U.S. Labor Force: One Foot in the Third World

Chronicles Magazine ^ | Tuesday, June 07, 2005 | Paul Craig Roberts

[superiorslots]

Quote: Actually the trade deficit with China went from $124 billion to $162 billion.

Wait and see what those numbers will be in a few more years. Alot of companies have not moved over there because they were seeing what their compeition was doing and where unsure of the process. My brother in michigan said many of his clients are planning or are in the to process send operations to china. He was a staunch free trader at one time but his income has really been going down because companies he sells to have been laying off people or moving to china. His ox is getting gored now so he has changed his view.

[Toddsterpatriot]

Show us the 2004 to 2005 wages.

As soon as you show me the drop in wages due to NAFTA.

[Toddsterpatriot]

Wait and see what those numbers will be in a few more years.

You mean maybe they'll match your incorrect numbers?

[superiorslots]

Quote: As soon as you show me the drop in wages due to NAFTA.


I'll check out the USBL site myself I guess. The 2004 wages are at near 2000 levels according to your chart. Not a good sign of trade deficits and free tradin.

[expat_panama]

the trade deficit with China went from $124 billion to $162 billion...

--and others say the it is between $124 billion to $162 billion.  This site with the DOC puts it at $125 billion in 2004.

[superiorslots]

Quote: You mean maybe they'll match your incorrect numbers?

The 196 billion was the total amount imported. But yeah you are correct in a sense. We'll wait and see what the 2005 numbers are.

[Toddsterpatriot]

But yeah you are correct in a sense.

In the sense of you being wrong? That's my favorite sense :^)

[Toddsterpatriot]

The 2004 wages are at near 2000 levels according to your chart.

Yeah, wages can shrink coming out of a recession.

Not a good sign of trade deficits and free tradin.

So while our wages increased from 1994 to 2000 there was no free trade or deficits?

[superiorslots]

The 2004 wages are at near 2000 levels according to your chart.

Should read 2002 levels.

[Paul Ross]

We have a $12 trillion economy.They have a $1.5 trillion economy and exported less than $200 billion to us in 2004. You have a strange definition of debt ridden beggar.

No he doesn't. Check this:

Actually, China could already be the world's third largest economy when based on more realistic purchasing price equivalents. Some international groups (including the International Monetary Fund), and number of U.S. financial analysts too, think that the Yuan is undervalued by a factor of four. If so, the implications of this are significant. It implies that the size of China's economy is really $6 trillion, rather than $1.5 trillion. It helps explain why they hold $620 billion of U.S. paper. So does your postulate really have any credible legs anymore? No.

[CompSciGuy]

If you factor in the foreign based firms perhaps a million world wide. Perhaps thousands would be a better quantity?

You also have to take in to account the fact that companies like IBM, AT&T and Oracle do significant defense contracting as well.

Cheers,
CSG

[CompSciGuy]

if I work as an engineer for a defense contractor, and the government cancels the contract, and I lose my job as a result - it must mean that I in-effect worked for the government. The government contract paid my salary, in its absence I am unemployed, so they must have effectively been my employer. Forget the semantics of it.

Wrong, you work for the company that hired you. They pay your salary from their profit margin (some or all of it may come from the government). If you loose the contract the company may or may not be able to relocate you to another (this is just like private industry here). The fact that the government is your client makes no difference on the fact that you are part of the free market. The government is not your employer, it is your client. If you work for a company that has one client and one contract then you effectively work for the client, consequently the most successful defense contractors do not have one client and one contract. They also don't turn around and dump people when contracts are lost (as a rule) usually they have enough work to retool. These principles work the same way for any corporation that deals with private industry. You'd be hard pressed to find a large (i.e. Fortune 100) company that doesn't have some percentage of its profit coming from the government though.

Cheers,
CSG

[SwordofTruth]

When I visit local bookstoers I avoid the computer sections. I do not want my mood to be ruined - these sections are reduced by the factor of three or four and have old books gathering dust. No new books there.

That may have more to do with the fact that online booksellers can beat any local bookstore on price and they deliver to your door free of charge for orders over $25 dollars. Bookstores in general are being killed off by online book sales. That's one of the reasons they sell more than just books now, e.g., coffee, food, deserts. They know most people just come there to browse with little intention of actually buying a book.

[Paul Ross]

I'm trying to do a search on the guy to find out how old he is on the possibility that 'others' are doing his writing for him. From what I can gather Roberts is in his 90's and is simply not competent.

I haven't seen anything on his age either, but I sincerely doubt that his misanthropy over the Iraq War is his first senior moment. That being said, he seems to be a lot more stable than a lot of the other supply-side economists who are notoriously flighty. Arthur Laffer, for example was a big-time booster of Bill Clinton. Roberts going "off the ranch" appears to be much more recent...and so too his "squeaky wheel" political statements. Maybe he had a stroke, I don't know. But as for his economics views, they are long-standing, and well developed. And need to be taken seriously by anybody in the Rational Expectations and Supply Side schools of thought.

BIOGRAPHY FOR

PAUL CRAIG ROBERTS

Hon. Paul Craig Roberts is the John M. Olin Fellow at the Institute for Political Economy, Senior Research Fellow at the Hoover Institution, Stanford University, and Research Fellow at the Independent Institute. A former editor and columnist for The Wall Street Journal and columnist for Business Week and the Scripps Howard News Service, he is a nationally syndicated columnist for Creators Syndicate in Los Angeles and a columnist for Investor’s Business Daily. In 1992 he received the Warren Brookes Award for Excellence in Journalism. In 1993 the Forbes Media Guide ranked him as one of the top seven journalists.

He was Distinguished Fellow at the Cato Institute from 1993 to 1996. From 1982 through 1993, he held the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies. During 1981-82 he served as Assistant Secretary of the Treasury for Economic Policy. President Reagan and Treasury Secretary Regan credited him with a major role in the Economic Recovery Tax Act of 1981, and he was awarded the Treasury Department’s Meritorious Service Award for "his outstanding contributions to the formulation of United States economic policy." From 1975 to 1978, Dr. Roberts served on the congressional staff where he drafted the Kemp-Roth bill and played a leading role in developing bipartisan support for a supply-side economic policy.

In 1987 the French government recognized him as "the artisan of a renewal in economic science and policy after half a century of state interventionism" and inducted him into the Legion of Honor.

Dr. Roberts’ latest books are The Tyranny of Good Intentions, co-authored with IPE Fellow Lawrence Stratton, and published by Prima Publishing in May 2000, and Chile: Two Visions—The Allende-Pinochet Era, co-authored with IPE Fellow Karen Araujo, and published in Spanish by Universidad Nacional Andres Bello in Santiago, Chile, in November 2000. The Capitalist Revolution in Latin America, co-authored with IPE Fellow Karen LaFollette Araujo, was published by Oxford University Press in 1997. A Spanish language edition was published by Oxford in 1999. The New Colorline: How Quotas and Privilege Destroy Democracy, co- authored with Lawrence Stratton, was published by Regnery in 1995. A paperback edition was published in 1997. Meltdown: Inside the Soviet Economy, co- authored with Karen LaFollette, was published by the Cato Institute in 1990. Harvard University Press published his book, The Supply-Side Revolution, in 1984. Widely reviewed and favorably received, the book was praised by Forbes as "a timely masterpiece that will have real impact on economic thinking in the years ahead." Dr. Roberts is the author of Alienation and the Soviet Economy, published in 1971 and republished in 1990. He is the author of Marx’s Theory of Exchange, Alienation and Crisis, published in 1973 and republished in 1983. A Spanish language edition was published in 1974.

Dr. Roberts has held numerous academic appointments. He has contributed chapters to numerous books and has published many articles in journals of scholarship, including the Journal of Political Economy, Oxford Economic Papers, Journal of Law and Economics, Studies in Banking and Finance, Journal of Monetary Economics, Public Finance Quarterly, Public Choice, Classica et Mediaevalia, Ethics, Slavic Review, Soviet Studies, Rivista de Political Economica, and Zeitschrift fur Wirtschafspolitik. He has entries in the McGraw-Hill Encyclopedia of Economics and the New Palgrave Dictionary of Money and Finance. He has contributed to Commentary, The Public Interest, The National Interest, Harper’s, the New York Times, The Washington Post, The Los Angeles Times, Fortune, London Times, The Financial Times, TLS, The Spectator, Il Sole 24 Ore, Le Figaro, Liberation, and the Nihon Keizai Shimbun. He has testified before committees of Congress on 30 occasions.

Dr. Roberts was educated at the Georgia Institute of Technology (B.S.), the University of Virginia (Ph.D.), the University of California at Berkeley and Oxford University where he was a member of Merton College.

He is listed in Who’s Who in America, Who’s Who in the World, The Dictionary of International Biography, Outstanding People of the Twentieth Century, and 1000 Leaders of World Influence

[Paul Ross]

And then we could bring them out of mothballs and the machines weren't all worn out because they hadn't been used in 10 years?

Not so much that, as that the industries themselves were still here, underutilized, but still up and running, with all the necessary structures and industrial and engineering know-how, and plant and equipment and a skilled work force that could easily expand production and switch to new tasks...just needing the capital and the "customer" so to speak...which were provided respectively by Lend-Lease and the military's huge purchases.

[Paul Ross]

And U.S. wages denominated in what currency, are doing what as against the majors?

[Toddsterpatriot]

Actually, China could already be the world's third largest economy when based on more realistic purchasing price equivalents.

PPP is good for measuring standard of living, why is PPP more realistic when discussing size of economy?

As I understand it we produce 8 times more goods and services priced in dollars than they do, is that wrong?

Nice chart (couldn't you get one from E.P.I.?), that makes us a debt ridden beggar?

[jb6]

Yeah, I guess you missed the part about the government having to borrow $2.5 BILLION DAILY, 80% of which comes from foreign sources: primarly Japan and China. Meanwhile, we exported $40 billion to China.

CIA World Fact Book:

USA: GDP: purchasing power parity - $11.75 trillion (2004 est.)

Public debt: 65% of GDP (2004 est.)

Budget:
revenues: $1.862 trillion
expenditures: $2.338 trillion, including capital expenditures of NA (2004 est.)

Current account balance: $-646.5 billion (2004 est.)

Debt - external: $1.4 trillion (2001 est.)

CHINA:

GDP: purchasing power parity - $7.262 trillion (2004 est.)

Public debt: 31.4% of GDP (2004 est.)

Current account balance: $30.32 billion (2004 est.)

Debt - external: $233.3 billion (3rd quarter 2004 est.)

Budget:
revenues: $317.9 billion
expenditures: $348.9 billion, including capital expenditures of NA (2004 est.)

[jb6]

Yup, they only return goods, services, jobs and taxes. Hardly worth mentioning

Excuse me? Jobs? Sure, primarly as salesmen and secretaries. The manufacturing, support, etc is what is being taken out. Services and goods? Those are free? Hardly. Those are charged for and subsidized by the consumer. In other words, empty investment into Corporate Welfare. Taxes? Only on money repatriated to the US. Most of that cash gets spent on cost of goods sold and resunk overseas into more investments. Keep trying.

[Wolfhound777]

Well first of all, we won't honor our treaty to defend Taiwan. Foggy Bottom itself has said that US policy agrees that there is only one China. Further, all of the examples that you provided are the other reasons we won't go to war over Taiwan.