Nuking the Economy

Discussion in 'Economics' started by dddooo, Feb 12, 2006.

  1. Forget Iran, Americans Should be Hysterical About This
    Last week the Bureau of Labor Statistics re-benchmarked the payroll jobs data back to 2000. Thanks to Charles McMillion of MBG Information Services, I have the adjusted data from January 2001 through January 2006. If you are worried about terrorists, you don’t know what worry is.

    Job growth over the last five years is the weakest on record. The US economy came up more than 7 million jobs short of keeping up with population growth. That’s one good reason for controlling immigration. An economy that cannot keep up with population growth should not be boosting population with heavy rates of legal and illegal immigration.

    Over the past five years the US economy experienced a net job loss in goods producing activities. The entire job growth was in service-providing activities--primarily credit intermediation, health care and social assistance, waiters, waitresses and bartenders, and state and local government.

    US manufacturing lost 2.9 million jobs, almost 17% of the manufacturing work force. The wipeout is across the board. Not a single manufacturing payroll classification created a single new job.

    The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a super-economy that is “the envy of the world.” Communications equipment lost 43% of its workforce. Semiconductors and electronic components lost 37% of its workforce. The workforce in computers and electronic products declined 30%. Electrical equipment and appliances lost 25% of its employees. The workforce in motor vehicles and parts declined 12%. Furniture and related products lost 17% of its jobs. Apparel manufacturers lost almost half of the work force. Employment in textile mills declined 43%. Paper and paper products lost one-fifth of its jobs. The work force in plastics and rubber products declined by 15%. Even manufacturers of beverages and tobacco products experienced a 7% shrinkage in jobs.

    The knowledge jobs that were supposed to take the place of lost manufacturing jobs in the globalized “new economy” never appeared. The information sector lost 17% of its jobs, with the telecommunications work force declining by 25%.
    Even wholesale and retail trade lost jobs. Despite massive new accounting burdens imposed by Sarbanes-Oxley, accounting and bookkeeping employment shrank by 4%. Computer systems design and related lost 9% of its jobs. Today there are 209,000 fewer managerial and supervisory jobs than 5 years ago.

    In five years the US economy only created 70,000 jobs in architecture and engineering, many of which are clerical. Little wonder engineering enrollments are shrinking. There are no jobs for graduates. The talk about engineering shortages is absolute ignorance. There are several hundred thousand American engineers who are unemployed and have been for years. No student wants a degree that is nothing but a ticket to a soup line. Many engineers have written to me that they cannot even get Wal-Mart jobs because their education makes them over-qualified.

    Offshore outsourcing and offshore production have left the US awash with unemployment among the highly educated. The low measured rate of unemployment does not include discouraged workers. Labor arbitrage has made the unemployment rate less and less a meaningful indicator. In the past unemployment resulted mainly from turnover in the labor force and recession. Recoveries pulled people back into jobs.

    Unemployment benefits were intended to help people over the down time in the cycle when workers were laid off. Today the unemployment is permanent as entire occupations and industries are wiped out by labor arbitrage as corporations replace their American employees with foreign ones.

    Economists who look beyond political press releases estimate the US unemployment rate to be between 7% and 8.5%. There are now hundreds of thousands of Americans who will never recover their investment in their university education.

    Unless the BLS is falsifying the data or businesses are reporting the opposite of the facts, the US is experiencing a job depression. Most economists refuse to acknowledge the facts, because they endorsed globalization. It was a win-win situation, they said. They were wrong.

    At a time when America desperately needs the voices of educated people as a counterweight to the disinformation that emanates from the Bush administration and its supporters, economists have discredited themselves. This is especially true for “free market economists” who foolishly assumed that international labor arbitrage was an example of free trade that was benefitting Americans. Where is the benefit when employment in US export industries and import-competitive industries is shrinking? After decades of struggle to regain credibility, free market economics is on the verge of another wipeout.

    No sane economist can possibly maintain that a deplorable record of merely 1,054,000 net new private sector jobs over five years is an indication of a healthy economy. The total number of private sector jobs created over the five year period is 500,000 jobs less than one year’s legal and illegal immigration! (In a December 2005 Center for Immigration Studies report based on the Census Bureau’s March 2005 Current Population Survey, Steven Camarota writes that there were 7,9 million new immigrants between January 2000 and March 2005.)

    The economics profession has failed America. It touts a meaningless number while joblessness soars. Lazy journalists at the New York Times simply rewrite the Bush administration’s press releases.

    On February 10 the Commerce Department released a record US trade deficit in goods and services for 2005--$726 billion. The US deficit in Advanced Technology Products reached a new high. Offshore production for home markets and jobs outsourcing has made the US highly dependent on foreign provided goods and services, while simultaneously reducing the export capability of the US economy. It is possible that there might be no exchange rate at which the US can balance its trade.

    Polls indicate that the Bush administration is succeeding in whipping up fear and hysteria about Iran. The secretary of defense is promising Americans decades-long war. Is death in battle Bush’s solution to the job depression? Will Asians finance a decades-long war for a bankrupt country?
  2. 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:
  3. babe714


    This was the best place in town to work. Oh well ...............Audios!!!
    They were making record profits but could make even more by moving south of the border. Just the latest in a long line of manufacturesr to do that here. All the the complex high value added jobs were supposed to stay here according to the politicians. Where are they ?

    Sunday February 12, 2006

    Steris to move Pa. operation to Mexico
    Related Links
    Steris Corp.


    4:17 pm, January 30, 2006

    Mentor-based Steris Corp. announced today that it will move its Erie, Pa., manufacturing operations to Mexico.

    About 450 people make sterilization equipment at Steris’ Erie plant, while another 230 employees there provide business support services.

    “The decision to transfer manufacturing activities from Erie to Mexico was a difficult one. However, the reality is that our core health care customers are under significant pressure to reduce costs and we are experiencing new global competition from lower cost suppliers,” Steris president and CEO Les Vinney said in a statement.

    “The new facility will allow us the flexibility to better meet the needs of our customers, enhance our competitive position and provide future growth opportunities,” he said.

    The move also is expected to save Steris about $20 million before taxes beginning in fiscal year 2009. But in the meantime, Steris will incur pre-tax costs of $30 million in the fourth quarter of fiscal year 2006. Those costs are expected to impact diluted earnings per share by about $0.27 in the fourth quarter of fiscal year 2006.

    In recent years, Steris attempted to make the plant more competitive by investing “considerable amounts” in new equipment, improved processes and designs. However, the plant continued to be Steris’ most expensive operation.

    The move to Mexico is expected to take place in stages and to be completed by summer 2007. On Tuesday, Jan. 31, Steris will announce third-quarter 2006 earnings and will further discuss the financial impact of moving its Erie manufacturing operations to Mexico.
  4. dddooo must be one of the ones unemployed. :D

    If you hate America much, why don't you leave the country? Immigrants have the right idea.
  6. Have you thought of paying living wage? If no one wants to work for you - you're not offering enough money, greedy bastards. Besides that's the other side of globalization and outsourcing - kids don't want to invest in dead end careers like technology and engineering knowing full well they'd have to spend $100,000 on education and then compete with $5 hr equally qualified and educated indian engineers.

    The article was written by Paul Craig Roberts - former Assistant Secretary of the Treasury in the Reagan administration and Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review.
  7. You are probably Florida or Arizona right? Wait til interest rates keep going up and the housing boom dies down. I graduated in 2004 with a degree in mechanical engineering and still haven't a job in my field. Every interview that I have asked how many candidates applied, I got an answer of over 50. A lot of these companies think they can pay their engineer's the same amount as they do their factory workers. Anyone who is seriously hiring engineers, expects them to move all over the country whenever snap their fingers. I even had one company who wanted to know if I would be willing to go to China for a couple weeks at a time.

    The combination of free trade and lazy union workers has destroyed manufacturing in this country. I am only in support of free trade if we are trading with countries who enforce all the same regulations that are in US. There is no way American companies can compete with foreign companies who can pay their workers 15 cents an hour, destroy their environment, and don't have to pay all the insurance and taxes that American companies do.
  8. I should probably add too that I'm not willing to work for a so called "defense contractor". I would have a real problem with designing stuff to kill people especially when I don't agree with American foreign policy. Weapons are probably the only thing America still manufactures a lot of. You know all hope is lost if we ever start exporting those jobs too.
  9. He's in Florida according to his profile.

    Actually they pay virtually the same corporate taxes in China and India. The top corporate tax rate in India is 33%, it's 30% in China and 35% in the US. Of course they can always bribe a local government bureaucrat... My point is american companies are not leaving for China and India because they are overtaxed or overregulated. I do agree with the rest of your post.
  10. Sam123

    Sam123 Guest

    Expect sudden changes in global statistics in the next few years.
    #10     Feb 15, 2006