The real economy continues to stagger

Idiot economics has real-world consequences.   When folks tell us that it doesn't matter if folks forget how to make things, they are just wrong.  And while it took some doing to destroy the greatest manufacturing colossus the world has ever known, it looks like the job is almost done.

21 Signs That The Once Great U.S. Economy Is Being Gutted, Neutered And Destroyed

Michael Snyder, The Economic Collapse | Feb. 15, 2011, 10:07 AM 

Once upon a time, the United States was the greatest industrial powerhouse that the world has ever seen. 

Our immense economic machinery was the envy of the rest of the globe and it provided the foundation for the largest and most vibrant middle class in the history of the world. 

But now the once great U.S. economic machine is being dismantled piece by piece. The U.S. economy is being gutted, neutered, defanged, declawed and deindustrialized and very few of our leaders even seem to care. 

It was the United States that once showed the rest of the world how to mass produce televisions and automobiles and airplanes and computers, but now our industrial base is being ripped to shreds. Tens of thousands of our factories and millions of our jobs have been shipped overseas. Many of our proudest manufacturing cities have been transformed into "post-industrial" hellholes that nobody wants to live in anymore.

[snip] 

We simply cannot expect to continue to have a "great economy" if we allow our economy to be deindustrialized.

A nation that consumes far more than it produces is not going to be wealthy for long.

1. The U.S. trade deficit with the rest of the world rose to 497.8 billion dollars in 2010. That represented a 32.8% increase from 2009.  Source: USA Today
2. The U.S. trade deficit with China rose to an all-time record of 273.1 billion dollars in 2010. This is the largest trade deficit that one nation has had with another nation in the history of the world.  Source: USA Today
3. The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.  Source: US Census Bureau
4. In the years since 1975, the United States had run a total trade deficit of 7.5 trillion dollars with the rest of the world Source: US Census Bureau, Foreign Trade Division
5. The United States spends more than 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.  Source: US Census Bureau, US Center for Economic Analysis
6. In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent and it continues to fall.  Source: The American Prospect
7. The number of net jobs gained by the U.S. economy during this past decade was smaller than during any other decade since World War 2. Source: Sott.net
8. The Bureau of Labor Statistics originally predicted that the U.S. economy would create approximately 22 million jobs during the decade of the 2000s.  However, it turns out that the U.S. economy only produced about 7 million jobs during that time period.
9. Japan now manufactures about 5 million more automobiles than the United States does.  Source: Economy In Crisis
10. China has now become the world's largest exporter of high technology products.  Source: Economy In Crisis
11. Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.  Source: Bloomberg Businessweek
12. The United States now has 10 percent fewer "middle class jobs" than it did just ten years ago.  Source: The American Dream
13. Between 1999 and 2008 employment at the foreign affiliates of U.S. parent companies increased an astounding 30 percent to 10.1 million.  During that exact same time period, U.S. employment at American multinational corporations declined 8 percent to 21.1 million. Source: Tax Notes
14. Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs. Source: The American Dream
15. Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent.  Ten years later, the United States had less than 15 percent and China's share had soared to 20 percent.
16. The number of Americans that have become so discouraged that they have given up searching for work completely now stands at an all-time high.  Source: The Huffington Post
17. Half of all American workers now earn $505 or less per week. Source: Tax.com
18. The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.  Source: The American Prospect
19. Since 2001, over 42,000 U.S. factories have closed down for good.  Source: The American Dream
20. In 2008, 1.2 billion cellphones were sold worldwide. So how many of them were manufactured inside the United States? Zero. Source: American Prospect
21. Ten years ago, the "employment rate" in the United States was about 64%.  Since then it has been constantly declining and now the "employment rate" in the United States is only about 58%. So where did all of those jobs go? more

And while the big destruction of the real economy came during the mad reign of Reagan, the trigger was pulled in the 1970s when the USA was unable to come up with a meaningful plan to cope with peak oil within the national borders.

Ronald Reagan's 30-Year Time Bombs

By Robert Parry 

January 28, 2011

The time element of “30 years” keeps slipping into American official reports and news stories about the origins of crises – the latest in “The Financial Crisis Inquiry Report” – but rarely is the relevance of the three-decade span explained, and there is a reason.

The failure to close the circle in saying who started the nation off on the path toward these disasters is because nearly everyone shies away from blaming Ronald Reagan for almost anything.

The overpowering consensus in Washington is that it’s political suicide to criticize the 40th president of the United States, whose centennial birthday on Feb. 6 will be celebrated elaborately.

It’s much safer to behave like MSNBC’s “Hardball” host Chris Matthews and simply accept that Reagan was “one of the all-time greats.”

But the truth is that Reagan’s current historical reputation rests more on the effectiveness of the Republican propaganda machine – and the timidity of many Democrats and media personalities – than on his actual record of accomplishments.

Indeed, many of today’s worst national and international problems can be traced to misjudgments and malfeasance from the Reagan years – from the swelling national debt to out-of-control banks, from the decline of the U.S. middle class to the inaction on energy independence, from the rise of Islamic fundamentalism to Pakistan’s nuclear arsenal.

All of these disasters are part of the Reagan Legacy. Yet, possibly the most insidious residue from the Reagan Years was the concept of manipulating information – what some Reagan officials liked to call “perception management” – as a means of societal control. more

The triumph of the ideologues is nearly complete.  In the real economy, there are some things best done by the private sector and some best done by public institutions.  In the world of the ideologues, everything should be done by governments (communism) or private for-profit entities (neoliberalism).  The first craziness collapsed in 1989, the second is still with us but needs huge bailouts to survive.  History is pretty clear on these matters--a successful society is a mixture of both private enterprise AND public involvement in the economy.

Myth Sold as Truth: Privatization

Posted Friday, Feb. 04, 2011

By ED WALLACE

"There is little doubt [Morgan Stanley Infrastructures Partners] will recoup their investment in a relatively short period of time." - Investment Banker Dennis Enright, discussing the privatization of Chicago's parking meters in the New York Times

The public is so deluged with Big Myths that it's almost impossible to deal with all of them - much less disprove the untruths they're built on. That's probably the idea. These Big Myth premises, successfully foisted onto a gullible public incapable of critical thinking, serve only to enlarge the wealth of those spreading the disinformation.

Privatization of publicly owned assets, sold to us wrapped in the shiny myth that "private companies can always do the job better than inefficient governments" is one of the most effective sales job. It is quickly altering the lives and draining the pocketbooks of all Americans.

First, maybe it's true that private industry is more efficient at some things than government is. But it is equally true that these companies are not buying public assets for anything as altruistic as lowering the costs of using these assets for the public good. They have little incentive to provide more efficient services; the reason they buy the assets that we all paid for is a simple investment/profit motive. Once the new owners control the asset, their only mission statement reads, "To maximize investors' return on their investment."

Your Taxes at Work-In India

This really struck home a week ago. ABC News did a story about Florida's privatizing its food stamp operations to J.P Morgan - which in turn contracted a call center in India to process the claims. Imagine that. Florida gives taxpayers' money to J.P. Morgan, which to make a greater profit uses that money to hire people in India, putting Floridians out of a job. Then out-of-work Floridians have to call India to get approved for food stamps. Now that's ironic.

The best place to see how privatization really affects average Americans may be in Chicago. Like many cities, Chicago has had a hard time living within its budgetary means, even while collecting one of America's highest city sales taxes: 10.25 percent. So two years ago Chicago decided to sell the city's parking meters.

According to Associated Content, William Blair is a close associate of Chicago Mayor Richard Daley. Selling off the city's 36,000 parking meters to a private investment group was his idea, but Blair also was instrumental in getting Daley to sell off the city-owned downtown parking garages back in 2006. And for his clever suggestions for taking revenue-producing, publicly owned assets and privatizing them (and for being a member of Daley's Kitchen Cabinet), Blair has received payments totaling $6.5 million. more

One must be at least 55 years old in USA to even remember when liberals concerned themselves with progressive economics.  Hey, the culture wars make a nice pastime for the already rich and prosperous.  But now that the middle class is teetering on the edge of destruction, maybe some bread and butter issues will be taken seriously again.

The End of New Deal Liberalism

William Greider

January 24, 2011

We have reached a pivotal moment in government and politics, and it feels like the last, groaning spasms of New Deal liberalism. When the party of activist government, faced with an epic crisis, will not use government's extensive powers to reverse the economic disorders and heal deepening social deterioration, then it must be the end of the line for the governing ideology inherited from Roosevelt, Truman and Johnson.

Political events of the past two years have delivered a more profound and devastating message: American democracy has been conclusively conquered by American capitalism. Government has been disabled or captured by the formidable powers of private enterprise and concentrated wealth. Self-governing rights that representative democracy conferred on citizens are now usurped by the overbearing demands of corporate and financial interests. Collectively, the corporate sector has its arms around both political parties, the financing of political careers, the production of the policy agendas and propaganda of influential think tanks, and control of most major media.

What the capitalist system wants is more—more wealth, more freedom to do whatever it wishes. This has always been its instinct, unless government intervened to stop it. The objective now is to destroy any remaining forms of government interference, except of course for business subsidies and protections. Many elected representatives are implicitly enlisted in the cause.

A lot of Americans seem to know this; at least they sense that the structural reality of government and politics is not on their side. When the choice comes down to society or capitalism, society regularly loses. First attention is devoted to the economic priorities of the largest, most powerful institutions of business and finance. The bias comes naturally to Republicans, the party of money and private enterprise, but on the big structural questions business-first also defines Democrats, formerly the party of working people. Despite partisan rhetoric, the two parties are more alike than they acknowledge.

In these terms, the administration of Barack Obama has been a crushing disappointment for those of us who hoped he would be different. It turns out Obama is a more conventional and limited politician than advertised, more right-of-center than his soaring rhetoric suggested. Most Congressional Democrats, likewise, proved weak and incoherent, unreliable defenders of their supposed values or most loyal constituencies. They call it pragmatism. I call it surrender. more