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Forget Iran, Americans Should be Hysterical About This
Nuking the Economy
By PAUL CRAIG ROBERTS
02/13/06 "Counterpunch" -- -- Last week the Bureau of Labor
Statistics re-benchmarked the payroll jobs data back to 2000.
Thanks to Charles McMillion of MBG Information Services, I have
the adjusted data from January 2001 through January 2006. If you
are worried about terrorists, you don’t know what worry is.
Job growth over the last five years is the weakest on record.
The US economy came up more than 7 million jobs short of keeping
up with population growth. That’s one good reason for
controlling immigration. An economy that cannot keep up with
population growth should not be boosting population with heavy
rates of legal and illegal immigration.
Over the past five years the US economy experienced a net job
loss in goods producing activities. The entire job growth was in
service-providing activities--primarily credit intermediation,
health care and social assistance, waiters, waitresses and
bartenders, and state and local government.
US manufacturing lost 2.9 million jobs, almost 17% of the
manufacturing work force. The wipeout is across the board. Not a
single manufacturing payroll classification created a single new
job.
The declines in some manufacturing sectors have more in common
with a country undergoing saturation bombing during war than
with a super-economy that is “the envy of the world.”
Communications equipment lost 43% of its workforce.
Semiconductors and electronic components lost 37% of its
workforce. The workforce in computers and electronic products
declined 30%. Electrical equipment and appliances lost 25% of
its employees. The workforce in motor vehicles and parts
declined 12%. Furniture and related products lost 17% of its
jobs. Apparel manufacturers lost almost half of the work force.
Employment in textile mills declined 43%. Paper and paper
products lost one-fifth of its jobs. The work force in plastics
and rubber products declined by 15%. Even manufacturers of
beverages and tobacco products experienced a 7% shrinkage in
jobs.
The knowledge jobs that were supposed to take the place of lost
manufacturing jobs in the globalized “new economy” never
appeared. The information sector lost 17% of its jobs, with the
telecommunications work force declining by 25%. Even wholesale
and retail trade lost jobs. Despite massive new accounting
burdens imposed by Sarbanes-Oxley, accounting and bookkeeping
employment shrank by 4%. Computer systems design and related
lost 9% of its jobs. Today there are 209,000 fewer managerial
and supervisory jobs than 5 years ago.
In five years the US economy only created 70,000 jobs in
architecture and engineering, many of which are clerical. Little
wonder engineering enrollments are shrinking. There are no jobs
for graduates. The talk about engineering shortages is absolute
ignorance. There are several hundred thousand American engineers
who are unemployed and have been for years. No student wants a
degree that is nothing but a ticket to a soup line. Many
engineers have written to me that they cannot even get Wal-Mart
jobs because their education makes them over-qualified.
Offshore outsourcing and offshore production have left the US
awash with unemployment among the highly educated. The low
measured rate of unemployment does not include discouraged
workers. Labor arbitrage has made the unemployment rate less and
less a meaningful indicator. In the past unemployment resulted
mainly from turnover in the labor force and recession.
Recoveries pulled people back into jobs.
Unemployment benefits were intended to help people over the down
time in the cycle when workers were laid off. Today the
unemployment is permanent as entire occupations and industries
are wiped out by labor arbitrage as corporations replace their
American employees with foreign ones.
Economists who look beyond political press releases estimate the
US unemployment rate to be between 7% and 8.5%. There are now
hundreds of thousands of Americans who will never recover their
investment in their university education.
Unless the BLS is falsifying the data or businesses are
reporting the opposite of the facts, the US is experiencing a
job depression. Most economists refuse to acknowledge the facts,
because they endorsed globalization. It was a win-win situation,
they said.
They were wrong.
At a time when America desperately needs the voices of educated
people as a counterweight to the disinformation that emanates
from the Bush administration and its supporters, economists have
discredited themselves. This is especially true for “free market
economists” who foolishly assumed that international labor
arbitrage was an example of free trade that was benefitting
Americans. Where is the benefit when employment in US export
industries and import-competitive industries is shrinking? After
decades of struggle to regain credibility, free market economics
is on the verge of another wipeout.
No sane economist can possibly maintain that a deplorable record
of merely 1,054,000 net new private sector jobs over five years
is an indication of a healthy economy. The total number of
private sector jobs created over the five year period is 500,000
jobs less than one year’s legal and illegal immigration! (In a
December 2005 Center for Immigration Studies report based on the
Census Bureau’s March 2005 Current Population Survey, Steven
Camarota writes that there were 7,9 million new immigrants
between January 2000 and March 2005.)
The economics profession has failed America. It touts a
meaningless number while joblessness soars. Lazy journalists at
the New York Times simply rewrite the Bush administration’s
press releases.
On February 10 the Commerce Department released a record US
trade deficit in goods and services for 2005--$726 billion. The
US deficit in Advanced Technology Products reached a new high.
Offshore production for home markets and jobs outsourcing has
made the US highly dependent on foreign provided goods and
services, while simultaneously reducing the export capability of
the US economy. It is possible that there might be no exchange
rate at which the US can balance its trade.
Polls indicate that the Bush administration is succeeding in
whipping up fear and hysteria about Iran. The secretary of
defense is promising Americans decades-long war. Is death in
battle Bush’s solution to the job depression? Will Asians
finance a decades-long war for a bankrupt country?
Paul Craig Roberts was Assistant Secretary of the Treasury in
the Reagan administration. He was Associate Editor of the Wall
Street Journal editorial page and Contributing Editor of
National Review. He is coauthor of The Tyranny of Good
Intentions.He can be reached at:
paulcraigroberts@yahoo.com
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