Pat Buchanan : America's Hollow Prosperity

WorldNetDaily.com ^ | 02/15/2006 | Patrick Buchanan

[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.

[television is just wrong]

Ronald Reagan, " I'm not worried about the national debt, it is big enough to take care of itself".

[Clemenza]

Ah, the 1950s were great. Living in small row houses, only owning one car, going on vacations to "the shore" for a week (forget about overseas or even Florida), living near smelly factories, only going out to eat maybe twice a month, buying overpriced clothes and other goods, etc....

I happen to live considerably better than any of my grandparents, as did my dad (born in 1946). I wouldn't trade the 1950s for the 2000s if I had a gun to my head.

[remember]

The dollar against other currencies has dropped considerably in the last 5 years and will continue to drop.

The Yen dollar ratio is kept artificially high by Japan for their own reasons.

The Yen might be a bad example for you.

And the dollar is stronger against the Euro over the last few years.

You're mistaken. The first graph in your post #512 is the U.S. Dollar to Yen conversion over the last five years. However, the second graph is the Euro to U.S. Dollar (not U.S. Dollar to Euro) conversion over last 2 (not 5) years. This can be seen in following two URLs of the two graphs:

http://ichart.finance.yahoo.com/5y?usdjpy=x http://ichart.finance.yahoo.com/2y?eurusd=x

The 5y and 2y are for five-year and two-year spans and the usdjpy and eurusd are for U.S. Dollar to Yen and Euro to U.S. Dollar conversions. In any case, the following graph shows the conversion from the U.S. Dollar to five major currencies over the past five years:

As can be seen, the U.S Dollar is up versus the Euro (USDEUR=X) during the past year but down about 25 percent over the past 5 years. It is down about 20 percent against the British Pound (USDGBP=X), down about 25 percent against the Canadian Dollar (USDCAD=X) and Swiss Franc (USDCHF=X), and down about 30 percent against the Australian Dollar (USDAUD=X). It's only held up against the Japanese Yen against which it's about even (perhaps for the reason given by rcocean).

You can see the entire Yahoo page that contains the above graph (and make any changes) at this link.

[simon says what]

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%.

Something I find interesting about the article is it focuses on the family as the unit of measure. Adjusted for inflation, more families earned a higher income today than in 1967. No where in the article however, does it mention the dramatic increase in dual income families since 1967.

[remember]

The two URLs in my post #803 were:

http://ichart.finance.yahoo.com/5y?usdjpy=x
http://ichart.finance.yahoo.com/2y?eurusd=x

[DoughtyOne]

Good morning.

To be charitable, that was perhaps the most imbalanced view of the 50s and 60s I've seen.  Look, there is never a perfect economy.  It's really rather pointless to mention the negatives in light of the overall expansion and improvements in standards of living.  I'm not saying there weren't negatives or that it's not fair to mention them, but to act as if those negatives were the real story of those years is quite skewed IMO.  You yourself mention coming off years of war and well I do have to scratch my head your going back to the early to mid 1930s, but okay.  What financed that boom?  Once again I have to point to the policies in place at that time vs today's policies.

You mention cheap products from Japan, but fail to mention that our trade deficit in the 50s and 60s was almost non-existant.

Our current trade deficit policies took a swerve to the top of the charts around 1991.  In the decade prior to 1991 we had rebuilt our military and experienced one of the best expansions of our economy in our nation's history.  Federal tax intake doubled under President Ronald Reagan.  How can you folks explain that?  How did our nation survive prior to 1991, with trade deficits in the $50 billion dollar range?  How did we survive not giving our main strategic global threat an influx of hundreds of billions of dollars in commerce?

Do you realize, that if we had treated the U.S.S.R. the same way we're treating China right now, it would never have collapsed?  What the hell are we doing propping up a nation that abuses it's own people, threatens it's neighbors, and is expanding it's military with the express intent of blunting our influence on the world, despite the fact that it has no natural enemies?

[DoughtyOne]

LOL, you guys are a riot.

Clamenza, I don't know too many people of any time in our nation's history that would trade their standard of living for that of fifty years previous.  My point, and I think it's a valid point, is that our nation did experience an economic boom in the 50s and 60s.  Your and NoPardon's view seems to be that isn't correct.  Tell me, do you think the standard of living was better in 1972 than it was in 1952?  If you don't think so, say so.  I would wager that just about everyone's standard of living was far better in 1972 than in 1952.  And I don't think you can explain that improvement unless there was a significant economic boom during the 1950s and 60s.

You mentioned what seemed to be your lifestyle in the 1950s.  Were you still living in those small row houses in 1975?  Did you still only own one car?  Did you still only get one weeks vacation?  Did you still live near a smelly factory?  Did you still only go out to eat twice a month?

My point is that between 1950 and 1991, our nation expanded tremendously.  We did it without insane trade policies.  We did it without flooding our nation with three to five million foreign nationals per year.

I remain unconvinced that our nation today is more strong and healthy than it was in 1991.  I believe that on a number of levels, this nation has figuratively traded in it's American cheese for Swiss cheese.

[Ciexyz]

I remember the 50's and it was a good decade. My Dad was a mechanical engineer and his one income was our ticket to the middle class. With one income, we could afford a ranch home, vacations to the shore, and one car. Mom stayed home. Mom was always there when I got home from school. Taxes were lower and a family could live on one income. Yes, the factories in the Pittsburgh area belched smelly fumes in the air. That was life.

[durasell]

Maybe so -- but we live in more interesting times today.

[DoughtyOne]

I lived with my grandparents. My grandfather was an RN and worked for Dupont in Carl Junction, Missouri. With that one job he was able to pay the mortgage on a 120 acre farm, feed the family and keep my brother and I in church school.

My grandmother stayed home as a homemaker.

We weren't rich. We had enough. We were happy. I wouldn't trade those years for anything.

We had horses and cattle.

Take a look at the lifestyle of the 1950s and the lifestyle of the 2000s. In all honesty, it's undeniable that some things are better today. It's still shocking that it's impossible to live on one salary today, and almost impossible to purchase a home on two.

[Clemenza]

The 1950s only looked great compared to the depression. If you would have asked my great-grandmother, she would tell you how there seemed to be more excess in the 20s, while the 50s involved a lot of "budgeting" to get by.

As far as the world going to hell since 1991, well the stock market exploded, the banking industry (which I worked in) thrived like never before, most native born folks lived more prosperously than they did in the 1960s and 1970s (don't see too many native-born white folks working sh-t jobs anymore, at least in the northeast). Folks are able to by better good more cheaply than ever before, etc.

The world that Patches seems to love so much was a brief period in our history (late 1940s-early 1970s) when the U.S. was alone as a major industrial power as 1. Europe had been destroyed and 2. the Japanese were at an early stage of their rebuilding process. As a result, the Unions were able to extort, er, gain considerable concessions from management that allowed a guy who polished a screw for a living and had little education to have the same salary as someone in middle management. This all ended with the energy crisis and the rise of the Asian Tigers.

The U.S. hasn't really been protectionist since the 1930s, so you can't exactly blame free trade.

I think your perspective is effected by where you live in Calipornia. The Southern California economy was driven by Defense Spending from the 1940s until around 1991. That was when the bottom fell out of the aerospace industry, and Lakewood, Long Beach, Palmdale, etc., nearly became the rustbelt of the west. Now Southern Cal lives on Real Estate, Hollywood, and, to a lesser extent, financial services.

[durasell]

And today, for the first time in American history, a large percentage of its citizens want to turn back the clock. They want to eliminate, rather than fix, all things that don't work, and stop all progress.

To me that indicates a new kind of fear.

[Clemenza]

And today, for the first time in American history, a large percentage of its citizens want to turn back the clock. They want to eliminate, rather than fix, all things that don't work, and stop all progress.

Well, we all know of the Luddites in England who attacked the looms and called for a ban on the mechanical spinning of cotton threads.

In the USA, we had a Utopian movement which sought to make "time stand still" in many cases. Do a Google on New Harmony, Indiana, or Brentwood, New York, to say nothing of Josiah Warren, the Shakers, etc.

[Clemenza]

BTW: Pat Buchanan is rapidly turning into the main non-Democrat that I despise. He was a great speechwriter, who has gone off the deep end. He also sounds like Kenny Rogers FWIW.

[durasell]

This is a secular, non-organized movement -- zeitgeist -- that takes various forms. In it's most pernicious, it imitates the past.

[durasell]

I love Buchanan. He's kind of like a consevative Breslin, whom I also love. These guys who had the courage to write with outrage on deadline are all but gone.

Buchanan's genius -- if that's the right word -- is to identify the exact knot of a problem, clearly and concisely describe it, and then come to precisely the wrong conclusion.

[raybbr]

There are all kinds of "beauty"; some of which one can buy, some you can't. But "beauty" is NOT a "value", in the sense you mean.

Hah! Just look at the homes and the cars plastic surgeons live in and drive.

Are saying that the purchase of "beauty" has no value to them?

[DoughtyOne]

I didn't see a response to the question of whether you were doing better in 1972 than you were in 1952. Why is that?

Please point out where I said that the 1950s and 60s were a better time. I'll make it simple for you. I didn't. What I said was that there was an economic boom in the 50s and 60s. And undeniably, there was.

I will say that in the 1950s and 60s, it was easier to support a family on one income. That's probably going to be hard to take, but it's still true. Perhaps it did take some budgeting. I don't care how you budget today, one salary isn't going to do the trick.

You seem fixated on union activity during the 1950s and 60s. I didn't advocate on behalf of the unions so I'm a little puzzled why you're so fixated on it. I consider uinons to be corrupt evil influences on society at large. I've never joined one and would be just fine if what passes for labor unions today would cease to exist.

As for the 1950s only looking great compared to the depression, that's one of the most negative outlooks I've every seen regarding the 1950s. It's simply silly. If a person can pay the mortage, put food on the table, buy new cars, pay for medical care out of pocket and live a middle income lifestyle on just one salary, I consider that to be laughable as a comparison to the depression on just about any level.

Once again you're off on some union tangent regarding screws and inflated salaries. I don't know how to break this to you, but there were a whole lot of people who didn't work for the unions even in those days. They were able to put food on the table.

I realize that the stock market and banking industry is very important to some people. I know you're going to find this incredibly hard to imagine, but there are a whole lot of people out here who don't own stocks or make money off of money. We're simply schleps who go to go to work in the morning, do an honest day's labor and get paid every two weeks. We may not make it big in those great years, but then we don't lose trillions of dollars and our retirement over a few short months when the market tanks.

Once again, during the Reagan years the markets grew considerably. Trade deficits aren't the be all end all when it comes to a positive market environment. I'm of a mind that the markets continued to grow into the 90s, not because of the new trade policies, but more because Reagan laid the groundwork for growth. He lowered taxes and instituted pro-growth policies. Bush I seemed to have caused a hick-up, and Clinton lucked out. You can't name one thing Clinton did to make the economy grow. The 1990s were largely a continuation of the Reagan years economically.

No, the U.S. hadn't been protectionist, but neither had it enticed corporations to move off shore. It actually persued a policy doing just this in the 1990s. Our trade deficits went from roughly $125 billion per year in the 1990s, to $750 billion today. That 400% increase has had an incredibly negative impact on our nation. While you look at the 15th cheap VCR you own as the ultimate nevana, I submit that a person can get by on two when he knows his neighbor down the street still has a decent paying job with which to support his family.

Tell me, why do you think it is that we don't have any money for infrastructure these days? Do you think the taxes from $5 trillions dollars in commerce each year might help?

Good night Clamenza.

[RipSawyer]

By definition about half of population has IQ below average.>>>>>>>>>>>>>>>>>>

Actually, that statement is incorrect.

[RipSawyer]

Until that day comes, no one can say for sure he owns the roof over his head.>>>>>>>>>>>>>

Actually, as long as there are property taxes, paying off the mortgage only buys the right to rent from the government at whatever rate has been set. And with recent Supreme Court decisions not even that right is guaranteed any longer.