[Peace-discuss] The US has become a rogue nation.

[Lisa Chason]

The US has become a rogue nation.

Gentle reader, if you prefer comforting lies to harsh truths, don't read
this column.

By Paul Craig Roberts

02/01/06 " <http://www.informationclearinghouse.info/> ICH" -- -- The state
of the union is disastrous. By its naked aggression, bullying, illegal
spying on Americans, and illegal torture and detentions, the Bush
administration has demonstrated American contempt for the Geneva Convention,
for human life and dignity, and for the civil liberties of its own citizens.
Increasingly, the US is isolated in the world, having to resort to bribery
and threats to impose its diktats. No country any longer looks to America
for moral leadership. The US has become a rogue nation.

Least of all did President Bush tell any truth about the economy. He talked
about economic growth rates without acknowledging that they result from
eating the seed corn and do not produce jobs with a living wage for
Americans. He touted a low rate of unemployment and did not admit that the
figure is false because it does not count millions of discouraged workers
who have dropped out of the work force.

Americans did not hear from Bush that a new Wal-Mart just opened on
Chicago's city boundary and 25,000 people applied for 325 jobs (Chicago
Sun-Times, Jan. 26), or that 11,000 people applied for a few Wal-Mart jobs
in Oakland, California. Obviously, employment is far from full.

Neither did Bush tell Americans any of the dire facts reported by economist
Charles McMillion in the January 19 issue of Manufacturing & Technology
News:

During Bush's presidency the US has experienced the slowest job creation on
record (going back to 1939). During the past five years private business has
added only 958,000 net new jobs to the economy, while the government sector
has added 1.1 million jobs. Moreover, as many of the jobs are not for a full
work week, "the country ended 2005 with fewer private sector hours worked
than it had in January 2001."

McMillion reports that the largest sources of private sector jobs have been
health care and waitresses and bartenders. Other areas of the private sector
lost so many jobs, including supervisory/managerial jobs, that had health
care not added 1.4 million new jobs, the private sector would have
experienced a net loss of 467,000 jobs between January 2001 and December
2005 despite an "economic recovery." Without the new jobs waiting tables and
serving drinks, the US economy in the past five years would have eked out a
measly 64,000 jobs. In other words, there is a job depression in the US.

McMillion reports that during the past five years of Bush's presidency the
US has lost 16.5% of its manufacturing jobs. The hardest hit are clothes
manufacturers, textile mills, communications equipment, and semiconductors.
Workforces in these industries shrunk by 37 to 46 percent. These are amazing
job losses. Major industries have shriveled to insignificance in half a
decade.

Free trade, offshore production for US markets, and the outsourcing of US
jobs are the culprits. McMillion writes that "every industry that faces
foreign outsourcing or import competition is losing jobs," including both
Ford and General Motors, both of which recently announced new job losses of
30,000 each. The parts supplier, Delphi, is on the ropes and cutting
thousands of jobs, wages, benefits, and pensions.

If the free trade/outsourcing propaganda were true, would not at least some
US export industries be experiencing a growth in employment? If free trade
and outsourcing benefit the US economy, how did America run up $2.85
trillion in trade deficits over the last five years? This means Americans
consumed almost $3 trillion dollars more in goods and services than they
produced and turned over $3 trillion of their existing assets to foreigners
to pay for their consumption. Consuming accumulated wealth makes a country
poorer, not richer.

Americans are constantly reassured that America is the leader in advanced
technology and intellectual property and doesn't need jobs making clothes or
even semiconductors. McMillion puts the lie to this reassurance. During
Bush's presidency, the US has lost its trade surplus in manufactured
Advanced Technology Products (ATP). The US trade deficit in ATP now exceeds
the US surplus in Intellectual Property licenses and fees. The US no longer
earns enough from high tech to cover any part of its import bill for oil,
autos, or clothing.

This is an astonishing development. The US "superpower" is dependent on
China for advanced technology products and is dependent on Asia to finance
its massive deficits and foreign wars. In view of the rapid collapse of US
economic potential, my prediction in January 2004 that the US would be a
third world economy in 20 years was optimistic. Another five years like the
last, and little will be left. America's capacity to export manufactured
goods has been so reduced that some economists say that there is no exchange
rate at which the US can balance its trade.

McMillion reports that median household income has fallen for a record fifth
year in succession. Growth in consumer spending has resulted from households
spending their savings and equity in their homes. In 2005 for the first time
since the Great Depression in the 1930s, American consumers spent more than
they earned, and the government budget deficit was larger than all business
savings combined. American households are paying a record share of their
disposable income to service their debts.

With America hemorrhaging red ink in every direction, how much longer can
the dollar hold on to its role as world reserve currency?

The World Economic Forum in Davos, Switzerland, is the cradle of the
propaganda that globalization is win-win for all concerned. Free trader
Stephen Roach of Morgan Stanley reports that the mood at the recently
concluded Davos meeting was different, because the predicted "wins" for the
industrialized world have not made an appearance.

Roach writes that "job creation and real wages in the mature, industrialized
economies have seriously lagged historical norms. It is now commonplace for
recoveries in the developed world to be either jobless or wageless--or
both."

Roach is the first free trade economist to admit that the disruptive
technology of the Internet has dashed the globalization hopes. It was
supposed to work like this: The first world would lose market share in
tradable manufactured goods and make up the job and economic loss with
highly-educated knowledge workers. The "win-win" was supposed to be cheaper
manufactured goods for the first world and more and better jobs for the
third world.

It did not work out this way, Roach writes, because the Internet allowed job
outsourcing to quickly migrate from call centers and data processing to the
upper end of the value chain, displacing first world employees in "software
programming, engineering, design, and the medical profession, as well as a
broad array of professionals in the legal, accounting, actuarial,
consulting, and financial services industries."

This is what I have been writing for years, while the economics profession
adopted a position of total denial. The first world gainers from
globalization are the corporate executives, who gain millions of dollars in
bonuses by arbitraging labor and substituting cheaper foreign labor for
first world labor. For the past decade free market economists have served as
apologists for corporate interests that are dismantling the ladders of
upward mobility in the US and creating what McMillion writes is the worst
income inequality on record.

Globalization is wiping out the American middle class and terminating jobs
for university graduates, who now serve as temps, waitresses and bartenders.
But the whores among economists and the evil men and women in the Bush
administration still sing globalization's praises.

The state of the nation has never been worse. The Great Depression was an
accident caused by the incompetence of the Federal Reserve, which was still
new at its job. The new American job depression is the result of free trade
ideology. The new job depression is creating a reserve army of the
unemployed to serve as desperate recruits for neoconservative military
adventures. Perhaps that explains the Bush administration's enthusiasm for
globalization.

Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan
administration. He was Associate Editor of the Wall Street Journal editorial
page and Contributing Editor of National Review. He is coauthor of The
Tyranny of Good Intentions.He can be reached at: paulcraigroberts at yahoo.com
"Brainwash yourself before somebody nasty beats you to it."
-Rob Brezsny

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