Metrics of National Decline
"Bush Boom Continues" trilled the headline over the Lawrence Kudlow column, as George W. Bush closed out his seventh year in office.
"You can call it Goldilocks 2.0," purred Kudlow.
Yes, you could. But what a difference 12 months can make.
Final returns are now in on the eight years of George Bush. Charles McMillion of MBG Information Services has crunched the numbers. And, pace Kudlow, the only relevant comparison is to Herbert Hoover.
From January 2008, right after Kudlow's column ran, through January 2009, the U.S. economy lost 3.5 million jobs. The private sector loss of 3.65 million jobs was slightly offset by 148,000 jobs created by federal, state and local governments. Say what you will, the Bush years were boom times for Big Government.
And the private sector? Beginning and ending in recession, the Bush presidency added a net of 407,000 private sector jobs over eight years, less than 51,000 a year, the worst eight-year record since 1927-35, which includes the first six years of the Great Depression.
By January 2009, the average workweek had fallen to 33.3 hours, the lowest since record keeping began in 1964.
From Jan. 31, 2001, through Jan. 31, 2009, 4.4 million manufacturing jobs, 26 percent of all of the manufacturing jobs in the United States, disappeared.
Semiconductors and electronic component producers lost 42 percent of their jobs. Communications equipment producers lost 48 percent of their jobs. Textile and apparel producers lost, respectively, 63 percent and 61 percent of their jobs.
As a source of American jobs, manufacturing, for the first time in our history, fell below health care and education in 2001, below retail sales in 2002, below local government in 2006, below leisure and hospitality, i.e., restaurants and bars, in 2008.
Between this unprecedented loss in manufacturing capacity and jobs, and the $3.5 trillion in trade deficits in manufactured goods alone, run up by George W. Bush, the correlation is absolute.
Last week, final trade figures for 2008 came in. They make for riveting reading for Americans who yet believe that manufacturing is an indispensable element of national power.
With China exporting five times the dollar volume in goods to us as she imports from us, Beijing's trade surplus with the United States set yet another world record: $266 billion.
In those critical items the Commerce Department defines as advanced technology products (ATP), our trade deficit with China in 2008 reached an astonishing $72 billion. Since Bush took office, our total trade deficit with China in ATP exceeds $300 billion.
Which of us, China or America, has the trade profile of a mature industrial and technological power?
Americans deplore our deepening dependence on foreign regimes for the vital necessity of oil. Are they unaware that the U.S. trade deficit in manufactured goods, $440 billion, is $89 billion greater than our all-time record trade deficit of $351 billion in crude oil?
Why is a dependence on Canada, Mexico, Venezuela or Saudi Arabia for oil a greater peril than a reliance on China and Asia for vital necessities upon which our prosperity and military depend?
A week ago, the Washington Times ("Volcker Blames Recession on Trade Imbalances") reported that ex-Fed Chair Paul Volcker told Congress the "massive trade-related imbalances in the United States economy were the source of the financial crisis."
Pressed by Sen. Chris Dodd, Volcker said, "Go back to the imbalances in the economy. The United States has been consuming more than it has been producing for many years."
What "imbalances" was Volcker referring to? Perhaps these.
Since 1982, the United States has run $5.7 trillion in trade deficits in manufactured goods, and $2.1 trillion in trade deficits in auto parts, trucks and automobiles. In the Bush years alone, the United States ran more than $1 trillion in trade deficits in auto parts, trucks and cars.
These statistics, these realities—factories closing in the United States, manufacturing jobs being outsourced in the millions to China and Asia, enormous, endless trade deficits in goods—testify to a painful truth: America is a receding and declining world power.
And in dealing with this systemic crisis, Obama's stimulus package is as irrelevant as were the Bush tax cuts.
How do we correct those "trade-related imbalances" of which Volcker spoke? We must export more and import less, save more and spend less, produce more and consume less. We need to emulate the ants and behave less like the grasshoppers of summer.
But how do you tell that to two generations of Americans who have been raised in an era of entitlement?
America needs an Industrial Policy.
But how do you tell that to Americans indoctrinated in the hoary myth that Reed Smoot and Willis Hawley caused the Great Depression and anything that sounds like America First risks a rerun of the 1930s?
COPYRIGHT 2009 CREATORS SYNDICATE INC.
Entries(RSS)
Volcker gets religion! Spare me.
What the hell did he think would happen when he, after Bert Lance was libeled by the excreable Bill Safire to, in Safire's own words, "keep him out of the Federal Reserve Chair", buried our domestic shoe, steel, textile, farm implement and very nearly oil, petrochemical and farming sectors with his 20% interest rates. Famers drove their tractors on the Mall and the Building Trades put 1000's of 2x4's on the Eccles Building to lawn to represent all the jobs lost. Big Paul just took a drag on his stogie and laughed in their face
Jim Baker was right about Volcker. Just a New Jersey bag man for David Rockefeller and the rest of the money changers. Too late to save your soul now buddy.
There are many people who are glad that dirty, boring, and undignified manufacturing jobs have been replaced with clean, monotonous, soul-killing cubicle work that drives people to the brink of insanity. Besides, office jobs don't pollute the air and water, and that must be good, or something. U no wut I mean, huh?
Pat fails to mention agricultural output. We may still export more calories than we import. But the vast majority of the calories that we produce are nutrition-lite; they are foodstuffs that have only slightly more nutrition than water and pesticide and disease laden to boot. To the extent that it has survived it has done so only because it still is useful to the banks and has also done so only by being hallowed out from within.
When we speak of challenges that Americans supposedly excel at, people often list things like the opening of the West, World Wars, landing on the moon, spreading "democracy", etc. We have, in addition, nearly exhausted 15,000 years worth of soil (formed since the end of the last ice age) in a century and a half. In the rather simple minded effort to feed people real food from our own soil, we lag way behind the Chinese who still have in production rice patties producing real food that have been in continual production for thousands of years. Our elite needs to take their gaze off the horizon and start focusing on our neighborhoods in more ways than one.
I hope Mr. Buchanan will mention in depth the wars against terror and in Iraq and Afghanistan in a soon-to-come column, because as I see it, they've accelerated America's economic decline, and he really should've mentioned them.
I would only add that the post-industrial, modernist economy with its cult of IT guys is a socially liberal order at odds with conservative values. Think of Bill Gates and Tim Gill.
And US manufacturing has become so irrelevant that the gloomy predictions issued today affected the stock market, mostly in a downward direction -- to the tune of 300 points or roughly 5%.
@5 Derek
Not to mention Larry Ellison a major Friend of Bill.
The amusing Richard Florida has a new essay in ATLANTIC explaining how the "creative class" will rise out of the current collapse. It would be fascinating to read Scott Richert or Tom Piatak critique Florida's views.
@7:
Go to Steve Sailer's blog. He already flayed that jackass Florida with a hilarious sendup underscoring the fact that no matter how many gay nighclubs, sushi parlors, and pet hotels the likes of Wichita, Kansas or Huntington WV might try to prop up via taxpayer subsidy, the effete elites Florida worships will never move to such benighted fecal swamps of bad taste and traditional values.
Florida truly deserves his own Mencken.
Mr. Leaberry,
Thanks for the heads up, I'll take a look. Virgil Caine is right--Steve Sailer has already done a good job on Florida. But I very much value and learn from your comments on the broader issue, on which you are both eloquent and exactly right: the sort of culture created by manufacturing is far more conducive to paleoconservatism than is the "post-industrial" economy our elites have been trying to create.
Professor Florida enjoys talking about a "creation elite." I guess that can mean anything from the "music" of Lil' Wayne and Fiddy Cent to subsidized dance to the invention of Tweeter(by the way, Republicans are boasting that more of their members tweeter than do Democrats, a sign of an enormous political change to come) and the cooking of Mario Batali and Rachael Ray. But what will the "creative class" do when society is stripped down to essentials and the gaudy affluence of yesteryear that allowed for frivolous spending is over? If economic changes are to come, who is more important, the shrimper toiling at the nets or a Broadway choreographer? The CSA farmer or the IT guy? The plumber or the itinerant professor, with no ties to the land?
Mr. Leaberry,
I think you are exactly right.
I am a member of the creative class--or perhaps the creative underclass,as the hillbilly songs I sing are surely anathema to Mr. Florida and his ilk--and I know how much I prefer to have fully employed steelworkers and millwrights and plumbers packing the bars that employ me. Very few IT types in my millieu. I can't bring myself to say that creative types are superfluous (mustn't tell lies), but it is good to have patrons who aren't on the brink of ruin.
For the record, I second the endorsement of pretty much anything Mr. Piatak writes here and abroad and Mr. Leaberry's comments as well. Of course the elites hate manufacturing, just not quite as much as small independent farmers.
George Kennedy in his Academy award winning turn as "Dragline" in "Cool Hand Luke", put Mr. Leaberry's cogent observation in #10 as follows: "There's gonna be some world shakin'!"
@13 Virgil
I thought everybody loved a farmer, but hated a businessman. That was something of a joke back in the 70s. Of course nowadays there's highly-leveraged agribusiness pitted against horse-drawn, cash-on-the-barrelhead, big family Amish. And everybody knows the Amish go to church frequently, that must be why they're hated by the elites.
Mr. Caine,
Thanks very much for your kind words.
Mr. Piatak and Mr. Leaberry,
In agreeing with your comments regarding a manufacturing culture...Have you noticed how the tv and print mainstream news media has been trained to ignore the major impacts of and not question the specific allocations of the huge stimulous packages (i.e., the nearly trillion dollar set aside for big banking) and yet now instinctively howls at any mention of the travails of teh auto industry and the comparatively meager loan package that was set aside for that sector? The propogandists work very consistenty across the outlets. The message is clear when CNN's mostly clueless, but serious looking and sounding, Campbell Brown nods respectfully and listens intently to the talking heads describing the necessity for and care to be taken in infusing huge money to banks with defunct balance sheets and yet interrupts incessently those that are on to talk about what a calamity would result if the Big 3 formally goes into bankruptcy reorganization. It makes me question whether there is a behind the scenes conspiracy to kill off the auto industry. And the question is of course - why?
As to the "creative class", I would mention that the aforementioned auto sector even in its beleagured status represents the biggest pice of the pie when we analyse sector by sector the biggest funders of R&D activity in the US. This "rust belt" industry had employed many more creative types than any other, but is now being gutted. From what I hear from those in a position to know, Chrysler will not likely ever again be the car company that it was not simply from lacking in liquidity, but from the human capital loss that has occurred these past two years in the white collar staffs.
Eagle,
The overwhelmingly negative (and often ignorant and dishonest) media coverage of the auto industry reeks of something that can only be called anti-Americanism. There is a positive relish in attacking American industry and American workers, and holding up foreigners for emulation. But there has been less of such coverage now than when the Big Three CEOs had the misfortune to go before Congress when Bush was a lame duck and the media had little other political news to cover, in part, I think, because the size of the loans being requested by GM and Chrysler are so obviously dwarfed by the $700 billion TARP, the $800 billion stimulus package, the $275 billion mortgage bailout, the additional trillion plus Obama intends for the financial sector, not to mention the trillions loaned by the Federal Reserve to that sector.
You also make a very important point about the decline of human capital. I saw a story yesterday about unemployed Chrysler engineers who cannot find work as engineers--one was studying to be an MBA in a country that foolishly values finance over engineering. America neither protects the manufacturing on which much of the engineering profession has long relied, nor the salaries of engineers subject to competition from H1B visa holders. Given these realities, many Americans with the intelligence to be engineers have simply gone into other fields instead. Unless we start valuing professions like engineering that actually help create wealth, we are headed for Third World status.
Another point on Chrysler: that company was badly served by Daimler. "Looted" might be an appropriate description of what happened to Chrysler when it was owned by a German company. Another aspect of the story ignored by our xenophilic, anti-American media.
Mr. Piatak
Another difficulty in trying to reverse our national economic decline is the angry reactions one gets just by suggesting the USA is "headed for Third World status". It is hard to get a discussion started when few are even willing to acknowledge that this country is in big trouble.