In a recent interview with Dr. Paul Craig Roberts, Dr. Roberts stated that the United States was halfway to becoming a third world country.
The middle class is essentially being forced into poverty by high unemployment, low wages, low interest rates, high food and energy prices, increased taxes, higher health insurance costs and more.
In particular, Dr. Roberts focuses on the big picture of the future economic situation in the U.S.
“It’s a de-industrialization. Instead of moving into a modern country, it is a move in the other way. The main culprit is not the financial crisis, but the off-shoring of all middle class jobs.”
Interviewer: “You have said the U.S. is past it’s zenith and we’re halfway there to becoming a third world country. What is the US going to look like as a third world country?”
Dr. Roberts: “The only way anyone will be able to get a loan will be with very high interest rates. The labor force aspect- the people are involved in low paid domestic service jobs. That’s what’s been happening in the US in the last 10 years.
These are not well paid jobs and so you find that you have a labor force, a small very rich class, and everyone else is having trouble making ends meet.
The US is overwhelmed with loss of wealth-it’s shrinking and it’s been going on for 10 years. They face the bond market bubble, stock market bubble, and now, the dollar bubble.
It’s a de-industrialization. Instead of moving into a modern country, it is a move in the other way. The main culprit is not the financial crisis, but the offshoring of all middle class jobs. The manufacturing has moved offshore, so that is what’s happened.
What the US faces, if they lose their reserve currency because they collapsed the dollar by printing too many for too long; if they lose their reserve currency status, they no longer can pay their bills by printing money.And if the dollar is collapsing, the Federal Reserve can’t print more money, because that would just drive the dollar lower. And that would mean more domestic inflation from the import prices.”
In other words, prices for imports would increase drastically as the purchasing power of the dollar goes lower. In case you haven’t noticed, literally EVERYTHING we buy now is imported. Wal-Mart is China on wheels. Look at the tags on your clothing. Just TRY and find one that is made in the USA.
I remember in the 90’s when former Presidential candidate Ross Perot emphatically stated that NAFTA (North American Free Trade Agreement) would create a giant “sucking sound” of jobs being extracted away from the U.S. He did not win the election, and NAFTA was instituted on Jan. 1, 1994. Now, 20 years later, we see the result of all the jobs that have been “sucked away” to other countries.
According to an article by the Economic Policy Institute on 1/3/14:
“Clinton and his collaborators promised that the deal would bring “good-paying American jobs,” a rising trade surplus with Mexico, and a dramatic reduction in illegal immigration. Considering that thousands of kids are pouring over the border as we speak, well, how’d that work out for us?
Instead, NAFTA directly cost the United States a net loss of 700,000 jobs. The surplus with Mexico turned into a chronic deficit. And the economic dislocation in Mexicoincreased the the flow of undocumented workers into the United States.”
Last year, the New England Fishery Management Council approved a year-to-year extreme cut of 77 percent, limiting the amount of fish that fishermen can catch. Then shortly after came the restrictions on scallops.
New England fisherman say now they’re facing industry collapse because the fishing industry has been regulated out of business.
Gloucester fishermen Paul Vitale says, “I’m bankrupt. That’s it,” said the 40-year-old father of three, “I’m all done, the boat’s going up for sale.”
“This is what happens in every case when the Federal Government intrusively regulates people’s livelihoods out of business with their bullshit science. The only result here will be less fish on the market and much higher prices on the few fish that do make it to market.”
That’s no joke. I used to be able to buy a nice hunk of salmon for $8 a pound. That’s been $12 a pound now for at least a year. That’s a 50% increase! Needless to say, I’m not getting my Omega 3s anymore.
No doubt the closing of “Davy’s Locker”Seafood Restaurant in the fishing town of New Bedford, Massachusetts is one of many related casualties. Davy’s Locker had been voted best seafood 11 years in a row-a fantastic waterfront, seafood restaurant that had been in operation for decades.They closed their doors last year.
Nevertheless, Clinton and his Republican successor, George Bush II, then used the NAFTA template to design the World Trade Organization, more than a dozen bilateral trade treaties, and the deal that opened the American market to China—which alone has cost the United States another net 2.7 million jobs. The result has been 20 years of relentless outsourcing of jobs and technology.
By any measure, NAFTA and its sequels has been a major contributor to the rising inequality of incomes and wealth that Barack Obama bemoans in his speeches. Yet today—the president proposes two more such trade deals: the Trans-Pacific Partnership with eleven Pacific Rim countries and a free trade agreement with Europe.
Like his predecessors, he repeats the mantra that more such trade deals will create “millions of American jobs” because we excel at high technology. In actuality, the U.S. surplus in hi-tech industries has turned into a deficit—including a deficit with China.
I experienced this first-hand when my career disappeared from NAFTA.
Clothing manufacturers accounted for one-third of the manufacturing jobs in New Bedford in the 1960s. In the 1980s, I worked in factories so big that rows of seamstresses were as far as you could see. Bundles of clothing created big piles alongside each sewing machine.
Cutting tables were seen that spanned 1/4 mile long, with men in steel gloves expertly using 18″ long blades to expertly cut through hundred of many layers of carefully spread fabric.
Clothing production was the bread and butter in the Northeast, at least until NAFTA.
I lost my job when the sewing and clothing production factories decided to close down in the states and move their production facilities overseas. You can’t blame them.
Why should they pay seamstresses $10 an hour when you could pay a foreign worker 50 cents a DAY?
Did it bring down the prices of clothes? Not so much, but it did enrich the owners.
One by one, the clothing manufacturers were rapidly moving overseas, until all the factories in New Bedford and Fall River, Massachusetts finally closed their doors.
In the global trade system initiated by NAFTA, any job that can be done with a computer can be out-sourced, unless American workers are willing to work at the wages of Mexico, India or China.
That trade system has not delivered the promised benefits because it was designed not to.
The agreements traded away the interests of American workers in favor of the interests of American corporations eager to produce for the U.S. market in countries where labor is cheap, environment and public health regulations weak, and governments easily bribable.
NAFTA’s fundamental purpose was not to free trade, it was to free multinational corporations from public regulation in the U.S., Mexico, Canada, and eventually all over the world.
As soon as NAFTA became law, corporate managers began using the threat to move elsewhere in order to force U.S. workers to work longer and harder for less. Threatening employees with outsourcing is now standard practice in American business.
~a partial transcript of an interview with Dr. Paul Craig Roberts on 4/10/13: Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments.