Forget Iran, Americans Should be Hysterical About Nuking the Economy

Forget Iran, Americans Should be Hysterical About Nuking the Economy


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:
I wouldn't bet on it ...

phoenix80 said:
any thing out of a source like should go to the trash bin

I agree that this organisation is NOT the best source of information ... but ... this information dovetails nicely with information which is beginning to surface from independent economists and business sources.

The economy is NOT and has NOT shown any real indications that it is rebounding as it should have from the market dive (post 9/11).

Just because you don't particularly care for a source doesn't mean that the source is completely wrong ... you need to look a little closer at some of the economic indicators and weigh them against the actual breakdown of new jobs and the type of jobs which are being counted by the administration and then look at the estimated influx of illegals and ask yourself the question ... "Is it possible that the information contained in the site is NOT really that far off?".

If you keep an open mind ... there is just a little more than a possibility that the information is accurate.
oh...if the supporting datas, this article has provided, are all accurate, the situation of U.S economy is indeed troubling...

but as I have said many times, a big "ocean" like U.S economy will take awhile to really go up or go down...
When you are a small fish in that ocean it doesn't take a big wave to upset your world.

The only reason I am still within the bowels of the Big Red Chicken is that I can make more money here than I can back home and Australia hasn't come through with a solid job offer yet. I don't really give a damn to be honest about the big picture, the small part that is having an effect on me is more than troubling enough.
All I can say...

$9 Trillion Dollar deficiet...

...And all this sorry lot in the White House can do solve our spending problems is to borrow even more money. I tell you folks, like the Titanic, we are heading Flank speed right into the Iceberg

I think I'll need to go lie down for awhile.
No one can seriously state the economy of the US isn't rock solid at this point. He ingerited a recession that started under Clinton and the economy (notice, I will not credit the government) started its rebound in November 2001.

Of course, 9/11 hit our economy hard. The tax cuts re-stimulated the economy and got it back on track faster than if they'd not been enacted.

Unemployment in January was at 4.7%. February it is 4.8%. In Hawaii, the unemployment rate is so low, employers are offering generous sign on bonuses and health club memberships.

The GDP growth since the Bush tax cuts have been steady and impressive. In fact, the GDP has grown for 17 straight quarters. Overall, the GDP growth rate for 2005 was 3.5%.

According to the Federal Reserve, over the past year, total industrial production rose 3.1% and manufacturing industrial production rose 4.5%.

Inflation has remained in check for years.

The housing market is fantastic. Private ownership of houses continue to be at record levels, including ownership by minorities.

James F. Smith, chief economist at the Society of Industrial & Office Realtors:

There are several reasons why a national housing bubble is relatively silly. According to census data, current home-ownership rates are at 69.3% of all households, a record.

The minority home ownership rate rose a record 51.6 percent during the first quarter of 2005, as 15.7 ethnic minorities claimed ownership of the roof over their heads, according to the U.S. Census Bureau.
Overall, home ownership was also at an all-time high in the first quarter, with 74.5 million American families now owning their own homes.

Minority owned businesses are also increasing and increasing their buying power (and economic influence, as a result):


Now, if you want to complain about spending, I'm ready to hear it. It bothers me terribly that Bush hasn't signed a single veto for any spending bill.

He boosted education spending to record levels when he first took office and hasn't backed off the spending. Why? Show me how spending more on education actually translates to much better results. So far, I haven't seen anything to show me it does more than add to the bureaucracy.

He boosted spending on Medicare with the preseciption drug plan. Said it would be $X. Everyone knew it would be far more.

Believe me, there's more where that came from and Congress is largely to blame. The party of the small government seems dead. I want to see a great reduction in spending.

Cut the Department of Education. Since it came to being, have we gotten better or worse or no change? Ditch it.
Cut the Department of Commerce and outsource it to the private sector when possible.

Heck, just take an axe to half the cabinet positions. Somehow, I think we'll manage.
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