Loss of Jobs in America

[BKM]

El Guapo talks about "true conservatives" Its interesting to read what one of Ronald Reagan's gurus has to say about our current "Import everything and pay for it with credit" economy:

Loss of Jobs in America
Paul Craig Roberts
Wednesday, Nov. 12, 2003
Are we being spun on jobs by the White House and the rah-rah Bush media like we are being spun on Iraq? Make up your own mind after considering the following.

Only a few of the 116,000 private sector jobs created in October provide good incomes: 6,000 new positions in legal services and accounting – activities that reflect corporations gearing up to protect their top executives from Sarbanes-Oxley.

The remainder of the 116,000 new jobs consist of temps, retail trade, telephone marketing, and fund raising, administrative and waste services, and private education and health services.

Physicians' offices hired 9,000 people to cope with Medicare and insurance company paperwork. Nursing and residential care facilities hired 5,000, childcare services hired 6,000, and hospitals hired 3,000.

Many of the new jobs do not pay enough to support a family. The temp and retail jobs are 40 percent of the total.

All of the new jobs are in services. None of the new service jobs are capable of producing export earnings to bring balance to our massive trade deficit.

Jobs capable of producing tradable goods and services continue to be lost at a rapid rate. In the last three months, the United States lost 91,000 manufacturing jobs.

Computer jobs have disappeared. In Tampa, San Antonio, Seattle and California, office buildings are closed that a few years ago contained tens of thousands of computer engineers. People who in 2000 were making between $60,000 and $100,000 annually cannot today find jobs.

On Nov. 3, CBS News reported: "U.S. October layoffs surge 125 percent." Layoff announcements from U.S. companies more than doubled in October to 171,874, the highest in a year according to the outplacement firm Challenger Gray & Christmas. In October, the auto industry sacked 28,000 workers and telecommunications companies cut 21,000 jobs.

While the ladders of upward mobility are collapsing, the United States continues to import several million legal and illegal poor immigrants each year. Thirty-five million Mexicans are not needed to pick the California fruit and vegetable crops. There is no economic or social rationale for the United States to permit massive inflows of poor people, whose needs are overwhelming U.S. taxpayers, hospitals and government budgets.

Population experts predict that immigration will boost the U.S. population by 100 million people by mid-century. Imagine what that portends for energy consumption and the environment.

The United States is already a heavy energy importer with a serious trade deficit. The economic development projected for Asia means a huge increase in world energy consumption. Unlike the United States, Asian economies have export surpluses with which to pay their energy bills.

It is possible that the loss of American jobs in tradable goods and services, combined with the importation of massive numbers of poor people, will leave the United States without the means to purchase its energy needs in world markets. When the dollar's value is undermined by budget and trade deficits, energy prices for Americans will explode.

A country that substitutes foreign labor for its own domestic labor via outsourcing, offshore production and Internet hiring, a country that transfers its wealth to foreigners to pay for imports, a country that fills up with welfare-dependent multitudes while it squanders $200 billion in Iraq is a country headed for Third World status.

Some industry experts argue that the United States has lost so much of its core industrial capability that advanced manufacturing skills are disappearing in this country. The United States lacks mass production ability in critical areas of high-tech manufacturing.

The United States assembles parts made elsewhere. Knowledge- and capital-demanding activities, such as charge-coupled devices, industrial robotics, numerically controlled machine tools, laser diodes and carbon fibers, are passing out of U.S. hands.

A service economy has less to export than a manufacturing economy. What will the United States sell abroad to pay for its energy and manufacturing imports?

We are currently paying for our imports by giving up the ownership of our companies, real estate, and corporate and government bonds. Once the United States has spent its wealth, we will have no way to pay for the energy and manufactured goods on which we have become import-dependent.

While the once fabulous U.S. economy erodes, the hapless Bush administration thinks its most important goal is to waste American lives and massive sums of money to force "democracy" on Middle Eastern peoples who do not want it.


COPYRIGHT 2003 CREATORS SYNDICATE, INC.

Dr. Roberts' latest book, "The Tyranny of Good Intentions," has been published by Prima Publishers.

[SkeLeton]

Wow... you're into deep sh*t! There goes the number one world superpower.. Don't worry, the Third World is a welcoming Clube...
The bad thing is that a crisis in the US means crisis worldwide... Will another Black Thursday come? Although the roles seem to be inverted this time... The US is the one that can't pay their debts, rather than Europe..

[BKM]

Of course, that is the other side of the coin. Once the US is "tapped out," who will buy all of the cheap goods manufactured in China and the like. Certainly not a workforce paid 50 cents per day.

I am being a lot like Kunstler, I guess, in the sense that I see no solutions. These are inevitable forces of history-especially when these forces/trends benefit-for the short term-the people who control the American economy and government.

[Duke Of Dystopia]

Nice article.

Dont think it has anything to do with the 2nd Gulf War.

The ALL business should pay MUCH more in taxes AND pay a living wage argument is great politics. How does that keep manufacutirng business in the US? You can't be pro-business AND pro-workers without changing some of the way we do things. I believe in a minimum wage and want people to earn living wages, every one can buy more crap that way.

Seems to me like both PARTIES and PARTISANS get it wrong again! The pole we had a week back about who pays more taxes was stupid and it misses the whole point. The point is how to stem/solve the whole problem associated with successfully industrialized nations pricing themselves out of business. Has not yet been acomplished ANYWHERE. That is why each nation has thier pet subsidies to protect certain industries.


That very well would make us MUCH more competitive in the world market place than at present, IMHO.

As a solution, I propose the following:

A successful business does not pay taxes. An unsuccessful business does not pay taxes for long. We would be better off not charging a single business a single penny in taxes with the only exception being "the percentage of workers who do not live within the boundaries of the US is the percentage of taxes you will pay on goods sold IN the boundaries of the US". (those nations that wish a balanced trade agrement with similar ways of measuring could come to an arangement)

Socialize our health care or whatever you want to name the new system so business did NOT have to pay to provide that to workers. That is something that should be funded by people any way. Companies only offered to start paying for health care in the first place during the second world war because wages were frozen and workers were short. It was incentives to lure workers. It was never meant to be permanant and part of the reason the system is broke today.

[BKM]

Socialize our health care or whatever you want to name the new system so business did NOT have to pay to provide that to workers. That is something that should be funded by people any way. Companies only offered to start paying for health care in the first place during the second world war because wages were frozen and workers were short. It was incentives to lure workers. It was never meant to be permanant and part of the reason the system is broke today.

An interesting point. I read somewhere during the tech boom that a semiconductor manufacturer located its plant in Ireland rather than the United States partly because Ireland has "socialized medicine."

One of more pollyannish co-workers glibly asserts that we can be a purely service economy-that the medical industry pays a good living wage. I responded that the US medical care system is broke (too many examples like my own family-the Federal Government spent more than 1/2 million dollars on the last year of his life for my mother's second husband (RIP)-we won't be doing that for very long.)

I could see your corporate tax thing IF things were structured to require corporations to meet the original intent behind the concept of a limited liability corporation-that is, the community grants such a charter in exchange for certain concrete public benefits. Get rid of the whole Delaware (or Bahamas) scam. (Sorry Delaware. No apologies for Bahamas)

As for no country successfully solving the dilemna you speak of-thats true. Some boutique nations (Denmark) are doing a better job-but that's a country of what, 5 million people?

[jordanb]

I think we should:

A) Require all goods sold in the United States to be produced using processes that do not break our environmental laws, regardless of where they are manufactured

B) Require all goods sold in the United States to be produced by workers being paid a living wage (that would have to be defined in more detail) with the right to organise and following all of our labor laws (like 8 hour workday, etc), again, regardless of where they are manufactured.

That virtually eliminates the appeal of going off to the third world. There is still some advantage, because differences in the price of the dollar and the cost of living for workers would still make it cheaper in some circumstances.

But workers in those places would be getting a living wage, so they'd have discretionary income that they can use to buy the goods they're producing. They will become consumers as well, and the cost of living would rise as well as the value of their currency against the dollar, so advangages to moving would be short-term.

The end result is a "race to the top," rather than the race to the bottom we have now.

[Duke Of Dystopia]

Its not enough just to fix the import side of the equation. We have to Make goods people need or want to buy, plus those goods need to be affordable. This is the problem of All of the developed nations.

Denmarks economy is similar enough to all developed nations economies. They have had better days for themselves in history also. France, a once great, has leveled off. By no means has it sunk into obscurity as some would like. It is also not the same as it once was. Same for England. A German friend of mine tells me the situation there is so bad it is illegal to moonlight at a second job because you would be stealing a job from somebody with NO job. Japan has had 10 years of stagnant economies and misery.

The article fails to point out this is the problem of the entire developed world, not just the US. The developing nations need a way up too or it remains broken for everyone. Wish I had the answere but I don't. Got to be a way out of it though.

[SkeLeton]

Actually come to think of it... didn't the same thing happen to Rome? They started buying and buying things from their colonies and the rest of the empire.. that lead to their doom. Romans at the end of the empire didn't even grow their own food!, everything was imported and romas just partied all day long.

If you examine this carefully, the developed countries send out their manufacturing out to the sub-developed countries, the developed countries lose jobs, and the sub-developed world wins jobs and money. But in no case the sub-developed countries can survive without the developed countries, hence if one falls, everybody falls.

[Duke Of Dystopia]

Originally posted by SkeLeton
Actually come to think of it... didn't the same thing happen to Rome? They started buying and buying things from their colonies and the rest of the empire.. ........But in no case the sub-developed countries can survive without the developed countries, hence if one falls, everybody falls.

Yup, your getting the idea now. Rome was a lot more complicated than that, but the basics are there. I don't think the Romans were that decadant.

Sub-developed countries always survive, its what they do, just not in the lap of luxury.

[gkmo62u]

Jordon--would your proposal lead to cd players costing 500 dollars and mens suits costing 1500? Ok, maybe a bit of an exaggeration. Are you willing to pay union members 100,000 a piece to make widgets?

I am going to look into Mr. Robert's--the author of the article--for his true frame of reference.

Before I do that, I am not sure the reason for the shot at the Bush administration at the end of the article--or was that shot from BKM?. If things are as bad as he opines, it is essentially an indictment of the American way as it has evolved.

I am back

Looks like Mr. Roberts is a bit of an anti-immigration advocate, bordering on the racist. From an article appearing in Newmax.com:

"White American males face deteriorating career prospects because U.S. companies substitute foreign labor for U.S. labor, civil rights policy requires discrimination against white males in employment and promotion, and massive immigration drives down wages in construction, services and other employment."

Nice.

I just like to make sure everybody knows that everybody has an agenda.

[MaineMan]

Originally posted by gkmo62u
"White American males face deteriorating career prospects because U.S. companies substitute foreign labor for U.S. labor, civil rights policy requires discrimination against white males in employment and promotion, and massive immigration drives down wages in construction, services and other employment."

Isn't that basically Bush's position on Affirmative Action???

We DO need more blue-collar jobs in the US. Jobs where the poor guy who didn't go to college can work and live a decent life. Instead we have half the country working at Taco Bell and recieving social assistance because their jobs don't pay them enough to get by.

I thought republicans and businesses hated taxes! Then why is our government and corporate lobby pushing the service-sector economy so hard... won't bad jobs and poor wages require more people to be on social programs and thereby raise taxes?

And, by the way, you CAN be pro-business and pro-worker. Its called compromise. Where the employer and the employees can agree on the terms of their employment - like an independent contractor would. Unfortunately, right now all our policies are slanted to be about 90% pro-business and 10% pro-worker, with work on the way to make things even worse for the common American. Sorry if the price of a CD player goes up by $10. How much cheap palstic junk do we really need?

[jresta]

As long as the average CEO makes 475 times what the average worker makes i don't think we're in any danger of paying some guy on the assembly line or in the stock room too much money.

Capitalism doesn't work. It's failing like communism did. You can deny the correlations but as they say "it ain't just a river in Africa" I've said it before but our economy need to grow at 3% a year to be considered healthy. It needs to constantly expand and it's running out of places to go - enter privatization of schools, hospitals, the postal/parcel system, the military, etc. And in case you've missed Tom Brokaw's Fleecing of America, don't be surprised to see an Iraqi constitution drawn up as soon as their national assets have been privatized by majority American companies.

Adam Smith, when he advocated for the free market, was saying this 200 years ago. He spelled out very clearly what would happen and he's been absolutely right so far. There's nothing free about our economy. When companies like Wal-Mart and GE have internal GDPs larger than most countries, and all of the money is borrowed and spent in 5 year plans . . . well, that's capitalism (or laissez-faire capitalism if you prefer)not a free market.

( sorry, this is from David Korten)

Pyramids, bubbles and the global casino

Albania recently suffered a national crisis brought on by the collapse of fraudulent pyramid schemes. Westerners wise in the ways of the market were bemused by the naiveté of the Albanians who fell for "investment" schemes promising returns as high as 25 percent a month with no real business activity behind them. During the course of the nationwide speculative frenzy, farmers sold their flocks and urban dwellers their apartments to share in the promised bonanza of effortless wealth. The inevitable collapse sparked widespread riots, arson, and looting when the Albanian government failed to make up the losses.
Those inclined to laugh at the innocence of the Albanians should first consider their own response to proposals that social security contributions be invested in a stock market that even Federal Reserve Chairman Alan Greenspan says is substantially over valued. The speculative financial bubble, which involves bidding up the price of an asset far beyond its underlying value, is little more than a sophisticated variant of the classic pyramid scam.
Investing in a bubble is a form of gambling and it isn't entirely naive. Who cares if there is nothing behind it? The bubble is the action. The trick is to place big bets and get out before it bursts. It is a game of nerves. The action gets especially exciting when banks are willing to accept the inflated assets as collateral and lend new money into existence to stake further play, which pushes prices ever higher. This process of borrowing into bubbles with newly created money is key to making financial wealth increase faster than real wealth. Furthermore, when a leveraged bubble bursts and banks are left with substantial portfolios of uncollectible loans, governments are almost forced to step in with a bailout to stop a banking collapse -- as the US government did in the case of the Great Depression and the more recent Savings and Loan crisis. This amounts to another money transfer, this time from taxpayers to those with money.
Betting on financial bubbles is only one of the lucrative games that attract players to the global finance casino. There are as well opportunities to speculate on short-term price movements, buy and sell simultaneously in different markets to profit from minute price differences, and bet on derivatives contracts. While economists have become exceedingly facile in rationalizing how such activities actually benefit society, in truth they are more accurately described as forms of legal theft by which a clever few expropriate rights to the real wealth of society while contributing more to its depletion than to its creation.

Consuming capital to make money


William Greider, in his newly released book One World Ready or Not, observes that corporations get caught in the trap of having to compete for investment funds against the often more lucrative financial games of the world of pure finance. With the rare exception of companies with a hot product or distinctive market niche, in an unregulated global economy most corporations have little choice but to use their economic and political power to externalize ever growing portions of their costs onto the community. The dynamics of a competitive global economy favor the cost externalization process because they pit workers and communities against one another in a deadly race to the bottom. By competing for the jobs corporations offer, workers and communities are compelled to deplete real wealth to make corporations more profitable.
Responding to the pressures of financial markets, corporations:


Deplete social capital by moving production to places where they can pay less than a living wage or use the threat of moving jobs to break up labor unions and bargain down wages. Gains from productive activity are thus shifted from working people to money people. Furthermore, the stress of attempting to maintain self and family on insecure jobs paying less than a family wage results in family breakdown and violence, depleting the social capital of society.

Deplete human capital by hiring young women in places like the Mexican maquiladoras under conditions that lead to their physical burnout after three or four years. Once eyesight problems, allergies, kidney problems, and repetitive stress injuries deplete their efficiency, they are replaced by a fresh supply of younger women. Such practices destroy lives and deplete society's human capital.

Deplete the Earth's natural capital through strip mining forests, fisheries, and mineral deposits, dumping wastes, and aggressively marketing toxic chemicals.

Deplete institutional capital by fighting environmental and other regulations essential to the long-term health and viability of society. Corporations further demand direct public subsidies, subsidized infrastructure, and relief from their fair share of taxes. This shifts a greater share of the tax burden onto working people and undermines the credibility and performance of government in its essential functions, thus eroding the legitimacy of democratic government.

Deplete business capital. Corporate managers are forced into a short-term view even in regard to their own operations. They cut investment in research and training essential to their own future prospects. As they downsize, the sharp employee quickly learns to use the job only to build a resume to attract a higher bidder. These actions erode the corporation's own human, intellectual, social, and physical capital.[I]

[gkmo62u]

I stopped reading after "Capitalism doesn't work."

[jresta]

Originally posted by gkmo62u

I just like to make sure everybody knows that everybody has an agenda.

In the interest of logic, how does your painting this guy as a racist (or any other person you disagree with for whatever reason) make what he says any less true? I'm not saying that i agree with him on economics (i might but i can't tell from one article) or on affrimative action but how does that make his assessment of the state of the economy any less relevant?

Are you saying that "this guy is against affirmative action therefore trade deficits must be OK?"

Just saying that I agree with Pat Buchanan on a number of issues and i'll readily admit it regardless of the names I call him for other stuff that he says.

Sometimes Pat and I come at issues from different angles and sometimes from the same angle. I still think he's xenophobic, patronizing, and paternalistic but that doesn't mean there's no truth to what he says.

[jresta]

Originally posted by gkmo62u
I stopped reading after "Capitalism doesn't work."

well when you or anyone else can show me that it works, and is viable for 51% of humanity i'll retract my statement, take down my picture of Emma Goldman, and edit my post to say "Go Capitalism!"

[Miles Ignatius]

Thanks for putting this out there; I think if it been penned by one of those "lefties" the Fox-Bushite media would have assaulted him. When somebody like Roberts says "look at the numbers" we'd better stand up and take notice before we're just another "banana rupublic."

[el Guapo]

Originally posted by BKM
El Guapo talks about "true conservatives" Its interesting to read what one of Ronald Reagan's gurus has to say about our current "Import everything and pay for it with credit" economy:

el Guapo did a search an he doesn't find any instance of his using the term 'true conservatives" on Cyburbia. Which once again makes him doubt the liberal media lies of BKM

[MaineMan]

Originally posted by el Guapo
Which once again makes him doubt the liberal media lies of BKM

The liberal media? I've never heard of such a thing! Tell me quick so I can turn it on - Which multi-national corporation owns/operates/sponsors that one? And which advertisers pay to run commericals on that channel?


PS- Yes, I am really posting this at 12:30 on a friday night. I am SOOO lame. Maine is too quiet for the likes of me.

[Duke Of Dystopia]

Originally posted by jresta
....Capitalism doesn't work. It's failing like communism did. .....[I]

And your replacement is?

If I have no money or currency, but we use cattle instead, and I have more cattle than you, that is still capitalism.

If we use shells instead of coins and I find more shells, I still have more.

If I am a better hunter, farmer, or brewer than you, IT IS STILL CAPITALISM!

I wish things were different, but as long as there are people with free will AND differing skill sets, you will be living in a capitalistic society. You can't get around it. No possible way around it. Or are you going to enlighten us as to the altruistic benifits of giving up your hard earned currency no matter what that currency is?

Altruism, if it exists, is too statisticly insignificant to matter.

Believe me, it pains me to agree with gkmo62u, but you bitch about capitalism but you have NO alternative. Please inform us of your model, the nobel prize committee is perched on thier seats.

[The Irish One]

Gotta have markets, competition -it's the best system. Some markets are a little to controlled for my taste and amount to socialism for the very very very well off, nevertheless, even some of those big boys get knocked off the perch and replaced. The American economy is about as good a model the world has ever seen, imho. That being said it's not perfect, nor is it 100% capitalistic, never will be, there is a place for government in markets, always will be, sorry purist'.

[SkeLeton]

Mabye Jresta got confused and wanted to say that the neoliberal capitalist model doesn't work... because as DoD said... we've had capitalism since the dawn of humanity.
As for the neoliberal capitalist model, the only countries in which that model works decently are the US, Chile and I forgot which else...
Theoretically a mixed economy, in which state and market rule the economy, would be the best, but the state and private sector generaly are bumping eachother, so that's one of it's biggest problems, which of course can be fixed.
Humanity will never see perfect economic model, but that doesn't mean we can't create better ones.

[Wulf9]

The open market with currency is the best way to deliver and price goods and services.

However, there is constant pressure to make a market less open. So the goal should be to maintain the sweet spot in the market, where competition is strong and regulation is reasonable.

The forces against the open market are:

Monopoly, which raises prices and closes the market.

Goverrnment intervention against consumers by mandating that consumers use a certain product (like ethanol as a prescribed clean air fuel).

Government intervention against business (increased costs for business that fall outside of "reasonable.")

Government subsidies for products (requires taxpayers to pay to guarantee higher prices for a product).

Government regulations that raise costs of a product.

Note that the market is still a "market" after any of these anti-competitive things are done. It's just that costs are higher and choice is lower and jobs disappear. Right now, we have a government that hypothesizes monopoly to be the "open market." Consider the FCC granting media oligopolies. Your local news and commentary is recorded in some far away place (sorry far away places). So the opportunity for local employment is gone -- as is the opportunity for a free press. That's why we have a jobless recovery.

[gkmo62u]

Thanks Duke. I think.

[jresta]

Originally posted by Duke Of Dystopia
And your replacement is?

If I have no money or currency, but we use cattle instead, and I have more cattle than you, that is still capitalism.

If we use shells instead of coins and I find more shells, I still have more.

If I am a better hunter, farmer, or brewer than you, IT IS STILL CAPITALISM!

No, you just described a free market economy. Not capitalism. Capitalism takes its name because it involves the control and movement of huge amounts of capital. If you and i have equal access to cattle or shells and if we both have equal opportunities to hunt, fish, or farm on land/waters of equal value - then that's a free market.

If i was just starting out (farming) in a capitalist economy the land available to me would be the cheapest because, well, i'm just starting and i don't have any money . . . i hope we all agree that cheap agricultural land in most cases means "marginal". My inputs are greater and my yields are lower. Plus, you've been doing it longer and maybe you have a few tricks up your sleeve that you're using to keep yourself on top.

In a capitalist economy money, land, resources flow up and trickle back down but every time the water cycles through some of it is lost and some of it gets stuck at the top.

In a free market economy money flows in a more horizontal fashion with those who actually put in more effort being justly rewarded.

I don't have time to respond to every reply right now but that doesn't mean i won't get around to it so bear with me.

[jresta]

Originally posted by SkeLeton
Mabye Jresta got confused and wanted to say that the neoliberal capitalist model doesn't work... because as DoD said... we've had capitalism since the dawn of humanity.
As for the neoliberal capitalist model, the only countries in which that model works decently are the US, Chile and I forgot which else...
Theoretically a mixed economy, in which state and market rule the economy, would be the best, but the state and private sector generaly are bumping eachother, so that's one of it's biggest problems, which of course can be fixed.
Humanity will never see perfect economic model, but that doesn't mean we can't create better ones.

5 years ago Argentina was the darling of the neoliberals. Before that it was South Korea, Malaysia, Taiwan, etc. One by one they all went down. You don't think Chile is next?