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Pat Buchanan : America's Hollow Prosperity ^ | 02/15/2006 | Patrick Buchanan

Posted on 02/15/2006 10:42:45 AM PST by SirLinksalot

Our hollow prosperity


Posted: February 15, 2006 1:00 a.m. Eastern


© 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.

TOPICS: Business/Economy; Culture/Society; Editorial; News/Current Events
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To: MikeA
I read you loud and clear but do you know or do you understand why trade deficits are alleged to not be an indication of an economy in trouble?

It was written several years ago if I can remember correctly that when we experience a trade deficit we get goods from abroad and all they get is pieces of paper, which they in turn have to return to us for something of value, so in the end it is a wash. Then lately, I read that a deficit of trade is actually good for our economy because all the pieces of paper foreigners have is invested in means of production and property in the USA (ostensibly because if we had goods and services they wanted there would not be a deficit to begin with) raising the value of our property (making us rich) and increasing our productivity (reducing the need for labor units and jobs).

I couldn't help but think when I read this about the banker who lent nearly everybody in town money to buy a house. He had cash and he invested in property. It is like he was using his cash to invest in the national debt (as do foreign institutions using excess dollars earned in trade). Although house owners had home to live in the banker got rich and was able to build a golf course, buy vacation property, etc., while the home owner paid down his debt.

Home owners who were able to buy without debt do much better as it is better to be on the ownership side of investment or on the loaner side of investment than on the interest paying side.

When we as a nation support our consumption through the demand of investment from without and are required to pay interest on consumption we are at a disadvantage, no matter what is said to disabuse one of the facts.
81 posted on 02/15/2006 11:49:12 AM PST by Final Authority
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To: hedgetrimmer
Can you disprove this statement?

Can you prove it? Just because two "economists" and a couple of wing-nut columnists write it doesn't mean it's the truth either.

I'm sure you remember that old adage regarding statistics.

82 posted on 02/15/2006 11:49:45 AM PST by wireman
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To: hedgetrimmer
No matter what you say Hedge ole boy or how you back it up. To many have bought into the hijacked theology of free trade. Lest they forget that 450 of 900 points Ricardo made concerning free trade the IMMOBILITY of capital and technology was a must! You never hear that though.
83 posted on 02/15/2006 11:50:33 AM PST by mr_hammer (They have eyes, but do not see . . .)
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To: A. Pole
Freetraders arguments are OVERWHELMING !

LOL! Yes, the do lack variety, and originality, not to mention persuasiveness!

84 posted on 02/15/2006 11:50:58 AM PST by Paul Ross (Hitting bullets with bullets successfully for 35 years!)
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To: dead

All the way to post 13 to get one that isn't a jibe at Pat or his stands on the WOT. Good for you for getting to the issue.

85 posted on 02/15/2006 11:51:07 AM PST by Jack Black
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To: ex-snook
pat agrees with Hamas:

"Having plunged us into an unnecessary war, Bush now confronts the real possibility of strategic defeat and a failed presidency. His victory in Iraq, like the wars of Wilson and FDR, has turned to ashes in our mouths. And like Truman's war in Korea and Kennedy's war in Vietnam, Bush's war has left America divided and her people regretting he ever led us in. But unlike the world wars, Korea and Vietnam, Bush cannot claim the enemy attacked us and we had no choice. Iraq is Bush's war. Isolationists had nothing to do with it. To a man and woman, they opposed it."

"Now, with an army bogged down in Afghanistan and another slowly exiting Iraq, and no end in sight to either, Bush seeks to counter critics who warned him not to go in by associating them with the demonized and supposedly discredited patriots of the America First movement of 1940-41."

86 posted on 02/15/2006 11:51:15 AM PST by CWOJackson (Tancredo? Wasn't he the bounty hunter in Star Wars?)
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To: CWOJackson
>>>>I guess you missed pat's recent screed where he was whining about the poor "innocent woman and children" we killed in Pakistan.

A complete mischaracterization: Pat wrote that the Pakis didn't like us because we had killed women and children there.

Of course, this has nothing to do with the topic of this Buchanan column, which you seem incapable of understanding or discussing rationally.

87 posted on 02/15/2006 11:51:17 AM PST by Thorin ("I won't be reconstructed, and I do not give a damn.")
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To: Thorin

Actually pat made a long and lengthy article about how we had killed innocent women and children and never once mentioned that the bad guys had been the target...and that we had taken out the target.

88 posted on 02/15/2006 11:53:07 AM PST by CWOJackson (Tancredo? Wasn't he the bounty hunter in Star Wars?)
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To: logician2u
The march toward tyranny continues.

All pursuant the Chinese Communist government intervention.

89 posted on 02/15/2006 11:55:23 AM PST by Paul Ross (Hitting bullets with bullets successfully for 35 years!)
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To: SirLinksalot
Let's see:

No one is watching our southern border, and very few seem to care; as evidenced by most of the flat-world-flat-head responses.

Military hardware components are frequently made outside the us. That makes a lot of sense; to someone.

Dubai just purchased the management rights to all of the US' major ports, which they bought from the Brits. See the page 19 blurb for the story.

Free trade is not free and will ultimately cost the US its future. Economically unpatriotic? You bet!

Right on Pat.
90 posted on 02/15/2006 11:55:37 AM PST by markedman (Islam means surrender, and I will NEVER surrender!)
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To: Aquinasfan
They'll spend the money eventually, and it will return to us.

Whistling in the dark....

91 posted on 02/15/2006 11:56:20 AM PST by Paul Ross (Hitting bullets with bullets successfully for 35 years!)
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To: Aquinasfan

They are spending the money. On factories, machines, infrastructure, oil, other commodities and new buildings. Most of which are NOT in the USA.

How are we all going to be rich if we don't have high paying jobs? What high paying jobs will we have if everything of value is made elsewhere.

All the people saying "Pat is an idiot" are dodging the question completely. OK, we heard you!!! You don't like Pat! Great. He's not my top choice for a golf partner.

But I don't see real answers to the questions he poses. NAFTA was not passed with Al Gore aruguing "by passing this the Mexican economy will collapse, the south western USA will be overrun by illegals, and millions of high paying jobs will leave America never to return".

Did he? NO!

92 posted on 02/15/2006 11:57:14 AM PST by Jack Black
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To: SirLinksalot

To think I once supported this jerk!!. Reminds one of Barry Goldwater who went liberal toward the end.

93 posted on 02/15/2006 11:57:28 AM PST by KenmcG414 (wHAT'ST)
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To: SirLinksalot
Well, also, much of our employment now is government makework that doesn't produce anything. If there are actually 1.1 million new government jobs, the underlying employment is simply reducing the efficiency of the overall machine by taking money from the people generating products and giving it to people regulating people generating products.

Also, the they're taking the deficit dollars and investing them here argument doesn't make a whole lot of sense to me, except in the case of say, Toyota, that is building automobile plants here now, and then exporting the cars out of the US. If we've got a trade deficit with China, and they're using those funds to buy stock in say, Exxon, aren't we really just selling a tangible assest for a consumable (kind of like trading our car for a trip to Disneyworld)? (just an example, not to be confused with actual stock purchases).

94 posted on 02/15/2006 11:59:08 AM PST by Richard Kimball
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To: KenmcG414

You should check out everything he's written in the last two months over at the World Net Daily website: they all have one common theme...they are anti-Bush. Or course we're expected to believe this article is accurate and doesn't push his personal agenda.

95 posted on 02/15/2006 11:59:58 AM PST by CWOJackson (Tancredo? Wasn't he the bounty hunter in Star Wars?)
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To: CWOJackson
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.)"

P.S. The topic of Pat's column is trade.

96 posted on 02/15/2006 12:00:14 PM PST by ex-snook (God of the Universe, God of Creation, God of Love, thank you for life.)
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To: logician2u

Your mincing words. The "FT" in NAFTA stands for Free Trade. Yes, it is not some internationalist-libertarian wet dream policy. No, it is not a restrictive mercantilist high-tarrif, industry protecting policy like we had for many years, which Buchanan has suggested for more than a decade we go back to.

Mincing words isn't making a point.

97 posted on 02/15/2006 12:00:35 PM PST by Jack Black
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To: Rummyfan

"Yeah, like, who cares?"

People whose understanding of economic and monetary systems peaked circa 1600.

It's leakage of an expanding economy, not net loss, people.

They need to go crack a macro-economics book written in this century.

98 posted on 02/15/2006 12:00:58 PM PST by MeanWestTexan (Many at FR would respond to Christ "Darn right, I'll cast the first stone!")
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To: ex-snook

You mean the way pat demands we keep funding Hamas?

99 posted on 02/15/2006 12:01:00 PM PST by CWOJackson (Tancredo? Wasn't he the bounty hunter in Star Wars?)
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To: Aquinasfan
National security and patent protection are separate and important issues.

But both require, GASP!, government action to enforce.

Can't have any of THAT apparently.

100 posted on 02/15/2006 12:01:05 PM PST by Paul Ross (Hitting bullets with bullets successfully for 35 years!)
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