Paul Craig Roberts

@Wikipedia, @VDare

Here is a selection from Mr. Roberts’s writings.


Their Own Economic Reality
counterpunch.org, 2006-02-16

[This is, I think, writing in January 2011,
a remarkably prescient column for 2006.]

Who can forget the neocons’ claim that
under their leadership America creates its own reality?
Remember the neocons’ Iraq reality—a “cakewalk” war?
After three years of combat, thousands of casualties,
and cost estimated at over $1 trillion,
real reality must still compete with the White House spin machine.

One might think that the Iraq experience
would restore sober judgement to policymakers.
Alas, neocon reality has spread everywhere.
It has infected the media and the new Federal Reserve Chairman, Ben Bernanke,
who just gave Congress an upbeat report on the economy.
The robust economy, he declared,
could soon lead to inflation and higher interest rates.

Consumers deeper in debt
and fresh from their first negative savings rate since the Great Depression
show high consumer confidence.
It is as if the entire country is on
an acid trip or a cocaine trip or whatever it is
that lets people create realities for themselves
that bear no relation to real reality.
[Sounds just like SOP for TeamPC.
Let's face it: reality means nothing to the PC, only achieving their PC goals.]

How can the upbeat views be reconciled with
the Bureau of Labor Statistics’ payroll jobs data,
the extraordinary red ink, and exploding trade deficit?
Perhaps the answer is that

every economic development,
no matter how detrimental,
is spun
as if it were good news.

For example:
The worsening US trade deficit is spun as
evidence of the fast growth of the US economy:
the economy is growing so fast it can’t meet its needs
and must rely on imports.
Declining household income is spun as
an inflation fighter that keeps mortgage interest rates low.
Federal budget deficits are spun as
letting taxpayers keep and spend more of their own money.
Massive layoffs are spun as
evidence that change is so rapid that
the work force must constantly upgrade skills and re-educate itself.

The denial of economic reality has become an art form.
Except for Lou Dobbs,
no accurate economic reporting is available in the “mainstream media.”

Occasionally, real information escapes the spin machine.
The National Association of Manufacturers,
one of outsourcing’s greatest boosters,
has just released a report,
US Manufacturing Innovation at Risk,”
by economists Joel Popkin and Kathryn Kobe.
The economists find that
US industry’s investment in research and development
is not languishing after all.
It just appears to be languishing,
because it is rapidly being shifted overseas:
“Funds provided for foreign-performed R&D
have grown by almost 73 percent
between 1999 and 2003,
with a 36 percent increase in the number of firms funding foreign R&D.”

US industry is still investing in R&D after all;
it is just not hiring Americans to do the R&D.
US manufacturers still make things,
only less and less in America with American labor.
US manufacturers still hire engineers,
only they are foreign ones, not American ones.

In other words, everything is fine for US manufacturers.
It is just their former American work force that is in the doldrums.
As these Americans happen to be customers for US manufacturers,
US brand names will gradually lose their US market.
US household median income has fallen for the past five years.
Consumer demand has been kept alive by
consumers’ spending their savings and home equity and going deeper into debt.
It is not possible for debt to forever rise faster than income.

When manufacturing moves abroad, engineering follows.
R&D follows engineering, and innovation follows R&D.
The entire economy drains away.
This is why the “new economy” has not materialized
to take the place of the lost “old economy.”

The latest technologies go into the newest plants,
and those plants are abroad.
Innovations take place in new plants
as new processes are developed
to optimize the efficiency of the new technologies.
The skills required to operate new processes call forth
investment in education and training.
As US manufacturing and R&D move abroad,
Indian and Chinese engineering enrollments rise,
and US enrollments decline.

The process is a unified whole.
It is not possible for a country to lose parts of the process
and hold on to other parts.
That is why the “new economy” was a hoax from the beginning.

As Popkin and Kobe note,
new technologies, new manufacturing processes, and new designs
take place where things are made.

The notion that the US can lose everything else
but hold on to innovation
is absurd.

Someone needs to tell Congress before they waste yet more borrowed money.
In an adjoining column to the NAM report on innovation,
the February 6 Manufacturing & Technology News reports that
“the US Senate is jumping on board the competitiveness issue.”
The Bush regime and the doormat Congress
have come together in the belief that
the US can keep its edge in science and technology
if the federal government spends $9 billion a year
to “fund innovative, big-payoff ideas
that have the potential to transform the US economy.”

The utter stupidity of the “Protecting America’s Competitive Edge Act” (PACE)
is obvious.
The tremendous labor cost advantage of doing things abroad
will equally apply to any new “big-payoff ideas”
as it does to the goods and services currently outsourced.

Moreover, US research is open-sourced.
It is available to anyone.

As the Cox Commission Report made clear,
there are a large number of Chinese front companies in the US
for the sole purpose of collecting technology.
PACE will simply be another US taxpayer subsidy to the rising Asian economies.

The assertion that we hear every day that America is falling behind
because it doesn’t produce enough
science, mathematics and engineering graduates
is a bald-faced lie.

The problem is always brought back to education failures in K-12,
that is, to more education subsidies.
When CEOs say they can’t find American engineers,
they mean they cannot find Americans
who will work for Chinese or Indian wages.

That is what the so-called “shortage” is all about.

I receive a constant stream of emails
from unemployed and underemployed engineers
with many years of experience and advanced degrees.
Many have been out of work for years.
They describe the movement of their jobs offshore
or their replacement by foreigners brought in on work visas.
Many no longer even know American engineers
who are employed in the profession.
Some are now working in sawmills, others in Home Depot,
and others are attempting to eke out a living as consultants....


Many ask me how economists can be so blind to reality.
Here is my answer:
Many economists are bought and paid for by outsourcers.

[Cf. the 2010-12-31 NYT story “Academic Economists to Consider Ethics Code.”]
Most of the studies claiming to prove that Americans benefit from outsourcing
are done by economic consulting firms hired by outsourcers.
Or they are done by think tanks or university professors
dependent on corporate donors.
Or they reflect the ideology of “free market economists”
who are committed to the belief that “freedom” is good
and always produces good results.
Since outsourcing is merely the freedom of property to act in its interest,
and since this self-interest is always guided by an invisible hand
to the greater welfare of everyone,
outsourcing, ipso facto, is good for America.
Anyone who doesn’t think so is a fascist
who wants to take away the rights of property.
this is what passes for analysis among “free market economists.”
Economists’ commitment to their “reality”
is destroying the ladders of upward mobility
that made America the land of opportunity.
It is just as destructive as
the neocons’ commitment to their “reality”
that is driving the US deeper into war in the Middle East.

Fact and analysis no longer play a role.
The spun reality in which Americans live
is insulated against intelligent perception.

American “manufacturers” are becoming
merely marketers of foreign made goods.

The CEOs and shareholders have too short a time horizon
to understand that
once foreigners control the manufacture-design-innovation process,
they will bypass American brand names.
US companies will simply cease to exist.

Norm Augustine, former CEO of Lockheed Martin, says that
even McDonald’s jobs are no longer safe.
Why pay an error-prone order-taker the minimum wage
when McDonald’s can have the order
transmitted via satellite to a central location
and from there to the person preparing the order.
McDonald’s experiment with this system to date
has cut its error rate by 50% and increased its throughput by 20 percent.
Technology lets the orders be taken in India or China
at costs below the minimum wage
and without the liabilities of US employees.

Americans are giving up their civil liberties
because they fear terrorist attacks.
All of the terrorists in the world cannot do America
the damage it has already suffered from offshore outsourcing.


No Jobs for the New Economy (or the Old)
counterpunch.org, 2008-01-08

December did not bring Americans any jobs.
To the contrary, the private sector lost 13,000 jobs from the previous month.

If December is a harbinger of the new year,
it is going to be a bad one.
The past year,
hailed by Republican propagandists and “free trade” economists
as proof of globalism’s benefit to Americans, was dismal.
According to the Bureau of Labor Statistics’ nonfarm payroll data,
the US “super economy”
created a miserable 1,054,000 net new jobs during 2007.

This is not enough to keep up with population growth--
even at the rate discouraged Americans, unable to find jobs,
are dropping out of the work force--
thus the rise in the unemployment rate to 5%.

During the past year, US goods producing industries,
continuing a long trend, lost 374,000 jobs.

But making things was the “old economy.”
The “new economy” provides services.
Last year 1,428,000 private sector service jobs were created.

Are the “free trade” propagandists correct that
these service jobs, which are our future, are high-end jobs in
research and development, innovation, venture capitalism,
information technology, high finance, and science and engineering
where the US allegedly has such a shortage of scientists and engineers
that it must import them from abroad on work visas?

Not according to the official job statistics.

What occupations provided the 1.4 million service jobs in 2007?

Waitresses and bartenders accounted for
304,200, or
21% of the new service jobs last year and
29% of the net new jobs.

Health care and social assistance accounted for
478,400, or
33% of the new service jobs and
45% of the net new jobs.
Ambulatory health care and hospitals
accounted for the lion’s share of these jobs.

Professional and business services accounted for
314,000, or
22% of the new service jobs and
30% of the net new jobs.
Are these professional and business service jobs
the high-end jobs of which “free traders” speak?
Decide for yourself.
Services to buildings and dwellings account for 53,600 of the jobs.
Accounting and bookkeeping services account for 60,500 of the jobs.
Architectural and engineering services account for 54,700 of the jobs.
Computer systems design and related services account for 70,400 of the jobs.
Management consultants account for 88,400 of the jobs.

There were more jobs for hospital orderlies than for architects and engineers.
Waitresses and bartenders accounted for as many of last year’s new jobs
as the entirety of professional and business services.

Wholesale and retail trade, transportation, and utilities accounted for
181,000 of 2007’s new jobs.

Where are the rest of the new jobs?
There are a few scattered among arts, entertainment, and recreation,
repair and maintenance, personal and laundry services,
and membership associations and organizations.

That’s it.

Keep in mind that the loss of 374,000 goods producing jobs
must be subtracted from the 1,428,000 new service jobs
to arrive at the net job gain figure.
The new service jobs account for more than 100% of the net new jobs.

Keep in mind, too, that
many of the new jobs are not filled by American citizens.
Many of the engineering and science jobs were filled by
foreigners brought in on work visas.
Indians and others from abroad can be hired to work in the US
for one-third less.
The engineering and science jobs that are offshored
are paid as little as one-fifth of the US salary.
Even foreign nurses are brought in on work visas.
No one knows how many of the hospital orderlies are illegals.

What a super new economy Americans have!
US job growth has a distinctly third world flavor.
A very small percentage of 2007’s new jobs required a college education.
Since there are so few jobs for university graduates,
how is “education the answer”?

Where is the benefit to Americans of offshoring?
The answer is that
the benefit is confined to a few highly paid executives
who receive multi-million dollar bonuses
for increasing profits by offshoring jobs.

The rest of the big money went to Wall Street crooks
who sold trusting people subprime derivatives.

“Free traders” will assert that the benefit is in low Wal-Mart prices.
But the prices are low only because
China keeps its currency pegged to the dollar.
Thus, the Chinese currency value falls with the dollar.
The peg will not continue forever.
The dollar has lost 60% of its value against the Euro
during the years of the Bush regime.
Already China is having to adjust the peg.
When the peg goes,
Wal-Mart shoppers will think they are in Neiman Marcus.

Just as Americans have been betrayed by
“their” leaders in government at all levels,
they have been betrayed by
business “leaders” on Wall Street and in the corporations.
US government and business elites have proven themselves
to be Americans’ worst enemies.


Truth Has Fallen and Taken Liberty With It
counterpunch.org, 2010-03-24 [His “Good-Bye” column]

[This begins with a lot of generalities,
but moves on into some much-needed challenges to conventional wisdom
in both the economic and foreign policy spheres.
I agree with his criticisms of our foreign and economic policies
(but not his opposition to entitlement reduction),
so I am reprinting it in its entirety.]

There was a time when the pen was mightier than the sword.
That was a time when people believed in truth
and regarded truth as an independent power
and not as an auxiliary for
government, class, race, ideological, personal, or financial interest.

Today Americans are ruled by propaganda.
Americans have little regard for truth, little access to it,
and little ability to recognize it.

Truth is an unwelcome entity. It is disturbing. It is off limits.
Those who speak it run the risk of being branded
“anti-American,” “anti-semite” or “conspiracy theorist.”

Truth is an inconvenience for government and for
the interest groups whose campaign contributions control government.

Truth is an inconvenience for prosecutors who want convictions,
not the discovery of innocence or guilt.

Truth is inconvenient for ideologues.

Today many whose goal once was the discovery of truth
are now paid handsomely to hide it.
“Free market economists” are paid to sell offshoring to the American people.
High-productivity, high value-added American jobs are denigrated as
dirty, old industrial jobs.
Relicts from long ago, we are best shed of them.
Their place has been taken by “the New Economy,”
a mythical economy that allegedly consists of high-tech white collar jobs
in which Americans innovate and finance activities that occur offshore.
All Americans need in order to participate in this “new economy”
are finance degrees from Ivy League universities,
and then they will work on Wall Street at million dollar jobs.

Economists who were once respectable took money to contribute to
this myth of “the New Economy.”

And not only economists sell their souls for filthy lucre.
Recently we have had reports of medical doctors who, for money,
have published in peer-reviewed journals concocted “studies”
that hype this or that new medicine produced by
pharmaceutical companies that paid for the “studies.”

The Council of Europe is investigating the drug companies’ role
in hyping a false swine flu pandemic
in order to gain billions of dollars in sales of the vaccine.

The media helped the US military hype
its recent Marja offensive in Afghanistan,
describing Marja as a city of 80,000 under Taliban control.
It turns out that Marja is not urban
but a collection of village farms.

And there is the global warming scandal,
in which NGOs, the UN, and the nuclear industry
colluded in concocting a doomsday scenario
in order to create profit in pollution.

Wherever one looks, truth has fallen to money.

Wherever money is insufficient to bury the truth,
ignorance, propaganda, and short memories finish the job.

I remember when, following CIA director William Colby’s testimony
before the Church Committee in the mid-1970s,
presidents Gerald Ford and Ronald Reagan issued executive orders
preventing the CIA and U.S. black-op groups
from assassinating foreign leaders.
In 2010 the US Congress
was told by Dennis Blair, head of national intelligence, that
the US now assassinates its own citizens in addition to foreign leaders.

When Blair told the House Intelligence Committee that
US citizens no longer needed to be
arrested, charged, tried, and convicted of a capital crime,
just murdered on suspicion alone of being a “threat,” he wasn’t impeached.
No investigation pursued. Nothing happened. There was no Church Committee.
In the mid-1970s the CIA got into trouble for plots to kill Castro.
Today it is American citizens who are on the hit list.
Whatever objections there might be don’t carry any weight.
No one in government is in any trouble over
the assassination of U.S. citizens by the U.S. government.

As an economist, I am astonished that
the American economics profession has no awareness whatsoever that
the U.S. economy has been destroyed by
the offshoring of U.S. GDP to overseas countries.

U.S. corporations,
in pursuit of absolute advantage or lowest labor costs
and maximum CEO “performance bonuses,”
have moved the production of goods and services marketed to Americans
to China, India, and elsewhere abroad.
When I read economists describe offshoring as
free trade based on comparative advantage,
I realize that there is no intelligence or integrity
in the American economics profession.

Intelligence and integrity have been purchased by money.
The transnational or global U.S. corporations
pay multi-million dollar compensation packages to top managers,
who achieve these “performance awards”
by replacing U.S. labor with foreign labor.
While Washington worries about “the Muslim threat,”
Wall Street, U.S. corporations and “free market” shills
destroy the U.S. economy
and the prospects of tens of millions of Americans.

Americans, or most of them,
have proved to be putty in the hands of the police state.

Americans have bought into the government’s claim that
security requires the suspension of civil liberties
and accountable government.
Astonishingly, Americans, or most of them,
believe that civil liberties, such as habeas corpus and due process,
protect “terrorists,” and not themselves.
Many also believe that the Constitution is a tired old document
that prevents government from exercising
the kind of police state powers necessary to keep Americans safe and free.

Most Americans are unlikely to hear from
anyone who would tell them any different.

I was associate editor and columnist for the Wall Street Journal.
I was Business Week’s first outside columnist,
a position I held for 15 years.
I was columnist for a decade for Scripps Howard News Service,
carried in 300 newspapers.
I was a columnist for the Washington Times
and for newspapers in France and Italy and for a magazine in Germany.
I was a contributor to the New York Times
and a regular feature in the Los Angeles Times.
Today I cannot publish in, or appear on, the American “mainstream media.”

For the last six years I have been banned from the “mainstream media.”
My last column in the New York Times appeared in January, 2004,
coauthored with Democratic U.S. Senator Charles Schumer representing New York.
We addressed the offshoring of U.S. jobs.
Our op-ed article produced a conference at
the Brookings Institution in Washington, D.C. and live coverage by C-Span.
A debate was launched.
No such thing could happen today.

For years I was a mainstay at the Washington Times,
producing credibility for the Moony newspaper as a Business Week columnist,
former Wall Street Journal editor,
and former Assistant Secretary of the U.S. Treasury.
But when I began criticizing Bush’s wars of aggression,
the order came down to Mary Lou Forbes to cancel my column.

The American corporate media does not serve the truth.
It serves the government and the interest groups that empower the government.

America’s fate was sealed
when the public and the anti-war movement bought
the government’s 9/11 conspiracy theory.
The government’s account of 9/11 is contradicted by much evidence.
Nevertheless, this defining event of our time,
which has launched the US on interminable wars of aggression
and a domestic police state,
is a taboo topic for investigation in the media.
It is pointless to complain of war and a police state
when one accepts the premise upon which they are based.

These trillion dollar wars
have created financing problems for Washington’s deficits
and threaten the U.S. dollar’s role as world reserve currency.
The wars and the pressure that the budget deficits put on the dollar’s value
have put Social Security and Medicare on the chopping block.
Former Goldman Sachs chairman and U.S. Treasury Secretary Hank Paulson
is after these protections for the elderly.
Fed chairman Bernanke is also after them.
The Republicans are after them as well.
These protections are called “entitlements”
as if they are some sort of welfare
that people have not paid for in payroll taxes all their working lives.
[Well, if we're going to speak truth,
we need to observe that
all these entitlements programs have always been on a "pay as you go" basis.
today's retirees had their contributions go to pay for, not their own retirement,
but rather the retirement of the first generation of beneficiaries,
who in turned received benefits without any payments whatsoever.
And, of course, all this has been exacerbated by the perennial policy of
constantly raising benefits (for all those already enrolled)
at the same time as contributions are raised
(which affects only those not yet enrolled).
The elderly generation show their trickiness by not acknowledging these truths.
Cf. “Analysis illustrates big gap between Medicare taxes and benefits.”]

With over 21 per cent unemployment as measured by the methodology of 1980,
with American jobs, GDP, and technology having been given to China and India,
with war being Washington’s greatest commitment,
with the dollar over-burdened with debt,
with civil liberty sacrificed to the “war on terror,”
the liberty and prosperity of the American people
have been thrown into the trash bin of history.

The militarism of the U.S. and Israeli states,
and Wall Street and corporate greed,
will now run their course.
As the pen is censored and its might extinguished,
I am signing off.

[Roberts discusses and expands on this farewell column
in this video (4 minutes, Russia Today, 2010-03-25).]

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