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.
Don't bother people that are busy "free tradin'". Of course an agreement is a treaty, except in the courts.
And as far as the market goes, the BOOM took off in the 1960s, far greater than it did during and after Reagan's policies and tax cut. As a matter of fact, the markets took off so great, in the late '60s, that the back room couldn't handle it, the ticker couldn't handle the volume, and hours had to change, so that trades could catch up with the paper work!
BTW...the market mostly did a crab dance, during your beloved '50s! Go buy a damned clue; for crying out loud!
Middle class families can still live on one salary, today, but they don't want to. Noooooooooooooooo, they want at least two cars, a T.V., with cable, in almost every room, they want the latest "IN" thing, DVDs, air conditioning, cell phones, three bathrooms, family rooms, expensive vacations...all the goodies!
And as to the '50s and '60s being "easier", you don't know WHAT you're talking about. From recessions to strikes, to civil strife, to blood in the streets, the COLD WAR, the Korean war, the Cuban Missile Crisis, heavy taxation, and everything else gloss over/ignore, your pretty picture, of that time, is an hallucination!
Very good points, it is like the grocery store comparison that Rush likes to do. He points out that the customer runs a trade deficit with the grocery. The grocer sells the goods, and receives the money. The grocer has to spend his money, so the money comes back into the economy. It sounds great, but he doesn't mention that the grocer is making a better living, and has a relationship with the customer that cannot be severed without harm to both. We are enriching the Chinese, and just about everyone else, and are dependent upon them now to supply us with our needs. The theory is that there will be no war between trading partners, but they forget that there is something more powerful than the greed factor. It is what those that have enough money always want, power and control.
If the money they have is just so much worthless paper, that would mean the money we hold would be worthless. What if they used the excess to buy oil futures, or gold bullion? Wouldn't it drive up the price of such things, leading them to have more money? If they bought using US dollars, then sold into say Euros, wouldn't that have the effect of collapsing our money?
What was being talked about was SPAM from a BOILER ROOM/BUCKET SHOP operation. Those people don't get paid in stock.
And you have swerved into the truth: there is no such thing as a trade deficit unless the currency of the country running the deficit is backed by a tangible commodity.
Of course the money has to go somewhere, but where?
It ends up getting invested in goods and services produced in the country the money's from.
Besides, the way the trade deficit is calculated is completely whack, anyway.
Let me give you an example my daughter described to me last week:
The company she works for exported a very sophisticated software package to a foreign country. The materials exported were several dozen CD-ROMs and several trees' worth of manuals. The purchase agreement included technical support (telephone & Internet; if they need a warm body onsite to fix a problem, that costs a LOT extra).
When she calculated the amount exported using the Department of Commerce's methods, it priced out as follows:
CD-ROMs: $0.99 apiece, or about $50.
Manuals: valuation was at $500, based on number of volumes and sizes.
Total "export" value: $550.
Technical support: zero export value (i.e., nothing left the country).
The total deal was in the mid-seven-figure range, and the majority of it was in the technical support. But almost all of it disappeared in the official count.
Heavy industry and their lobbyists have resisted recalculating the trade deficit for decades, because if it is calculated based on actual dollar flows, then they lose their ability to scream about "massive trade deficits" being an imminent threat to America, because much of that trade deficit will disappear.
Additionally, $725 billion sounds like a lot of money--until you realize that the Gross Domestic Product for 2005 was somewhere around $13 trillion...or $13,000 billion. In other words, the trade deficit was less than 6% of the GDP.
According to those that see things as positive, something new will come along, it always does.
I almost know Dickens' "A CHRISTMAS CAROL" by heart; sentence by sentence, word by word. In it, he doesn't touch on aesthetics at all and economics is an oh by the way, is a moral sense only.
Though I do love Charles Dickens' books, he was a terrible bleeding heart liberal, his prose are often over the top ( he did, after all, get paid by the word, for a lot of his work ), and a damned hypocrite.
That wasn't because of the union; not in the way you mean.
Bud, you've lost it. I won't be participating in any further discussion with you. Thanks for the comments. Later...
Why should government interfere in the production of music or drugs? If a company comes along that can sell the product cheaper, or improve the production with the results of lower prices, that is free trade.
There was a purge?
Buchanan is always whinning about the dead and wounded children of our implaccable enemies. I've not heard him once say a thing or voice any sympathy for the 1,000 innocent Israelis who've been killed by his Palestinian buds.
Though your English is very good, you still trip up in it, because the subtleties of it still escape you. And THAT is partly the problem with your first introduction of the word "values" and the whole rest of the discussion on them. Another of your problems, is that you don't know me at all, what I think, what I know, how I feel; YOU DON'T EVEN KNOW WHAT SEX I AM ! Stiil, you have decided that you know all of these things and more; everything you've stated, though, is completely wrong.
BTW...fully knowing and understanding the language you use, whether it's your mother tongue or not, is of great value to you and others whom you communicate with.
Actually, there are all sorts of "values", many you haven't mentioned, nor plumbed the depths of. All, however, need modifiers, when you talk about them.
Which didn't work all that well, now, did it?
If anyone has "lost it", Doughty, it's you! You know better than to call me "Bud".
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