Even Alan Greenspan has gotten into the act. I read a comment by Alan Greenspan where he said that our economy was facing serious consequences if we did not address the nationç—´ serious debt problems, and if the country adopted a "protectionist" attitude.
The subliminal message here is the "protectionist" part. No one wants to be a full blown protectionist, but every country is a protectionist in some form or fashion. You have to be a little bit of a protectionist to prevent the loss of millions of jobs, and to prevent the total destruction of the nations manufacturing base.
Greenspan, in his comments, basically took the side of the multinational corporations, and suggested that any form of protectionism would hurt the nation. Nothing could be further from the truth.
The massive outsourcing that we are currently witnessing runs contrary to the rights given to all Americans in the preamble of the constitution.
Politicians who are being influenced by the multinational corporations in this country, are not "insuring domestic tranquility, promoting the general welfare, and securing the blessings of liberty to ourselves and our posterity", by creating huge trade deficits, and outsourcing millions of American jobs.
Paul Craig Robert, PhD., served as Assistant Secretary of the Treasury in the Reagan administration. He is a nationally syndicated columnist, and here are a few exerpts from a recent article he wrote.
Paul Craig Roberts: "Still No Jobs"
"The domestic service sector of the economy, which has been the source of net new jobs in the 21st century, experienced no job growth in October".
"In the 21st century the US economy has ceased to generate net new jobs in middle and upper middle class professions. This is a serious economic, social and political problem that receives no attention".
"There is a great deal of meltdown inside the US economy.
Manufacturing is hollowed out. The decline in manufacturing means decline in the engineering and other professions that serve it.
Knowledge jobs are also being lost to offshore outsourcing and other work visas. In October, there were 81,301 corporate layoffs".
"The government does not keep records of the US jobs lost to offshore outsourcing and to work visas for foreigners".
"In December 2003, Congress directed the US Department of Commerce to complete a study within six months of the impact of jobs outsourcing on knowledge-based industries. The report due in June of 2004 was not released until September of this year in response to a Freedom of Information action and only after the report was gutted by political appointees and reduced to 12 pages of PR quoting reports by organizations and individuals that have been funded by multinationals that benefit from shifting American jobs overseas".
"Powerful lobbies that benefit from low cost foreign labor have invested heavily in public relations campaigns to create the impression that American jobs have to be outsourced and foreign workers brought into the US because there are shortages of US engineers, scientists, nurses and school teachers. It is amazing that the occupations in which shortages are alleged to exist are the very occupations in which qualified Americans cannot find jobs".
"The US runs trade deficits in manufactured goods and advanced technology products. Last year the US trade deficit in advanced technology products was $36,857,000,000. As of August of this year, the US trade deficit in advanced technology products is running 26% higher than in 2004".
"America's volume exports are paper, waste paper, agricultural products and chemicals".
"The October 28 issue of Manufacturing & Technology News reports that Procter & Gamble, General Electric, Ford, Kimberly Clark, Caterpillar, Goodyear, General Motors, USG, Honeywell, Alcoa and Kodak combined exported 269,600 containers of goods in 2004. Wal-Mart alone imported 576,000 containers of goods".
"Last year the US imported $196,682,000,000 in goods and services from China and exported a mere $34,744,100,000 to China. The American "superpower's" trade deficit with China came to $161,938,000,000. To put this figure in perspective, America's trade deficit with China is 28% higher than American's total oil import bill".
"In recent years, offshore outsourcing has caused the US trade deficit to explode. Offshore outsourcing means that the production of goods and services for the US market is shifted from America to foreign countries. This turns goods formerly produced in the US into imports. Between 1997 and 2004 the US trade deficit increased six fold".
"During the 1980s economists spoke in doom and gloom terms about the "Reagan deficits." The cumulative US trade deficit for the entire decade of the 1980s totaled $846 billion. The US trade deficit for 2005 alone is 83 percent of the cumulative deficit of the Reagan 1980s. Yet, we hear very little doom and gloom. Economists now declare the trade deficit to be good for us. They mistakenly describe the trade deficit as a mere reflection of the beneficial workings of free trade. Economists have become mouthpieces for the corporate interests who benefit by deserting their American work force and replacing them with foreigners".
"This process of substituting foreign workers for American workers cannot go on for too long before the US consumer market dies from lack of income and purchasing power. US policymakers have no clue.
Market Watch (Nov. 4) reports that "wage growth is a chief concern of the Federal Reserve, which fears that wage pressures could imbed an inflationary psychology in the economy." This is amazing. US wages are not keeping up with inflation. Real wages are falling, and the Federal Reserve is worried about wage pressures!"
"Globalization separates Americans from the production of the goods and services that they consume. Americans are expected to buy the products without having the incomes associated with their production".
This is the best explanation of why I believe the low interest rates alone cannot propel the US economy in the years ahead. Roberts laid out very eloquently that the loss of jobs, and falling wages, is a problem that low interest rates cannot fix.
