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Our hollow prosperity
By Patrick J. Buchanan
02/15/06 -- -- Now that the U.S. trade deficit for 2005 has come
in at $726 billion, the fourth straight all-time record, a
question arises.
What constitutes failure for a free-trade policy? Or is there no
such thing? Is free trade simply right no matter the results?
Last year, the United States ran a $202 billion trade deficit
with China, the largest ever between two nations. We ran
all-time record trade deficits with OPEC, the European Union,
Japan, Canada and Latin America. The $50 billion deficit with
Mexico was the largest since NAFTA passed and also the largest
in history.
When NAFTA was up for a vote in 1993, the Clintonites and their
GOP fellow-travelers said it would grow our trade surplus, raise
Mexico's standard of living and reduce illegal immigration.
None of this happened. Indeed, the opposite occurred. Mexico's
standard of living is lower than it was in 1993, the U.S. trade
surplus has vanished, and America is being invaded. Mexico is
now the primary source of narcotics entering the United States.
Again, when can we say a free-trade policy has failed?
The Bushites point proudly to 4.6 million jobs created since May
2003, a 4.7 percent unemployment rate and low inflation.
Unfortunately, conservative columnist Paul Craig Roberts and
analysts Charles McMillion and Ed Rubenstein have taken a close
look at the figures and discovered that the foundation of the
Bush prosperity rests on rotten timber.
The entire job increase since 2001 has been in the service
sector – credit intermediation, health care, social assistance,
waiters, waitresses, bartenders, etc. – and state and local
government.
But, from January 2001 to January 2006, the United States lost
2.9 million manufacturing jobs, 17 percent of all we had. Over
the past five years, we have suffered a net loss in
goods-producing jobs.
"The decline in some manufacturing sectors has more in common
with a country undergoing saturation bombing than with a
super-economy that is 'the envy of the world,'" writes Roberts.
Communications equipment lost 43 percent of its workforce.
Semiconductors and electronic components lost 37 percent ... The
workforce in computers and electronic products declined 30
percent. Electrical equipment and appliances lost 25 percent of
its workforce.
How did this happen? Imports. The U.S. trade deficit in advanced
technology jobs in 2005 hit an all-time high.
As for the "knowledge industry" jobs that were going to replace
blue-collar jobs, it's not happening. The information sector
lost 17 percent of all its jobs over the last five years.
In the same half-decade, the U.S. economy created only 70,000
net new jobs in architecture and engineering, while hundreds of
thousands of American engineers remain unemployed.
If we go back to when Clinton left office, one finds that, in
five years, the United States has created a net of only
1,054,000 private-sector jobs, while government added 1.1
million. But as many new private sector jobs are not full-time,
McMillion reports, "the country ended 2005 with fewer private
sector hours worked than it had in January 2001."
This is an economic triumph?
Had the United States not created the 1.4 million new jobs it
did in health care since January 2001, we would have nearly half
a million fewer private-sector jobs than when Bush first took
the oath.
Ed Rubenstein of ESR Research Economic Consultants looks at the
wage and employment figures and discovers why, though the
Bushites were touting historic progress, 55 percent of the
American people in a January poll rated the Bush economy only
"fair" or "poor."
Not only was 2005's growth of 2 million jobs a gain of only 1.5
percent, anemic compared to the average 3.5 percent at this
stage of other recoveries, the big jobs gains are going to
immigrants.
Non-Hispanic whites, over 70 percent of the labor force, saw
only a 1 percent employment increase in 2005. Hispanics, half of
whom are foreign born, saw a 4.7 percent increase. As Hispanics
will work for less in hospitals and hospices, and as waiters and
waitresses, they are getting the new jobs.
But are not wages rising? Nope. When inflation is factored in,
the Economic Policy Institute reports, "real wages fell by 0.5
percent over the last 12 months after falling 0.7 percent the
previous 12 months."
If one looks at labor force participation – what share of the
227 million potential workers in America have jobs – it has
fallen since 2002 for whites, blacks and Hispanics alike.
Non-Hispanic whites are down to 63.4 percent, but black
Americans have fallen to 57.7 percent.
What is going on? Hispanic immigrants are crowding out black
Americans in the unskilled, semi-skilled and skilled job market.
And millions of our better jobs are being lost to imports and
outsourcing.
The affluent free-traders, whose wealth resides in stocks in
global companies, are enriching themselves at the expense of
their fellow citizens and sacrificing the American worker on the
altar of the Global Economy.
None dare call it economic treason.
© 2006 Creators Syndicate Inc.
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