|
Bush's Con Jobs
Will the US Need an IMF Bail Out?
By PAUL CRAIG ROBERTS
01/11/06 -- --
President George W. Bush has destroyed America's economy along with
America's reputation as a truthful, compassionate, peace-loving
nation that values civil liberties and human rights.
Nobel prize-winning economist Joseph Stiglitz and Harvard University
budget expert Linda Bilmes have calculated the cost to Americans of
Bush's Iraq war to be between one and two trillion dollars. This
figure is 5 to 10 times higher than the $200 billion that Bush's
economic adviser, Larry Lindsey, estimated. Lindsey was fired by
Bush, because Lindsey's estimate was three times higher than the $70
billion figure that the Bush administration used to mislead Congress
and the American voters about the burden of the war. You can't work
in the Bush administration unless you are willing to lie for dub-ya.
Americans need to ask themselves if the White House is in competent
hands when a $70 billion war becomes a $2 trillion war. Bush sold
his war by understating its cost by a factor of 28.57. Any financial
officer any where in the world whose project was 2,857 percent over
budget would instantly be fired for utter incompetence.
Bush's war cost almost 30 times more than he said it would because
the moronic neoconservatives that he stupidly appointed to policy
positions told him the invasion would be a cakewalk. Neocons
promised minimal US casualties. Iraq already has cost 2,200 dead
Americans and 16,000 seriously wounded--and Bush's war is not over
yet. The cost of lifetime care and disability payments for the
thousands of US troops who have suffered brain and spinal damage was
not part of the unrealistic rosy picture that Bush painted.
Dr. Stiglitz's $2 trillion estimate is OK as far as it goes. But it
doesn't go far enough. My own estimate is a multiple of Stiglitz's.
Stiglitz correctly includes the cost of lifetime care of the
wounded, the economic value of destroyed and lost lives, and the
opportunity cost of the resources diverted to war destruction. What
he leaves out is the war's diversion of the nation's attention away
from the ongoing erosion of the US economy. War and the accompanying
domestic police state have filled the attention span of Americans
and their government. Meanwhile, the US economy has been rapidly
deteriorating into third world status.
In 2005 for the first time on record consumer, business, and
government spending exceeded the total income of the country. Net
national savings actually fell.
America can consume more than it produces only if foreigners supply
the difference. China recently announced that it intends to
diversify its foreign exchange holdings away from the US dollar. If
this is not merely a threat in order to extort even more concessions
from Bush, Americans' ability to consume will be brought up short by
a fall in the dollar's value as China ceases to be a sponge that is
absorbing an excessive outpouring of dollars. Oil producing
countries might follow China's lead.
Now that Americans are dependent on imports for their clothing,
manufactured goods, and even high technology products, a decline in
the dollar's value will make all these products much more expensive.
American living standards, which have been treading water, will
sink.
A decline in living standards is an enormous cost and will make
existing debt burdens unbearable. Stiglitz did not include this cost
in his estimate.
Even more serious is the war's diversion of attention from the
disappearance of middle class jobs for university graduates. The
ladders of upward mobility are being rapidly dismantled by offshore
production for US markets, job outsourcing and importation of
foreign professionals on work visas. In almost every US corporation,
US employees are being dismissed and replaced by foreigners who work
for lower pay. Even American public school teachers and hospital
nurses are being replaced by foreigners imported on work visas.
The American Dream has become a nightmare for college graduates who
cannot find meaningful work.
This fact is made abundantly clear from the payroll jobs data over
the past five years. December's numbers, released on January 6, show
the same pattern that I have reported each month for years. Under
pressure from offshore outsourcing, the US economy only creates low
productivity jobs in low-pay domestic services.
Only a paltry number of private sector jobs were created--94,000. Of
these 94,000 jobs, 35,800 or 38% are for waitresses and bartenders.
Health care and social assistance account for 28% of the new jobs
and temporary workers account for 10%. These three categories of low
tech, nontradable domestic services account for 76% of the new jobs.
This is the jobs pattern of a poor third world economy that consumes
more than it produces.
America's so-called first world superpower economy was only able to
create in December a measly 12,000 jobs in goods producing
industries, of which 77% are accounted for by wood products and
fabricated metal products--the furniture and roofing metal of the
housing boom that has now come to an end. US employment declined in
machinery, electronic instruments, and motor vehicles and parts.
2,600 jobs were created in computer systems design and related
services, depressing news for the several hundred thousand
unemployed American computer and software engineers.
When manufacturing leaves a country, engineering, R&D, and
innovation rapidly follow. Now that outsourcing has killed
employment opportunities for US citizens and even General Motors and
Ford are failing, US economic growth depends on how much longer the
rest of the world will absorb our debt and finance our consumption.
How much longer will it be before "the world's only remaining
superpower" is universally acknowledged as a debt-ridden,
hollowed-out economy desperately in need of IMF bailout?
Paul Craig Roberts has held a number of academic appointments and
has contributed to numerous scholarly publications. He served as
Assistant Secretary of the Treasury in the Reagan administration.
His graduate economics education was at the University of Virginia,
the University of California at Berkeley, and Oxford University. He
is coauthor of The Tyranny of Good Intentions. He can be reached at:
paulcraigroberts@yahoo.com
Translate
this page
(In accordance with Title 17
U.S.C. Section 107, this material is distributed without profit to
those who have expressed a prior interest in receiving the
included information for research and educational purposes.
Information Clearing House has no affiliation whatsoever with the
originator of this article nor is Information Clearing House
endorsed or sponsored by the originator.) |
