Republicans are celebrating 337,000 new jobs created in October, but a look behind the numbers shows the same discouraging trend of the past four years. The US economy can only create jobs in government and in areas of domestic services that cannot be outsourced or replaced with imports.
Government employment accounts for 41,000 of the new jobs. The private economy produced 296,000 jobs in October. Of these jobs, 71,000 are in construction; 36,000 are in wholesale trade, retail trade, transportation and warehousing; credit services account for 17,000 jobs; employment services (primarily temporary help) account for 55,000 jobs; school administrators and teachers and health care and social assistance account for 62,000 jobs, bars and restaurants account for 20,000 jobs.
These are not “new economy” jobs, and they are not “old economy” manufacturing jobs. Today the US economy has 2.7 million fewer manufacturing jobs and 1.26 million fewer private sector jobs than when Bush was inaugurated. The only areas of job growth are in government, waitresses and bars, education and health services, construction, and credit intermediation. Gains in these areas have been more than offset by losses elsewhere.
During October US manufacturing lost another 5,000 jobs. Charles W. McMillion, president of MBG Information Services, reports that hours worked for non-managerial manufacturing workers have declined 7.6% since the current recovery began–an unprecedented development. “Never before,” writes McMillion, “has a recovery failed to increase the number of hours worked in manufacturing.”
America’s growing dependence on imported manufacturing goods and knowledge services means a swelling trade deficit that cannot be brought into balance by selling more abroad.
No one knows how much longer the dollar can stand the strain of heavy foreign borrowing. The policy of the Bush administration is to ignore the problem until the dollar collapses–at which time it will be too late to avoid dollar dumping as the world abandons the dollar as the reserve currency.
When that time comes, it will be very unpleasant–particularly if the US is overextended in empire-building adventures abroad.
The alliance-shattering policy of the Bush administration has left America in a weak position to call on allies for help in supporting a wounded dollar.
Americans need to wake up and to realize that their country’s superpower status is imperiled.
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 assistant secretary of the U.S. Treasury. He is the co-author of The Tyranny of Good Intentions.