Posted on 02/15/2006 10:42:45 AM PST by SirLinksalot
Our hollow prosperity
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Posted: February 15, 2006 1:00 a.m. Eastern
PATRICK BUCHANAN
© 2006 Creators Syndicate Inc.
Now that the U.S. trade deficit for 2005 has come in at $726 billion, the fourth straight all-time record, a question arises.
What constitutes failure for a free-trade policy? Or is there no such thing? Is free trade simply right no matter the results?
Last year, the United States ran a $202 billion trade deficit with China, the largest ever between two nations. We ran all-time record trade deficits with OPEC, the European Union, Japan, Canada and Latin America. The $50 billion deficit with Mexico was the largest since NAFTA passed and also the largest in history.
When NAFTA was up for a vote in 1993, the Clintonites and their GOP fellow-travelers said it would grow our trade surplus, raise Mexico's standard of living and reduce illegal immigration.
None of this happened. Indeed, the opposite occurred. Mexico's standard of living is lower than it was in 1993, the U.S. trade surplus has vanished, and America is being invaded. Mexico is now the primary source of narcotics entering the United States.
Again, when can we say a free-trade policy has failed?
The Bushites point proudly to 4.6 million jobs created since May 2003, a 4.7 percent unemployment rate and low inflation.
Unfortunately, conservative columnist Paul Craig Roberts and analysts Charles McMillion and Ed Rubenstein have taken a close look at the figures and discovered that the foundation of the Bush prosperity rests on rotten timber.
The entire job increase since 2001 has been in the service sector – credit intermediation, health care, social assistance, waiters, waitresses, bartenders, etc. – and state and local government.
But, from January 2001 to January 2006, the United States lost 2.9 million manufacturing jobs, 17 percent of all we had. Over the past five years, we have suffered a net loss in goods-producing jobs.
"The decline in some manufacturing sectors has more in common with a country undergoing saturation bombing than with a super-economy that is 'the envy of the world,'" writes Roberts.
Communications equipment lost 43 percent of its workforce. Semiconductors and electronic components lost 37 percent ... The workforce in computers and electronic products declined 30 percent. Electrical equipment and appliances lost 25 percent of its workforce.
How did this happen? Imports. The U.S. trade deficit in advanced technology jobs in 2005 hit an all-time high.
As for the "knowledge industry" jobs that were going to replace blue-collar jobs, it's not happening. The information sector lost 17 percent of all its jobs over the last five years.
In the same half-decade, the U.S. economy created only 70,000 net new jobs in architecture and engineering, while hundreds of thousands of American engineers remain unemployed.
If we go back to when Clinton left office, one finds that, in five years, the United States has created a net of only 1,054,000 private-sector jobs, while government added 1.1 million. But as many new private sector jobs are not full-time, McMillion reports, "the country ended 2005 with fewer private sector hours worked than it had in January 2001."
This is an economic triumph?
Had the United States not created the 1.4 million new jobs it did in health care since January 2001, we would have nearly half a million fewer private-sector jobs than when Bush first took the oath.
Ed Rubenstein of ESR Research Economic Consultants looks at the wage and employment figures and discovers why, though the Bushites were touting historic progress, 55 percent of the American people in a January poll rated the Bush economy only "fair" or "poor."
Not only was 2005's growth of 2 million jobs a gain of only 1.5 percent, anemic compared to the average 3.5 percent at this stage of other recoveries, the big jobs gains are going to immigrants.
Non-Hispanic whites, over 70 percent of the labor force, saw only a 1 percent employment increase in 2005. Hispanics, half of whom are foreign born, saw a 4.7 percent increase. As Hispanics will work for less in hospitals and hospices, and as waiters and waitresses, they are getting the new jobs.
But are not wages rising? Nope. When inflation is factored in, the Economic Policy Institute reports, "real wages fell by 0.5 percent over the last 12 months after falling 0.7 percent the previous 12 months."
If one looks at labor force participation – what share of the 227 million potential workers in America have jobs – it has fallen since 2002 for whites, blacks and Hispanics alike. Non-Hispanic whites are down to 63.4 percent, but black Americans have fallen to 57.7 percent.
What is going on? Hispanic immigrants are crowding out black Americans in the unskilled, semi-skilled and skilled job market. And millions of our better jobs are being lost to imports and outsourcing.
The affluent free-traders, whose wealth resides in stocks in global companies, are enriching themselves at the expense of their fellow citizens and sacrificing the American worker on the altar of the Global Economy.
None dare call it economic treason.
Even Pat is in it. shesh
And the average earnings for even "unskilled" tradesmen willing to go to work in Fort Mac, Alberta right now is $80,000 US a year.
Blame NAFTA.
Yet these same people complain about the Government being to big.
I guess you missed pat's recent screed where he was whining about the poor "innocent woman and children" we killed in Pakistan.
Seems like Pat's detractors are a strange lot. They encompass being supporters of a virulently anti-American regime (Mexico), support an Iranian spy as a model Arabian democrat, view the deindustrialization of America as a sign of progress (the same as the enviro left), think Armageddon is around the corner, and the kicker of it all is that they have done a 180 degree turnaround on what constitutes economic health for the average person in terms of debt. Maybe the "End Days" conservatives are right and all this doesn't matter, spend away.
Pat is having an off day - he left out some things. No more blood for oil in Iraq - where are those BLTs??? 9/11 was our fault for being imperialists...terrorists hate us for what we do, not what we are. Those evil Mohammad cartoons insulted the great prophet - the damn secular hedonists with their freedom of speech, while the poor neo-nazis in Germany are persecuted. Diesel engines.
There, fixed it.
You hit it squarely on the head.
As Mises pointed out, one government intervention in the economy always brings some unintended results, leaving planners with the choice of making further interventions or repealing prior ones.
They invariably choose further interventions.
The march toward tyranny continues.
The basic premise of your post is totally flawed. These "foreign entities" are the ones bidding on this U.S. infrastructure because U.S. companies recognize them as a terrible investment. Anyone who buys a U.S. highway these days with the expectation that it can be run as a profitable business is out of his mind.
Bush SOTU "I will ask Congress for $350 million to support Palestinian political, economic, and security reforms. The goal of two democratic states, Israel and Palestine, living side by side in peace, is within reach -- and America will help them achieve that goal. (Applause.)"
pat fails to mention the bad guys who were the target and who we took out.
Do you think that economy can be based on rising real estate values?
National security and patent protection are separate and important issues.
They now have $800 billion in currency reserves stockpiled...almost all dollars.
If they don't buy anything with it, all they will own is green pieces of paper. They'll spend the money eventually, and it will return to us.
Pat agrees with Bush.
Bush SOTU "I will ask Congress for $350 million to support Palestinian political, economic, and security reforms. The goal of two democratic states, Israel and Palestine, living side by side in peace, is within reach -- and America will help them achieve that goal. (Applause.)"
pat agrees with Hamas...
Time to make some popcorn. This should be fun. NAFTA supporters, where are you ?
Texas has more tax revenues then ever. The fact that they have chosen to finance their unneccessary highway through Cintra rather than through taxes is irrelevent. Texas could raise taxes to pay for the highway if it wanted to.
Pat agrees with Bush.
Bush SOTU "I will ask Congress for $350 million to support Palestinian political, economic, and security reforms. The goal of two democratic states, Israel and Palestine, living side by side in peace, is within reach -- and America will help them achieve that goal. (Applause.)"
Shhhhh. Don't tell yourself. The Red Chinese are now hoardimg $800 billion of currency...and they aren't buying our stuff. 5-to-1 trade imbalance. They buy only our production technology when they can't otherwise steal it or get it elsewhere...or they buy raw materials from us (as if we were a third world pesthole). Then they turn around and increase their export product to us.
Nor is the money, in any significant degree, flowing back via intermediaries. Go figure, LOL!
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