PCR, Lost Wars and a Lost Economy

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Last Friday's payroll jobs report was a continuation of Bush's dismal record. Only 59,000 net new private sector jobs were created during September. That is about 90,000 less than would be needed to stay even with population growth. Like all jobs that the US economy has created in the 21st century, the September jobs are in domestic services.

Waitresses and bar tenders accounted for a quarter of the new jobs.
The remainder were in health care and social assistance, wholesale trade and transportation, financial activities, and accounting and bookkeeping services.

US manufacturing lost another 19,000 jobs. Since Bush took office, the US has lost 3 million manufacturing jobs.

Charles McMillion of MBG Information Services in Washington DC notes that the growth of total hours worked over the current "recovery" is less than half the average rate of all previous recoveries and is the worst performance on record. Due to offshoring, manufacturing hours worked have declined 6.6% since the recovery began in November 2001.

It has been years since the US economy has created high-productivity, high-paying jobs in export and import-competitive sectors. The US manufacturing trade deficit is now twice the size of the oil import bill. The years of deficits have destroyed America's creditor status in the balance of payments. At the beginning of this month, the Wall Street Journal reported that for the first time in 90 years, the US is now paying noticeably more to foreign creditors than it receives from its investments abroad."

Jobs offshoring and work visas for foreigners are dismantling the ladders of upward mobility that made America an opportunity society for American citizens. In the 21st century, real income growth has been limited to a few at the top, while median family income stagnates or declines. As a result of the moronic American system of tying CEO pay to quarterly results, fat cats get richer by arbitraging labor and replacing American workers with foreigners.

The current recovery is based on the expansion of consumer and public debt. The artificially low interest rates engineered by the Federal Reserve fueled a real estate bubble that encouraged Americans to refinance their homes and to spend the equity.

Another source of the "recovery" has been credit card debt which has been turned into securities and sold to investors. Credit card companies assume that the high interest rates that they charge compensate for the high default rates and, therefore, issue new cards to people already overwhelmed with credit card debt. Much of this debt is tied to derivatives in ways that no one understands.

Many of the home refinancings used interest only adjustable rate mortgages that are now pushing up monthly payments for households. As these higher payments hit over-stressed budgets, US employers plan to lay off more Americans in order to lower costs by locating production abroad and by hiring more foreigners on work visas.

Meanwhile corporate bankruptcies and other machinations are depriving more Americans of pensions and health care coverage. The growing number of Americans without health coverage will turn to the hospital emergency rooms and join the illegal immigrants in driving more hospitals and communities into bankruptcy.