Monday, February 27, 2006
Reading Paul Craig Roberts for an Economic Reality Check
Lately, I've been reading a lot of the columns by Paul Craig Roberts in CounterPunch. I'm not sure I understand this guy's history: former Assistant Secretary of the Treasury in the Reagan administration, former Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review - what is he doing writing regularly for this leftist newsletter, and how is it that this guy from the Reagan administration can be writing things that I/we can agree with so much? Maybe he's been through some major changes, or maybe there's a logical straight trajectory to his work that I can't understand. But I find the words that he writes about the economy to be much more understandable - in terms of being comprehensible in a rational way - than most of what passes for "economic reporting" in the present age.
Having seen bizarre reports of improvements in "consumer confidence" (at least in some of the past few months) and other news that has been heralded by politicians and their journalist lackeys as an indication of a "good," "strong," or "improving" economy, I definitely appreciated these words in Roberts' article Their Own Economic Reality:
Consumers deeper in debt and fresh from their first negative savings rate since the Great Depression show high consumer confidence. It is as if the entire country is on an acid trip or a cocaine trip or whatever it is that lets people create realities for themselves that bear no relation to real reality.
How can the upbeat views be reconciled with the Bureau of Labor Statistics' payroll jobs data, the extraordinary red ink, and exploding trade deficit? Perhaps the answer is that every economic development, no matter how detrimental, is spun as if it were good news. For example, the worsening US trade deficit is spun as evidence of the fast growth of the US economy: the economy is growing so fast it can't meet its needs and must rely on imports. Declining household income is spun as an inflation fighter that keeps mortgage interest rates low. Federal budget deficits are spun as letting taxpayers keep and spend more of their own money. Massive layoffs are spun as evidence that change is so rapid that the work force must constantly upgrade skills and re-educate itself.
The denial of economic reality has become an art form.
I also appreciate the way that Roberts exposes the myth that the problems of underemployment and unemployment would be solved if only more people in the U.S. would get more training and better education. Having suffered through some of the worst underemployment myself even with my overrated college education, I can especially appreciate how Roberts exposes the fact that even people in "practical" fields such as engineering - or maybe especially those people with such supposedly highly valued skills - are finding that they have to struggle more and more just to get by.
The assertion that we hear every day that America is falling behind because it doesn't produce enough science, mathematics and engineering graduates is a bald-faced lie. The problem is always brought back to education failures in K-12, that is, to more education subsidies. When CEOs say they can't find American engineers, they mean they cannot find Americans who will work for Chinese or Indian wages. That is what the so-called "shortage" is all about.
I receive a constant stream of emails from unemployed and underemployed engineers with many years of experience and advanced degrees. Many have been out of work for years. They describe the movement of their jobs offshore or their replacement by foreigners brought in on work visas. Many no longer even know American engineers who are employed in the profession. Some are now working in sawmills, others in Home Depot, and others are attempting to eke out a living as consultants. Many describe lost homes, broken marriages, even imprisonment for inability to make child support payments.
I found it particularly, darkly amusing, after reading the above-quoted article, to encounter another article about the so-called "talent shortage" splashed all over the corporate newswires, based on a survey conducted by Manpower, a company which I always thought of as the biggest work-with-no-benefits-promoting temp agency (and certainly, I should know). Over at Yahoo News/Reuters, we got to see some pertinent quotes from the CEO of Manpower, Jeffrey Joerres himself, such as:
This is not a cyclical trend, as we have seen in the past, this time the talent crunch is for real, and it's going to last for decades.
But tellingly, the same article states in the next sentence:
Recruitment firms have benefited from global trends such as outsourcing and better economic growth worldwide.
Getting back to Roberts' reality check, here is a little more information about outsourcing:
Norm Augustine, former CEO of Lockheed Martin, says that even McDonald's jobs are no longer safe. Why pay an error-prone order-taker the minimum wage when McDonald's can have the order transmitted via satellite to a central location and from there to the person preparing the order. McDonald's' experiment with this system to date has cut its error rate by 50% and increased its throughput by 20 percent. Technology lets the orders be taken in India or China at costs below the minimum wage and without the liabilities of US employees.
Americans are giving up their civil liberties because they fear terrorist attacks. All of the terrorists in the world cannot do America the damage it has already suffered from offshore outsourcing.
Roberts hits even harder in a slightly earlier article, The True State of the Union. Here are a few words about the condition that the Reuters article seems to be referring to as "world economic growth":
The World Economic Forum in Davos, Switzerland, is the cradle of the propaganda that globalization is win-win for all concerned. Free trader Stephen Roach of Morgan Stanley reports that the mood at the recently concluded Davos meeting was different, because the predicted "wins" for the industrialized world have not made an appearance.
Roach writes that "job creation and real wages in the mature, industrialized economies have seriously lagged historical norms. It is now commonplace for recoveries in the developed world to be either jobless or wageless - or both."
Roach is the first free trade economist to admit that the disruptive technology of the Internet has dashed the globalization hopes. It was supposed to work like this: The first world would lose market share in tradable manufactured goods and make up the job and economic loss with highly-educated knowledge workers. The "win-win" was supposed to be cheaper manufactured goods for the first world and more and better jobs for the third world.
It did not work out this way, Roach writes, because the Internet allowed job outsourcing to quickly migrate from call centers and data processing to the upper end of the value chain, displacing first world employees in "software programming, engineering, design, and the medical profession, as well as a broad array of professionals in the legal, accounting, actuarial, consulting, and financial services industries."
Although, these trends aren't hurting everyone - CEOs are thriving, as are certain members of government and their public relations generators:
The first world gainers from globalization are the corporate executives, who gain millions of dollars in bonuses by arbitraging labor and substituting cheaper foreign labor for first world labor.
For the past decade free market economists have served as apologists for corporate interests that are dismantling the ladders of upward mobility in the US and creating what McMillion [an economist] writes is the worst income inequality on record.
Globalization is wiping out the American middle class and terminating jobs for university graduates, who now serve as temps, waitresses and bartenders. But the whores among economists and the evil men and women in the Bush administration still sing globalization's praises.
And you might also take some encouragement if you're an army recruiter worried that the Iraq-related downward trend in enrollment may never stop:
The new job depression is creating a reserve army of the unemployed to serve as desperate recruits for neoconservative military adventures. Perhaps that explains the Bush administration's enthusiasm for globalization.
Having seen bizarre reports of improvements in "consumer confidence" (at least in some of the past few months) and other news that has been heralded by politicians and their journalist lackeys as an indication of a "good," "strong," or "improving" economy, I definitely appreciated these words in Roberts' article Their Own Economic Reality:
Consumers deeper in debt and fresh from their first negative savings rate since the Great Depression show high consumer confidence. It is as if the entire country is on an acid trip or a cocaine trip or whatever it is that lets people create realities for themselves that bear no relation to real reality.
How can the upbeat views be reconciled with the Bureau of Labor Statistics' payroll jobs data, the extraordinary red ink, and exploding trade deficit? Perhaps the answer is that every economic development, no matter how detrimental, is spun as if it were good news. For example, the worsening US trade deficit is spun as evidence of the fast growth of the US economy: the economy is growing so fast it can't meet its needs and must rely on imports. Declining household income is spun as an inflation fighter that keeps mortgage interest rates low. Federal budget deficits are spun as letting taxpayers keep and spend more of their own money. Massive layoffs are spun as evidence that change is so rapid that the work force must constantly upgrade skills and re-educate itself.
The denial of economic reality has become an art form.
I also appreciate the way that Roberts exposes the myth that the problems of underemployment and unemployment would be solved if only more people in the U.S. would get more training and better education. Having suffered through some of the worst underemployment myself even with my overrated college education, I can especially appreciate how Roberts exposes the fact that even people in "practical" fields such as engineering - or maybe especially those people with such supposedly highly valued skills - are finding that they have to struggle more and more just to get by.
The assertion that we hear every day that America is falling behind because it doesn't produce enough science, mathematics and engineering graduates is a bald-faced lie. The problem is always brought back to education failures in K-12, that is, to more education subsidies. When CEOs say they can't find American engineers, they mean they cannot find Americans who will work for Chinese or Indian wages. That is what the so-called "shortage" is all about.
I receive a constant stream of emails from unemployed and underemployed engineers with many years of experience and advanced degrees. Many have been out of work for years. They describe the movement of their jobs offshore or their replacement by foreigners brought in on work visas. Many no longer even know American engineers who are employed in the profession. Some are now working in sawmills, others in Home Depot, and others are attempting to eke out a living as consultants. Many describe lost homes, broken marriages, even imprisonment for inability to make child support payments.
I found it particularly, darkly amusing, after reading the above-quoted article, to encounter another article about the so-called "talent shortage" splashed all over the corporate newswires, based on a survey conducted by Manpower, a company which I always thought of as the biggest work-with-no-benefits-promoting temp agency (and certainly, I should know). Over at Yahoo News/Reuters, we got to see some pertinent quotes from the CEO of Manpower, Jeffrey Joerres himself, such as:
This is not a cyclical trend, as we have seen in the past, this time the talent crunch is for real, and it's going to last for decades.
But tellingly, the same article states in the next sentence:
Recruitment firms have benefited from global trends such as outsourcing and better economic growth worldwide.
Getting back to Roberts' reality check, here is a little more information about outsourcing:
Norm Augustine, former CEO of Lockheed Martin, says that even McDonald's jobs are no longer safe. Why pay an error-prone order-taker the minimum wage when McDonald's can have the order transmitted via satellite to a central location and from there to the person preparing the order. McDonald's' experiment with this system to date has cut its error rate by 50% and increased its throughput by 20 percent. Technology lets the orders be taken in India or China at costs below the minimum wage and without the liabilities of US employees.
Americans are giving up their civil liberties because they fear terrorist attacks. All of the terrorists in the world cannot do America the damage it has already suffered from offshore outsourcing.
Roberts hits even harder in a slightly earlier article, The True State of the Union. Here are a few words about the condition that the Reuters article seems to be referring to as "world economic growth":
The World Economic Forum in Davos, Switzerland, is the cradle of the propaganda that globalization is win-win for all concerned. Free trader Stephen Roach of Morgan Stanley reports that the mood at the recently concluded Davos meeting was different, because the predicted "wins" for the industrialized world have not made an appearance.
Roach writes that "job creation and real wages in the mature, industrialized economies have seriously lagged historical norms. It is now commonplace for recoveries in the developed world to be either jobless or wageless - or both."
Roach is the first free trade economist to admit that the disruptive technology of the Internet has dashed the globalization hopes. It was supposed to work like this: The first world would lose market share in tradable manufactured goods and make up the job and economic loss with highly-educated knowledge workers. The "win-win" was supposed to be cheaper manufactured goods for the first world and more and better jobs for the third world.
It did not work out this way, Roach writes, because the Internet allowed job outsourcing to quickly migrate from call centers and data processing to the upper end of the value chain, displacing first world employees in "software programming, engineering, design, and the medical profession, as well as a broad array of professionals in the legal, accounting, actuarial, consulting, and financial services industries."
Although, these trends aren't hurting everyone - CEOs are thriving, as are certain members of government and their public relations generators:
The first world gainers from globalization are the corporate executives, who gain millions of dollars in bonuses by arbitraging labor and substituting cheaper foreign labor for first world labor.
For the past decade free market economists have served as apologists for corporate interests that are dismantling the ladders of upward mobility in the US and creating what McMillion [an economist] writes is the worst income inequality on record.
Globalization is wiping out the American middle class and terminating jobs for university graduates, who now serve as temps, waitresses and bartenders. But the whores among economists and the evil men and women in the Bush administration still sing globalization's praises.
And you might also take some encouragement if you're an army recruiter worried that the Iraq-related downward trend in enrollment may never stop:
The new job depression is creating a reserve army of the unemployed to serve as desperate recruits for neoconservative military adventures. Perhaps that explains the Bush administration's enthusiasm for globalization.
Comments:
<< Home
Richard,
Like you, I've been reading Roberts' articles on Counterpunch for awhile. Unlike you, I didn't catch his former ties to the Reagan W'house. I knew he was a former WSJ writer, which seemed odd in itself, given the general slant of his C'punch material.
Cockburn and St. Clair's site has been a regular haunt for me for some time. The writers are solid and the reporting doesn't fall into the insipid, Republican, bad, Democrat, good, of much on the so-called left end, or progressive side of the spectrum.
His Feb. 27th article, "Twilight of the Hegemony" mirrored some of my own thoughts about where we are headed. Nothing earth-shattering, especially for people who read wider than the morning newspaper, or rely on something other than the TV for their news and views of the world. Still, you don't find alot of journalists giving light to the idea of the U.S. becoming a "soft dictatorship" as Roberts' does in the piece.
Post a Comment
Like you, I've been reading Roberts' articles on Counterpunch for awhile. Unlike you, I didn't catch his former ties to the Reagan W'house. I knew he was a former WSJ writer, which seemed odd in itself, given the general slant of his C'punch material.
Cockburn and St. Clair's site has been a regular haunt for me for some time. The writers are solid and the reporting doesn't fall into the insipid, Republican, bad, Democrat, good, of much on the so-called left end, or progressive side of the spectrum.
His Feb. 27th article, "Twilight of the Hegemony" mirrored some of my own thoughts about where we are headed. Nothing earth-shattering, especially for people who read wider than the morning newspaper, or rely on something other than the TV for their news and views of the world. Still, you don't find alot of journalists giving light to the idea of the U.S. becoming a "soft dictatorship" as Roberts' does in the piece.
<< Home
