Posted on 12/12/2003 12:38:41 PM PST by Willie Green
For education and discussion only. Not for commercial use.
The Bureau of Labor Statistics reports that only 57,000 net new jobs were created in November. Forecasters had predicted three times that many jobs would be created, given the massive stimulus dumped into the economy by tax cuts, increased government spending and monetary expansion by the Federal Reserve – not to mention the slew of home mortgage refinancings due to the Fed´s keeping rates low. Though the Bush Administration was quick to claim progress, the tepid pace of job creation still leaves the country with fewer jobs than a year ago. The manufacturing sector lost another 17,000 jobs in November – the 40th consecutive month of decline – and there are 549,000 fewer manufacturing jobs today than a year ago. Every major manufacturing industry has lost jobs over the past year.
The Bush Administration has been running a public relations campaign to convince both American business and the general public that it is serious about reviving the manufacturing sector. Yet, signs persist that the White House only sees concern over closing factories as a political problem, not an economic problem, and is thus not really committed to doing anything constructive.
What former Deputy Secretary of Commerce Sam Bodman said at a business conference last June remains true: “There was a comment [concerning] a vision for manufacturing within the government. I will tell you it is very hard for this government to have a vision on anything.” Bodman candidly told the “Made in America 2020: The Future Face of Manufacturing" meeting in Washington. He continued, “A lot of what I hear you all asking -- we need a leader, we need somebody to take a position and do things -- that runs counter to the way the town works and you need to know that.”
Examples of how things work in Washington permeated the omnibus appropriations bill passed by the House on December 8. The bill spends $328 billion to fund 11 government departments through next September, and $492 billion for other non-military purposes. The measure was riddled with pork barrel projects “earmarked” for favored Congressional districts. Yet, the National Institute of Standards and Technology will have its budget cut by 12 percent ($81 million) in 2004. Its scientific and technical laboratories will experience a budget cut of 4.3 percent ($15.2 million).
NIST's Manufacturing Extension Partnership (MEP) budget is slashed by 63 percent, from $106 million to $39.5 million. The MEP´s national network of centers was created to help small- and medium-sized manufacturers modernize their operations. The Bush administration, through the Commerce Department, had requested a 90 percent budget cut for MEP to essentially kill the entire program. In a $2 trillion Federal budget, the amount “saved” is trivial, but the message sent is unmistakable.
If new technology is not developed in the United States to meet the needs of advanced production, industry will either have to import the technology from overseas or, more likely, see foreign industry take the lead and create the future.
Mike Wojcicki, president of the Modernization Forum, the association representing manufacturing centers, was quoted in Manufacturing and Technology News on December 5 describing how things work in Washington: “They don't care about small manufacturers -- they care about large manufacturers, who contribute lots of money to PACS -- that's what it comes down to." And it is the large manufacturers who are shifting their operations overseas and who do not want any government effort to keep industry in America.
Another area where the influence of transnational corporations predominates and makes the formulation of national strategy impossible is China policy. James Sasser, who served as U.S. ambassador to China from 1995 to 1999 and was a U.S. Senator before that, recently told Bloomberg news, “The Chinese really don't do any lobbying. The heavy lifting is done by the American business community.” On his visit this week to the United States, Chinese Premier Wen Jiabao first went to New York where he rang the bell to open the New York Stock Exchange and spoke to the American Bankers Association. When he came to Washington, he spoke to top executives Tuesday at the Ritz-Carlton hotel at an event sponsored by the Chamber of Commerce. Of the Fortune 500, some 400 have set up operations in China. They lobby heavily for appeasement policies to protect their investments, and an open American market to which they will export much of what they produce in Chinese factories.
It is no wonder then that the Bush Administration has made no progress in persuading Beijing to halt is currency manipulation or comply with its market opening obligations under the World Trade Organization. The transnational corporations do not want any progress on these issues because they have aligned their business models with the ambitions of the Chinese government. With easy access to the top echelons of the U.S. government greased through campaign contributions, they have influenced American trade officials to back off from any confrontation with China. Thus, when Deputy Assistant U.S. Trade Representative Charles W. Freeman testified before the Senate Subcommittee on Oversight of Government Management on December 9, he told the lawmakers that while there were two China-specific safeguard mechanisms under Section 421 of the Trade Act allowing American industries to cope with market disruptions caused by “increasing economic integration with China” (yes, he did use the term “integration” rather than “trade”). President Bush has not invoked either of them.
Freeman also said that the Bush administration has no plans to launch a complaint against China's currency peg at the World Trade Organization, nor would it initiate a Section 301 case under U.S. law charging Beijing with using currency manipulation to gain an unfair trade advantage.
This lack of government action leaves a boost in exports to China as the only “solution” to the current problem, a solution favored by both Beijing and the major transnational corporations. Premier Wen has voiced displeasure with restrictions on the export to China of high-tech products with potential military applications saying, “I ardently hope that the relevant U.S. departments will make a clean break with those obsolete concepts and anachronistic practices, and throw them into the Pacific Ocean.” What China wants is technology and capital with which to build what Beijing calls “comprehensive national power,” which it intends to use to challenge the U.S. across the board. Alarmingly, there are any number of heedless businessmen willing to help China do this, while equally imprudent American officials look the other way. It is now perfectly clear that the many trade and national security problems with China are not going to be addressed by the Bush administration.
William R. Hawkins is Senior Fellow for National Security Studies at the U.S. Business and Industry Council.
;-)
Try this one - our annual cost for just the interest on the debt is approx $450 Billion. Then this prescription drug fiasco is estimated to cost $2 Trillion in about 20 yrs. Plus these idiots get re-elected each term!
I haven't heard of a single sane forcaster making such bold claims??? I assume that this article must come from the instant gratification crowd??
Actually, according to Morgan Stanley's Stephen Roach in a commentary today, only the Temps, educational, health, and Government employment has expanded...those areas protected...er, poor choice of words,..."not exposed" to "offshoring competition".
If NBER is right, this is tne Second Anniversary of the "Recovery", and Roach calculates that the real job shortfall is about 7.4 MILLION!
He blames this on three new factors...Outsourcing Goods to China, "IT enabled" White Collar activities to India; the Internet in its modern form since 1995 to make seemless 'Supply Chain Management' across the world, and lastly the absence of "pricing power", which though he did not blame on the Internet, others like Bob Brinker of Money Talk have.
Really??? And how do you come upon this asserton???
O.K., I'll admit Roach missed the Restaurant jobs, and perhaps a few others. By and large, though, he scrupulously avoids to say that these categories are 'naturally protected' since they can't be 'Offshored'. He is careful to say these jobs are 'not exposed' to foreign 'outsourcing'. I guess his Masters don't want to hear the 'Protection' word.
Still, it is astounding to hear Morgan Stanley's Chief Economist mention twice, in as many days, first the 'almost SEVEN million jobs' under trend in the Singapore conference call, and then in his regular 'Golbal' column, today, the 7.4 MILLION jobless figure.
It is VERY sobering!
TABLE 2. Detailed industry employment* ranked by change between Oct. and Nov. 2003,
and prior 3-month average change, in thousands, seasonally adjusted
Current Prior Minimum Pass
Rank Industry NAICS over-the-month 3-month significant test of
change average change* significance
1 Administrative and support services 561 16.8 16.3 39.3
2 Accommodations 721 12.9 -9.0 10.9 YES
3 Ambulatory health care services 621 11.1 9.7 10.1 YES
4 Durable goods 423 9.4 -1.3 9.8
5 Specialty trade contractors 238 8.4 8.5 20.2
6 Hospitals 622 7.9 5.7 5.9 YES
7 Food services and drinking places 722 7.8 19.6 21.1
8 Local government, excluding education 932 7.1 8.3 13.9
9 Membership associations and organizations 813 4.7 0.6 21.8
10 Furniture and home furnishings stores 442 3.7 0.3 5.2
11 Health and personal care stores 446 3.7 3.1 6.3
12 Nursing and residential care facilities 623 3.7 4.1 6.5
13 Securities, commodity contracts, investments 523 3.6 1.2 6.3
14 Wood products 321 3.5 1.3 3.9
15 Heavy and civil engineering construction 237 3.4 0.7 7.7
16 Air transportation 481 2.9 -1.1 2.2 YES
17 Motion picture and sound recording industries 512 2.4 -0.5 10.5
18 Electronics and appliance stores 443 2.3 0.6 5.4
19 Personal and laundry services 812 2.2 -0.9 6.1
20 Social assistance 624 2.1 7.2 7.7
21 Truck transportation 484 1.8 2.9 7.3
22 Amusements, gambling, and recreation 713 1.7 -1.5 16.6
23(tie) Machinery 333 1.5 -1.5 5.8
Building material and garden supply stores 444 1.5 5.3 6.3
24 Furniture and related products 337 1.4 0.1 3.8
25 Real estate 531 1.3 1.5 8.3
26 Gasoline stations 447 1.1 -1.2 6.2
27 Apparel 315 0.9 -1.4 5.4
28 Fabricated metal products 332 0.9 -1.1 6.1
29 State government, excluding education 922 0.7 -0.1 7.5
30 Nonmetallic mineral products 327 0.4 -0.4 3.6
31 Museums, historical sites, zoos, and parks 712 0.4 0.0 1.5
32 Internet publishing and broadcasting 516 0.4 -0.1 0.7
33 Funds, trusts, and other financial vehicles 525 0.4 -0.4 0.7
34 Nonstore retailers 454 0.4 -1.5 6.8
*See footnotes at end of table.
TABLE 2. Detailed industry employment* ranked by change between Oct. and Nov. 2003,
and prior 3-month average change, in thousands, seasonally adjusted
Current Prior Minimum Pass
Rank Industry NAICS over-the-month 3-month significant test of
change average change* significance
35 Support activities for transportation 488 0.3 0.4 6.5
36 Pipeline transportation 486 0.3 -0.1 1.0
37 Rental and leasing services 532 0.3 -1.3 6.0
38 Transit and ground passenger transportation 485 0.2 3.7 4.1
39 Scenic and sightseeing transportation 487 0.1 0.1 4.8
40 Textile product mills 314 0.1 -1.6 2.8
41 Electrical equipment and appliances 335 0.1 -1.7 3.2
42(tie) Oil and gas extraction 211 0.0 0.2 1.3
Mining, except oil and gas 212 0.0 -0.7 2.0
Broadcasting, except Internet 515 0.0 -0.4 4.2
Other information services 519 0.0 0.2 1.0
Monetary authorities - central bank 521 0.0 -0.1 0.1
43 Rail transportation 482 -0.1 -0.2 2.8
44(tie) Leather and allied products 316 -0.1 -0.3 1.0
Lessors of nonfinancial intangible assets 533 -0.1 0.3 0.7
45(tie) Electronic markets and agents and brokers 425 -0.1 1.3 4.9
Warehousing and storage 493 -0.1 0.9 5.4
46 Support activities for mining 213 -0.2 -0.2 3.4
47 Water transportation 483 -0.2 -0.3 1.5
48 Couriers and messengers 492 -0.3 -1.6 5.5
49 Publishing industries, except Internet 511 -0.4 -1.2 3.8
50 Petroleum and coal products 324 -0.6 -0.9 1.4
51(tie) Telecommunications 517 -0.8 -1.5 5.5
ISPs, search portals, and data processing 518 -0.8 -1.2 4.8
52(tie) Miscellaneous manufacturing 339 -1.0 -1.6 4.0
Motor vehicle and parts dealers 441 -1.0 0.4 6.7
53 Sporting goods, hobby, book, and music stores 451 -1.1 -0.3 6.5
54 Beverages and tobacco products 312 -1.2 -0.4 2.4
55 Printing and related support activities 323 -1.5 -2.3 4.2
56 Plastics and rubber products 326 -1.6 -2.3 3.9
57 Computer and electronic products 334 -1.8 -4.5 7.9
58 Textile mills 313 -1.8 -3.0 2.2
59 Insurance carriers and related activities 524 -1.8 -1.9 7.5
60(tie) Primary metals 331 -1.9 -2.9 3.3
Chemicals 325 -1.9 -2.6 4.5
*See footnotes at end of table.
TABLE 2. Detailed industry employment* ranked by change between Oct. and Nov. 2003,
and prior 3-month average change, in thousands, seasonally adjusted
Current Prior Minimum Pass
Rank Industry NAICS over-the-month 3-month significant test of
change average change* significance
Performing arts and spectator sports 711 -1.9 1.0 8.7
61(tie) Construction of buildings 236 -2.0 4.8 12.7
Paper and paper products 322 -2.0 -0.9 2.9
62 Miscellaneous store retailers 453 -2.6 -0.1 7.5
63 Transportation equipment 336 -2.7 2.8 7.6
64 Waste management and remediation services 562 -3.3 -2.5 4.1
65 Repair and maintenance 811 -3.3 -1.0 7.4
66 Nondurable goods 424 -3.8 -2.7 9.6
67 Clothing and clothing accessories stores 448 -4.5 2.3 11.4
68 Federal, except U.S. Postal Service 911 -6.5 -2.4 19.0
69 Food manufacturing 311 -7.8 0.9 8.8
70 General merchandise stores 452 -8.7 6.4 13.5
71 Credit intermediation and related activities 522 -9.0 -1.8 8.5 YES
72 Food and beverage stores 445 -22.7 3.7 9.4 YES
*NOTE: Significant over-the-month changes are calculated at a 90 percent confidence level. The standard error is used
for a 1-month change. The variance for total nonfarm is an approximation because government is not based on a
probability sample. Federal and State government are essentially full population counts and do not contribute to
variance. Local government variance was approximated by extrapolating from the variances for similar size industries.
Government significance is a function of the root-mean-square error of the seasonally adjusted estimates. The
root-mean-square error is defined as the difference between the final and preliminary estimates averaged across
a series of monthly observations.
There you can find out about the Top Ten Asswipers at Free Republic. Guess who #1 is?
I am afraid that they see the law of comparative advantage in the light of the price of labor seen as a commodity, cost/loss and necessary evil. So they figure that it is beneficial to hire professionals in China and India in order to put American professionals to flip burgers or greet shoppers at Walmart.
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