The True State of the Union
More Deception from the Bush White House

By PAUL CRAIG ROBERTS

Gentle reader, if you prefer comforting lies to harsh truths,
don't read this column.

The state of the union is disastrous. By its naked aggression,
bullying, illegal spying on Americans, and illegal torture and
detentions, the Bush administration has demonstrated American
contempt for the Geneva Convention, for human life and dignity,
and for the civil liberties of its own citizens.  Increasingly,
the US is isolated in the world, having to resort to bribery and
threats to impose its diktats. No country any longer looks to
America for moral leadership. The US has become a rogue nation.

Least of all did President Bush tell any truth about the economy.
He talked about economic growth rates without acknowledging that
they result from eating the seed corn and do not produce jobs
with a living wage for Americans. He touted a low rate of
unemployment and did not admit that the figure is false because
it does not count millions of discouraged workers who have
dropped out of the work force.

Americans did not hear from Bush that a new Wal-Mart just opened
on Chicago's city boundary and 25,000 people applied for 325 jobs
(Chicago Sun-Times, Jan.  26), or that 11,000 people applied for
a few Wal-Mart jobs in Oakland, California. Obviously, employment
is far from full.

Neither did Bush tell Americans any of the dire facts reported by
economist Charles McMillion in the January 19 issue of
Manufacturing & Technology News:

During Bush's presidency the US has experienced the slowest job
creation on record (going back to 1939).  During the past five
years private business has added only 958,000 net new jobs to the
economy, while the government sector has added 1.1 million jobs.
Moreover, as many of the jobs are not for a full work week, "the
country ended 2005 with fewer private sector hours worked than it
had in January 2001."

McMillion reports that the largest sources of private sector jobs
have been health care and waitresses and bartenders. Other areas
of the private sector lost so many jobs, including
supervisory/managerial jobs, that had health care not added 1.4
million new jobs, the private sector would have experienced a net
loss of 467,000 jobs between January 2001 and December 2005
despite an "economic recovery." Without the new jobs waiting
tables and serving drinks, the US economy in the past five years
would have eked out a measly 64,000 jobs. In other words, there
is a job depression in the US.

McMillion reports that during the past five years of Bush's
presidency the US has lost 16.5% of its manufacturing jobs. The
hardest hit are clothes manufacturers, textile mills,
communications equipment, and semiconductors. Workforces in these
industries shrunk by 37 to 46 percent. These are amazing job
losses. Major industries have shriveled to insignificance in half
a decade.

Free trade, offshore production for US markets, and the
outsourcing of US jobs are the culprits. McMillion writes that
"every industry that faces foreign outsourcing or import
competition is losing jobs," including both Ford and General
Motors, both of which recently announced new job losses of 30,000
each. The parts supplier, Delphi, is on the ropes and cutting
thousands of jobs, wages, benefits, and pensions.

If the free trade/outsourcing propaganda were true, would not at
least some US export industries be experiencing a growth in
employment? If free trade and outsourcing benefit the US economy,
how did America run up $2.85 trillion in trade deficits over the
last five years? This means Americans consumed almost $3 trillion
dollars more in goods and services than they produced and turned
over $3 trillion of their existing assets to foreigners to pay
for their consumption. Consuming accumulated wealth makes a
country poorer, not richer.

Americans are constantly reassured that America is the leader in
advanced technology and intellectual property and doesn't need
jobs making clothes or even semiconductors. McMillion puts the
lie to this reassurance. During Bush's presidency, the US has
lost its trade surplus in manufactured Advanced Technology
Products (ATP). The US trade deficit in ATP now exceeds the US
surplus in Intellectual Property licenses and fees. The US no
longer earns enough from high tech to cover any part of its
import bill for oil, autos, or clothing.

This is an astonishing development. The US "superpower" is
dependent on China for advanced technology products and is
dependent on Asia to finance its massive deficits and foreign
wars. In view of the rapid collapse of US economic potential, my
prediction in January 2004 that the US would be a third world
economy in 20 years was optimistic.  Another five years like the
last, and little will be left. America's capacity to export
manufactured goods has been so reduced that some economists say
that there is no exchange rate at which the US can balance its
trade.

McMillion reports that median household income has fallen for a
record fifth year in succession. Growth in consumer spending has
resulted from households spending their savings and equity in
their homes. In 2005 for the first time since the Great
Depression in the 1930s, American consumers spent more than they
earned, and the government budget deficit was larger than all
business savings combined. American households are paying a
record share of their disposable income to service their debts.

With America hemorrhaging red ink in every direction, how much
longer can the dollar hold on to its role as world reserve
currency?

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."

This is what I have been writing for years, while the economics
profession adopted a position of total denial. 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 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.

The state of the nation has never been worse. The Great
Depression was an accident caused by the incompetence of the
Federal Reserve, which was still new at its job. The new American
job depression is the result of free trade ideology. 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.

Paul Craig Roberts was Assistant Secretary of the Treasury in the
Reagan administration. He was Associate Editor of the Wall Street
Journal editorial page and Contributing Editor of National
Review. He is coauthor of The Tyranny of Good Intentions.He can
be reached at: paulcraigroberts@yahoo.com




NOTICE: Due to Presidential Executive Orders, the National
Security Agency may have read this email without warning,
warrant, or notice. They may do this without any judicial or
legislative oversight. You have no recourse nor protection save
to call for the impeachment of the current President.


"The National Government will regard it as its first and foremost
duty to revive in the nation the spirit of unity and cooperation.
It will preserve and defend those basic principles on which our
nation has been built. It regards Christianity as the foundation
of our national morality, and the family as the basis of national
life."

Adolph Hitler (My New World Order, Proclamation to the German
Nation at Berlin, February 1, 1933)


Mark Hull-Richter, U.S. Citizen & Patriot
U.S.A. - From democracy to kakistocracy in one fell coup.
"Those who make peaceful revolution impossible will make violent revolution inevitable." - JFK
http://www.commondreams.org/views03/0416-01.htm
http://verifiedvoting.org  http://blackboxvoting.org