Bush recovery is being called the jobless recovery.
Not so. We are
creating millions of jobs overseas"
THE ECONOMY STUPID!
Posted February 29, 2004 thepeoplesvoice.org
By: Ted Lang
Although the Bush administration has made itself unbelievably
vulnerable via the exposed falsehoods and/or bumbling intelligence and
foreign policy disasters, the faltering economy will be the death knell of
this president and his forked-tongued advisors.
Not since the economic upheaval typified by the Hoover presidency has
an economic downturn been so significant during an election year.
And this “it’s-the-economy-stupid!” environment far surpasses
the “gray science” ramifications attributable to Bush I.
The current economic downturn is more than just a cyclical quirk; it is an
unusual anomaly because the financial markets do not reflect the dire
straits now faced by America’s labor force.
This time around, “it’s the unemployment stupid!”
And if one thing in particular could be negatively ascribed to Bush
I, it most certainly was the prevarication involved with his saying, “read
my lips – no new taxes!” President
G.W. Bush’s tax cuts to revitalize the economy may have worked for Wall
Street, but Main Street America is getting very nervous.
The reason is simple: jobs are leaving our country.
Those who offer that this is no big deal because new jobs will take
the place of the ones lost don’t quite grasp the problem yet.
What precisely is the problem, why is it so unique this time around,
and why is America so at risk? Before
we try to clarify the problem, perhaps we should identify the opposing
economic camps. First,
there’s a group that can be identified as anarcho-capitalist economists.
These theorists believe in little or no government, and put full
confidence in Adam Smith’s invisible hand driven by individual
capitalistic greed that unintentionally works for the betterment of all via
the “free market.”
The other camp sees the free market through the auspices of clearly
identified national interests, viewing the functions of our economy as a
strong tie-in to our national and state governments.
They do not view economic activity as viable unless it is closely
tied in with the operation of government.
The malevolent role of government is increasingly seen as such either
because we now enjoy more open, honest news or opinion services as presented
by the Internet, or because the consolidation of big business and big
government has never been greater than is now the case.
Perhaps it is a little bit of both.
Summing up, we have an economic debate brewing between libertarian-type
economists, and more traditional conservative economists relying on the
intervention of the state in the free market.
And when we speak of the free market, we should extend that to
include overseas producers and consumers, as do the anarcho-capitalist
economists, who point out that a free market must be founded upon universal
Generally, libertarian-type economists offer that there should be little
concern over the loss of jobs overseas, primarily production and heavy
manufacturing work. But lately,
services have been slipping out of the country as well, typified mostly by
computer support, data evaluation and statistical/scientific analysis work.
Please reflect upon this phenomenon keeping in mind the economic
non-concerns voiced earlier by global economists that have pointed out our
progress from an agrarian, to a manufacturing, and now to a service economy,
the latter characterized mostly by “information age” services.
But now, it is these very same services that are leaving the country
As has been pointed out by Patrick J. Buchanan, our primary exports out of
country are agricultural products, led by soybean exports.
Citing his depressing but revealing article again, “An index of
American decline” written for WorldNetDaily.com
February 23rd, Buchanan writes: “With the markets soaring,
the Bush recovery is being called the jobless recovery.
Not so. We are creating
millions of jobs overseas – even as we are destroying manufacturing jobs
at a rate of 77,000 per month in the United States.”
Buchanan states, “Last year, we bought $958 billion worth of foreign
manufactures and our trade deficit in manufactures alone was over $400
billion, more than $1 billion a day. Millions
of foreign workers now labor in plants that manufacture for America, doing
jobs that used to be done by American workers….
Our largest trade deficit with any country is with China.
It has rocketed from $22 billion in Clinton’s first year to $124
billion last year. ‘The
World’s Most Unequal Trade Relationship’ is how [Charles] McMillion
Buchanan sums up the causative factors he discerns: “To neoconservatives
of the Wall Street Journal school, these trade numbers are yardsticks of
their success at creating a Global Economy and measures of their triumph in
championing NAFTA, the WTO and MFN for Beijing.
To the Old Right, however, manufacturing was a critical component of
American power, indispensable to our sovereignty and independence, and the
access road for working Americans into the middle class.”
Conservative Dr. Paul Craig Roberts and liberal Democrat Senator Chuck
Schumer have teamed up to bolster the conservative “economics begins at
home” argument. On the other
side, we have anarcho-capitalists Lew Rockwell and Butler Shaffer defending
the minimum government globalist view.
Shaffer, a professor at Southwestern University School of Law, sheds
light on a society devoid of government supervision in his January 13th
piece for Lew Rockwell.com entitled,
“What is Anarchy?”
Shaffer writes, “One philosophical abstraction that seems to befuddle most
people is ‘anarchy.’ To
those challenged by complexity – such as radio talk show hosts and
cable-TV ‘newscasters’ who are convinced that all political opinions can
be confined to the categories of ‘liberal’ and ‘conservative’ –
the word anarchy evokes an unfocused fear of uncertain forces.
Images of bomb-throwing thugs who smash and burn the property of
others are routinely conjured up by politicians and the media to frighten
people into an extension of police authority over their lives.”
Shaffer goes on: “As long as a president continues to rationalize war
against the Iraqi people as ‘operation freedom’; as long as the
Strategic Air Command insists that ‘peace is our profession’; and as
long as police departments advertise that they are there to ‘protect and
serve,’ intelligent minds must be prepared to look behind the
superficiality and imagery of words to discover their deeper meaning.
Such is the case with the word ‘anarchy.’”
In his article of January 21st, Lew Rockwell in his commentary
entitled “A World Recreated,” offers: “The market economy –
globalized, enormously powerful, breathtaking in scope and breadth – is
remaking the world in ways that far surpass any existing political
development in the US, from the crafted blather of the State of the Union to
the mad rush to grab the Democratic nomination.”
He goes on, “These developments are going to bring about surprising
political shifts, profound upsets in rooted cultural assumptions, and an
eventual and merciful end to the US imperium.
These changes will touch everyone in ways that will be both stunning
and glorious for average Americans, and deeply disturbing for the American
regime that aspires to unchallenged global hegemony.”
Rockwell continues, “What is the underlying cause?
The unleashing of human energies in nations that have been isolated,
regimented, and closed for centuries. China,
Malaysia, India, the countries of Latin America, and the new economies of
Eastern Europe, among many others, are expanding at as much as twice the
rate of American and European markets.
This is not only remaking their nations, but the way we perceive the
geographical distribution of wealth and power.
Over time, and extended far into the future, this trend is going to
mean dramatic upheavals in the way Americans perceive their role in the
Rockwell points out that cheaper labor available in this Third World sector
will drive down the biggest ticket expense item on corporate profit and loss
statements; namely, wages and salaries.
Lower labor costs bring down consumer prices and will ratchet up
quality. This frees up consumer
spending for other things, such as investing.
And the cheaper labor overseas will attract more US investment.
“The nation-state as such plays no part in its calculus, and this
has proven to be the winning ticket,” says Rockwell.
Admitting that there will be a price for this transition, Rockwell points
out: “People who have noted these trends say that we should panic that
there won’t be any jobs left for Americans to do.
What this forgets is the reality of scarcity in the world, which
implies that there are always and everywhere jobs to do because there are
always and everywhere unmet needs. Specialization
and the division of labor permits Americans to produce most efficiently in a
way that is integral to world demand and not waste time and resources in
jobs that can be done more cheaply elsewhere.”
But then Rockwell concludes that happy worldview with a caveat: “This does
mean a change in world patterns of production, but the market will manage
the change with minimum disruption, as it has for the last several hundred
years.” Rockwell addresses
this period of transition as “over time” and as “minimum
disruption,” but what does that mean precisely to today’s growing
unemployable American labor force? How
long will the transition take, and how will it actually manifest itself to
working people saddled with mortgages, college tuition, credit card debt and
Rockwell then provides another dimension: “A world dominated by a single
superpower is a gravely dangerous place, especially when that power is
irresponsibly managed (and, some would say, is managed by maniacs).
A decline in the power, might, and influence of the US is not the
same thing as a decline in America; quite the opposite.
The only real downside
is the transition: the US government may increasingly behave like a dying
rabid animal, posing danger to its random victims.
But once you hear the ‘thud’ of the final fall, the world will be
more peaceful and prosperous than ever before.”
That sums up the anarcho-capitalist economic view of the growing
global economy that is costing America jobs.
Offering another view, one that relies more on either government
intervention or a drastic change in existing government policy, is Dr. Paul
Craig Roberts’ arguments in his January 10th “Clarifications
on the Case for Free Trade,” posted on Rockwell’s Ludwig
von Mises Institute’s website. Roberts
bases his position on classic economist David Ricardo’s principle of comparative
advantage, which argues that trading nations should concentrate labor
and capital within their borders
on products that they are most efficient at producing to facilitate a free
international market. But
Robert’s argues that as regards the current booming global economy, both
labor and investment for exchangeable products between nations is all being
transferred to the Third World markets, thereby creating an absolute
advantage for these countries. Considering
our transition from an agrarian economy, to a manufacturing one, and now
supposedly, a service economy, where does this leave the American worker?
Roberts attacks the investment argument as well.
US investments in the Third World are being utilized to create new
plants and equipment. Our trade
deficit is funding an infusion of foreign investment to the US, but these
investments are buying up existing assets comprised of plant and equipment,
and not creating new product-generating assets.
It would seem that Roberts and Rockwell are in opposite camps, but are they?
Here’s Roberts’ take on the future: “We do not dispute that
global gains might exceed first world [United States] losses.
Nevertheless, the flow of factors of production to absolute advantage
in place of comparative advantage vitiates the case for free trade--that it
produces mutual gains to the countries involved.
What we may be witnessing is global capitalism destroying national
sovereignties, leading to a global government, much as Marx described
capitalism’s role in the overthrow of feudalism and the rise of the
nation-state.” Roberts also
feels that “…the loss of incomes outweighs the lower prices” that
unemployed consumers can enjoy.
What is clear is that there is a coming economic trauma, and basically, it
will affect US all and might turn out for the worse as regards individual
freedom. Roberts again: “So
many people forget that the reason that highly paid US workers could compete
against lowly paid Asian workers is that the US workers were much more
productive due to the immobility of capital and technology.
The international mobility of factors of production has stripped away
the productivity advantage of first world labor.
Try to imagine the political instability in store for the US as the
ladders of upward mobility collapse. The reality toward which we head is not
a libertarian paradise.”
© Copyright THEODORE E. LANG 2/27/04 All
rights reserved. Ted Lang is a political analyst and a freelance writer.