I deal in lead, friend. (That's how I'll get the gold when needed.)
Posted on 03/03/2006 10:09:19 AM PST by SirLinksalot
How Economic News is Spun
Paul Craig Roberts
Friday, March 3, 2006
Readers ask me to reconcile the jobs and debt data that I report to them with the positive economic outlook and good news that comes to them from regular news sources. Some readers are being snide, but most are sincere.
I am pleased to provide the explanation. First, let me give my reassurances that the numbers I report to you come straight from official U.S. government statistics. I do not massage the numbers or rework them in any way. I cannot assure you that the numbers are perfectly reported to, and collected by, the government, but they are the only numbers we have.
Here is how to reconcile my reports with the good news you get from the mainstream media:
First, when the U.S. Department of Labor, for example, releases the monthly payroll jobs data, the press release will put the best spin on the data. The focus is on the aggregate number of new jobs created the previous month - for example, 150,000 new jobs. That sounds good. News reporters report the press release. They do not look into the data to see what kinds of jobs have been created and what kinds are being lost. They do not look back in time and provide a net job creation number over a longer period of time.
This is why the American public is unaware that higher-paid jobs in export and import-competitive industries are being phased out, along with engineering and other professional "knowledge jobs," and replaced with lower-paid jobs in domestic services. The replacement of higher-paid jobs with lower-paid jobs is one reason for the decline in median household income over the past five years. It is not a large decline, but it is a decline. How can it be possible for the economy to be doing well when median household income is not growing and when economic growth is based on increased consumer indebtedness?
Many economists mistake offshore outsourcing with free trade based on comparative advantage. As a result of this mistake, ideology speaks instead of economic analysis. For example, Matthew J. Slaughter, an economics professor at Dartmouth, commits a huge error when he writes: "For every one job that U.S. multinationals created abroad in their foreign affiliates, they created nearly two U.S. jobs in their parent operations."
If Slaughter had consulted the Bureau of Labor Statistics payroll jobs data, he would have realized that his claim could not possibly be true. Slaughter did not come to his conclusion by examining aggregate job creation. Instead, he measured the growth of U.S. multinational employment and failed to take into account the two reasons for an increase in multinational employment: Multinationals acquired many existing smaller firms, thus raising multinational employment but not overall employment, and many firms established foreign operations for the first time and thereby became multinationals, thus adding their existing employment to Slaughter's number for multinational employment.
ABC News' John Stossel, a libertarian hero, recently made a similar error. In debunking Lou Dobbs' concern with U.S. jobs lost to offshore outsourcing, Stossel invokes the California-based company, Collabnet. He quotes the CEO's claim that outsourcing saves his company money and lets him hire more Americans. Turning to Collabnet's Webpage, it is very interesting to see the employment opportunities that the company posts for the United States and for India.
In India, Collabnet has openings for eight engineers, a sales engineer, a technical writer and a telemarketing representative. In the United States, Collabnet has openings for one engineer, a receptionist/office assistant, and positions in marketing, sales, services and operations. Collabnet is a perfect example of what Lou Dobbs and I report: The engineering and design jobs move abroad, and Americans are employed to sell and market the foreign-made products.
Second, Wall Street economists are salesmen. The companies that employ them want to sell stocks and bonds. They don't want bad news. A bear market is not good for business. Similarly, business associations have the agenda of their members. Offshore outsourcing reduces their labor costs and boosts their profits and performance-based bonuses. Therefore, it is natural that their association reports put a positive spin on outsourcing. The same organizations benefit from work visas that allow them to bring foreign workers in as indentured servants to replace their more fractious and higher-paid American employees. Thus, the myth of a U.S. shortage of engineers and scientists. This myth is used to wheedle more subsidies in the form of more H-1B visas out of Congress.
Third, official U.S. government reports are written to obfuscate serious problems for which the government has no solution. For example, "The Economic Report of the President," written by the Council of Economic Advisers, blames the huge U.S. trade deficit on the low rate of domestic savings. The report claims that if only Americans would save more of their incomes, they would not spend so much on imports, and the $726 billion trade gap would close.
This analysis is nonsensical on its face. Offshore outsourcing has turned U.S. production into imports. Americans are now dependent on offshore production for their clothes, manufactured goods and advanced technology products. There are simply no longer domestic suppliers of many of the products on which Americans depend.
Moreover, many Americans are struggling to make ends meet, having lost their jobs to offshore outsourcing. They are living on credit cards and struggling to make minimum payments. Median household real incomes are falling, as higher-paid jobs are outsourced while Americans are relegated to lower-paying jobs in domestic services. They haven't a dollar to save.
As Charles McMillion points out, the Feb. 28 report from the Bureau of Economic Analysis shows that all GDP growth in the fourth quarter of 2005 was due to the accumulation of unsold inventory and that consumers continued to outspend their incomes.
Matthew Spiegleman, a Conference Board economist, claims that manufacturing jobs are only slightly higher paid than domestic service jobs. He reaches this conclusion by comparing only hourly pay and leaving out the longer manufacturing workweek and the associated benefits, such as health care and pensions.
Stossel simply does not know enough economics to be aware that he is being used. The bought-and-paid-for-economists are simply earning their living and their grants by serving the interests of corporate outsourcers.
Fourth, policy reports from think tanks reflect what the donors want to hear. Truth can be "negative" and taken as a reflection on the favored administration in power. Consider, for example, the conservative Bruce Bartlett, who was recently fired by the National Center for Policy Analysis for writing a truthful book about George Bush's economic policies. Donors to NCPA saw Bartlett's book as an attack on George Bush, their hero, and withheld $165,000 in donations. There were not enough Bartlett supporters to step in and fill the gap, so he was fired in order to save donations.
When I held the William E. Simon chair in political economy at the Center for Strategic and International Studies, I saw internal memos describing the grants CSIS could receive from the George H.W. Bush administration in exchange for removing me from the Simon chair.
In America, "truth" has long been for sale. We see it in expert witness testimony, in the corrupt reports from forensic labs that send innocent people to prison and even in policy disputes among scientists themselves. In scholarship, ideas that are too challenging to prevailing opinion have a rough row to hoe and often cannot get a hearing.
Even the president of Harvard University, Larry Summers, an academic economist of some note and a former secretary of the treasury, was forced to resign because he offered a politically incorrect hypothesis about the relative scarcity of women in science.
The few reporters and columnists who are brave or naive enough to speak out are constrained by editors, who are constrained by owners and advertisers. For example, it is impermissible to examine the gaping holes in the 9-11 Commission Report. Publications and editors are intimidated by the charge of "conspiracy theory," just as criticism of Israel is muted for fear of being labeled "anti-Semitic."
All of these reasons and others make truth a scarce commodity. Censorship exists everywhere and is especially heavy in the U.S. mainstream media.
COPYRIGHT 2006 CREATORS SYNDICATE INC.
That's spam.
He's selling "research," and your link is a sales pitch. He's also shilling for gold.
Also credit cards are a great cash and time management tool...they hope you will run a continuing balance so they earn the interest. Many consumers choose to use the float and pay off each billing cycle. A good strategy if you get a card with no annual fee and do in fact pay off each month. I personally can't see stopping at an ATM to carry gas money around...the exception to this would be a station offering a worthwhile cash discount.
North America accounted for 11.2% of the world’s total [production], with steelmaking in the USA, the third largest steel producer in the world, decreasing by 5.8% in 2005 to 93.9 million tonnes.
Source
Nothing going on here, just move along, go on home, and go to sleep.
As soon as you wake up.
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Again, the operative word in your so-far-as-it-goes-correct summary is "decreasing".
I get up most days at 3AM, and get to bed a few hours after sundown.
http://www.businessweek.com/bwdaily/dnflash/feb2006/nf2006022_3731_db053.htm?campaign_id=rss_daily Lakshmi Mittal's "Industrial Logic"
The chairman and CEO of the world's largest steelmaker discusses his plans to acquire, Arcelor, his company's top rival for $23 billion
Lakshmi N. Mittal hasn't been putting in much time at the office these days. Instead, the chairman and chief executive of London- and Rotterdam-based Mittal Steel (MT ), the world's largest steelmaker, has been jetting around Europe trying to sell skeptical politicians and shareholders on his $23 billion bid for Luxembourg-based Arcelor, the industry's No. 2 player.
The fight for Arcelor has a bitter edge, perhaps because Mittal and Arcelor CEO Guy Dollé know each other well, and have raced each other to assemble strong companies in what had been a weak and fragmented industry. Mittal, 55, talked to BusinessWeek's London bureau chief, Stanley Reed, on Jan. 31 by phone from Luxembourg. Following are edited excerpts of their conversation:
- clip - - - - - - - - - - - - - - - - -- - - - - - - - -- - - - - - - clip -
How is the integration of ISG [the U.S. steel company Mittal acquired from bankruptcy investor Wilbur Ross in 2004] going?
Very well. We have a top-class team, performing well.
Did you cut back production in the U.S. last year?
We did last year. This is part of consolidation. When you are a stronger and larger company, you can afford to modify production based on market demand and supply. We do not believe in oversupplying the market. When you are a large company, you can afford to do it. When you are a small player, your flexibility gets reduced.
- - - end of interview - - -
True, as far as it goes, but the key word in your summary is "decreasing",.
Actually the key bit of info is 93.9 million tonnes as compared to your claim "steel industry about gone"
Check back in 2010.
So by then your claim will be correct?
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It helps to look at more than one point on a graph. Check the trend, and the driver behind the trend. How does 93.9 million tons compare with domestic consumption? How does the percent of domestic consumption produced domestically in 2005 compare with 2000, 1995, etc. How much will be left after "consolidation". Etc.
http://www.gillespieresearch.com/cgi-bin/bgn/
John Williams' Shadow Government Statistics
Analysis Behind and Beyond Government Economic Reporting
That's spam.
He's selling "research," and your link is a sales pitch. He's also shilling for gold.
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Yes, it's an ad - - - with a lot of freebies attached. No need to pay anything to follow the links. And no need to accept his inferences from the evidence of declining reliability of govt economic statistics. Draw your own conclusions about that.
Going long in gold has been one good way to short the dollar and dollar denominated assets lately. One can expect a reaction, so other ways may be better for a while. Something other than alternative fiat currency units which, as Warren Buffet discovered, can sometimes move adversely wrt dollar.
Gotta go and work on some asset growth and preservation chores. Best wishes for greater awareness of the world beyond the "theater of the official big picture".
Great, production is trending down.It's still a long way from 93.9 million tonnes to production almost gone.
It helps to look at more than one point on a graph.
That's funny, considering you provided no points when you said American production was already almost gone.
Don't forget to add the fact that for many years the fedgov has been masking the true budget deficits by applying Social Security surpluses to make these deficits appear lower than the actual figures and this little bit of voodoo economics has I'm sure added quite few $ to the "unfunded liabilities" figure.
Another little bit accounting wizardy practiced by the feds (and gov'ts. at all levels) are CAFR accounts (Comprehensive Annual Fin'l Reports......check out www.cafrman.com or keyword 'Walter Burien' for more info) which uses some more accounting magic to classify potential budget surpluses into expense areas thus creating huge pools of funds available only to the "in crowd". The amount of $ available in the CAFR accounts could solve a lot ills if we had more honesty from certain public officials.
So the know it all crowd can post any # of charts they want from the fedboys but anyone who thinks we're getting anywhere near the truth from that bunch deserves the fate their ignorance & arrogance will surely bring them.
Don't believe everything the MSM and the gold hustlers tell you.
It's refreshing to see at least ONE of the gold shilling Freepers actually admit that they are shilling.
I deal in lead, friend. (That's how I'll get the gold when needed.)
How much will be left after "consolidation". Etc.
Great, production is trending down.It's still a long way from 93.9 million tonnes to production almost gone.
It helps to look at more than one point on a graph.
That's funny, considering you provided no points when you said American production was already almost gone.
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I've checked, and I stand corrected (though cold comfort to the work force in this industry - - note the trend there). The Indian clearly will not be able to "consolidate" this away in any forseeable time, so I'm wrong on that. Still gotta go.
http://www.census.gov/prod/2005pubs/06statab/manufact.pdf
(table 996)
BAMOG Ping. isofo gsn l k d e y
BAMOG Ping. isofo gsn l k d e y to you, too.
I vant to touch your monkey.
Is a big ass monkey of gold better than a big ass hunk of gold?
Thank you for the link and the admission. Yes, I'm afraid employment in the steel industry will probably continue to shrink.
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