The Economy is in Trouble (Read This to See Why)

Here is a great article from August of 2005 that explains why the economy is in trouble.

Watching the Economy Crumble

by Paul Craig Roberts

The US continues its descent into the Third World, but you would never know it from news reports of the Bureau of Labor Statistics’ July payroll jobs release.

The media gives a bare bones jobs report that is misleading. The public heard that 207,000 jobs were created in July. If not a reassuring figure, at least it is not a disturbing one. On the surface things look to be pretty much OK. It is when you look into the composition of these jobs that the concern arises.

Of the new jobs, 26,000 (about 13%) are tax-supported government jobs. That leaves 181,000 private sector jobs. Of these private sector jobs, 177,000, or 98%, are in the domestic service sector.

Here is the breakdown of the major categories:

• 30,000 food servers and bar tenders;
• 28,000 health care and social assistance:
• 12,000 real estate;
• 6,000 credit intermediation;
• 8,000 transit and ground passenger transportation;
• 50,000 retail trade; and
• 8,000 wholesale trade.

(There were 7,000 construction jobs, most of which were filled by Mexicans immigrants.)

Not a single one of these jobs produces a tradable good or service that can be exported or serve as an import substitute to help reduce the massive and growing US trade deficit. The US economy is employing people to sell things, to move people around, and to serve them fast food and alcoholic beverages. The items may have an American brand name, but they are mainly made off shore. For example, 70% of Wal-Mart’s goods are made in China.

Where are the jobs for the 65,000 engineers the US graduates each year? Where are the jobs for the physics, chemistry, and math majors? Who needs a university degree to wait tables and serve drinks, to build houses, to work as hospital orderlies, bus drivers, and sales clerks?

In the 21st century job growth in the US economy has consistently reflected that of a Third World country--low productivity domestic services jobs. This goes on month after month and no one catches on--least of all the economists and the policymakers.

More........

http://www.counterpunch.org/roberts08092005.html

I guess all the future engineers and scientists will have to go to India to get educated and find jobs. hehheh

Also, George Will himself said that the USA economy was fine, else why would countries like China be so willing to put all those billions into financing our debt?

That kind of incredible maroonic logic just defies imagination.

Sue

I tried.

People don't seem to grasp that fact yet.

Between a potential for the petrol economy to be shattered by supply issues to incomes stagnating to dropping this is a dangerous mix.

Buy rice and ammo.

just what a bad idea all this offshoring is, in a war, a big war.

We won't be on the winning side of the next one.

It really isn't funny....but I would rather laugh than cry.

I am buying some pasta too...and growing basil...love pesto sauce.

This is likely to be a defning issue in our nation's near-term future.

has done anything substantail in the 25 years since to stop this slade toward a third world economy...

So I don't care about trade deficits. (They don't technically exist as far as I'm concerned)

What I care about is that we are mortgaging our future for cheap goods now, by selling debt to foreigners. The problem isn't the trade deficit, but rather the budget deficit.

Get rid of taxes on labor. Get rid of taxes on labor products: goods, services, capital.

Leave the taxes on land and license.
I'll even let you keep a tax on incomes over $100,000 - they're not likely from wages.

but we need at least 7.5 mil new jobs in that time to break even.

The 5% unemployment rate is a bald-faced lie. It's at least 7% and getting worse. Bush cooks the numbers.

During the Clinton years from 1992 to 2000 the economy added 22 million new jobs, that's 11 million new jobs in 4 years. The Bush economy has only created 7.5 million new jobs in 5 years, and most of the jobs created under Bush are low paying service sector jobs.

and pay special attention to the last paragraph. Freepers will love it.

We ship them our technology, then we train them, then they lay us off - I've seen it happen three times since I graduated - most recently last week. What do we need engineers for anyway? We're screwed and the managers who are padding their bank accounts could give a flying fuck. Actual quotes from our management "You should learn Cantonese" and "Americans are expensive". We weren't surprised when the jobs were shipped to China recently :eyes:

The traitors to the flag known as American business managers really should be thinking of the consequences of their actions before it's too late...

that our kids will most likely be employed in service industry jobs - waitresses, maids, etc. First time I heard this was at least 15 years ago.

The 207K jobs statistic refers to "net jobs", which means a lot more than 207K jobs were added -- it's just net of the jobs which are lost.

The author hopes you'll add up the numbers and find that 78% (142K/181K) of the jobs added were crappy jobs, when in actuality the percentage is much smaller.

And without comparing the real percentage to a meaningful historical average, it's not worth looking at anyways.

There's enough bad news out there with which to bash the * Administration that it's unnecessary to make some up like this guy did. And it makes him look desperate.

Do you know who Paul Craig Roberts is? He's a true conservative with amazing credentials as well as having served as Ronald Reagan's Assistant Secretary of the Treasury. I hope you're not implying he has some sort of agenda and is try to mislead because you're mistaken.

--if you can't eat it, drink it, wear it, build something with it or burn it to keep warm, then to hell with it.

Nothing that will create a GDP. Just Americans consuming goods from elsewhere, passing the rest of our wealth back-and-forth while we entertain and sue (perform services) each-other.

Otherwise, all we can create in this "information age" is out of thin air. There's no there there.

We're becoming a third world country.

This goes back to Reagan. The 80's is when our nation was successfully invaded by foreign powers -- Japan and China. Japan with its cars, steel, and electronics. China with it's cheap labor intensive manufactured goods. That's when we converted to a consumer economy, the most worthless type of economy there is. Companies no longer feel it is profitable to invest in America and don't value American workers.

General Motors, Ford, and DaimlerChrysler publicly endorse Canada's national health insurance because it's good for business. I read that up to $1000 of every GM car goes toward health care costs. Somehow every developed nation from Canada to Japan provides quality health insurance to all their citizens while easing the burden on industry. They can do it much cheaper than the private insurance we have. Because they take only 2% of revenue for administrative costs and we take 25%. Freeptards whine about high taxes, but your average Canadian or European citizen pays much less for health care taxes than your average American does on health insurance.

And then there's retirement investment. Companies need investments to exist and function and grow. Nobody has pensions anymore. It's unfortunate that your average American doesn't have the means to invest privately. The group that is pushing hardest to privatize social security are the financial advisors. They know that they can rob people for everything they've got. Not to mention dishonest corporations like Enron and WorldCom. There's got to be a better way.

Then there's training/education, child care, regulation compliance, etc.

It's important to understand that it's very expensive to create good jobs in the US. Until we manage to make it more affordable (without losing benefits) we're going to see more of the same.

It doesn't help when Republicans are so militantly against free-market competition. They prefer to have 1 or 2 huge corporations rather than many smaller competing companies.