zbalansowany
13.02.06, 04:12
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
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
