By Chuck Kelly
It's now official. Conditions for working Americans are irrelevant to our definitions of "prosperity," "recession," or "economic recovery." The Wall Street Journal described our modern way of defining an ideal economy in a July 18 report:
Despite Job Losses, Recession
Is Officially Declared Over
The National Bureau of Economic Research said the U.S. economic recession that began in March 2001 ended eight months later, not long after the Sept. 11 terrorist attacks.
Most economists concluded more than a year ago that the recession ended in late 2001. But Thursday's declaration by the NBER""a private, nonprofit economic research group that is considered the official arbiter of recession timing""came after a lengthy internal debate over whether there can be an economic recovery if the labor market continues to contract. The bureau's answer: a decisive yes".
Since the fourth quarter of 2001, GDP has expanded slowly but consistently""rising 4% through March of 2003".
Employers, however, have eliminated 938,000 payroll jobs since November 2001. In addition, 150,000 people have dropped out of the labor force because they are discouraged about their job prospects, according to the government".
The group's long-running debate on the timing of the recession sheds light on broader structural shifts that have made this business cycle much different from previous cycles and on how the economy responded to the shocks of Sept. 11". As the gap between growing GDP and falling employment persisted, "there was a gradual shift of opinion on the committee that employment should be demoted in the committee decision," said Robert Gordon, a Northwestern University professor and committee member. He had been quietly lobbying for several months to declare an end to the recession".
Welcome to our new prosperity. If employment levels are embarrassingly low for conservative economists, they can just "demote" them in their formula for describing the economy they have created for America's workers.
Of course, one wonders how they will be able to explain away the kinds of things that are happening in every state of our country. Two weeks later The Wall Street Journal described what is happening in Oregon""one of our most successful "new era" states of recent years.
From The Wall Street Journal, July 30.
In Quest for Steady Work,
A Man Traces State's Decline
Fred Harp, Just 32, Jumped From Mills
To High Tech to Utilities to Government
EUGENE, Ore.""Oregon has pegged its fortunes to one hot industry after another, and Fred Harp has had a foot in all of them. He started in timber and bounced to paper to electronics to electric power""only to lose his job as each went into a slump.
Now he's working for his county government, just as that sector faces a big crunch. "My uncle used to tell me get a job and stay with it," the 32-year-old Mr. Harp says, guiding his 1979 Ford pickup past some of his old work haunts. "But I tell him you can't do that anymore."
Mr. Harp's ill-starred odyssey traces the woes of a state that has searched in vain for economic salvation over the past dozen years. Oregon grew faster than most states during the 1990s, only to crash harder as virtually every one of its major industries shriveled".
Oregon's schools are so strapped for cash that some have closed and many have had to sack teachers. In a few cases, schools shaved weeks off their schedules".
In Lane County, a heavily forested area in the foothills of the Cascade mountains where Mr. Harp works, local officials say they have had to eliminate 119 of their jail's 450 beds, forcing the early release of less-violent offenders".
Old-line industries, Mr. Harp concluded, were a thing of the past. The future lay in electronics.
Oregon's planners had decided the same thing and opened their arms to high-tech manufacturers. Microchip giant Intel Corp., custom-chip maker LSI Logic Corp. and others enthralled with Oregon's low-cost labor market were flooding into the state with production plants".
The Sony plant was the biggest economic event ever to hit the Eugene area and was a symbol of Oregon's new economic hope. Built in the neighboring city of Springfield for $50 million, the campus sprawled across 37 acres and created economic ripple effects. Among other vendors who arrived to supply Sony, an International Paper Co. unit opened a big carton plant across the street".
Then, shortly after reporting for a graveyard shift in the spring of 2001, Mr. Harp says he and almost all his co-workers were handed pink slips. Komag Inc., of San Jose, Calif., had bought HMT a few months earlier and decided to send all U.S. production jobs to Malaysia, citing a slowdown in demand for its products and the need to cut costs".
It became clear to Mr. Harp that even his new government job wasn't immune. In late April, Lane County announced it would cut about 80 jobs as part of an effort to slash $20 million from its $408 million annual budget. "We are in the midst of a full-scale financial storm," County Administrator William Van Vactor warned in his budget report".
It's the same old story:
Jobs are shipped overseas,
Displaced workers enter the job market,
Wages for everyone are reduced,
Tax revenues dry up,
Public services for those who need it most are eliminated by financially-strapped states,
Conservative investors and top corporate execs get incredibly richer, and use their money for propaganda to
Blame liberals for being "tax and spenders," and
More conservatives are elected to public office, who then
CONTINUE THE PROCESS!
Articles like the above are so obviously alarming, one would think that the advocates for globalization would be having second thoughts. Not so. Just look at this editorial comment from The Wall Street Journal, July 29.
Clothing Costs
Once upon a time the favorite target of American protectionists was Japan. But judging from a complaint just filed by American textile and apparel industry groups, these days the bull's-eye has been painted squarely on China.
The idea here is that a surge in Chinese textile imports to America is causing "market disruption.""
Thursday's petition, moreover, is only a taste of things to come"
It's doubtful that American workers will really benefit in any case. American textile jobs are bound to be lost as protection is peeled away, and by free-market rights probably would have been lost a long time ago. The only real question is to what developing country locale the jobs will go: Bangladesh, Vietnam, China or elsewhere".
The bad news is that Beijing has too often settled for managed trade, and indications are it might settle for voluntary restrictions in textiles too. But China would do American consumers a service if it used its leverage as a large and growing market for American products to accelerate the political demise of the U.S. textile lobby.
Ten years ago, when "globalization" was rapidly destroying American industry, conservative politicians assured us that American workers""with their ingenuity and their increasing productivity""could compete with any workers in the world.
Now the Journal editors tell us that we can forget our textile industry. It's history. Not only that, our country (meaning wealthy investors and tight-fisted consumers""not workers, however) will be better off without it.
In upcoming elections, every politician's position on globalization (increasing it or rolling-it back) should be a major consideration for every voter who cares about our future.
Chuck Kelly is at http://www.KellySite.net. He holds a Ph.D. in industrial communications from Purdue University, is now a retired management consultant, and author of the books, THE DESTRUCTIVE ACHEIVER, THE GREAT LIMBAUGH CON, and CLASS WAR IN AMERICA. This article is originally published at opednews.com. Copyright Chuck Kelly, but permission is granted for reprint in print, email, blog, or web media so long as this credit is attached
