| Subject: The future is here |
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Gene
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Date Posted: 08:49:09 03/09/06 Thu
Weekend Edition
February 11/12, 2006
Forget Iran, Americans Should be Hysterical About This
Nuking the Economy
By PAUL CRAIG ROBERTS
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 benefiting 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@...
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