The US Economy Continues Its Collapse
By Paul Craig Roberts
Do you remember when real reporters existed? Those
were the days before the Clinton regime concentrated the media into
a few hands and turned the media into a Ministry of Propaganda, a
tool of Big Brother. The false reality in which Americans live
extends into economic life. Last Friday’s employment report was a
continuation of a long string of bad news spun into good news. The
media repeats two numbers as if they mean something—the monthly
payroll jobs gains and the unemployment rate—and ignores the numbers
that show the continuing multi-year decline in employment
opportunities while the economy is allegedly recovering.
The so-called recovery is based on the U.3 measure
of the unemployment rate. This measure does not include any
unemployed person who has become discouraged from the inability to
find a job and has not looked for a job in four weeks. The U.3
measure of unemployment only includes the still hopeful who think
they will find a job.
The government has a second official measure of
unemployment, U.6. This measure, seldom reported, includes among the
unemployed those who have been discouraged for less than one year.
This official measure is double the 5.3% U.3 measure. What does it
mean that the unemployment rate is over 10% after six years of
alleged economic recovery?
In 1994 the Clinton regime stopped counting
long-term discouraged workers as unemployed. Clinton wanted his
economy to look better than Reagan’s, so he ceased counting the
long-term discouraged workers that were part of Reagan’s
unemployment rate. John Williams (shadowstats.com) continues to
measure the long-term discouraged with the official methodology of
that time, and when these unemployed are included, the US rate of
unemployment as of July 2015 is 23%, several times higher than
during the recession with which Fed chairman Paul Volcker greeted
the Reagan presidency.
An unemployment rate of 23% gives economic
recovery a new meaning. It has been eighty-five years since the
Great Depression, and the US economy is in economic recovery with an
unemployment rate close to that of the Great Depression.
The labor force participation rate has declined
over the “recovery” that allegedly began in June 2009 and continues
today. This is highly unusual. Normally, as an economy recovers jobs
rebound, and people flock into the labor force. Based on what he was
told by his economic advisors, President Obama attributed the
decline in the participation rate to baby boomers taking retirement.
In actual fact, over the so-called recovery, job growth has been
primarily among those 55 years of age and older. For example, all of
the July payroll jobs gains were accounted for by those 55 and
older. Those Americans of prime working age (25 to 54 years old)
lost 131,000 jobs in July.
Over the previous year (July 2014 — July 2015),
those in the age group 55 and older gained 1,554,000 jobs. Youth,
16-18 and 20-24, lost 887,000 and 489,000 jobs.
Today there are 4,000,000 fewer jobs for Americans
aged 25 to 54 than in December 2007. From 2009 to 2013, Americans in
this age group were down 6,000,000 jobs. Those years of alleged
economic recovery apparently bypassed Americans of prime working
As of July 2015, the US has 27,265,000 people with
part-time jobs, of whom 6,300,000 or 23% are working part-time
because they cannot find full time jobs. There are 7,124,000
Americans who hold multiple part-time jobs in order to make ends
meet, an increase of 337,000 from a year ago.
The young cannot form households on the basis of
part-time jobs, but retirees take these jobs in order to provide the
missing income on their savings from the Federal Reserve’s zero
interest rate policy, which is keyed toward supporting the balance
sheets of a handful of giant banks, whose executives control the US
Treasury and Federal Reserve. With so many manufacturing and
tradable professional skill jobs, such as software engineering,
offshored to China and India, professional careers are disappearing
in the US.
The most lucrative jobs in America involve running
Wall Street scams, lobbying for private interest groups, for which
former members of the House, Senate, and executive branch are
preferred, and producing schemes for the enrichment of think-tank
donors, which, masquerading as public policy, can become law.
The claimed payroll jobs for July are in the usual
categories familiar to us month after month year after year. They
are domestic service jobs—waitresses and bartenders, retail clerks,
transportation, warehousing, finance and insurance, health care and
social assistance. Nothing to export in order to pay for massive
imports. With scant growth in real median family incomes, as savings
are drawn down and credit used up, even the sales part of the
economy will falter.
Clearly, this is not an economy that has a future.
But you would never know that from listening to
the financial media or reading the New York Times business section
or the Wall Street Journal.
When I was a Wall Street Journal editor, the
deplorable condition of the US economy would have been front page
Dr. Paul Craig Roberts was
Assistant Secretary of the Treasury for Economic Policy and
associate editor of the Wall Street Journal. He was columnist for
Business Week, Scripps Howard News Service, and Creators Syndicate.
He has had many university appointments. His internet columns have
attracted a worldwide following. Roberts' latest books are
The Failure of Laissez Faire Capitalism and Economic Dissolution of
the West and
How America Was Lost.