[Congressional Record (Bound Edition), Volume 150 (2004), Part 5]
[House]
[Pages 6276-6282]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     EMPLOYMENT PROBLEMS IN AMERICA

  The SPEAKER pro tempore (Mr. Ose). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from Massachusetts (Mr. Frank) 
is recognized for 60 minutes.
  Mr. FRANK of Massachusetts. Mr. Speaker, a few weeks ago I took this 
floor to talk about the very serious problem we have in our country 
today regarding jobs.
  Last year, as the economy began finally to recover from the recession 
in a somewhat robust fashion, we expected to see a significant increase 
in jobs. As I noted previously, Secretary of the Treasury Snow in 
October said he thought we would get 200,000 jobs a month, because we 
had seen such vigorous growth. He said everything he knew about the way 
the American economy worked, meant with that level of growth, we were 
going to get 200,000 jobs a month.
  A couple of months later, when he was drafting the President's 
economic report, the Chairman of the Council of Economic Advisers, Mr. 
Mankiw, said something similarly. In fact, he went him a little better. 
He said about 215,000 jobs a month. By February of this year they both 
had retracted those predictions.
  Unfortunately, we clearly now are in a situation in which the old 
rules, by which we mean over the last 20 or 30 years, by which we could 
calculate the given number of jobs we would get for a given level of 
increase in our gross domestic product, do not seem to be working.
  For a variety of reasons, we are not producing at a given level of 
economic activity the jobs we used to have. That is a serious problem. 
It is, first of all, of course, a terrible social problem.

[[Page 6277]]

The people who do not get jobs are often the most vulnerable in our 
society, and joblessness is a terrible plight for anyone who suffers 
from it. The joblessness has been prolonged.
  In addition to joblessness, of course, by the working of supply and 
demand, when you have a larger number of people unemployed, wages do 
not rise at the normal level, so that we had last year a drop in real 
wages. Inflation outstripped real wages for people who work for pay 
from others.

                              {time}  2030

  We have seen the erosion in health benefits. There was some debate 
late last year and early this year about that. As I said, the 
President's economic report came out in January, and it was still under 
the old rules. Well, facts are stubborn things, as a number of people 
have said. I forget who said it first, but a lot of us have liked it 
and repeated it, and it is now undeniable that we have a serious lag in 
job creation.
  We are debating the reasons. I think they are multiple. One is 
productivity; and that is, of course, the great paradox. The good news 
of increased productivity becomes the bad news because it is one of the 
major explanations for the lag in job creation. There is the 
globalization factor, outsourcing. There is the debate about how many 
jobs this is costing, but it is costing jobs, undeniably.
  There are other factors that are involved. I think the health care 
system of the United States is a problem. We have one of the few 
societies, the only one I can think of right offhand, where your health 
care is so tied to your job, so that when an American company has to 
hire, they have to think about health care. We have a situation where 
the American automobile manufacturers are burdened in their competition 
with others because they have to factor into the cost of every Ford and 
every Chevrolet and every car that is built here, the health care that 
is not a marginal cost for their competitors.
  But leave aside for a while the reasons. We have to deal with the 
fact. And the fact is, as I said, it is now clear that we are in a 
period where we are producing fewer jobs per element of gross domestic 
product than previously. Then the question is, well, how long is this 
going to be with us?
  Last year, the optimists were the people who said, well, we are going 
to just get a lot of jobs, a couple of million jobs a year, more than 
that, 2\1/2\. The Bush administration said from 2.4 to 2.6 million jobs 
a year. No one thinks that anymore. I hope tomorrow we are going to see 
a very robust job figure. There are some reasons to hope that it will 
finally begin to show something, probably because a major strike was 
settled in California, other seasonable factors, weather changes, but 
no one thinks we are going to get to those predictions of 2.4 to 2.6 
million jobs.
  So there has been a kind of down-scaling of expectations by the 
administration and others. We still have pessimists and optimists, but, 
sadly, the pessimists and the optimists agree that we are in a period 
of slow job growth, and they differ as to how permanent this is.
  Now, there are really three levels here.
  There are always, of course, job losses of a cyclical nature in a 
recession. The optimists last year said basically, look, these are 
cyclical job losses and as we come out of this recession, we are going 
to restore them. That has not happened. Clearly, there is a structural 
element here. So we now have this understanding that increased 
productivity, foreign outsourcing, and globalization are costing jobs 
in the near term.
  But the optimists say, okay, that is true, but that is temporary. In 
other words, they concede, we have not just the cyclical problem of a 
recession, we have something of a structural problem as our workforce 
gets reorganized. But, they say, that is temporary, because, given the 
dynamism of the American economy and the inherent workings of the 
market, new jobs will be created. So they concede, as the facts require 
them to, that we are now in a position where we do not have the jobs we 
had expected to have but, they say, have hope. The jobs are just around 
the corner. The jobs are coming.
  I wish I could be as optimistic. I do not think it is possible at 
this time to conclude for sure how deeply embedded in our economy this 
structural problem is. I fear that to a great extent we are going to 
have to cope with this on into the future. It is not simply that 
productivity means, I believe, a qualitative change going forward in 
the wealth-to-job mix, but it is also not clear that foreign trade will 
do what people say.
  We have some of those who are the strongest proponents of trade, I 
think, overselling it. Foreign trade clearly has been a reason why 
inflation has been low. Foreign trade clearly holds down the cost of 
products we buy. But the notion that it will automatically produce as 
many jobs as it costs simply has not been borne out.
  I was struck by a very interesting panel held on the question of 
outsourcing. One of those who spoke on the panel, a former member of 
the Board of Governors and Federal Reserve, a very distinguished 
economist, Lawrence Meyer, talking about this general subject quoted 
another very distinguished economist, Robert Lawrence, and he said that 
he had recently read a quote of Mr. Lawrence which really troubled him, 
and here is the quote. As he notes, Robert Lawrence has studied 
international competitiveness his entire career, and here is what Mr. 
Lawrence said, as quoted by Mr. Meyer:
  ``If foreign countries specialized in high-skilled areas where we 
have an advantage, we could be worse off. I still have faith in 
globalization, but it is no more than faith.''
  In other words, there is no guarantee that the factors that are 
causing this slowdown in job creation now are going to fade away.
  I will talk in a further speech, however, let me reassure the 
Speaker, I do not plan to try to cover everything tonight and keep 
everyone here, about whether the optimists or the pessimists are right 
and what we do about it. Today I want to take the optimists at their 
word and hope that they are right and hope that what we are in is just 
a period of transition. That is the optimistic view.
  The optimists concede that, as I said, it is not just a cyclical 
problem. What they now say is, well, it is a transitional problem. We 
are in a transition at this point. Of course, the economy is always 
undergoing transition, but there does appear to be a more significant 
transition now: the outsourcing of computer jobs and service jobs, that 
is relatively new. We have had outsourcing in effect not of jobs but of 
whole operations in the manufacturing area. This is new. The 
productivity, the integration of information technology, that seems 
new.
  But they say, look, it is true we are in a transition, but do not 
worry, because the dynamism of the American economy will soon produce 
new jobs to replace those that are lost.
  Here is what President Bush said. Now, again, President Bush was, of 
course, last year one of the great optimists of the old sort. President 
Bush was having his administration officials predict 2.5 million jobs 
this year. That is gone. Now here is what the President has to say. 
According to the New York Times of March 31, the President was in 
Wisconsin; and the Times says he acknowledged the economic anxiety felt 
by many voters, saying that the intense pressure on business and 
workers to produce more for less, while good for the economy in the 
long run, has held down the creation of jobs.
  It then goes on to quote Mr. Bush directly, and here is Mr. Bush's 
quote: ``This is called a period of transition,'' Mr. Bush said. ``That 
is an economist's word for things aren't going too well for you, and I 
understand that. I understand people are worried about the job they 
have.''
  In other words, this is the new optimist view, which is a less 
optimistic view than the old optimist view, and the President says, 
transition means ``things aren't going well for you.'' Well, now 
lexicography was never one of his claimed strengths, so we will let 
that pass, but it is an acknowledgment

[[Page 6278]]

that this transition is hurting people, but, he says, in the long run, 
you will be better off.
  That is what I want to address. I want to take those optimists at 
their word, and President Bush is in that camp.
  The leader of the optimistic camp, because of his stature, his 
justifiable stature, the respect for which people have for him as an 
economist and a thoughtful maker of policy, is Alan Greenspan. And I 
commend people who want to see the optimistic view, the new down-scaled 
optimistic view, to read his testimony given on March 11 before the 
Committee on Education and the Workforce.
  As an aside, Mr. Speaker, as some Members know, that used to be 
called the Committee on Education and Labor, but in a display of 
political correctness, when the Republican Party took over the House, 
``labor'' being a word with unpleasant implications for the Republican 
party, I think perhaps too much social concern for people who earn 
their living by being paid by others, the word ``labor'' was banished 
from the official roster of committees and we now have the Committee on 
Education and the Workforce.
  Mr. Greenspan's testimony before the Committee on Education and the 
Workforce is the optimist view. He says in here, as he has said before, 
that the stress that significant parts of our workforce are enduring 
reflect, and here I quote him, it is what ``Joseph Schumpeter, the 
renowned Harvard professor, called the process of `creative 
destruction,' the continuous scrapping of old technologies to make way 
for the new. This is the process by which wealth is created, 
incremental step by incremental step.''
  In other words, as the President said, you are suffering in the short 
run. Transition means things are not going well for you. But, in the 
long run, you will be better off. It is the process of creative 
destruction.
  The very fact that you are losing your job is, in a perverse way, 
good news, because the job you are losing is a job that we no longer 
really find that useful, and we are going to create, out of that job 
loss, a freedom for you to take a new job.
  Well, as I said, I hope that is the case. It has been the case 
historically in America that we have produced new jobs as we have lost 
old ones. There is a very real question in my mind about the extent to 
which that is still true. Of course we will produce new jobs. Certainly 
we will. But whether or not the rate of new job production will equal 
the rate of job loss, that is not to be taken for granted, and that is 
why Professor Meyer quoted Mr. Lawrence. He is saying, look, I have 
faith in globalization, but it is only faith.
  It is clear that trade will help with the inflation issue. Trade 
helps bring us products cheaply, but there is no guarantee whatsoever 
to assume that it will allow us to replace the jobs that have been 
lost, and there is no mechanism under productivity that says that, 
either.
  But I will take the optimists, for now, at their word. They 
acknowledge that, however, there is a problem. In other words, the 
optimist view is, okay, this is a transitional period, and in this 
transitional period a lot of you are losing your jobs and some of you 
are keeping your jobs, but you are losing your health care and you are 
getting cut back.
  An example of that, we just saw the settlement of a strike here or a 
dispute in Washington, D.C., fortunately, it did not lead to a strike, 
I guess, of grocery workers. Grocery workers have a new contract, and 
here is the headline from the Washington Post yesterday: ``New Workers 
Bear Brunt of Concessions. New people hired to work in the grocery 
stores in Giant and Safeway will get less in the way of compensation 
than the people who have been working there.''
  Well, that is the creative destruction, but it does seem to me in 
this case, for the new people, a little more destruction than 
creativity, because they are going to get less.
  By the way, we are talking about grocery workers. We are not talking 
about people whose compensation will go from $150,000 to $140,000. We 
are talking about people working very hard for not an enormous amount 
of money, and they will get less of it, and their health care will cost 
them more.
  Mr. Meyer makes that clear, by the way. Mr. Meyer, former governor of 
the Federal Reserve who cares about employment, here is what he said 
about the transition:
  ``We have got to keep in mind here that the costs associated with 
globalization and even productivity in terms of the skill bias, some of 
them are transitional. People will generally get jobs back, but they 
won't get the same jobs back. They may get jobs back with lower wages, 
with less benefits. There may be permanent costs. So we have to make 
sure this is not just transitional. There are winners and losers, and 
it is more than short run. It can be sort of permanent.''
  In other words, even for those who have some optimism, there is a 
recognition that the transition will be damaging to a lot of people.
  So then the question is, what do we do about the transition? Again, I 
will deal later with the more pessimistic view in another speech. But 
today I am taking the optimists at their word. Mr. Greenspan, the 
President, they say, okay, yes, integrating into information 
technology, expanding foreign trade, it is a two-way street. 
Ultimately, you will be better off, and we recognize there is some 
short-term pain. Bear with us.
  Well, as Mr. Meyer points out, it is not at all the case that the 
losers of today will be the winners. There are different losers and 
winners. So even if we take this optimistic view that this is just a 
transition, it does seem to me that society has an obligation to make 
the transition a lot less painful.
  The President says, remember, this is George Bush's definition of 
transition: ``things aren't going well for you,'' he says. ``That is an 
economist's word for things aren't going too well for you, and I 
understand that.''
  Well, Mr. President, we need more than understanding. We need a 
response.

                              {time}  2045

  That response has to involve a more active public sector than we 
have. By definition, the transition is a private sector transition. It 
is in the private sector that people are losing jobs and getting new 
jobs, as Mr. Meyer points out, that will pay less and that will have 
fewer benefits as the grocery workers have found out now, the new 
grocery workers.
  Now I believe there is a very important reason to try to ease the 
pain of the transition and that is a matter of equity. Productivity 
outsourcing, cheaper products, better products, those benefit society 
as a whole. There is a particular benefit for those us who are 
fortunate enough to be earning well, above the median income, and those 
benefits are widely distributed. But while the benefits are widely 
distributed, the costs of achieving those benefits is very narrowly 
borne.
  It seems to me morally a decent society will try to take some of the 
increased benefit and use that to alleviate the pain of the few who are 
bearing the cost that made it possible.
  Mr. Greenspan acknowledges that. ``Creative destruction'' is the 
phrase he borrows from Professor Schumpeter. That means that all of us 
are benefiting, but some are getting hurt. The President says, 
transition, things are not going well for you. Okay, but do we not have 
some obligation to have things go better? Is it reasonable?
  I guess, because of outsourcing and other things, some of the things 
I buy I will buy more cheaply. Because am I, then, free of any moral 
obligation to worry about the fact that the people who are selling me 
these things more cheaply are getting paid less and having trouble 
meeting their family's needs and do not get the health care they ought 
to get, have to pay too much for it and sacrifice elsewhere?
  So I think there is a moral reason why we should be trying to improve 
things. That, of course, requires some public policies. But even for 
those who do not believe in the moral argument, their own self-interest 
ought to convince them to do more about the transition.

[[Page 6279]]

  Given Mr. Greenspan's recognition of the pain of the transition, 
given Mr. Bush's recognition of the pain of the transition, they are 
making a great mistake in failing to alleviate the pain of the 
transition, if only because the people who are suffering that pain are 
beginning to be in sufficient numbers and have sufficient sympathy so 
their response to transition is going to be to block it.
  Now, remember in the view of the people I am quoting, the transition 
is a good thing. It is the way in which we grow. It is the way in which 
we improve. What you have is a paradox. Given our political situation, 
the victims of the transition do not have the political power in some 
situations to get some of those benefits to alleviate their pain, but 
they do have the political power to stop things from going forward.
  Mr. Meyers says in an economist's ideal world that these trends are 
producing increased globalization, productivity, they are producing 
winners and losers. And he said the economists believe that the total 
gains of the winners significantly outweigh the total loss of the 
losers. So what you do is you take some of the gains from the winners 
and you compensate the losers and then the society as a whole is better 
off. The winners still win; the losers break even.
  But as he points out politically, and Mr. Meyer was credited, he 
points out, yeah, but in our current politics the winners do not do 
anything for the losers. While the losers do not have the political 
power to force the winners to share, paradoxically they have the 
political power to stop the whole transition process and have there be 
many fewer winners. We know that.
  Recently in Congress Daily there was a note that the lobbyists in 
town who work on trade are very disappointed because they do not 
believe the Central American Free Trade Agreement can go through the 
House. I certainly do not think it can or should in its current form. I 
think it is very lagging, although I would like to see a better version 
of that come forward.
  Outsourcing, we know now in this great outcry, outsourcing, we are 
being told, do you not understand how good the outsourcing is? Well, 
the people who are being outsourced do not understand that. They 
understand that it is good, but they know it is not good for them. As 
long as all the benefits of outsourcing are going to some people and 
none of the gains, they are not going to be too happy about this.
  In other words, I say to the optimists who believe that this is 
simply a matter of a transition which in the end will leave all of us 
better off, if you do not do something to alleviate the pain that 
transition inflicts on the lower economic sectors of this society and 
into the middle economic sectors of this society, they are not going to 
let the transition go forward.
  Now, unfortunately, under the current administration and with the 
current congressional leadership, not only are we not doing anything to 
alleviate the pain of the transition, we are making it worse through 
public policy. Let me give you one example where I say we are making it 
worse.
  I talked about the grocery workers. Now, some American workers are 
put at risk because the things that they do can be done overseas. And 
they are told, listen, if you do not adopt some lower benefits we will 
send this work overseas. We know that that threat is made often.
  People in the computer industry are being told you are going to lose 
your job, you are going to be outsourced. Well, yes, there are some 
things where there is international competition. But how does that 
explain the erosion in the relative position of grocery workers? We 
know that that is there because the new grocery workers are going to 
get less than the existing ones. Very few Americans will go to India to 
buy their groceries. There is not a problem of outsourcing of your 
frozen food. What we have got are public policies that are eroding 
their position, in particular, the assault on the role of unions.
  What has happened has been a systematic dismantling of the Federal 
law passed under Franklin Roosevelt and generally supported by 
presidents since, which allow men and women to bargain collectively for 
their jobs. So you have a Wal-Mart which, in part because of the law 
and the way it is now being interpreted, is able to block collective 
bargaining because you have people hostile to unions administering the 
law that is supposed to protect people's rights to join them. So Wal-
Mart then becomes the standard down to which others must repair. That 
is a public policy problem.
  The tax system over the past few years has been made more favorable 
to the wealthy and less favorable to working people in relative terms. 
The payroll tax continues to go forward. That is another example of 
public policy making things worse rather than better.
  And we have a number of very specific areas where the people in power 
in Washington are either making things worse or refusing to make things 
better. That is, there are some things that can be done to ease the 
transition.
  And, again, I want to reiterate, I am not here debating whether or 
not these changes in job creation are going to be with us for a while 
or whether they are short term. Everybody admits that we now have this 
transition. Everyone acknowledges it, the President, Mr. Greenspan, and 
others, that it causes pain to people.
  Let us assume they are right and within a few years the dynamism of 
the American economy will make this a time that we will all look back 
on and say, oh, were not we worried too much? Well, at least those of 
us who have had jobs throughout this and health care and other things. 
But what about the people who are not in a position to maybe even make 
it through there with any kind of economic integrity?
  Well, there are things you can do to ease the transition. This 
Republican administration and Congress, sadly, are doing the reverse. 
Nothing could be clearer on this than the question of unemployment 
compensation.
  Now, here Mr. Greenspan, who is the leading optimist in this, has, 
when pressed, agreed that we should extend unemployment benefits. I 
stress Mr. Greenspan, because I think he is the leading articulator of 
the more optimistic view. And when pressed, as he does not volunteer, 
he says, well, yes, you should extend unemployment. How do you, Mr. 
President, acknowledge that this is a time of transition in which, to 
use your words, things are not going well for the people who are at 
work and you do not use your power to get extended unemployment 
compensation?
  Now, historically, when the recession ended we would do extended 
unemployment in a recession, extended unemployment benefits. When the 
recession ends, jobs came back, you did not need extended unemployment 
benefits. In this case, we have the recovery without the jobs, so you 
still needed unemployment compensation. The administration opposes it.
  Part of the problem, we agree, is foreign trade related. That is not 
the whole problem. Productivity may be a bigger part of it. I think it 
probably is. But part of it is foreign trade related. Well, we are told 
we have something called trade adjustment assistance. It helps you if 
you lose your job to an international operation. But when it was passed 
it dealt only with manufacturing. We were not thinking then about 
computer-type jobs being outsourced indeed. The jobs now being 
outsourced are the jobs we used to retrain people for. We just forget 
to give them airplane tickets when we gave them retraining.
  Where are we now? We are now in a situation in which the Republican 
administration and Congress is blocking efforts to extend trade 
adjustment assistance to service workers. So if you lose your job in a 
factory, you can get some trade adjustment assistance. It is not the 
best thing, but it is some help. But if you lose your job in a call 
center or in a computer programming operation, you get nothing. The 
administration has said no, no, we cannot help, because it says 
manufacturing products. It does not cover services.
  Senators have said and others have said, the House of Representatives 
Members have said, okay, we will

[[Page 6280]]

change the law so what this covers services; and the administration and 
the Republicans are blocking that.
  So no to extended unemployment compensation, no to expanding trade 
adjustment assistance to people who need it.
  Well, one of the things we could do would be to provide some public 
sector jobs for some of these people. Because, again, some of the 
people who are losing their jobs are not going to be the one who get 
the new ones.
  And I go back to Mr. Greenspan. Mr. Greenspan's testimony is really 
the articulation of this view, and what it shows is the inadequacy of 
the conservative optimistic approach to this problem. Mr. Greenspan is 
their intellectual leader, and his answer essentially is community 
colleges and some more training.
  One reads Mr. Greenspan, he says the whole problem is education. We 
do not have a good skill fit. We need more skilled workers, and we do 
not have them, and, therefore, the answer is to educate them more. That 
is shockingly inadequate. And Mr. Greenspan intellectually, I think, is 
not thinking this through.
  I think that the problem is that in this case Mr. Greenspan's deeply 
conservative ideology, to which, obviously, he is fully entitled, his 
view that less government is almost always better, which is a view he 
has held for a very long time, is winning out over his intellectual 
understanding of what is going on in the world.
  He grants that there is this insecurity. He did not always, but he 
now acknowledges it. He understands that the pain of the transition 
going unabated causes problems in resistance to the programs he would 
like to see go forward, but he cannot bring himself to let us help 
alleviate them.
  Now, one more minute on the Bush administration. One thing we could 
do that would be very helpful with jobs would be highway and transit 
construction programs. People always said, well, public works is not a 
good way to respond to a job crisis in a recession because by the time 
you get geared up the recession is over. Yeah, but we are in a 
situation now where, while the recession may be over, but the 
joblessness is not; and this is an ideal time with slack recesses in 
the economy to improve our transportation system, our highways, our 
trains, our public transit.
  A month or so ago the chairman of the Public Works and Transportation 
Committee here and his ranking member, bipartisan effort, correctly 
said we could spend usefully $375 billion over the next 6 years, not a 
huge amount in this whole country, improving transportation, and it 
would both be better for the society and it would provide jobs. And the 
President used his political muscle to cut that back and back and back 
to the point where he is now threatening to veto a bill that is $100 
billion less than the original one.
  Well, Mr. President, if you recognize that things are not going well 
in the transition, why should there be resistance to a piece of 
legislation that is one of the best answers we have to these problems? 
Because, again, to go back to Mr. Greenspan and the others, the problem 
with his argument about creative destruction is that, frankly, the 
people whose jobs are getting destroyed are not the people for whom the 
jobs will be created.
  Even if you do job retraining, there are people in their 40s and 50s 
who are losing their jobs, people who had a high school education. The 
likelihood that they can be retrained for jobs, anything comparable to 
what they had, is quite slight in large numbers.
  That is what Mr. Meyer correctly pointed out. Yes, some people get 
new jobs. They will be worse jobs than they had. They will not pay as 
much. They will not have the benefits, particularly since there is now 
a trend among American employers to cut back on health care and to cut 
back on defined pensions.

                              {time}  2100

  So, in any case, everything else being equal, you are likely to get a 
job paying less, and it is not going to be equal for all these people.
  Let me say, the President's mistakes are very clearcut. No to 
extended unemployment benefits, no to trade adjustment assistance to 
the people whose jobs are being outsourced, no to a good highway 
program that would put people to work and also create, in some local 
areas, better economic conditions. So the President betrays his own 
recognition that this transition means things are not going well for 
people by denying them this kind of short-term help.
  Mr. Greenspan's error is articulated more clearly, but I think it is 
equally grave. I have heard his and I have talked to him about this and 
his answer to the problem frankly is, well, let us do more with the 
community colleges, let us retrain people. There are a couple of 
problems with Mr. Greenspan's approach.
  First of all, I must say, as much as I respect him in general, as 
much as I admire what he did when during the 1990s he refused to raise 
interest rates and cut back the economy, some people argued that too 
little unemployment was bad for the economy, Mr. Greenspan resisted 
that. He said, no, he was not going to inflate interest rates just 
because unemployment was dropping. He was going to see if we could have 
low inflation and low unemployment. He was right and we did.
  But here again, I have to say his philosophical opposition to 
government is, I think, crowding out, to use a good financial term, his 
commitment to dealing with the problem he identifies. He understands 
that the transition is causing political problems, and he says in his 
testimony and he acknowledges that it is leading to problems, that it 
is leading to people being opposed to some of the policies he thinks 
are necessary.
  He understands that outsourcing and free trade, things he like, are 
at risk because of the resistance, but he cannot bring himself to 
overcome his philosophical objection to government to the point where 
he will really respond to those needs.
  Yes, grudgingly, when we asked him, he said, yeah, extend 
unemployment but it is not high on his agenda. In fact, the central 
tenet recently of what he has been arguing, well, there are two tenets 
and they are in disagreement. One, he says we have to greatly increase 
the skill-sets of American workers. We have to educate people more; let 
us have more community colleges; let us have more education. Well, Mr. 
Greenspan's too good an economist to think that people at community 
colleges will work for nothing, but some of them would have to if we 
are going to carry out what he wants.
  Mr. Greenspan has, after all, unlike the Bush administration, argued 
that the serious deficits we are now encountering and the enormous debt 
that they are building up, that that is bad for the economy, but sadly, 
he tells us that the only way that we can responsibly reduce that 
deficit is by cutting spending.
  He is generally in favor of continuing the very significant level of 
tax cuts, weighted towards wealthier people, and I think he agrees with 
that philosophically, and he says, therefore, we have to make all these 
reductions on the spending side. Well, I have two problems with his 
approach.
  First of all, he puts too much of a burden on education. I am all in 
favor of increasing the skills of American workers, but that does not 
mean that you do not have to, during the transition, alleviate the 
economic pain being felt by people who probably are not going to be 
able to acquire those new skills and who are going to take some time in 
arguably earning while they are trying to get them. Yes, community 
colleges are very important, but it is too heavy a lift to put on them 
the burden he puts on them basically of dealing with these job 
problems. I do not caricature. I urge people to read this. When we 
asked him what should we do about it, he said it is education, 
community colleges, improve the skills.
  One, as I said, he puts too heavy a burden on them, but two, at the 
same time as he urges us to do more in education to improve people's 
skill level, he actively argues against the revenues being made 
available to the public sector that would be necessary to do that.

[[Page 6281]]

No one thinks you can significantly increase the skill levels of 
workers without the public sector having a major role, and Mr. 
Greenspan's philosophical objection to the public sector having an 
expanded role comes head-on against his recognition that something 
ought to be done in this area.
  As I said, Mr. Speaker, I have been talking about what I consider to 
be the optimistic view. The optimistic view is that, yes, productivity 
increases, outsourcing, increased trade, they represent more than the 
cyclical loss of jobs which you get in a recession that is overcome 
when the cycle turns. They acknowledge, the President acknowledges, Mr. 
Greenspan and others, a transition which has painful effects on many 
workers.
  I will leave to a later speech, as I said, whether or not we may be 
in a period of a kind of permanent transition like this. That is, I 
fear that unless we do more than we are doing in public policy, even 
more than I have now been talking about, we are going to continue to 
have this problem.
  Increased productivity is a wonderful thing. It is what civilization 
strives for in the economic sphere. Productivity means we have more 
recreation and more leisure. We can make more with less. That is what 
we are trying for. The tragedy is that we have a set of bad social 
arrangements that take that wonderful thing, increased productivity, 
and make it into a source of pain and deprivation for so many of our 
citizens.
  But as I said, leave that one aside. Assume that Mr. Greenspan is 
right, the President is right, that cutting taxes and continued 
outsourcing and continued foreign trade, a continued $500 billion a 
year American trade deficit, continued increases in productivity 
without labor unions getting in the way, more freedom for employers to 
cut back on benefits and health care, let us suppose they are right and 
that while that is difficult for some people in the short-term, and we 
do not know whether the short-term is a year, two, three or four, at 
some point the dynamism in the American economy, as I said, will make 
us look back fondly on these days.
  Even if you believe that, and I am, as my tone probably indicated, 
skeptical, it is self-defeating unless you respond to that pain which 
you understand is, in fact, a current reality.
  So, the President, Mr. Greenspan and others are not understanding the 
implications of their own optimism. The increased wealth we are now 
creating, the benefit society as a whole is getting, the particular 
benefits that the very wealthy are getting, unless some of that is 
shared with the people whose jobs are being destroyed in the process of 
creative destruction, or the people who are losing jobs, or the people 
who are losing health care, with the new hires at the grocery stores 
here in Washington will be getting less than their colleagues doing 
exactly the same job, unless we do a better job at alleviating that 
pain, then the transition is going to be stopped. Arguing that free 
trade and outsourcing and the freedom of employers to hire and fire at-
will and not be hindered by unions, the objections to any restrictions 
on various productivity practice, those who take this position are 
doing their cause some harm, some very real harm.
  To go back to the phrasing of Mr. Meyer, and I think this is the best 
way to put it and I borrow from him and I adapt him a little. Given the 
political situation in our society today, given the Republican control 
and the view that the market will take care of things, and I believe in 
the market. I just do not believe in it as an absolute. I think it is 
clearly very valuable. I think it does not, however, do everything and 
there is a need for the public sector.
  But the view that says the market will take it, has a lot of power 
today, the market will take it all by itself. What this means is that 
in the current situation the losers cannot politically force the 
winners to treat them more fairly, but because of the nature of 
politics, while the losers cannot make the winners treat them more 
fairly, they can stop the winners from winning as much as they 
otherwise might.
  If you believe that all these things, unhindered scope for increased 
productivity, no restrictions on the Wal-Marts and the comparable 
institutions, more free trade without any restrictions, without 
worrying about labor rights and environmental rights, and I must say 
Mr. Greenspan erred. I was very sorry to see a quote from him in which 
he said that people were using a concern for labor and environmental 
rights as a shield for protectionism. That troubled me that Mr. 
Greenspan would not understand the sincerity of those of us who believe 
this. I fear he literally adds insult to injury when he impugns the 
motives of those who say that.
  The fact is that they face a situation in which their failure to 
alleviate the pain has built up such opposition to what they want to 
see happen that it will stop happening, and they cannot believe that 
this is good. So they really face a choice, because the electorate 
faces a choice later, but we deal today with public policy choices.
  Continue to block an extension of unemployment compensation, continue 
to deny trade adjustment assistance to people who are losing their jobs 
to outsourcing in the services area, continue to block the ability of 
organized labor to help people band together to defend themselves, 
continue to allow the erosion of pensions and health care, refuse to 
allow this Congress to pass by threatening to veto a highway bill that 
could put some people to work, and you will reap, unfortunately from 
your standpoint, and from mine, too, a degree of resistance to economic 
progress that may make us all worse off.
  So I say, in closing, Mr. Speaker, that we have had some advance. The 
President in particular, his aides they are not talking about 2.5 
million jobs a year or more. They are acknowledging that we are in a 
period of painful transition, but they stop short of helping us 
alleviate that pain. The transition does not have to be painful, and if 
the transition continues to be painful, at some point there may not be 
nearly as much transition as they want.
  I close by saying, as I said in my previous speech and will say 
again, a large part of the problem is the instinctive, intense, 
absolutist dislike of the public sector. The notion that when civilized 
people come together to do some things jointly because the market does 
a lot but it cannot do everything, the notion that that is something 
that is always bad gets in their way, because unemployment compensation 
and the highway bill, the trade adjustment assistance and improved 
community colleges, et cetera, that takes a public sector that is well-
funded and able to meet its responsibilities.
  As long as we have the President and a Congress that regard the 
public sector as something to be ridiculed and diminished and hindered 
at every turn, who do not have any confidence in our ability to come 
together as a people and achieve important social purposes, as long as 
Mr. Greenspan, the leader of intellectual conservatism, continues to 
argue out of his philosophical opposition to government that, yes, we 
must reduce the deficit but we must do it all by reducing spending and 
not at all by undoing some of these tax cuts, then things will get 
worse and not better. The political trends Mr. Greenspan laments, the 
opposition to free trade, the opposition to outsourcing, it is going to 
get worse, and we will see this year blocking outsourcing. In the 
short-term I am for that because I think the way it is being done is 
wrong.
  I would like us to be able to come together and say, let us, to go 
back to Mr. Meyer one last time, try to follow the pareto optimal motto 
he talked about in which some of what the winners get will be to 
alleviate the losers' loss, to the point where we will be able to go 
forward as a society, and there will always be some losers and some 
people will be hurt. We are talking about a very complex society of 
hundreds of millions, but we can substantially diminish the perceived, 
I believe, unfairness of the way in which the current increases in 
wealth are distributed.
  Until we do that, people should not be surprised when they encounter 
increasing resistance to things that they will tell the American people 
are in

[[Page 6282]]

their long-term best interests because, unfortunately, the people who 
are losing their jobs and feeling the pain and losing their health care 
and having their pensions jeopardized do not, in this case, feel as 
persuaded by Joseph Schumpeter's argument about creative destruction as 
they instinctively tend to understand what John Maynard Keynes said 
when he argued to people who said do not worry about what is happening 
now, it will be better in the long run. In the long run, we shall all 
be dead, and in the long run these people understand they will have 
encountered so much pain and so much difficulty in their lives that the 
promise of these future benefits, which may not even accrue to them but 
to society as a whole, do not account for much.
  Mr. Speaker, in a future speech, I will talk about the pessimistic 
view because, unfortunately, bleak as I sounded today in some ways, I 
was talking about what the optimists say. I am afraid that I think 
things may even be worse than that, but at the very least, I just want 
to say in closing, maybe repetition will get me some somewhere, extend 
unemployment benefits, extend trade adjustment assistance to service 
workers. Let us do a highway bill that meets America's highway needs 
and puts people back to work. Stop the union busting and the resistance 
to working men and women being able to come together, and I can promise 
you that we will be able at that point to consider some of the economic 
policies you are talking about in what you will find to be a better 
atmosphere.

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