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.
Yeah, why don't you hold your breathe until the perfect statistic is available to make whatever point you want to make. Good idea.
It's called destructive entrepreneurship.....some decline to be replaced by others with increased economic benefit and viability.
Can't comment on all the "doomsayers" claims, but I own some Qualcomm... cellphone semiconductor company; its doing quite well thank you.
Throw rocks....or get on-board! Your pick.
Now if Nikes went from $80 to $15- $20 due to outshoring your comment would make some sense.>>>>>>>>>>>>>
I understand your comment perfectly but in fairness I must say that I believe there are shoes just as good as Nike that can be bought for not much more than $20.00. The only reason Nike can outsource to slave labor countries and still sell for a high price is the American propensity to pay good money for a name rather than shopping for a good product at a reasonable price. We have raised a group of consumers stupid enough to pay high premiums for the privilege of wearing the manufacturer's logo on their clothing. Personally I consider that rather pathetic.
That might be a while. I once heard pat sometimes has problems with "regularity" and he's been so busy pulling stuff "out" this past two months...
But a year ago in March 2005, the Zloty was worth 2.9 to the US dollar, now it is 3.2 to the USD so the Zloty has lost 10% of its value relative to the dollar in the last year.
Yes in your collectivist nirvana I'm sure it does.
Let's go back to this article once again:
By STEPHEN MOORE and LINCOLN ANDERSON
"New reports by the Census Bureau and the Federal Reserve Board on the economic well-being of the typical American family reveal that over the past three decades, the vast majority of families have experienced a rapid growth in their income and wealth. Now that nearly six out of 10 households own stock and two out of three own their own homes, the average family -- for the first time ever -- has net worth (assets minus liabilities) of more than $100,000. Median family income has climbed to more than $54,000 a year.
Almost no one in the national media has taken notice of this good news, which has been camouflaged by a barrage of misleading and gloomy stories on "stagnant wages," "the growing income gap between rich and poor," "the disappearing middle class" and "rising poverty in America." The reality is that if the economic growth, employment and family-finances numbers get any better, the media will soon have to start calling this the "Clinton economy."
What the reports tell us is that the vast majority of Americans have not bumped into income glass-ceilings, but rather are experiencing an astonishing pace of upward income mobility. The Census data from 1967 to 2004 provides the percentage of families that fall within various income ranges, starting at $0 to $5,000, $5,000 to $10,000, and so on, up to over $100,000 (all numbers here are adjusted for inflation). These data show, for example, that in 1967 only one in 25 families earned an income of $100,000 or more in real income, whereas now, one in six do. The percentage of families that have an income of more than $75,000 a year has tripled from 9% to 27%.
But it's not just the rich that are getting richer. Virtually every income group has been lifted by the tide of growth in recent decades. The percentage of families with real incomes between $5,000 and $50,000 has been falling as more families move into higher income categories -- the figure has dropped by 19 percentage points since 1967. This huge move out of lower incomes and into middle- and higher-income categories shows that upward mobility is the rule, not the exception, in America today.
It is true that the median-income numbers have fallen slightly in recent years. But this has been the pattern during virtually every recession and immediate post-recession period of the last 40 years. Median-income growth stalls, and then when the recovery picks up steam, incomes resume their inexorable march upward. That is why the long-term trend is what we should be paying attention to. And examining this data leaves no room for argument: The middle class has not been "shrinking" or losing ground, it has been getting richer. For example, the Census data indicate that the income cutoff to be considered "middle class" has risen steadily. Back in 1967, the income range for the middle class (i.e., the middle-income quintile) was between $28,000 and $39,500 a year (in today's dollars). Now that income range is between $38,000 and $59,000 a year, which is to say that the middle class is now roughly $11,000 a year richer than 25 to 30 years ago. This helps explain why middle-income families can buy things like cable TV, air conditioning, DVD players, cell phones, second cars and so on, that were considered mostly luxury items for the rich in the 1950s and '60s.
The upper-middle class is also richer. Those falling within the 60th to 80th percentile in family income have an income range today of between $55,000 and $88,000 a year, which is about $24,000 a year higher than in 1967. This rapid upward income mobility indicates that the great American Dream, in which each generation achieves a higher living standard than their parents, is alive and well. ,p> Turning from income to wealth, data from the Fed provide further confirmation of family economic gains for the middle class. The total net worth of Americans rose to just shy of $50 trillion in 2004. The Fed has not yet calculated the median household wealth for 2004, but we estimated that number by taking the average ratio of mean wealth to median family wealth over the past 10 years. This yields an estimate of $105,000 in 2004. This is almost double the median family-wealth level of 1983 and nearly triple the level of 1962. Until very recently, for a family to attain six figures of wealth was considered quite rich. Despite all of the groans about the over-indebtedness of American households, the new Federal Reserve Board data suggest that the family balance sheet is not highly levered. The ratio of debt to assets is only 18.3%. ,p> Finally, we need to address the issue of whether the poor are being left behind in this era of wealth and income gains. It is true that there is one income category -- $0 to $5,000 a year -- where income mobility is hardly observable. This very low income group has stubbornly fluctuated between 2.3% and 3.6% of American families. We certainly think driving down the percentage of these "have nots" is a critical national priority, but we do not think their poverty is a result of a macro failure of the U.S. economy. Indeed, a very large percentage of these families do not even have a full-time worker participating in the labor force. We think poverty is best addressed by real competition-based reforms in education, by fighting crime and addiction, and by rebuilding American families.
The media and the poverty lobby have seized upon the news that the poverty rate has spiked upward to 12.7% in 2004, up from 11.3% before the recession. This rise was widely reported and condemned, but again this is a short-term phenomenon attributable to the aftershocks of the recession. What was not widely reported was that the 12.7% poverty rate was the lowest coming out of any recession in the last 25 years, and that the poverty rate has been lower than 12.7% in only five of the last 25 years. It certainly is better than the 15.1% rate poverty-rate peak in 1993.
The Census family-finances data corroborate the common-sense notion that by far the best long-term anti-poverty program is growth and avoidance of recession -- because the downturns invariably hit the poor hardest. That's why President Bush's tax cuts should be extended: They have created a positive investment, jobs and growth climate that will, if history is any guide, reverse the recent uptick in poverty levels.
We can say with certainty that most working Americans are achieving levels of wealth and income that far surpass those of their parents. It's reassuring to know that the U.S. is still the pre-eminent meritocracy, where economic success is still predominantly powered by hard work and saving, not inheritance and privilege.
Where is he wrong A. Pole?
Finally an explanation that makes sense!! Thanks - I think yo got it!
I do remember such words (like when GWB made a good choice for the Supreme Court).
Still we do not live in monarchy to use the loyalty and love toward the head of the state as the key measure of social virtue. Not yet, but maybe the time is coming close.
He has mistaken the Republican Party for the America Firsters circa 1940's.
I think he belongs here:
http://www.americafirstparty.org/
So, keep your UNION dollars where they belong....in the UNION!
But it is a long way back to 4.
I'm only asking this, because "health", "physical beauty", and "joy" aren't "values". Neither are a lot of the other things you listed.
Goals? Maybe. Priorities? Okay. VALUES? NOT IN THE ENGLISH LANGUAGE!
Oh, okay, you're giving me the old Catholic LIFE IS A VEIL OF TEARS routine, mixed in with your own brand of thought?
Yes, I asked a good question, but what I got as an answer, is gibberish! But you certainly DID expose just why your posts are what they are. LOL
"....kinda strange how there's dozens and dozens of personal attacks against PJB yet no one (I stopped reading at about post 75) takes his article head on and disputes it..."
I haven't seen anyone dispute Pat's comments either.
Thanks for the post.
I receive on a daily basis several unsolicited and, presumably, untraceable penny stock hot tips at my work e-mail account. So do some of my colleagues. I and my boss, but probably not all of the recipients, figure that these traders/speculators buy a stock, send out this spam to a million addresses, and when 1,000 (maybe) recipients take the bait, the stock goes up a penny or two, and the traders dump it. Likely scenario?
While I fully understand your points about the value of traders in markets, I also understand why their reputation is such as it is. The example I cited is not so isolated, after all the whole business invites manipulation, rumour mongering and such, especially when you've got your own money invested. Check out the practices of professional flea market sellers for examples closer to home. So, 'parasites' is not far off the mark.
"Having plunged us into an unnecessary war, Bush now confronts the real possibility of strategic defeat and a failed presidency. His victory in Iraq, like the wars of Wilson and FDR, has turned to ashes in our mouths. And like Truman's war in Korea and Kennedy's war in Vietnam, Bush's war has left America divided and her people regretting he ever led us in. But unlike the world wars, Korea and Vietnam, Bush cannot claim the enemy attacked us and we had no choice. Iraq is Bush's war. Isolationists had nothing to do with it. To a man and woman, they opposed it."
"Now, with an army bogged down in Afghanistan and another slowly exiting Iraq, and no end in sight to either, Bush seeks to counter critics who warned him not to go in by associating them with the demonized and supposedly discredited patriots of the America First movement of 1940-41."
Also notice, besides defending that group who admired Hitler, how pat seems to forget we "WON" WWI and WWII. Well, I guess that all depends on what side you're on.
its the only statistic that matters. if you want to assess private sector wage growth, having the salary increases for all US public school teachers in the stats - don't count for a whole lot.
its really pointless to discuss this topic anymore with you folks, I post alot of observations, and you want to focus on a point of simple statistical analysis as the basis for your argument.
in the meantime, the President is telling workers at Wendy's that they need to set aside some of their wages into a HSA. and telling US automakers that they "need to make better cars", while leaving the floodgates for the coming waves of chinese imports wide open to our market.
They were refutted numerous times but you have to care.
Or don't you know that EVERYONE who was 65, got SS checks, when that pyramid scheme went into effect?
One passage is good: "It is true that the median-income numbers have fallen slightly in recent years."
You have to get SERIOUS!
The President of the United States is the COMMANDER in CHIEF. (Not the head of the state)
As far as social virtue goes, you can't judge someone else for what you lack in yourself.
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