were at H-P and the Board of Directors forced you to resign in part because of the stock market dropping with regard to H-P, you got a severance of $21 million, so some people might say, Gee, shouldn’t CEOs have the same standard as school teachers? Fiorina: Absolutely they should, and in fact, during my time at Hewlett-Packard I ripped up my employment contract and put my pay up for shareholder vote. Every dollar I earned at Hewlett Packard was voted on by shareholders and every dollar was tied very specifically to performance….In the six years that I managed Hewlett Packard…we doubled the size of the company to $88 billion, we tripled the rate of innovation to eleven patents a day, we quintupled the cash flow, we improved the profitability in every product line… Boxer: I think we are entitled to our opinion but we’re not entitled to our own facts. The facts are there was a $21 million severance check, and my understanding is that it was taken after my opponent was fired. The stock went down more than 50%...

A description provided by Wikipedia bolsters Senator Boxer's account.

In April 2009, the business magazine web site Condé Nast Portfolio listed Fiorina as one of "The 20 Worst American CEOs of All Time", characterizing the HP-Compaq merger as a widely regarded failure, and citing the halving of HP's stock value under Fiorina's tenure.

Caught with her hand in the cookie jar, Fiorina dissembled:

I would remind [Sen. Boxer] as well is that when you lead a business…you sometimes have to make the agonizing choice to lose some jobs to save more and what enrages people in California as they see people making those tough choices…every day and stores shuttering is federal government employees growing at 14 ½%.

Outsourcing Hewlett Packard's high tech manufacturing was no more an "agonizing choice" than Fiorina's decision to accept a $21 million severance package in the wake of her utter failure. It was always about the bottom line --- hers!

Earlier in the "debate" Fiorina linked increases in California unemployment statistics to an increase in federal government employment. This seems bizarre, especially coming from the lips of someone who laid off tens of thousands of Hewlett Packard employees while she outsourced their jobs in search of cheap foreign labor. Does Fiorina not realize that when Californians accept federal employment, that reduces the number of Californians who are unemployed?

Extending the Bush tax cuts for the wealthy will not create new jobs

The "debate" included the following exchange:

Carla Marinucci of the San Francisco Chronicle : You supported tax cuts for business and the wealthiest Americans because they ‘pay for themselves by creating jobs’ but you’ve opposed two recent jobs bills, one a teacher’s jobs bill which would bring 16,000 jobs to California, the other a small business jobs bill which is actually supported by the U.S. Chamber of Commerce. So how do you justify immediate help for the wealthiest Americans but not for average Californians who might be out of a job and listening to this debate tonight? Fiorina: I think we need first to start by describing what the 2001/2003 tax cuts really were….The vast majority of that relief went to middle class Americans, and in fact if those tax cuts are not extended the average California family will pay up to $1,600 more in taxes….The death tax will skyrocket to 55% on January first. We have 88,000 farms in this great state. Most of them family owned…I think in the middle of a terrible recession…with twelve metropolitan areas with unemployment up to 15%...and meanwhile in the last 20 months the federal government spending has increased 10% each year and federal government employees have increased 14 1/2% over the last two years. Boxer:…We had 16,500 teachers plus get pink slips…What’s more important than our children?...My opponent actually called that bill where we saved these teacher’s jobs...a disgrace…I’ll tell you why I don’t think she likes it…because we paid for it by stopping some tax breaks for companies who ship jobs overseas. So every time you really get past the surface, you see my opponent fighting for the billionaires, for the millionaires, for the companies who ship jobs overseas.

The exchange typifies Republican dissembling on the issue of taxes. As noted by Paul Krugman:

The Obama administration wants to preserve those parts of the original tax cuts that mainly benefit the middle class…Republicans...want to keep the whole thing... According to the nonpartisan Tax Policy Center, making all of the Bush tax cuts permanent, as opposed to following the Obama proposal, would cost the federal government $680 billion in revenue over the next 10 years... [W]here would this $680 billion go? Nearly all of it would go to the richest 1 percent of Americans..., people with incomes of more than $500,000 a year. But that’s the least of it: the policy center’s estimates say that the majority of the tax cuts would go to the richest one-tenth of 1 percent. [T]he average tax break for those lucky few --- the poorest members of the group have annual incomes of more than $2 million, and the average member makes more than $7 million a year --- would be $3 million over the course of the next decade.

During the debate, Sen. Boxer reminded the audience that the Clinton years produced 23 million new jobs and a surplus. "Then I served for eight years with George W. Bush. I did not support his priorities and his budget. We wound up with a $1.3 trillion deficit after those 8 years and the worst job creation record since Herbert Hoover, one million new jobs compared to 23 million."

Of course, Boxer failed to mention that it was President Clinton who rammed NAFTA through on the fast-track, opening the door to the hemorrhaging of jobs via outsourcing during the Bush years. That said, there is no empirical evidence that tax cuts for the wealthy create jobs. To the contrary, reputable economists like Prof. Alan Blinder, a co-director of Princeton University's Center for Economic Policy Studies, make it clear that they do not.

Fiorini's reference to a so-called "death tax" (right-wing slang for the "inheritance tax") is also quite revealing. The inheritance tax does not kick in for any estate valued at less than $3.5 million. It's purpose is to prevent the rise of the very thing the Founding Fathers fought a revolution to destroy --- a landed aristocracy. As explained by Warren Buffet:

Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline. A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy.

Correction: It appears I erred in stating that KTVU was a CBS affiliate; that it is owned by Cox Communications. Mea Culpa!

That error doesn't change the fact that none of the commercial TV stations offered live coverage to the nearly 10 million people who reside in Los Angeles County. As we previously reported, citing a March 11, 2010, study performed by the Norman Lear Center of the USC Annenberg School for Communication & Journalism, commercial advertising makes up 29% of a typical 30-minute Los Angeles TV "news" broadcast.

The study revealed:

Stories about government actions on topics like education, health care and law enforcement took up...1:12. The majority of this time (0:49) was devoted to government actions taking place at the federal level or in other states.

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Ernest A. Canning has been an active member of the California state bar since 1977. Mr. Canning has received both undergraduate and graduate degrees in political science as well as a juris doctor. He is also a Vietnam vet (4th Infantry, Central Highlands 1968).



