America’s Descent Into the Third World

Chronicles Magazine ^ | Monday, July 25, 2005 | Paul Craig Roberts

[A. Pole]

The June payroll jobs report did not receive much attention due to the July 4 holiday, but the depressing 21st century job performance of the U.S. economy continues unabated.

Only 144,000 private sector jobs were created, each one of which was in domestic services.

Fifty-six thousand jobs were created in professional and business services, about half of which are in administrative and waste services.

Thirty-eight thousand jobs were created in education and health services, almost all of which are in health care and social assistance.

Nineteen thousand jobs were created in leisure and hospitality, almost all of which are waitresses and bartenders.

Membership associations and organizations created 10,000 jobs, and repair and maintenance created 4,000 jobs.

Financial activities created 16,000 jobs.

This most certainly is not the labor market profile of a First World country, much less a superpower.

Where are the jobs for this year’s crop of engineering and science graduates?

U.S. manufacturing lost another 24,000 jobs in June. A country that doesn’t manufacture doesn’t need many engineers. And the few engineering jobs available go to foreigners.

Readers have sent me employment listings from U.S. software development firms. The listings are discriminatory against American citizens. One ad from a company in New Jersey that is a developer for many companies, including Oracle, specifies that the applicant must have a TN visa.

A TN or Trade NAFTA visa is what is given to Mexicans and Canadians who are willing to work in the United States at below prevailing wages.

Another ad from a software consulting company based in Omaha, Neb., specifies it wants software engineers who are H-1B transferees. What this means is that the firm is advertising for foreigners already in the United States who have H-1B work visas.

The reason the U.S. firms specify that they have employment opportunities only for foreigners who hold work visas is because the foreigners will work for less than the prevailing U.S. salary.

Gentle reader, when you read allegations that there is a shortage of engineers in America, necessitating the importation of foreigners to do the work, you are reading a bald-faced lie. If there were a shortage of American engineers, employers would not word their job listings to read that no American need apply and that they are offering jobs only to foreigners holding work visas.

What kind of country gives preference to foreigners over its own engineering graduates?

What kind of country destroys the job market for its own citizens?

How much longer will parents shell out $100,000 for a college education for a son or daughter who ends up employed as a bartender, waitress or temp?

[durasell]

New trend here in NYC, parents paying for their kids to take Chinese language lessons. I'm in a chinese joint on the upper east side and there's a 12 year old blonde girl in a school uniform conversing in halting Chinese with the waiter.

[Maria S]

"Is it legal? Do you hire younger over the older ones? Do you hire whites over blacks? Do you hire Catholics?"


Sorry...the level of the comments in reply to my original comments has sunk to the level of juvenile silliness. If you can't understand hiring LEGAL aliens who are trying to learn English AND pass citizenship tests so they can better their lots in life, please just ignore my posts.

There are apparently several posters on this thread who are American Indians and all of their relatives were here before Christopher Columbus! Apparently no immigrants among their ancestors!

Give it a rest already.

[Dat Mon]

Well said...again!

I know an individual who makes a pretty good living, and lives well....he works as a supervisor for a small company who installs custom floors. Has a high school degree only. He made more last year than some engineers I know who were out of work. Hell..he makes more than some engineers who ARE working.

Now we need skilled carpet installers...but a nation of carpet installers ain't gonna cut it in the long run.

[A. Pole]

History tells us that countries heavily dependent on outside sources for raw materials, component parts, and finished goods eventually finds itself in a position where it is vulnerable to conquest by siege (in all it's forms).

Let me add. Free trade globalism is similar to the Soviet system of central planning in one key aspect - it utilises the economy of scale and division of labor. Soviets planners reduced the redundancy and made one region of SU dependent on another. When the Soviet Union split and there were disruptions to the trade and local production the whole economy crashed.

I wonder how the US economy will do during the recession or disruption of world trade? When the myriad of little "unimportant buggy whip" parts are not available at some moment?

[Paul Ross]

But I think a valid case can be made for a fair degree of interconnectivity. For example, to build a tank, you need a steel industry, a bearings industry, an automotive industry (engines), an electronics industry (communications and control), a munitions industry. To have a viable steel industry, you need mining capability. For mining, you need automotive capability (trucks and mining equipment). You need infrastructure (energy and transportation). I think the bottom line is that if you want to be a world-class military and industrial power, you need a broad-based and robust economy, which includes both low-tech and high-tech components. Being primarily a service industry isn't going to cut it. Being an assembler of parts manufactured elsewhere isn't going to do you any good if the supply of those parts is cut off. History tells us that countries heavily dependent on outside sources for raw materials, component parts, and finished goods eventually finds itself in a position where it is vulnerable to conquest by siege (in all it's forms). I'd rather us not be there.

This very same realization after the War of 1812 converted Thomas Jefferson, the original free trade absolutist in the U.S., into an staunch advocate for industrial protection.

I am of the opinion that we cannot afford to keep our defense base as purely a cottage industry. We just can't afford to do it. It's too expensive. Hence, it would be far CHEAPER to restore the economy to one that could do massive manufacturing without effort. That is the way Washington, Hamilton, Jay, Madison, and ultimately Jefferson looked at it. But today's phony free trade idealogues don't know their history. And what they think they know is wrong.

We may be reaching a crisis, where even the small residual cottage industry is going to be decimated due to cascading political weakness. It is an undeniable industrial implosion...we can't...or won't... even replace our F-15s or F-16 with the next generation planes. The following news article by the lefty LA Times still lets us read between the lines:

Pentagon May Scrap Jet Plans

The F-35 Joint Strike Fighter and the F/A-22 programs could be cut in budget moves and as strategies shift to meet unconventional threats.

By Mark Mazzetti, LA Times Staff Writer, July 27, 2005

WASHINGTON — Facing severe budget pressures, the Pentagon is developing plans to slash the Air Force's two prized fighter jet programs, according to Defense Department officials and outside experts.

Military planners are debating options to scale back the Air Force's F-35 Joint Strike Fighter and the stealth F/A-22 fighter, as some defense officials question spending billions on weapons that have little use against terrorist networks and other unconventional threats.

Such a move would be an enormous blow to the Air Force, which has spent years developing the two weapons to replace its aging fleet of fighter jets. The budget cuts could encounter fierce resistance from lawmakers, including some from California, whose districts would be hit hard by the economic repercussions.

Yet as the Pentagon conducts a top-to-bottom assessment of its entire arsenal, defense officials are mindful that the military buildup that followed Sept. 11 is coming to an end. The war in Iraq, which now costs the Defense Department more than $4 billion per month, is contributing to the budget squeeze that jeopardizes some of the Pentagon's most desired — and expensive — weapons.

The Joint Strike Fighter program is projected to cost $245 billion, a price tag shared by the Air Force, Navy, Marine Corps and nine U.S. allies, including Britain, Canada, Australia, Denmark and Turkey. It is the Pentagon's most expensive weapons program, and the Air Force has by far the largest part of the budget; it hopes to purchase 1,763 of the planes to replace the F-16 fighter.

The Air Force also plans to acquire 179 F/A-22s, each costing about $345 million.

A Pentagon decision to scale back the programs would be the strongest signal yet of a significant change in strategic priorities. With Defense Secretary Donald H. Rumsfeld trying to transform the military to deal with unconventional threats, many say that weapons built for dogfights and eluding enemy radar are increasingly irrelevant.

"What does Al Qaeda's air force look like?" said one defense official working on the Pentagon's assessment, known as the Quadrennial Defense Review.

The Pentagon's overall budget is expected to grow by 8% between now and the end of fiscal year 2011. Yet with the military planning to field about a dozen big-ticket planes, ships and submarines during that period, the Pentagon estimates that its budget for new weapons will balloon by 34%.

Some of these weapons, such as the Army's Future Combat System — a fleet of combat vehicles linked to a computer network — and the Navy's DDX destroyer, are being eyed for cutbacks to prevent a budget crisis later.

Because U.S. troops are heavily engaged in the Middle East and Central Asia, officials say there is little room to cut personnel costs from the Pentagon budget. Weapons, they say, are the only target for cost reductions.

Although Pentagon officials contend that no final decision has been made about the fate of the two Lockheed Martin- designed jets, some inside the Defense Department say that the deepest cuts could come in the Joint Strike Fighter program. According to one source, the Pentagon could cut the Air Force's allotment of the planes by half.

Officials involved in the review process say that the option of canceling one or both of the programs is on the table, although it is extremely unlikely — in part because such a move would cause a furor among members of Congress. The fact that close allies are involved in developing the JSF is another factor that should keep the program alive, the officials say.

Although Lockheed is the prime contractor for both jets, about 40% of the JSF is assembled at Northrop Grumman Corp.'s plant in Palmdale. Most of the F/A-22 is built at Lockheed's plant in Marietta, Ga.

Pentagon spokesman Lawrence DiRita said it was too early in the review process to know what specific programs might be cut or expanded, and that planners were still identifying which types of missions the military ought to be preparing for.

"It's definitely premature to say we're looking at cuts," said DiRita, who stressed that there were months remaining in the review — due before Congress by early February — and that no proposals had been presented to Rumsfeld.

He did say that Pentagon officials hoped to make some decisions about weapons programs by September or October, as the Defense Department prepared its fiscal year 2007 budget.

The Joint Strike Fighter and the F/A-22 have been plagued by cost overruns and production delays. In April, the Government Accountability Office called the JSF's original business case, laid out by the Pentagon in 1996, "unexecutable."

"When you have difficult budget choices to make, several of the Pentagon's expensive modernization programs become likely targets," said Andrew Krepinevich of the Center for Strategic and Budgetary Assessments in Washington.

"The JSF sits at the top of that list."

Air Force officials are vigorously lobbying to preserve their coveted weapons, and supporters of the two programs point out that the emergence of China as a potential long-term threat is the best case for a large investment in fighter jet technology.

Last week, a Pentagon report warned that China's military buildup threatened the balance of power in Asia, and that within a decade China's military could pose a threat to modern militaries on the continent.

Air Force officials, who consider protecting the F/A-22 their top priority during the review process, argue that the jet's stealth technology makes it essential for eluding the advanced radar systems the Chinese are developing.

The Pentagon has scaled back the number of F/A-22 jets it intends to buy from 381 aircraft to 179. But Pentagon officials say that deeper cuts in the number of planes purchased are possible.

Rumsfeld has repeatedly criticized the length of time it can take for a weapon to move from the drawing board to operational testing to deployment in the field.

"There's no question that the longer it takes to field a program, the more expensive it becomes," DiRita said.

The Pentagon has billed the 2005 Quadrennial Defense Review as a crucial step in the long-term effort to transform the military into a lighter, more agile fighting force.

As defense officials try to predict the types of threats U.S. forces will confront, they face hard choices about spending billions on weapons that in most cases were first envisioned during the Cold War.

Many defense experts point out that the success of Iraqi insurgents against U.S. troops is evidence that few enemies will choose to fight the U.S. military on the conventional battlefield.

Instead of buying expensive technology, they point out, the future of warfare requires that the Pentagon invest in counterinsurgency warfare and bulk up spending on armored vehicles, language training and civil affairs programs.

"The big cuts in fighters being considered are just one instance of a far broader rethinking in the Pentagon spending priorities," said Loren Thompson of the Lexington Institute, a defense think tank in Arlington, Va. "Much of the impetus for these cuts originated in the Iraqi insurgency and in the need to wage a protracted war against terror."

[Alberta's Child]

A woodworking router is manufactured in the US for $7.28; however it is sold for $100. That markup level is outrageous.

If someone actually walked away from this transaction with a profit of $92.72, then we're all in the wrong business. How much does it cost to ship this router from its point of origin to its point of sale? How much does the retailer pay for its floor space, sales staff, etc.?

And even when you add up the total cost associated with the development, production, and sale of a product like this, you simply cannot judge a "markup level" on the basis of how much it costs to produce and how much the buyer pays for it.

[Paul Ross]

Is this a case of the glass being "half full?" I'm sure our soldiers will be reassured by your optimistic slant:

U.S. Military Hits Ammunition Shortages
By AGENCE FRANCE-PRESSE, WASHINGTON, July 27, 2005

The United States cannot keep up with military demand for ammunition which has more than doubled since the war on terrorism and the invasion of Iraq were launched, according to a Congress watchdog report released July 27.

The report said that the amount of small ammunition needed had increased from about 730 million rounds a year to nearly 1.8 billion.

For medium caliber ammunition, the rise had gone from 11.7 million rounds to almost 22 million, said the General Accounting Office.

Defense Department purchases of ammunition had reduced after the end of the Cold War and a number of government owned production factories were closed, said the report by the Congress watchdog.

The department has spent more than 90 million dollars on improvements at the remaining three main facilities for small and medium caliber bullets in a bid to boost production.

But supplies of small sized ammunition is lagging behind demand and the United States is now relying on foreign producers, including from Israel, to help meet its needs.

”Unforeseen events such as the terrorist attacks of September 11, 2001 and subsequent military deployments, make predicting future requirements difficult,” said the GAO.

”However it is imperative that the warfighter be provided with sufficient ammunition to carry out missions to counter ongoing and emerging threats without amassing wasteful unused stockpiles.”

[superiorslots]

Quote: When the myriad of little "unimportant buggy whip" parts are not available at some moment?



Yeah people do not realize that a shortage of a $3 part can ground a hi tech stealth fighter or F-18 just as easliy as a missle hit.

[Happy2BMe]

The United States cannot keep up with military demand for ammunition which has more than doubled since the war on terrorism and the invasion of Iraq were launched, according to a Congress watchdog report released July 27.

The report said that the amount of small ammunition needed had increased from about 730 million rounds a year to nearly 1.8 billion.

===============================

If our military is in such dire need of ammunition, why are they closing at least three major ammunition facilities with this new round of base closures?

Make you wonder.

[Paul Ross]

So, it only makes sense that in such a situation, we would need to turn to foreign manufacturers. What would have been your solution? Government subsidies to bullet manufacturers to allow them to keep lots of unused manufacturing capacity, just in case?

It is what we used to do before Clinton. And btw...who are you going to buy your bullets from when we are at war with China?

[Paul Ross]

I said he was only at best, a "C" or a "D" student in regards to his Defense record. I wish it was better, but there it is.

[Paul Ross]

I as a Norwegian was an average student in math.

That is my general experience with Norwegians!! (Heh. I am married to one. You should see her when she balances her check book. Very traumatic...).

[B4Ranch]

I'm wondering why the American people are supporting socialists?

[Paul Ross]

I should also point out that the mental rot is much deeper than at 1600 Pennsylvania Avenue. Take this little gem for example:

"What does Al Qaeda's air force look like?" said one defense official working on the Pentagon's assessment, known as the Quadrennial Defense Review.

First, just what makes this mental titan in the DOD think that Al-Queda is truly our biggest long-term threat????

And as for the Axis of Evil...who does he think is the CENTER of that Axis...which was never named by the Pesident? It was the Red Chinese who armed and funded the Taliban, met 5 times with Osama Bin Laden, and openly celebrated and cheered 9-11 before it happened with their PLA Colonel's "Asymmetric Warfare" book, and then at the time while it happened with their media delegation in San Diego (resulting in their forced early deportationon the QT), and subsequently on their domestic television when Ziang Jemin visited D.C.!

I would note that The PLA has a rather large and growing stockpile of fighters. Perhaps they could easily unload the older ones to a radical islamic state. Or they could even start exporting them these much newer ones, ...the Indian version of which defeated our F-15s in war games:

Indian-versions of Russia's Su-30mki air-superiority fighter. China now has co-production arrangement with another variant.

Finally, more broadly, we are looking at a wide spectrum of aerial threats: I.e, the terrorists are flying Recon-UAV's into Israel. Can the bomb-payloads be far behind? And Al-Queda also seemed to do quite well without its own wings on 9-11... where is the city air-defenses?

[A. Pole]

GWB is insisting on going along with Clinton's-orchestrated outsourcing of U.S. defense procurement. He recently directed that an inferior (10 year old technology), British-made helicopter (Westland, built with UK Government money) be chosen over the brand-spanking new U.S. competitor (Sikorsky, developed with its own money) be chosen as the replacement for his Marine-One Helicopter fleet. He also will prematurely terminate in 2007 the US-built F-22 (95% US parts), and is instead going ahead with the vastly less-capable flying pig-farm, the F-35 which has in many cases (depending on version), less than 50% U.S. content...this desite the fact that 90+% of the R&D behind the F-35 is supplied by the U.S...not the foreign partners.

You are angering the Bushbots!

[A. Pole]

We are the ONLY first world nation that has bought in on this free traitor craziness!

Actually not the first. The first global superpower was Spain and she was ruined by the New World gold - it was easier to import foreign goods. Next was Britain in second half of XIX (when she started to believe her own free trade propaganda).

"Let London manufacture those fine fabrics of hers to her heart's content; let Holland her chambrays; Florence her cloth; the Indies their beaver and vicuna; Milan her brocade, Italy and Flanders their linens...so long as our capital can enjoy them; the only thing it proves is that all nations train their journeymen for Madrid, and that Madrid is the queen of Parliaments, for all the world serves her and she serves nobody." (Prominent Spanish official - Alfonso Nunez de Castro in 1675)

[A. Pole]

Well, then, get yourself elected and fix the problems, if you think you can do any better.

How many engineers are in Congress? How many workers? Must be that lawyers are much smarter.

[A. Pole]

Whatever. There was always money and therfore always ways of making it regardless of those who are clueless.

Yes, there is always enough of suckers for the con men to make a living! See these nice confidence tricks.

[Clintonfatigued]

Thanks very much! : )

[A. Pole]

Harder to replace is skilled labor and intellectual capital once that goes away. I was involved with an R&D project a few years ago that needed some specialty nuclear materials that used to be supplied by Oak Ridge. I called down there and the division that used to handle that stuff was disbanded a few years prior. The people that worked there were laid off and scattered to the four winds. They finally found an old-timer that had previously worked there that they kept on as a janitor or something. He checked into the possibility of restarting the work and found that all the machinery and equipment used to make the materials had either been scrapped or sold to the highest bidder on the foreign markets. The only supplier I found for the materials was a company in Europe and they said it might take up to two years to get an export license (for me to import technology that, ironically, had been invented and developed here). The research program was canceled as a result.

What a sad story!