• Monthly
  • $25
  • $50
  • $100
  • $other
  • use PayPal

CounterPunch needs you. piggybank-icon You need us. The cost of keeping the site alive and running is growing fast, as more and more readers visit. We want you to stick around, but it eats up bandwidth and costs us a bundle. Help us reach our modest goal (we are half way there!) so we can keep CounterPunch going. Donate today!
FacebookTwitterRedditEmail

Faith-Based Economics

 

The US economy has ceased to create jobs in tradable goods and services. The disastrous September payroll jobs data are a repeat of the monthly trend that has held for the nearly four years of the Bush administration.

Of September’s 96,000 new jobs, 73% are accounted for by two categories: government jobs and temporary help! There were only 59,000 private sector jobs created in September, and 33,000 of those–56%–are temps!

Manufacturing lost another 18,000 jobs. More Americans are employed in accommodations and food services than as production workers.

It is easy to blame the Bush administration, but the real blame lies with outsourcing and offshore production. By locating production for US markets offshore, US firms can substitute much cheaper foreign labor for US labor to make the goods and services sold to Americans. The high speed Internet makes it possible for US firms to hire foreigners residing abroad, where living costs are low, to do knowledge-based jobs formerly performed by US university graduates.

The US is losing the ability to manufacture a range of advanced technology products and is now dependent on imports of advanced technology goods from China and Japan. Entire high tech occupations are beginning to disappear in America, with computer engineering enrollments in topflight schools such as M.I.T., Georgia Tech, and UC, Berkeley shrinking by 45%.

Last week economist Joseph Stiglitz reported that median US income has fallen by over $1,500 in real terms over the past three and one-half years.

Despite all evidence to the contrary, “free market,” “free-trade” economists continue to give assurances that Americans are prospering from outsourcing.

This delusion is equivalent to the Bush administration’s delusion that the US is winning in Iraq.

US multinational firms, whose top executives and shareholders benefit from outsourcing, hire think-tanks to produce “studies” that conclude Americans benefit from the loss of jobs and careers to foreigners.

All the while the American labor force is being redirected into domestic nontradable services, an influx that depresses wages in domestic services. At the same time, illegal aliens are flooding into US construction jobs. Local governments and hospitals, claiming “shortages,” import foreign teachers and nurses who will work for less.

It is not clear how many of the jobs created in September went to Americans.

Faced with hard facts, economists take refuge in deceitful nonsense equivalent to the Bush administration’s claims that Saddam Hussein had weapons of mass destruction and was involved in the September 11 terrorist attacks.

As high-tech US jobs move offshore, economists chant a lemming-like chorus: the answer is more high-tech education.

Bill Gates responds to shrinking job opportunities for American engineers by beating the drums for more engineering majors.

Other economists claim that we need more tax cuts to help US firms acquire more capital with which to make US workers more productive and, thus, more competitive. This is a pointless exercise when the capital (and technology) is being used to employ foreigners in place of Americans.

Other economists claim that outsourcing can only be a small problem, because 90% of US output produced offshore is sold in foreign markets. This claim overlooks the inherited foreign investment America built up during its half century dominance of world trade and manufacturing. These foreign investments by US firms were made in order to sell in foreign markets, not as offshore platforms to serve domestic US markets.

Outsourcing and offshore production are new phenomena. They have not been around long enough to comprise a large share of US production abroad. But they have been around long enough to erode American employment and wages in tradable goods and services.

When a US multinational ceases to produce in Ohio for its domestic markets, and moves the production abroad, the Ohio jobs disappear. Wages fall or stagnate in similar lines of work that still remain the the US.

When Intel, Microsoft and all the rest hire Asian software engineers, the US engineers are out of work. US careers are sent abroad and given to foreigners, and with them go the incomes that comprise America’s ladders of upward mobility.

American students are becoming aware of the facts, but economists hold firmly to their fantasy that other new and even better jobs are taking the place of those that have been outsourced. There is no evidence whatsoever in behalf of this claim.

Economics has ceased to be an empirical science and has become a religious faith.

PAUL CRAIG ROBERTS is John M. Olin Fellow at the Institute for Political Economy and Research Fellow at the Independent Institute. He is a former associate editor of the Wall Street Journal and a former assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions.

 

 

More articles by:

Paul Craig Roberts is a former Assistant Secretary of the US Treasury and Associate Editor of the Wall Street Journal. Roberts’ How the Economy Was Lost is now available from CounterPunch in electronic format. His latest book is The Neoconservative Threat to World Order.

bernie-the-sandernistas-cover-344x550

Weekend Edition
May 24, 2019
Friday - Sunday
Rob Urie
Iran, Venezuela and the Throes of Empire
Melvin Goodman
The Dangerous Demise of Disarmament
Jeffrey St. Clair
“The Army Ain’t No Place for a Black Man:” How the Wolf Got Caged
Richard Moser
War is War on Mother Earth
Andrew Levine
The (Small-d) Democrat’s Dilemma
Russell Mokhiber
The Boeing Way: Blaming Dead Pilots
Rev. William Alberts
Gaslighters of God
Phyllis Bennis
The Amputation Crisis in Gaza: a US-Funded Atrocity
David Rosen
21st Century Conglomerate Trusts 
Jonathan Latham
As a GMO Stunt, Professor Tasted a Pesticide and Gave It to Students
Binoy Kampmark
The Espionage Act and Julian Assange
Kathy Deacon
Liberals Fall Into Line: a Recurring Phenomenon
Jill Richardson
The Disparity Behind Anti-Abortion Laws
Kollibri terre Sonnenblume
Chelsea Manning is Showing Us What Real Resistance Looks Like
Zhivko Illeieff
Russiagate and the Dry Rot in American Journalism
Norman Solomon
Will Biden’s Dog Whistles for Racism Catch Up with Him?
Yanis Varoufakis
The Left Refuses to Get Its Act Together in the Face of Neofascism
Lawrence Davidson
Senator Schumer’s Divine Mission
Thomas Knapp
War Crimes Pardons: A Terrible Memorial Day Idea
Renee Parsons
Dump Bolton before He Starts the Next War
Yves Engler
Canada’s Meddling in Venezuela
Katie Singer
Controlling 5G: A Course in Obstacles
Evaggelos Vallianatos
The Beauty of Trees
Jesse Jackson
Extremist Laws, Like Alabama’s, Will Hit Poor Women the Hardest
Andrew Bacevich
The “Forever Wars” Enshrined
Ron Jacobs
Another One Moves On: Roz Payne, Presente!
Christopher Brauchli
The Offal Office
Daniel Falcone
Where the ‘Democratic Left’ Goes to Die: Staten Island NYC and the Forgotten Primaries   
Julia Paley
Life After Deportation
Sarah Anderson
America Needs a Long-Term Care Program for Seniors
Seiji Yamada – John Witeck
Stop U.S. Funding for Human Rights Abuses in the Philippines
Shane Doyle, A.J. Not Afraid and Adrian Bird, Jr.
The Crazy Mountains Deserve Preservation
Charlie Nash
Will Generation Z Introduce a Wizard Renaissance?
Ron Ridenour
Denmark Peace-Justice Conference Based on Activism in Many Countries
Douglas Bevington
Why California’s Costly (and Destructive) Logging Plan for Wildfires Will Fail
Gary Leupp
“Escalating Tensions” with Iran
Jonathan Power
Making the World More Equal
Cesar Chelala
The Social Burden of Depression in Japan
Stephen Cooper
Imbibe Culture and Consciousness with Cocoa Tea (The Interview)
Stacy Bannerman
End This Hidden Threat to Military Families
Kevin Basl
Time to Rethink That POW/MIA Flag
Nicky Reid
Pledging Allegiance to the Divided States of America
Louis Proyect
A Second Look at Neflix
Martin Billheimer
Closed Shave: T. O. Bobe, the Girl and Curl
David Yearsley
Hard Bop and Bezos’ Balls
FacebookTwitterRedditEmail