Sen. Rick Scott, R-Fla., announced his strong opposition to Utah Sen. Mike Lee’s S.386 outsourcing bill, likely sinking the Utah Republican’s bill for the rest of the year.
Lee’s S.386 bill aids the tech industry and visa workers from India and China “at the expense of American workers, highly skilled immigrants, workers from Latin America and Europe, as well as Florida’s most important industries,” Scott wrote in the August 31 op-ed in the Miami Herald .
He continued:
I’ve heard from many constituents about how this bill would impact people in Florida, especially those who came to Florida from Latin America. Florida’s booming economy and location as the gateway to Latin America has allowed us to become a global hub for trade and business. We must look at the sectors that eliminating this cap would unjustly benefit, particularly the tech industry, and what sectors it would hurt.
…
We need a new approach that protects American workers and protects the diversity we cherish, and I am hopeful my colleagues in the Senate will be willing to work with me toward those goals.
Scott noted that the legislation would have a huge impact on immigration — yet it has gotten very little publicity:
Right now the United States Senate is considering a massive overhaul to our nation’s immigration system. And, what is shocking is that it could pass without even a single vote in the United States Senate. You read that correctly: a major change to our immigration system is being considered under “unanimous consent” in the U.S. Senate, which means this bill could pass without a vote ever occurring.
It hasn’t yet passed because I am the only senator holding it up.
Scott’s op-ed shows that Lee’s S.386 will be blocked until at least election day, said Kevin Lynn, founder of U.S. Tech Workers, which advocates for U.S. college graduates. “That’s a very solid ‘No’ on S.386 … It will be a cold day in a place beneath our feet when he will change his mind,” Lynn added.
“It is a well-considered objection,” said Bob Heath, a Florida-based technology professional who is also an expert on H-1B fraud. The bill’s Fortune 500 lobbyists “passed it through the House and tried to get it through the Senate with no hearing – no expert witnesses, no public debates, without anyone have to go on the record for or against,” said Heath. He created the H1Bfacts.com database that is widely used to count visa worker jobs in each politicians’ district.
“I called him and thanked him for opposing it,” Heath added.
“Great op-ed, so I called his office and left a message,” said an American professional in Chicago.
Scott jumped into the long-running debate over Lee’s S.386 bill on August 5, with a surprise vote to block the passage of the bill via the no-vote Unanimous Consent process.
His intervention came despite minimal media coverage of the bill, which also creates a new legal status — “green card lite” — that would effectively allow Fortune 500 companies to recruit millions of foreign workers with the dangled offer of lifetime work permits in exchange for just a few year’s low-wage labor.
For example, Jeff Bezos’s Washington Post has almost entirely ignored the issue throughout 2017, despite the huge impact it would have on the newspaper’s college graduate readership. Jeff Bezos’s Amazon company employs many Indian H-1B workers.
In his op-ed, Scott said any green card bill must protect American workers, noted Lynn. He added:
The only way we can protect American workers is to have real reform of employment visa [programs] before any attempt is made to clear the green traffic jam” of Indians trying to get green cards, he said. “Real reform will end this pipeline of cheap labor.
If the 300,000 Indian workers want to get through the traffic jam that they created as they try to get 20,000 green cards per year, “they need to accept reform first,” he said.
But their preferred fix, he said, is legislation that allows them to “drive on both sides of the highway [to green cards], forcing everyone else off into the gutter or on a side road, and that is not acceptable.”
The Indians “brought their style of dogfight politics to the U.S. It is not the way we do our politics,” he added.
“We’ve got to avoid a prolonged period of high levels of unemployment, and it’s a very real prospect,” he said. “It is not at all assured that we will get a return of tight labour markets even with traditional macroeconomic policy being properly applied.”
The paper continued: “This suggests that, even if a vaccine cures everyone in a year, the COVID-19 crisis will leave its mark on the US economy for many years to come.”
It makes clear that the orgy of speculation, leading to the creation of fabulous wealth at one pole and increasing poverty and misery at the other, is the official policy of the central financial arm of the capitalist state.
Fear and uncertainty dominate Jackson Hole central bankers’ meeting 31 August 2020The annual Jackson Hole conclave of central bankers, which concluded over the weekend, underscored the incapacity of global financial authorities to devise any policies either to bring about economic growth or counter the mounting contradictions in the financial system.
Reporting on the meeting, held in virtual format this year because of the COVID-19 pandemic, the Financial Times noted: “It was the head of Singapore’s monetary authority who best summed up the biggest fear gripping the virtual Jackson Hole conference this year.
“‘We’re not going back to the same world,’ Tharman Shanmugaratnam warned.’”
The central initiative at the gathering was the decision by the Fed’s key policy-making body to maintain interest rates at their ultra-low levels for an indefinite period and keep pumping money into the financial system.
The decision, announced by the Federal Open Market Committee as the conclave opened and elaborated on in a keynote speech by Fed Chair Jerome Powell, was in effect a guarantee to Wall Street that its demand for “forward guidance”—lower interest rates for longer—would be met.
The Fed said it would no longer be guided by a 2 percent inflation rate limit in determining its interest policy, but would instead focus on an “average” rate of 2 percent, meaning that the cheap money regime could continue even if prices rose above that level.
As for dealing with the slump in the global economy—the most serious since the Great Depression—and combating the potential for further storms in the financial system following the market meltdown in mid-March, there were no answers, as underscored by the remarks of the Singapore finance minister.
“We’ve got to avoid a prolonged period of high levels of unemployment, and it’s a very real prospect,” he said. “It is not at all assured that we will get a return of tight labour markets even with traditional macroeconomic policy being properly applied.”
It was a significant comment because one of main themes in remarks by central bank chiefs was that monetary policy alone would not be sufficient to restore growth, and government intervention was needed to boost the economy. But, as Shanmugaratnam noted, even if “properly applied,” there were no guarantees of success.
According to the Financial Times , the notion that central bankers “need to face the reality of permanent upheaval and long-term economic damage” was the “main theme” of the event.
One of the most frequently cited academic papers produced for the meeting was prepared earlier this month by Colombia University academic Laura Veldkamp on the long-term effects of the COVID-19 pandemic.
The paper said that the biggest economic effects of the pandemic “could arise from changes in behaviour long after the immediate health crisis is resolved.” A potential source of such a long-lived change was a shift in the “perceived probability of an extreme, negative shock in the future,” and that “long-run cost for the US economy from this channel is many times higher than the estimates of the short-run losses in output.”
The paper continued: “This suggests that, even if a vaccine cures everyone in a year, the COVID-19 crisis will leave its mark on the US economy for many years to come.”
In other words, the pandemic was not only a trigger event, acting on the contradictions that had built up in the economy and financial system, but a transformative one as well.
With the Fed now having formally committed itself to the endless supply of cheap money to Wall Street, attention will turn to the European Central Bank (ECB), which is also conducting a strategic policy review, to see whether it goes down the same road.
While the governing council, under the presidency of Christine Lagarde, may be inclined to move in the same direction as the Fed, it would face certain opposition from Germany’s Bundesbank, which has expressed opposition to the easing of monetary policy.
A member of the governing council told the Financial Times , “we will look at it,” but the Bundesbank would be “very nervous” about it.
“We are not out of firepower by any means, and to be honest, it looks from today’s vantage point that we were too cautious about our remaining firepower pre-COVID,” he said, adding that there are times when we “need to go big and go fast.”
The actions of the Fed have done nothing to boost the real economy, as an increasing number of companies announce that temporary layoffs will be made permanent.
The Wall Street Journal reported Saturday that a survey conducted by Randstad RiseSmart found that “nearly half of US employers that had furloughed or laid off staff because of COVID-19 are considering additional workplace cuts in the next 12 months.”
This indicates that the pandemic has been a trigger for a major restructuring of employment conditions.
The effects of the Fed’s policies and the further monetary easing to come are focused on the stock market, with Wall Street indexes rising to the record levels they achieved in February. The main beneficiaries have been the high tech companies—Apple, Microsoft, Alphabet (the owner of Google) and Facebook—which together comprise more than a fifth of the Nasdaq index.
The extent of their rise and growing financial and monopoly power is indicated by the results of an analysis carried out by Bank of America Global Research, reported by the business channel CNBC. It found that the market capitalization of the major US tech firms, now standing at $9.1 trillion, was greater than the market capitalization of the entire European market, including the UK and Switzerland, at $8.9 trillion. In an indication of the massive shift that has taken place, the research note pointed out that in 2007, total European market capitalization was four times that of US technology stocks.
Josh Hawley: GOP Must Defend Middle Class Americans Against ‘Concentrated Corporate Power,’ Tech Billionaires JOHN BINDER
The Republican Party must defend America’s working and middle class against “concentrated corporate power” and the monopolization of entire sectors of the United States’ economy, Sen. Josh Hawley (R-MO) says. In an interview on The Realignment podcast, Hawley said that “long gone are the days where” American workers can depend on big business to look out for their needs and the needs of their communities.
Instead, Hawley explained that increasing “concentrated corporate power” of whole sectors of the American economy — specifically among Silicon Valley’s giant tech conglomerates — is at the expense of working and middle class Americans.
“One of the things Republicans need to recover today is a defense of an open, free-market, of a fair healthy competing market and the length between that and Democratic citizenship,” Hawley said, and continued:
At the end of the day, we are trying to support and sustain here a great democracy. We’re not trying to make a select group of people rich. They’ve already done that. The tech billionaires are already billionaires, they don’t need any more help from government. I’m not interested in trying to help them further. I’m interested in trying to help sustain the great middle of this country that makes our democracy run and that’s the most important challenge of this day.
“You have these businesses who for years now have said ‘Well, we’re based in the United States, but we’re not actually an American company, we’re a global company,'” Hawley said. “And you know, what has driven profits for some of our biggest multinational corporations? It’s been … moving jobs overseas where it’s cheaper … moving your profits out of this country so you don’t have to pay any taxes.”
“I think that we have here at the same time that our economy has become more concentrated, we have bigger and bigger corporations that control more and more of our key sectors, those same corporations see themselves as less and less American and frankly they are less committed to American workers and American communities,” Hawley continued. “That’s turned out to be a problem which is one of the reasons we need to restore good, healthy, robust competition in this country that’s going to push up wages, that’s going to bring jobs back to the middle parts of this country, and most importantly, to the middle and working class of this country.”
While multinational corporations monopolize industries, Hawley said the GOP must defend working and middle class Americans and that big business interests should not come before the needs of American communities:
A free market is one where you can enter it, where there are new ideas, and also by the way, where people can start a small family business, you shouldn’t have to be gigantic in order to succeed in this country. Most people don’t want to start a tech company. [Americans] maybe want to work in their family’s business, which may be some corner shop in a small town … they want to be able to make a living and then give that to their kids or give their kids an option to do that. [Emphasis added]
The problem with corporate concentration is that it tends to kill all of that. The worst thing about corporate concentration is that it inevitably believes to a partnership with big government. Big business and big government always get together, always. And that is exactly what has happened now with the tech sector, for instance, and arguably many other sectors where you have this alliance between big government and big business … whatever you call it, it’s a problem and it’s something we need to address. [Emphasis added]
Hawley blasted the free trade-at-all-costs doctrine that has dominated the Republican and Democrat Party establishments for decades, crediting the globalist economic model with hollowing “out entire industries, entire supply chains” and sending them to China, among other countries.
“The thing is in this country is that not only do we not make very much stuff anymore, we don’t even make the machines that make the stuff,” Hawley said. “The entire supply chain up and down has gone overseas, and a lot of it to China, and this is a result of policies over some decades now.”
As Breitbart News reported, Hawley detailed in the interview how Republicans like former President George H.W. Bush’s ‘New World Order’ agenda and Democrats have helped to create a corporatist economy that disproportionately benefits the nation’s richest executives and donor class.
The billionaire class, the top 0.01 percent of earners, has enjoyed more than 15 times as much wage growth as the bottom 90 percent since 1979. That economy has been reinforced with federal rules that largely benefits the wealthiest of wealthiest earners. A study released last month revealed that the richest Americans are, in fact, paying a lower tax rate than all other Americans.
John Binder is a reporter for Breitbart News. Follow him on Twitter at @JxhnBinder .
Fed resets monetary policy framework to meet Wall Street’s demands 28 August 2020The US Federal Reserve has announced a major shift in its official framework for determining monetary policy to bring it into line with its existing practice of supporting financial markets, following the 2008 financial crisis and now the pandemic, and to assure them such support will continue indefinitely.
The shift was announced in a statement released by the policy-making Federal Open Market Committee (FOMC) yesterday morning before a keynote address by Fed chair Jerome Powell to the Jackson Hole conference of central bankers.
The FOMC said in future its interest rate policy would be formulated with the aim of seeking to ensure the inflation rate achieved an “average” of 2 percent over time, removing the concern in the markets that the Fed would look to lift rates once the inflation rate went above 2 percent.
Federal Reserve Building on Constitution Avenue in Washington [Credit: AP Photo/J. Scott Applewhite, file]
The effect of this change is to assure Wall Street that the Fed rate, and the interest rate structure of the entire financial system based on it, will remain at their present ultra-low levels for a long time.
To bolster this assurance, the FOMC also made clear that because low official unemployment rates in the period prior to the pandemic had not produced significant wage rises or set off inflation the Fed would not look to lift interest rates if the labour market tightened.
The breakdown in the previous relationship is largely the result of changes in the labour market in the past decade through the increased use of gig economy employment, part-time working and casualisation which have been the major source of increased employment rather than full-time jobs.
Announcing its new policy framework, the FOMC said the “updates reflect changes in the economy over the past decade and how policymakers are taking these changes into account in conducting monetary policy.”
That was an accurate assessment as far as it went. But the rest of the statement and the address delivered by Powell explaining the change was largely an exercise in covering up the real driving forces of the shift.
Powell spoke of the need to ensure the achievement of the Fed’s congressionally mandated goals of achieving price stability and maximum employment “in service to the American people,” together with the claim that through its “listening” program it had been taking into account their views and those of their communities.
There was no reference to the most significant change over the past period, especially in the wake of the financial crisis of 2008, that is, the growing divorce of Wall Street from the underlying real economy and the accumulation of wealth in the hands of a financial oligarchy at the expense of the rest of society.
This process—epitomised by the news on Wednesday that the wealth of Amazon chief Jeff Bezos has now reached $200 billion as he rakes in $321 million per day—has seen the institutionalisation of mechanisms whereby profit is accumulated via speculation, share buy backs and other forms of “financial engineering.”
These mechanisms, which involve the siphoning of ever increasing amounts of wealth produced by the labour of hundreds of millions of workers into the coffers of a tiny financial elite, depend above all on the guaranteed maintenance of ultra-low interest rates and a Fed commitment that it will step in to back the markets whenever rampant speculation threatens a financial crisis.
This has been the actual practice of the Fed, going back to the stock market crash of October 1987 and accelerating after the meltdown of 2008.
But to the extent it was not formally codified and there was any degree of ambiguity in the central bank’s policy framework statement the financial markets demanded that changes be made in the interests of so-called “forward guidance.” That demand has now been met.
In his Jackson Hole speech, Powell recalled that the review of the Fed’s monetary policy statement was initiated in early 2019.
The timing is significant. From December 2015, the Fed had begun to raise interest rates from the near-zero levels it had sent in place following the 2008 crash. This was in line with the claim that the measures it had introduced, including the purchases of trillions of dollars of Treasury bonds, were of an emergency character and would be gradually withdrawn once the economy started to return to “normal.”
In 2017 and 2018 there was a brief upturn in the US and world economy with the largest increase in gross domestic product since the period just prior to the financial crash and the Fed decided to press on in order to provide it with some room to manoeuvre in the event of another sharp downturn.
In 2018, it carried out four interest rate rises, each of 0.25 percentage points, and indicated there would be a further three such rises in 2019. It also stated it would continue winding down its holdings of financial assets, which had accumulated from around $800 billion prior to 2008 to more than $4 trillion, at the rate of $50 billion per month. In October 2019, Powell said the program of asset reductions was on “auto pilot.”
However, the orgy of financial speculation that had accelerated after 2008 had now become deeply entrenched in Wall Street and the entire financial system.
This meant that even very gradual moves to anything resembling what had previously been regarded as “normal” and the merest hint the supply of ultra-cheap money was an emergency measure, to be withdrawn at some point, produced a violent reaction.
It took the form of a sell-off on Wall Street in December 2018, recording its worst result for that month since 1931 in the midst the Great Depression. Together with a campaign in sections of the financial press, especially the Wall Street Journal , as well as the continued denunciations of Powell by US President Trump for keeping interest rates too high, this led to a U-turn.
In a speech in January 2019, Powell made clear that interest rate rises were off the agenda and the reduction of the Fed’s assets would be put on hold. This was followed by cuts in rates from the middle of 2019.
But Powell and the FOMC recognised this was not sufficient so long as there was even a trace of ambiguity remaining in the Fed’s policy framework. This led to the policy review the results of which were announced yesterday—a guarantee to the financial oligarchy that the ultra-cheap monetary policy, so essential to its operations, would continue indefinitely.
In his speech, Powell did not specifically deal with the measures initiated by the Fed in response to the meltdown of the financial system in mid-March when the Fed stepped in to act as the backstop for every area of the market.
It announced further massive purchases of Treasury bonds, the buying up of student loan and credit card debt, short-term commercial paper and initiating, for the first time, a program of buying corporate bonds, including from companies that had been junk-rated as a result of the pandemic
There were more than enough reassurances for Wall Street in the speech that these measures, described as temporary and to be withdrawn at some point, would also be permanent.
Powell noted that in previous times expansions in the economy typically ended in overheating and rising inflation but in the past period long expansions had been more likely to end with financial instability “prompting essential efforts to substantially increase the strength and resilience of the financial system.”
In another part of the speech, he said Fed policy was determined by risks to the economic outlook, “including potential risks to the financial system that could impede the attainment of our goals” and that to “counter these risks, we are prepared to use our full range of tools.”
There can be mistaking the essential content of the Fed’s adjustment to its statement of objectives. It makes clear that the orgy of speculation, leading to the creation of fabulous wealth at one pole and increasing poverty and misery at the other, is the official policy of the central financial arm of the capitalist state.
Two entities devoted to expanding the H-1B foreign worker program have (unwittingly, I am sure) just documented the fact that the program artificially suppresses wage levels — which in turn denies jobs to American workers and fattens corporate profits.
The players are the libertarian Cato Institute, here in the States, and the press in India.
As background, one would assume that in the U.S. labor market, all else being equal, workers with less experience, those who are younger, and those who are female would get wages that are substantially lower than a population that is a few years older, has more work experience, and is male.
Let's explore each of these factors, one at a time.
Women, generally, make about 19 percent less than men; People aged 30 make 15 percent less than those aged 35 (with similar gaps for other five-year intervals); Those with a few years less experience in the job market make less than those with a few years more — I could not find data on this point, but let us guesstimate 5 percent less. So, if you take all three factors into consideration (by multiplying 81 percent by 85 percent by 95 percent), the younger, less experienced, and female labor force would be expected to get something like 65 percent of the wages received by the other group of workers.
What we are describing above are two different labor forces with about the same education, roughly the same ability with the English language, and (though it should not make any difference) comparable skin colors and religious tendencies.
The younger, primarily female population is of H-4 nonimmigrant workers, essentially spouses of H-1B workers (it consists mostly of women from Southern India). Cato says that 91.81 percent of H-4s, according to the Department of Homeland Security, are from India. Another 6 percent or so are from China.
The older, primarily male population is that of their H-1B spouses, mostly slightly older males from southern India.
The women are said to have about as much education as the men, but earlier in their years as H-4s they did not work; the Obama administration made it possible for some of them to work in H-4 status, but many lost five or more years of work before they could get work permits.
So, given all the above, we might expect that the H-4s would be getting about two-thirds of the wages of their H-1B spouses, right?
Wrong! Their wage levels, according to a Cato blog post from earlier this year (and reported last week in the Times of India ) were 98.8 percent those of their spouses!
More exactly, H-1Bs in 2019 were earning $113,022 and their spouses were getting $111,632, according to Cato. If, on average, there is a $1,500 differential in favor of the men, there must be many households where the reverse is true, an uncomfortable position for some tradition-bound males.
As neither Cato nor the Times of India explains, the near equality of wages is the direct result of the differential legal status of the two work forces. People with H-4 work permits are not concentrated in industrial ghettoes, their employers have no sway over their legal presence in the country, and H-4s can move easily from one job to another.
Their rights in the labor market are nearly identical to those of citizens.
Their H-1B spouses, on the other hand, do not have those labor rights, leading to their lower-than-expected earnings. They often work in situations where many if not most of the other workers have the same visa; if they lose their visa by an employer's action they are subject to deportation; and, while they can move to another employer, it must be another H-1B employer. Further, their employers may have filed a green card application for them.
In short, the H-1Bs are near-indentured, and thus their wages are well below those of other workers with similar jobs, as Professor Ron Hira of Howard University has reported, using direct measures of wages rather than the indirect ones shown above.
It is pleasant when the other side makes a case for you, even though that case is hidden to most eyes.
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