Paul Craig Roberts on The Demise of the US Economy

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RTAmerica  |   October 08, 2010  

Paul Craig Roberts was Assistant Secretary of the Treasury

during President Reagan’s first term.



September Jobs Report Reveals America’s Emerging Third World Economy

Paul Craig Roberts, October 08, 2010

For a number of years I reported on the monthly non-farm payroll jobs data. The data did not support the praises economists were singing to the “New Economy.” The “New Economy” consisted, allegedly, of financial services, innovation, and high-tech services.

This economy was taking the place of the old “dirty fingernail” economy of industry and manufacturing. Education would retrain the workforce, and we would move on to a higher level of prosperity.

Time after time I reported that there was no sign of the “New Economy” jobs, but that the old economy jobs were disappearing. The only net new jobs were in lowly paid domestic services such as waitresses and bartenders, retail clerks, health care and social assistance (mainly ambulatory health care services), and, before the bubble burst, construction.

The facts, issued monthly by the U.S. Bureau of Labor Statistics, had no impact on the “New Economy” propaganda. Economists continued to wax eloquently about how globalism was a boon for our future.

The millions of unemployed today are blamed on the popped real estate bubble and the subprime derivative financial crisis. However, the U.S. economy has been losing jobs for a decade. As manufacturing, information technology, software engineering, research, development, and tradable professional services have been moved offshore, the American middle class has shriveled. The ladders of upward mobility that made American an “opportunity society” have been dismantled.

[snip]

The latest jobs report issued today shows that America’s transformation into a Third World economy continues. The economy lost 95,000 jobs in September, mainly due to cuts in local education and federal employment. Part of the loss of 159,000 government jobs was offset by 64,000 new private sector jobs.

Where are the new jobs? They are in non-tradable lowly paid domestic services: 32,000 were in health care and social services, and 33,900 were in food services and drinking places.

There you have it. That is America’s “New Economy.”

read the rest here…

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    • Edger on October 9, 2010 at 23:58
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    • Edger on October 10, 2010 at 00:22
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  1. I think that’s an accurate conclusion. Obama is an authoritarian elitist. He believes the “rabble” (Chomsky’s term) must be controlled by those who understand how the world works, which in his view happen to be his Wall St buddies

    In a way the Obama presidency represents the death of liberalism as we know it.

    This could be, ultimately, a good and necessary development.

  2. Here’s a link to an article by Doug Casey. I don’t agree with him 100% but generally speaking I think he has it about right, in particular the section “A Brief Summary of Our Story So Far“.

    While Casey continually refers to America vs China, I would suggest this generally applies to the West vs Asia.

    Here’s the link: http://www.lewrockwell.com/cas

    I sensed something like this was coming as early as the late 1980s after a trip back to Asia for the first time in about 20 years. One of the things that bothered me about America at the time is what Casey notes here as the

    Monetary policy encouraged everyone to take on huge amounts of debt, much more than ever in the past, and everyone soon found they could live way above their means. The stock, real estate, and bond markets got pumped up to ridiculous levels.

    Common sense makes one realize that this could not continue forever, but how long it would continue was a question mark at the time.

    China was changing as was much of Asia. The region being underdeveloped and at peace was a huge potential market. How could we manufacture products for their markets, ship them and sell them to people who earned 1/10 (or less) what US and other Western workers make performing similar tasks? There would be few buyers.

    The obvious solution is to manufacture and distribute regionally from there. American and logos from other Western countries proliferate Asia but the workers and management are, for the most part, local people.

    Casey predicts

    What’s going to happen is that the Americans’ earnings are going to drop, while those of the Chinese are going to rise, meeting someplace in the middle. Especially when the Chinese works harder, longer, saves his money, and doesn’t burden his employer with all kinds of legacy benefits, topped off with lawsuits. This is a new threat, one that can’t be countered with B-2 bombers. It’s also something as big and as inevitable as a glacier coming down a valley during an Ice Age.

    I don’t necessarily agree with everything he writes but I do agree that “globalization” or whatever we choose to call it is a force of equalization that will not, in general, be beneficial to Americans and other Westerners.

    As for the B-2 bombers I would not be surprised to see them become involved somewhere in this transition. Our political leadership seems to view the powerful military as our trump card in situations unfavorable to “US vital interests”.

    Then again perhaps Casey is just overly pessimistic. I hope that is the case. Time will tell.

  3. lot of nerve considering his former employment. The whole concept of super powers and globalism, competition and inevitability is such a con. Economies that drive the capitalist new world order yet think of people who work and the real economies they must live in as theirs alone to make a killing off, are not inevitable.

    Their is nothing new at all about this vicious economy as long as human’s have had societies these parasites have worked to control and enslave people and resources. Time to say fuck you and as South America is doing form our own economies, locally. I’m still ticked off from Obama’s speech on education which tied our education system into global competitiveness and the need to take on India, China and whoever else becomes the next slave population polishing those iphones.

    Sorry to be so hostile but the US economy is non existent, were just a profit loss to the fake economy. Hope the damn thing falls apart as it useless and stops all human progress and is killing the planet to boot. What for? Perhaps we need to figure out a way to break it down and quit thinking that emerging or even economy means working to be competitive from a system this immoral and insane as it offers the world nothing but crisis and cheap gadgets.                

  4. A left wing blogger featuring a Reaganite official from a “conspiracy” oriented site such as “Russia Today”.

    What say you to a Bush government reject Catherine Austin Fitts.

    http://solari.com/blog/?p=3532

    Are you in favor of exploding kids/people who don’t lust after keeping their carbon footprints down for the profit margins of CEOs and 401ks of the western world who financed factories of 86 cent an hour Chinese carbon exempt textile workers.

    yeah so I have had a couple of beers, am in my typical foul mood and think it sucks that neo-liberalism puts everybody equally under the techno-globo-corpo-fascist boot.

  5. I’ve been following many articles of Paul Craig Roberts, for a very long time now and I have never been in disagreement with his assessments, largely.  

    Personally?  I’ve been saying right down the line, here and there, we are very close to 3rd world status.  But it’s all pretty much a matter of simple logic and mathematics!  How can you continually ship jobs “offshore,” while none are created?  How can you continue to rack up trillions in “never-ending” obscene, illegal wars, profiting a few, yet plunging us into bankruptcy?”  How could we have paid off billions to Wall Street and bankers, who schemed against us and then, DEMANDED we bail them out for their criminality?  There’s so much more, as each of you know.  And, now, they want our Social Security and Medicare funds.  

    Consider the above!  Does anyone, but anyone think this is anything but deliberate?  

    You see, it’s like this, the hierarchy/oligarchy (via their billions) have decided that they need to control and manipulate human beings, according to their behest.

    Immigration controls?  I’ve been saying a long time, too, on this subject, what in the hell was the sudden interest in ridding ourselves of people who’ve always done the work that most Americans don’t care to do?  I suspected from the get-go, it was to make way for Americans to do those jobs, at minimum wages — figures, since none have been created and so many Americans have been “forced” to take on two jobs, if they’re lucky!  

    Deliberate?  Yes!  Just look at the progression of events leading us to where we are.  Just think about it all!

     

  6. on this number two rated contradictory mainsream media echo chamber.  Edger, you suck at CT shit.  And I should no longer bother with DD.

  7. crops. That was the deal if he wanted to keep his small shack for himself and his children. The serf didn’t own his little home or land. But in effect, the landlord owned his labor. This one sided deal, perpetuated through the centuries, created this sacred belief of privilege. The definition of property has expanded over time, but the idea of privilege hasn’t. It’s still real simple.

    Privilege is an aphrodisiac. If one hasn’t experienced it, he may still long for it in his dreams. If he tastes it, he’s generally hooked. The Clintons and Obamas are perfect examples of this longing; just little puppets in the puppet theatre of history. The nobles just tug their little strings. And when they talk, they all have the same lines, the same sympathy for the little guys. They have to pay attention to them, because their labor is usually quite important. {Could it be that this is changing today, that their labor is now quite unimportant?}

    Here’s the privileged Thomas Jefferson bullshitting as was his inclination in a letter to James Madison, one slave holder to another (1785) in the anticipation of a constitutional republic: Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right.

    Our boy Thomas is always waxing so philosophical in his letters. He and his buddies always love to talk about natural rights of the poor serfs: The earth is given as a common stock for man to labor and live on. If, for the encouragement of industry we allow it to be appropriated, we must take care that other employment be furnished to those excluded from the appropriation.

    There goes Thomas again. That natural rights thing is such a cool concept. Justice pulls at his heartstrings: If we do not [take care of the excluded], the fundamental right to labour the earth returns to the unemployed.

    Thomas is so smooth. He’s figuring out that there’s some kind of residual right, kind of like if the poor can’t find any work at all, natural law comes to the rescue. Yes, just like those great self evident truths he wrote about a decade earlier. They’re so self evident, that there will never be any need to put them into old, practical Anglo/American law.

    Jefferson also observes in a kind of romantic way how important the little guy will be to the country: The small landholders are the most precious part of a state.

    Oh Thomas, how sensitive. Now fast forward 225 years, and we get the same goop from the current crop of neo Jeffersonians. The Republicans? They just play the part of

    delusional, God Fearing seekers of truth ready to fight all insults to the monarchy and church. They have a tendency to get their centuries mixed up.  

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