FacebookTwitterGoogle+RedditEmail

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.

Weekend Edition
January 18, 2019
Friday - Sunday
Melvin Goodman
Star Wars Revisited: One More Nightmare From Trump
John Davis
“Weather Terrorism:” a National Emergency
Jeffrey St. Clair
Roaming Charges: Sometimes an Establishment Hack is Just What You Need
Louisa Willcox
Sky Bears, Earth Bears: Finding and Losing True North
Robert Fisk
Bernie Sanders, Israel and the Middle East
Robert Fantina
Pompeo, the U.S. and Iran
David Rosen
The Biden Band-Aid: Will Democrats Contain the Insurgency?
Nick Pemberton
Human Trafficking Should Be Illegal
Steve Early - Suzanne Gordon
Did Donald Get The Memo? Trump’s VA Secretary Denounces ‘Veteran as Victim’ Stereotyping
Andrew Levine
The Tulsi Gabbard Factor
John W. Whitehead
The Danger Within: Border Patrol is Turning America into a Constitution-Free Zone
Dana E. Abizaid
Kafka’s Grave: a Pilgrimage in Prague
Rebecca Lee
Punishment Through Humiliation: Justice For Sexual Assault Survivors
Dahr Jamail
A Planet in Crisis: The Heat’s On Us
John Feffer
Trump Punts on Syria: The Forever War is Far From Over
Dave Lindorff
Shut Down the War Machine!
Mark Ashwill
The Metamorphosis of International Students Into Honorary US Nationalists: a View from Viet Nam
Ramzy Baroud
The Moral Travesty of Israel Seeking Arab, Iranian Money for its Alleged Nakba
Ron Jacobs
Allen Ginsberg Takes a Trip
Jake Johnston
Haiti by the Numbers
Binoy Kampmark
No-Confidence Survivor: Theresa May and Brexit
Victor Grossman
Red Flowers for Rosa and Karl
Cesar Chelala
President Donald Trump’s “Magical Realism”
Christopher Brauchli
An Education in Fraud
Paul Bentley
The Death Penalty for Canada’s Foreign Policy?
David Swanson
Top 10 Reasons Not to Love NATO
Louis Proyect
Breaking the Left’s Gay Taboo
Kani Xulam
A Saudi Teen and Freedom’s Shining Moment
Ralph Nader
Bar Barr or Regret this Dictatorial Attorney General
Jessicah Pierre
A Dream Deferred: MLK’s Dream of Economic Justice is Far From Reality
Edward J. Martin
Glossip v. Gross, the Eighth Amendment and the Torture Court of the United States
Chuck Collins
Shutdown Expands the Ranks of the “Underwater Nation”
Paul Edwards
War Whores
Alycee Lane
Trump’s Federal Government Shutdown and Unpaid Dishwashers
Martha Rosenberg
New Questions About Ritual Slaughter as Belgium Bans the Practice
Wim Laven
The Annual Whitewashing of Martin Luther King Jr.
Nicky Reid
Panarchy as Full Spectrum Intersectionality
Jill Richardson
Hollywood’s Fat Shaming is Getting Old
Nyla Ali Khan
A Woman’s Wide Sphere of Influence Within Folklore and Social Practices
Richard Klin
Dial Israel: Amos Oz, 1939-2018
Graham Peebles
A Global Battle of Values and Ideals
David Rovics
Of Triggers and Bullets
Elliot Sperber
Eddie Spaghetti’s Alphabet
January 17, 2019
Stan Cox
That Green Growth at the Heart of the Green New Deal? It’s Malignant
David Schultz
Trump vs the Constitution: Why He Cannot Invoke the Emergencies Act to Build a Wall
FacebookTwitterGoogle+RedditEmail