The Shocking Truth About The Deindustrialization Of America That Everyone Should Know

Tyler Durden's picture

Submitted by Michael Snyder of The Economic Collapse blog,

How long can America continue to burn up wealth?  How long can this nation continue to consume far more wealth than it produces?  The trade deficit is one of the biggest reasons for the steady decline of the U.S. economy, but many Americans don't even understand what it is.  Basically, we are buying far more stuff from the rest of the world than they are buying from us.  That means that far more money is constantly leaving the country than is coming into the country.  In order to keep the game going, we have to go to the people that we bought all of that stuff from and ask them to lend our money back to us.  Or lately, we just have the Federal Reserve create new money out of thin air.  This is called "quantitative easing".  Our current debt-fueled lifestyle is dependent on this cycle continuing.  In order to live like we do, we must consume far more wealth than we produce.  If someday we are forced to only live on the wealth that we create, it will require a massive adjustment in our standard of living.  We have become great at consuming wealth but not so great at creating it.  But as a result of running gigantic trade deficits year after year, we have lost tens of thousands of businesses, millions upon millions of jobs, and America is being deindustrialized at a staggering pace.

Most Americans won't even notice, but the latest monthly trade deficit increased to 42.3 billion dollars...

The U.S. trade deficit climbed to the highest level in five months in February as demand for American exports fell while imports increased slightly.

 

The deficit increased to $42.3 billion, which was 7.7% above the January imbalance of $39.3 billion, the Commerce Department reported Thursday.

When the trade deficit increases, it means that even more wealth, even more jobs and even more businesses have left the United States.

In essence, we have gotten poorer as a nation.

Have you ever wondered how China has gotten so wealthy?

Just a few decades ago, they were basically a joke economically.

So how in the world did they get so powerful?

Well, one of the primary ways that they did it was by selling us far more stuff than we sold to them.  If we had refused to do business with communist China, they never would have become what they have become today.  It was our decisions that allowed China to become an economic powerhouse.

Last year, we sold 122 billion dollars of stuff to China.

That sounds like a lot until you learn that China sold 440 billion dollars of stuff to us.

We fill up our shopping carts with lots of cheap plastic trinkets that are "made in China", and they pile up gigantic mountains of our money which we beg them to lend back to us so that we can pay our bills.

Who is winning that game and who is losing that game?

Below, I have posted our yearly trade deficits with China since 1990.  Let's see if you can spot the trend...

1990: 10 billion dollars

1991: 12 billion dollars

1992: 18 billion dollars

1993: 22 billion dollars

1994: 29 billion dollars

1995: 33 billion dollars

1996: 39 billion dollars

1997: 49 billion dollars

1998: 56 billion dollars

1999: 68 billion dollars

2000: 83 billion dollars

2001: 83 billion dollars

2002: 103 billion dollars

2003: 124 billion dollars

2004: 162 billion dollars

2005: 202 billion dollars

2006: 234 billion dollars

2007: 258 billion dollars

2008: 268 billion dollars

2009: 226 billion dollars

2010: 273 billion dollars

2011: 295 billion dollars

2012: 315 billion dollars

2013: 318 billion dollars

Yikes!

It has been estimated that the U.S. economy loses approximately 9,000 jobs for every 1 billion dollars of goods that are imported from overseas, and according to the Economic Policy Institute, America is losing about half a million jobs to China every single year.

Considering the high level of unemployment that we now have in this country, can we really afford to be doing that?

Overall, the United States has accumulated a total trade deficit with the rest of the world of more than 8 trillion dollars since 1975.

As a result, we have lost tens of thousands of businesses, millions of jobs and our economic infrastructure has been absolutely gutted.

Just look at what has happened to manufacturing jobs in America.  Back in the 1980s, more than 20 percent of the jobs in the United States were manufacturing jobs.  Today, only about 9 percent of the jobs in the United States are manufacturing jobs.

And we have fewer Americans working in manufacturing today than we did in 1950 even though our population has more than doubled since then...

Manufacturing Employment

Many people find this statistic hard to believe, but the United States has lost a total of more than 56,000 manufacturing facilities since 2001.

Millions of good paying jobs have been lost.

As a result, the middle class is shriveling up, and at this point 9 out of the top 10 occupations in America pay less than $35,000 a year.

For a long time, U.S. consumers attempted to keep up their middle class lifestyles by going into constantly increasing amounts of debt, but now it is becoming increasingly apparent that middle class consumers are tapped out.

In response, major retailers are closing thousands of stores in poor and middle class neighborhoods all over the country.  You can see some amazing photos of America's abandoned shopping malls right here.

If we could start reducing the size of our trade deficit, that would go a long way toward getting the United States back on the right economic path.

Unfortunately, Barack Obama has been negotiating a treaty in secret which is going to send the deindustrialization of America into overdrive.  The Trans-Pacific Partnership is being called the "NAFTA of the Pacific", and it is going to result in millions more good jobs being sent to the other side of the planet where it is legal to pay slave labor wages.

According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.

So what will this country look like when we lose tens of millions more jobs than we already have?

U.S. workers are being merged into a giant global labor pool where they must compete directly for jobs with people making less than a dollar an hour with no benefits.

Obama tells us that globalization is good for us and that Americans need to be ready to adjust to a "level playing field".

The quality of our jobs has already been declining for decades, and if we continue down this path the quality of our jobs is going to get a whole lot worse and our economic infrastructure will continue to be absolutely gutted.

At one time, the city of Detroit was the greatest manufacturing city on the entire planet and it had the highest per capita income in the United States.  But today, it is a rotting, decaying hellhole that the rest of the world laughs at.

In the end, the rest of the nation is going to suffer the same fate as Detroit unless Americans are willing to stand up and fight for their economy while they still can.

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markmotive's picture

The collapse is speeding up as the Petrodollar system collapses

Documentary: Petrodollar - War Machine

http://www.planbeconomics.com/2014/04/documentary-petrodollar-war-machin...

R-502's picture

Wow, that one was hard to watch. Thanks

hansg's picture

Barely.

Just remember: free trade is great. Not for _you_ as an individual, but if you're an oligarch it is fantastic. And you get a cheap iPad to enjoy while you are living on the streets, so it's all good!

SimplePrinciple's picture

Trade deficits are always the bogeyman when unemployment spikes.  Yet the trade deficits are there when unemployment is low, too.  People pay no attention then.

The country gets poorer over time when it borrows and does not invest the borrowed money.  That is the real story.  You don't lose jobs, because the money returns to buy things like T-Bills.  You instead lose wealth because the money flowing back into T-Bills is not invested.  Government might call it investment, but its spending is rarely invested in productive enterprise.  GM, Solyndra, student loans, and other centrally planned investments squander the value of the money borrowed, as do give-aways like food stamps.  Eat now, pay later.

Unemployment is a problem, but it is caused by government not allowing the employment market to clear.  If it did, wages and benefits would be lower because of a dumbed-down workforce, but eventually the lower costs would attract investment that would raise standards of living once again.  It is how America became prosperous in the first place.

So the problem is not trade deficits or free trade.  Rather, it is too much borrowing in general and government interference in the labor market.  Getting rid of those would lead to re-industrialization and a higher average standard of living, albeit with less of a nanny-state safety net.

scraping_by's picture

Trade deficits are both the symptom and cause of the economy drifting down, as it has been since the Reagan years. This is real money leaving the national economy and financing the economies of foreign nations. Or capital has to be redefined as something other than retained earnings.

The earnings retained have to come from the earnings of the real economy, or they're just a bluff. Currently, much of the world buys our bluff either from custom or at the business end of a gun. Either way, our funny money is their real money. 

The only things we have they need are row crops and timber, and those don't need that many employees. The model of exporting raw materials and buying finished goods is historically the model colonial powers impose on their possessions. Life in a colony has never been very good outside the colonist's local henchmen cadre.

The mechanical analogy of allowing unemployment to clear is based on social snobbery. Regan's big patter about 'sunset jobs and sunrise jobs' always had a class undertone, defining manufacturing as old economy and writing software as new and improved. Offshoring can export the positions of skilled and educated workers just as easily as those in factories. Indeed, as many managers have discovered, their jobs depended on the blue collar workers they managed.

Even in a colony, there are police boys and local gang whippers who prosper. That's increasingly the situation in the colony that was once the United States.

SimplePrinciple's picture

I don't disagree, and certainly think the USSA is doing its best to destroy the dollar.  Some elements of the USSA may think they are trying to save the dollar by worldwide war against any that dare go against it, but that strategy is neither promising nor honorable.  As for Reagan, he had his opinion about the jobs of the future and maybe he was not entirely correct.  The difference is he did not impose his opinions on the market, unlike today's centrally planned, subsidized, and rigged markets.

FredFlintstone's picture

No, Greece is the word.

(grease is the word, is the word that you heard)
It's got a groove, it's got a meaning
Grease is the time, is the place, is the motion
Grease is the way we are feeling

 

acommenter's picture

Greeks have been around for thousands years and will be around for more.As "Modern" Greek STATE, I don't think so...

quebecgold's picture

By reductio ad absurdum, Bastiat argued that the national trade deficit was an indicator of a successful economy, rather than a failing one. Bastiat predicted that a successful, growing economy would result in greater trade deficits, and an unsuccessful, shrinking economy would result in lower trade deficits. This was later, in the 20th century, echoed by economist Milton Friedman.

doctor10's picture

At the end of the day, the only reason for people coming to the USA from around the world, was the US Constitution and the Bill of Rights.

When enforced by the Rule of Law, those documents made capital worth more here than anywhere else in the world. For 200 years, the USA was the most fertile place in the world to sow money.

in the absence of rule of law supporting the freedoms guaranteed by those documents, it should suprise no one that capital is worthless in the USA today. 

There is no way, under those circumstances, capital will hang around where there are trillions of overhead liabilities waiting to prey upon it.

More_sellers_than_buyers's picture

DING DING ! We have a winner DR.  Well said.

Totentänzerlied's picture

"At the end of the day, the only reason for people coming to the USA from around the world, was the US Constitution and the Bill of Rights."

I've never met a foreigner nor an immigrant who shared that view. Not one. Oh well, I'd still be willing to accept some evidence for this claim, but I don't see any.

(Why do, and did, people really come? Economic freedom and economic opportunity. Duh. Lots of them still go back to their home countries when they retire, the better to enjoy their wealth.)

James_Cole's picture

It's even simpler than that. Why do people rob banks? Cause that's where the money is.

Why do so many people risk so much to become guest labour in Saudi Arabia, Qatar etc.? Cause of the US constitution? Lol gawd people are so deluded it's astounding...rule of law zzzzzzzzzzz

Totentänzerlied's picture

Fair enough. In that case, the USA was just the biggest, most well-stocked, and for quite some time least-guarded bank around. Not being taxed out your ass (until the later 1900s) helped too.

ndotken's picture

Americans are fat, lazy and stupid ... and getting fatter, lazier and more stupider with every passing day.  This will not end well.

Spitzer's picture

How many Americans have been called a seppo before ?

FredFlintstone's picture

Me. I heard that word in NZ.

PrecipiceWatching's picture

And how specifically are the denizens of whatever shithole you are from, any better?

zerocash's picture

He probably is an American. A thinking person can see their own nation's people for what they are instead of believing that they live in "the best country in the world" yadda yadda. Most people are dumb as rocks and that's the case in all nations of the world.

PrecipiceWatching's picture

Well that's curious, because one of the most disgustingly popular memes on ZH is that Americans are uniquely stupid.

How about "stupid" Chinese, Aussies, Scandinavians or Canadians?   Never see that  here.

Most relevantly, among the "thinking persons" in the United States, we know it is the magnificent SYSTEM put in place by the prescient and wise Founders of our country that makes us unique, not any innate superiority in Americans.

 So shelve your INCESSANT, misplaced disdain for Americans, y'all.

 

 

PrecipiceWatching's picture

I don't play that way foof.

Why don't you elucidate that particular perverted sensation for us.

StupidEarthlings's picture

Well..im american and I can say without a doubt that MOST Americans are fat and lazy. .and they think tthey are entitled to every thing.

 

Sad yes..but thems the facts jack.

 

Granted ..its because they have been trained to be ignorant and not ask questions. Man, its gonna be rough for those that are blinded with ignorance. 

Stuck on Zero's picture

Stop hanging out at pool halls and welfare offices Stupid.  Spend a day working with some roofers, cement contractors, electricians, or engineers. 

StupidEarthlings's picture

For a hot sec I thought you were talkin to me..then I realized you must have just replied to my post accidentally. ;)

 

You see..Im faar from welfare or food stamps..I worked my way up since I was 16.. didnt graduate. .so I had to prove my worth. I worked.(I'm 43 now) I'm now an engineer in the aircraft biz, and EARN just shy of 100k. My girl makes 85. Not tootin my horn..but explaining where I stand.

 

If I was in some foodstamp line or whatever benefits they get..I would be livin in denial like the rest of them. THIS is why im pissed at the system..I work for mine..I am Not fat..and far from lazy. When it comes crashing down I have a lot to lose. The people who Earn nothing/ have nothing..or get their sht for free or by cheating ..stealing etc..THOSE are the ones that do not care to learn or undertand. Those are in fact the ones to blame.

 

You can be mad at the people committing the crimes all day long..but I would surmise that it's more the fault of the people that enable the criminals by denial..or ignorance. 

Its the PEOPLE that made this once great nation great..not the bankers/politician/ criminals.

 

It saddens me to see what the countys come to.

Didnt mean to offend anyone btw. Just calls em like I sees em.

James_Cole's picture

All depends on where you are in America, 300 million ffs.

Sure, some are fat and lazy, but the US also contains a lot of the smartest / hardest working folks around. Simply stratified.

TheMerryPrankster's picture

most will lead a short stupid life with no basis for comparison but whatever their chosen favorite television shows gives them.

They are not merely stupid, they have an insatiable apetite to be entertained and would not know how to entertain themselves if their very future depended on it, as it will.

even the semi elite waste their days in pursuit of paper profits that garner no more understanding of this world or the worlds after.

These are the last sunny days of Autumn, Winter will spare no souls, but first it takes the unprepared.

Leraconteur's picture

Give me a camera crew and an afternoon in Brussels and I can edit the footage to make it appear like the Arabian Peninsula.

You Europeans actually believe those man in the street pieces that ask Americans questions to make them appear stupid?

They are edited to feed your arrogance and superiority complex. The crew don't even approach anyone who appears together or well-read.

PrecipiceWatching's picture

Excellent.

On the nailhead.

The smell of abjectly ignorant Euro (and others) condescension toward Americans is among the least appealing aspects of ZH.

 

scraping_by's picture

Unfortunately it's built into the system.

When my kids came home from elementary school talking about 'so-called Americans' I had to have a few talks with the staff. It just got worse as they grew.

It really comes from domestic identity politics. Anti-nationalism was shocking once, now it's self-destruction.

NoDebt's picture

A friday night article with the training wheels on and streamers on the handlebars.

 

BigJim's picture

Yes, I suggest Mr Snyder research 'Triffin's Dilemma'... you want a reserve currency, you need a trade deficit... when you lose your reserve currency status, your currency floods home leading to currency devaluation and inflation proportional to the degree your currency was used by foreigners.

Defaults or hyperinflation or asset confiscation or a yummy mix of all three?

Keep your heads down, people, when this (finally) blows it's going to be a big one.

Ignatius's picture

The elite don't give a flying fuck about US jobs.  The Soviet Union collapsed and with it the only 'push back' against our own elite's attack on the middle and working class.  They didn't have to 'prove' our system superior anymore. Notice how worker's declines really accelerated since the 90s?  And we see the results.  Police state, corporate dominance and everyone else be damned.  When/if China and Russia fold there'll be NO countervailing force (if they are at all).  In brief, victory is defeat for the less than wealthy.  Obamacare is a prime policy example of this phenomenum.  We're collectively stuck sucking elite cock.

Plan/hedge accordingly.

LetThemEatRand's picture

The only positive in all of this is that "elite cock" tend to be small.  It explains a lot about their behavior (and a little).   The funny thing is that like with all bullies, all we as a People need to do in order to take back our society is bloody their noses.  They become sniveling little bitches the moment their power is taken from them.  

Anusocracy's picture

A host doesn't need the parasite for its survival but the parasite sure needs the host.

The problem with humans is convincing them to not WANT the parasite.

messystateofaffairs's picture

They don't really want the parasite, just the free lunch the parasite baits them with, the parasite comes as extra.

Buckaroo Banzai's picture

Unfortunately, the human race seems to have evolved in a such a way that psychopaths and sociopaths are marginalized and disposed of by actually putting them into positions of power. As a short term solution it is actually effective, as a long term solution it is disastrous.

scraping_by's picture

True enough. Social democracy started out a bottom up movement, and now it's presented as a gift from the elites. Ordinary people go along with it because they've been propagandized for decades, and to identify themselves with the elites. Used to call that a 'snob badge'.

Psychopaths and sociopaths present themselves as the rightful owners of everything and devalue other people's work. Perhaps they think the are.

kchrisc's picture

The ironic thing about the Soviet collapse was that there were industries available for the taking by the oligarchs, 'tribe' (look it up), and that will not be the case when the DC US collapses.

 

"Nothing but guillotines left."

August's picture

Aim small.  Miss small.

CunnyFunt's picture

Banks and .gov are hardening their bunkers. This accounts for most of the construction workforce. 

BigE_mks's picture

ZH needs to talk about the cop that recently violated the Constitution in New Orleans! The footage that they have is unreal.

fedupwhiteguy's picture

Yeah. Why can't you guys post a freakin link when you want to hijack a post. Here it is:

 

http://www.theroot.com/articles/culture/2014/04/this_news_orleans_police...

 

 

BTW, I read the whole article, didn't bother to watch the vid. THIS IS ONLY 1/2 OF THE STORY. I'd wouldn't go to war over this as I definitely feel that a man sitting in his house, on a Sunday, shouldn't have to hear two stoned aholes talking freakin loud and using foul language.

 

kfed

BigJim's picture

Cops violate the Constitution every fucking day. Where in the Constitution does it say 'our' government can throw people into a cage for smoking the 'wrong' type of plant?

angryBuddhist's picture

I agree with everything that is said here as well as the majority of countless similar arguments pointing towards the inevitable decline and collapse of the USofA in the not too distant future. The only problem is that IMHO we are waaaaaaaaay past the tipping point where anything can be done to prevent it. The Titanic has struck the iceburg and the hull is rapidly filling with water and the sheeple are not paying any attention. Now is the time to stop pointing out the obvious and switch gears to a discussion of what is the best strategy for survival and not get sucked down in the vortex of the sinking ship. Anything less is wasting precious energy and time.

PrecipiceWatching's picture

OK, I'll start.

This week I  converted $4K of Fiat into toilet paper, and a substantially larger amount into Canadian Gold Maple Leafs.

 

Your turn.....

 

August's picture

I converted a substantial amount of USD to HKD (gotta keep some fiat around).