Posted on 02/15/2006 10:42:45 AM PST by SirLinksalot
Our hollow prosperity
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Posted: February 15, 2006 1:00 a.m. Eastern
PATRICK BUCHANAN
© 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.
That really is the choice --simple as that. I'm becoming more and more convinced that the deep inside these Pat-People actually choose to avoid the success they fear, and to hate the rest of us who are successful.
There's another thread going on right now (Republicans happier than rivals) that's considering this very question. It's all about how happy conservatives are and how unhappy the big government types are. Sure seems that the most unhappy people around are the ones that want a government big enough to raise our taxes to pamper union bosses for life.
Isn't the intent of this forum and these threads to discuss political opinion? When a subject is introduced and examined by an author who is political in nature and who does it for political sport, aren't we obliged to discuss its political intent as well?
Although I have stuck to the subject matter in my replies I nevertheless realize that economics is difficult to understand for many on these threads, and the comments, political and otherwise, do not disprove that fact.
1999 would work, too. Or 1975. Just not 1650.
A trade deficit, by itself, means nothing.
It's like an elevated heartbeat. Could be bad. Or you could be jogging.
I believe this miscopetion is a caused by failure to require calculus to graduate high school.
It's based on static, zero-sum, thinking. Essentially, they assume there is a finite of wealth to go around.
This was last true in mercantile Holland when countries hoarded gold.
I believe the concept eludes the same type of people who can't get their mind around the (similiar) concept that lowering taxes increases can increase tax revenue by increasing the size of the pie, albeit it is a disease of non-mathematical minds on the right, as opposed to the limited minds of the left.
To grossly oversimplify (and make static for explaination), if the US economy imports 250 to expand its economy from 500 to 1000, it's up a net 250.
We import to expand more, in other words.
The floating dollar is the natural fix to this --- if we over-import the dollar devalues, so we export more and import less.
Pat is, well, limited, in his mental capacity apparently, or simply does not want to understand.
Yup, thats how it works, I take some of the profit I made on Real estate, and some gets invested elsewhere some gets used to make purchases that would not have been made other wise to grow the economy {economics 101}hope it's not too confusing for some on this thread.
Isn't the intent of this forum and these threads to discuss political opinion? When a subject is introduced and examined by an author who is political in nature and who does it for political sport, aren't we obliged to discuss its political intent as well?
Although I have stuck to the subject matter in my replies I nevertheless realize that economics is difficult to understand for many on these threads, and the comments, political and otherwise, do not disprove that fact.
Interesting how this thread proves the other.
That was the intent, just as Congress has mislabeled several other laws as "civil rights" or "tax reform" which are not really what they purport to be.
We can have free trade any time we want it without negotiating treaties or "agreements" that skirt the Constitution's ratification process. Just drop restrictive tariffs and trade embargoes. My son could go for a good Cuban cigar (I don't smoke, but I do care).
As far as "internationalist-libertarian" wet dreams go, perhaps you've forgotten that both the Cato Institute and the Libertarian Party were fully in support of NAFTA.
We either have a government that believes its citizens should be empowered to buy and sell freely or we don't.
The nature of bipartisan "agreements" on trade over the last decade indicate strongly that we don't.
If the economy is humming along, why is there no money for our infrastructure?
Because the government wastes our money on stupid crap that they shouldn’t be involved in.
I have no idea what this remotely has to do with our trade deficit though, beyond validating my point that the government is a piss poor economic planner and should do less of it.
The Buchananites cannot seem to tackle this inarguable point, so they throw out irrelevancies like how some people in Texas want to finance construction of a road.
I'm afraid your a tad clueless, the Infastructure I refer to in my area would include, just about every major thoughfare being improved, and the huge amount of NEW construction in the Pasco/Hernando/Citrus county I 75, and Suncoast parkway corridors.
Huh? Maybe because they are spending it on other stuff. Are you claiming that Texas is lying about how much it is collecting in taxes?
I think it is more respectful to readers to stick to the topic of the post and not hijack for other agendas. Other topics can be introduced at will for separate discussion.
Of course he is against trade.
Trade necessitates giving credit.
Credit involves "money lenders"
"Money lenders" = Jooooooooooooooooooooooooooooooos
It's also RESPECTFUL of readers to reveal when an author has a political agenda underlying what they're writing...it all goes to the integrity of his current writing.
Exactly! Truly amazing.
Yep...and don't publish cartoons that offend his Muslim friends.
Sure, Pat, we'll just put up a big wall, keep everyone out and keep the American's locked in tight ...
I agree that we don't have true Free Trade. Aside from Cuban cigars, which are a corner case, the NAFTA treaty was 2000 pages long with all sorts of rules for everything. I tried to bring a few cases of Tecate back from a short trip to Ensenada, Mexico and was told the "limit" was six cans per adult.
Imagine that. Post Free-trade agreemnet and GM can move an entire factory to Mexico but a US citizen can't bring back a case of beer.
The full on Free Trade fundamentalists often also support unlimited immigration and other extremely idealistic positions. Because we have little experience, and none in modern times, of what these super-libertarian systems would be like in practice it's hard to judge what the results would be.
Like it or not governments are a big part of the world. I guess I don't think our can unilaterally surrender while others view economics as war.
So your point is that instead of doing the things and making the products they're good at, countries should do the things and make the products that they're bad at?
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