This page has been archived and commenting is disabled.

Offshoring The Economy: Why The US Is On The Road To The Third World

Tyler Durden's picture




 

Submitted by Paul Craig Roberts,

On January 6, 2004, Senator Charles Schumer and I challenged the erroneous idea that jobs offshoring was free trade in a New York Times op-ed. Our article so astounded economists that within a few days Schumer and I were summoned to a Brookings Institution conference in Washington, DC, to explain our heresy. In the nationally televised conference, I declared that the consequence of jobs offshoring would be that the US would be a Third World country in 20 years.

That was 11 years ago, and the US is on course to descend to Third World status before the remaining nine years of my prediction have expired.

The evidence is everywhere.

In September the US Bureau of the Census released its report on US household income by quintile. Every quintile, as well as the top 5%, has experienced a decline in real household income since their peaks. The bottom quintile (lower 20 percent) has had a 17.1% decline in real income from the 1999 peak (from $14,092 to $11,676). The 4th quintile has had a 10.8% fall in real income since 2000 (from $34,863 to $31,087). The middle quintile has had a 6.9% decline in real income since 2000 (from $58,058 to $54,041). The 2nd quintile has had a 2.8% fall in real income since 2007 (from $90,331 to $87,834). The top quintile has had a decline in real income since 2006 of 1.7% (from $197,466 to $194,053). The top 5% has experienced a 4.8% reduction in real income since 2006 (from $349,215 to $332,347). Only the top One Percent or less (mainly the 0.1%) has experienced growth in income and wealth.

The Census Bureau uses official measures of inflation to arrive at real income. These measures are understated. If more accurate measures of inflation are used (such as those available from shadowstats.com), the declines in real household income are larger and have been declining for a longer period. Some measures show real median annual household income below levels of the late 1960s and early 1970s.

Note that these declines have occurred during an alleged six-year economic recovery from 2009 to the current time, and during a period when the labor force was shrinking due to a sustained decline in the labor force participation rate. On April 3, 2015 the US Bureau of Labor Statistics announced that 93,175,000 Americans of working age are not in the work force, a historical record. Normally, an economic recovery is marked by a rise in the labor force participation rate. John Williams reports that when discouraged workers are included among the measure of the unemployed, the US unemployment rate is currently 23%, not the 5.2% reported figure.

In a recently released report, the Social Security Administration provides annual income data on an individual basis. Are you ready for this?

In 2014 38% of all American workers made less than $20,000; 51% made less than $30,000; 63% made less than $40,000; and 72% made less than $50,000.

The scarcity of jobs and the low pay are direct consequences of jobs offshoring. Under pressure from “shareholder advocates” (Wall Street) and large retailers, US manufacturing companies moved their manufacturing abroad to countries where the rock bottom price of labor results in a rise in corporate profits, executive “performance bonuses,” and stock prices.

The departure of well-paid US manufacturing jobs was soon followed by the departure of software engineering, IT, and other professional service jobs.

Incompetent economic studies by careless economists, such as Michael Porter at Harvard and Matthew Slaughter at Dartmouth, concluded that the gift of vast numbers of US high productivity, high value-added jobs to foreign countries was a great benefit to the US economy.

In articles and books I challenged this absurd conclusion, and all of the economic evidence proves that I am correct. The promised better jobs that the “New Economy” would create to replace the jobs gifted to foreigners have never appeared. Instead, the economy creates lowly-paid part-time jobs, such as waitresses, bartenders, retail clerks, and ambulatory health care services, while full-time jobs with benefits continue to shrink as a percentage of total jobs.

These part-time jobs do not provide enough income to form a household. Consequently, as a Federal Reserve study reports, “Nationally, nearly half of 25-year-olds lived with their parents in 2012-2013, up from just over 25% in 1999.”

When half of 25-year olds cannot form households, the market for houses and home furnishings collapses.

Finance is the only sector of the US economy that is growing. The financial industry’s share of GDP has risen from less than 4% in 1960 to about 8% today. As Michael Hudson has shown, finance is not a productive activity. It is a looting activity (Killing The Host).

Moreover, extraordinary financial concentration and reckless risk and debt leverage have made the financial sector a grave threat to the economy.

The absence of growth in real consumer income means that there is no growth in aggregate demand to drive the economy. Consumer indebtedness limits the ability of consumers to expand their spending with credit. These spending limits on consumers mean that new investment has limited appeal to businesses. The economy simply cannot go anywhere, except down as businesses continue to lower their costs by substituting part-time jobs for full-time jobs and by substituting foreign for domestic workers. Government at every level is over-indebted, and quantitative easing has over-supplied the US currency.

This is not the end of the story. When manufacturing jobs depart, research, development, design, and innovation follow. An economy that doesn’t make things does not innovate. The entire economy is lost, not merely the supply chains.

The economic and social infrastructure is collapsing, including the family itself, the rule of law, and the accountability of government.

When college graduates can’t find employment because their jobs have been offshored or given to foreigners on work visas, the demand for college education declines. To become indebted only to find employment that cannot service student loans becomes a bad economic decision.

We already have the situation where college and university administrations spend 75% of the university’s budget on themselves, hiring adjuncts to teach the classes for a few thousand dollars. The demand for full time faculty with a career before them has collapsed. When the consequences of putting short-term corporate profits before jobs for Americans fully hit, the demand for university education will collapse and with it American science and technology.

The collapse of the Soviet Union was the worst thing that ever happened to the United States. The two main consequences of the Soviet collapse have been devastating. One consequence was the rise of the neoconservative hubris of US world hegemony, which has resulted in 14 years of wars that have cost $6 trillion. The other consequence was a change of mind in socialist India and communist China, large countries that responded to “the end of history” by opening their vast under-utilized labor forces to Western capital, which resulted in the American economic decline that this article describes, leaving a struggling economy to bear the enormous war debt.

It is a reasonable conclusion that a social-political-economic system so incompetently run already is a Third World country.

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sun, 11/01/2015 - 02:01 | 6736337 dark pools of soros
dark pools of soros's picture

and you'll just piss away whatever you saved there..  in the past, the social fabric mattered since people cared about their neighbors who may have been those contractors... and now everyone is programmed to be shutins out of greed and fear and not to care

 

Fri, 10/30/2015 - 22:58 | 6733225 NoWayJose
NoWayJose's picture

"Free Trade" is another word for "Now I can move my factory to China and the U.S. won't be able to put tariffs on my products when I ship them back to the U.S."

The part of this offshoring I hate the most is when the company closes the American factory. It would be better for the country if they turned the factory over to the employees. We might then see some real productivity increases and cost cutting - especially eliminating over-priced managers and CEOs. And the product can then be stamped 'Made in the USA' - which might help sales even if priced a little higher. Instead you just get to choose between a Chinese product or a Korean product!

Fri, 10/30/2015 - 23:16 | 6733248 live free
live free's picture

I'm a design engineering consultant.  Actually I'm diversifying ..... headin to china to make further relatioships.  Have contacts in Germany I'm working with, looking at South america and buying land here.... You MUST if you have the chance anticipate these changes..... If you want a decent lifestyle for  your family in the next 10+ years.

Edit: farming, welding are some of the major items that still make good money in the midwest. You cannot do one job alone in that area.  You must  do a couple things - normal job during day and then a unique job at night.  If you do that, you can still do very well in a lot of areas.

 

Fri, 10/30/2015 - 23:19 | 6733266 dexter_morgan
dexter_morgan's picture

Very interesting and no doubt accurate part of the story. PCR's and Schumer's solution is ???????

Fri, 10/30/2015 - 23:43 | 6733296 Insurrexion
Insurrexion's picture

 

Jesus fucking Christ, Droogs...

After reading all of the sunshine in this post, I think I'll fucking down a bottle of scotch, a bottle of muscle relaxers and stick my Glock in my mouth.

Better idea.

Get the fuck out of the United States. But, don't come to Europe. We are more fucked and we have too many refugees already.

Let the U.S. go down with the fucking neocons, the government employees, the free-shit-army, the military, the stupid TV watching population, the pensioners in assisted living, the entire education system and the puppies.

Especially, the fucking puppies.

Fri, 10/30/2015 - 23:56 | 6733314 MEFOBILLS
MEFOBILLS's picture

Let’s take a trip down memory lane:

1990 Berlin Wall

1992 Francis Fukuyama’s book  “end of History” debuts.

Nafta 1993 signed into law Clinton.

May 27 1994 Clinton gives China MFN status.

Clinton Telecommunication 1996

Graham Leach Bliley act 1999

 

China MFN circumvents/short circuits NAFTA in 1994.  The intent of NAFTA was to build a North American trade block, using Mexican labor to assemble high end American manufactured goods.  Mexican labor population has burgeoned due to 1960’s green revolution.  Increases of food into third world country = more children, as children are considered wealth.  Short circuiting NAFA is also part of the reason for America’s Mexinvasion, as a Zenith TV not made in Mexico, but instead its counterpart in China, is a diversion from local economy.

Housing bubble and .com bubble is ignited, this starts a private debt run up, while government erroneously tries to balance its budget on private economy debts/money creation.   This extra bank credit fuels stock market mania.

Wall Street tells American industry it wants wage arbitrage.  Arbitrage is the delta in wages between the U.S. and China. 

Captains of American Industry that don’t get on-board with China Gambit, are told they will be Greenmailed, their company bought out.  Buying out a company with greenmail techniques is done by creating new banker credit, while using target company’s assets (including pensions) as collateral on double entry ledger.

American industry picks up and moves to former communist lands, especially China.  China at this point has already met BIS and MFN conditions by erasing former Communist era debts, using slight of hand.

By transplanting American industry, the patrimony and knowledge of decades if not 100’s of years is transferred to then be monetized.   This is taking labors hard won know-how of the past and monetizing it for today.  This patrimony lost means that future American’s will have no industrial transfer/renewal cycle, and the knowledge is sold for peanuts.

Arbitrage is made to be maximum, as China exports are designed to be just under the American Price.  Arbitrage income vectors into Captains of industry by way of stock options and capital gains, while 401K’S grow in apparent value.  Capital Gains are taxed at a lower rate than Income, so it is a twofer to then grow Oligarchy.

This mechanism makes wall street a hero, but turns American main street into a zero.

In order to grease the fraud skids, dock workers are paid skim and skiff is paid to retail merchants.  This payment of bribe money to merchants keeps them quiet, and places China merchandise onto American retail shelves.

To add insult to injury, main street American’s pay taxes, to then fund the U.S. Navy, which insures China goods transshipment.

Graham Leach Bliley Act breaks Glass Steagall, and now Wall Street Banks can transfer risk to retail main street banks, especially those main street banks with FDIC insured loans.  The housing bubble begins in earnest.   Insurance companies, are part of the game as they funded GLB lobby activity.

This flood of new Credit money created against housing is false economics as swapping homes in a run up in prices is not creating new housing stock.  It is empty calories.

However, the price run up is counted in NIPA accounts as GDP activity, and all seems good.  Government skims off of this private credit creation to then fund war. 

Private debts continue to grow against housing, while real jobs are transferred.  Eventually the bubble will pop, as growing prices and usury on housing is a diversion from the circular flow of money (Say’s Law)… finance parasitism has metastasized.  Real incomes cannot grow due to diversion and losses.

Real jobs are those that can transform the earth and its bounty in useful goods and services, this mechanism is short circuited.

When one can walk into Wall Mart in North Carolina, and buy a wood table cheaper than local, then one must know the economic field is tilted.  China has no real natural source of Wood, yet the Carolina’s are heavily wooded.

China helps the game along by creating loans at their State Banks, and often forgiving the debts.  They also target loans at industry they want, for example Solar Cell companies. 

 

So, high technology created and funded in America, using Tax dollars, is lured to China, thus further dampening and preventing an American renewal cycle.  New industry does not bloom in American and hence middle class labor does not form.

Sat, 10/31/2015 - 00:25 | 6733360 dexter_morgan
dexter_morgan's picture

Thank you for reminding me of many of WJC's most treasonous acts as president. How soon we forget.

Sat, 10/31/2015 - 02:04 | 6733445 OldPhart
OldPhart's picture

My memory lane.

Knees fuck up in the Marines.  They discharge me, no benefits, 1978.  I've done nothing noteworthy in the Marines other than go through boot and AIT.  I've earned no benefits, I have no problem with that.

Hired at Disneyland, then transferred to Disney World, promoted three levels with a nickle an hour pay cut.  Tested and assigned to stir 1,500 pounds of apple/cherries per night in steam vats. Later to bake everything Disney World produces (still have visible burns from the six shelf, contantly rotating ovens.)

Meet current wife, have kid, age 19.

Have lung collapse, come back to work and first day put to work pulling hundred pounds sacks of flour (still have stitches).  Admit to supervisors that presently I cannot function at the load demanded due to medical condition, no longer candidate for promotion for $1 raise.  Put into same position without a raise.

Inform Supervisor that I plan to leave, Leave, and be blacklisted by Disney for not informing them of my plans to leave. 

Become a debit insurance agent (going house to house, collecting weekly premiums, and attempting to sell insurance products), become aa million dollar round table insurance agent, and being fired for much earlier calculations of monthly equivalents (there's a tremendous difference between 4.2 per week and 4.6 per week to cover a month in weekly premiums).  During this six years I've become a county volunteer ambulance EMT for Gulf County, Florida.  A cop accidently shoots himself and I can no longer get a traffic ticket anywhere in Florida, Alabama, South Carolina or even on Tyndall AFB.  (Same sheriff that shot Clyde Melvin that suddenly brought all those courthose metal detectors.) 

Worked six jobs, after insurance, as assistant manager at Hardee's; a DJ at WJBU, a pro EMT in Appalachicola, self employed as a wall paper hanger, painter and dry wall guy; and still a volunteer EMT for Gulf County, Flawed-duh.  (Another collapsed lung doing CPR, a week in the hospital, and then another week after doing CPR on a guy at the Piggly Wiggly when he collapsed.  Rippped all the stiches out doing that.  {The only ones that died on me were the ones already dead when we got there.  I never handed off a dead patient to Bay Medical in eight years.  That includes my personal PTSD event of the sixteen week primie that died on me six times from Eastpoint to Tyndall, that shit still fucking haunts me.  I actually felt Death sit down beside me.}  Bought a house in Panama City for the outrageous price of $30k, direct from the owner.  Had to pay her $100 a month and it was part of her retirement.  Paid it religiously, until all six jobs dried up.

Welcome to Reaganomics.  Would come up with a part time job building a Western Auto via ManPower.  Contractor wanted me to go with them to new sites to build.  Wife was pregnant with second oops baby, I had to decline.  Florida Highway Patrol approved me to come to their training.  Wife was pregnant with second oops baby.  Had to decline.  Took a job selling pizza products, became the national sales leader, became so big my district manager fired me so he could take over my route.  Took a sandwich route and got fired for insisting on attending my wife's labor delivering my second son.  Got a job as a temp Stone Container in Panama City as a Project Secretary as they did a $5 million renovation to their paper making process.  Found they were being overcharged by millions on replacement parts.  Got fired; afgter there was a huge renegotion and I identifid fourten local sources.

All of this under Reagan.

It makes no difference who is in charge, it matter's on who is controlling them.

Back then I had no idea, I was young and naive, and the internet didn't exist.  My sole source of news was the propaganda that we got from TV (FOX was a UHF station that featured mostly Benny Hill), and newspapers.  My great pride was being able to do crossword puzzles.  Other than local news, I wasn't too interested in much else.

That was life back in the 80's when you (well, me) were a dumb ass, absolutely without a clue.  You kept your head down and you did what you thought you had to do.

It took me all the way to the bail out of 2008 to wake the fuck up.

I'm ashamed of that.  But I did try to be a decent person even while I was asleep.

 

Sat, 10/31/2015 - 19:25 | 6735602 dark pools of soros
dark pools of soros's picture

control comes from restricting the boundaries of others..  their mind, their spirit, their self-esteem, and most importantly their awareness.   You see it with parents to their kids, spouses toward each other and to mice from men.  Once you awaken past their control you feel liberated & alive, once you awaken past what you can control you feel despair and wish for the bliss of ignorance

 

Sat, 10/31/2015 - 00:27 | 6733357 MedicalQuack
MedicalQuack's picture

Now that we have become a 3rd world with no jobs, watch out for the Chinese models of Citzens Score creeping in, as this further assigns every frigging risk some rogue software engineers and developers can think of to tag on to our ass to score us as middle and low class citizens to be even more useless by using queries and algorithms.  

http://ducknetweb.blogspot.com/2015/10/citizen-score-in-china-huge-warning-for.html

Where do you think common sense has gone?  US consumers are so brain washed that we can't make a simple decision anymore without consulting the web to see if it's been "scored" yet...it's the end of common sense as we have known it. 

http://ducknetweb.blogspot.com/2015/10/the-end-of-consumer-common-sense-in-us.html

 

Sat, 10/31/2015 - 00:29 | 6733366 MEFOBILLS
MEFOBILLS's picture

Hey Mefobills, how will we fix this cluster ____?  You fill in the blanks.

Oh, I’m glad you asked, and since nobody listens to me anyway, I’ll go ahead and give advice.  Here is my economic plan:

Issue MEFOBILLS debt free from Treasury.  On the bill it has a defining statement or statements.  This bill is good for paying down loan principle only.

When it is accepted for discount at a bank, then Treasury makes it good.  Actually, Treasury could force FED to accept MEFOBILLS from banks, thus expanding FED ledger in the same way that QE works.   The bill finds new money when it is discounted.

This action decrements double entry ledger, and private credit loans are reduced back to their former pre-run up bubble fraud.

When this new money enters banker double entry ledger to pay down mortgage principle, said money DISAPPEARS.  But, the debt positon of the country is changed to less debt.  Less debts then means that Say’s law is operative again, and people can buy their outputs from each other.  Disappearing money is not inflationary, and unhooks the future from debts.

What is the catch?  In order to receive new MEFOBILLS, the recipient has to agree to new taxes, especially Georgist land taxes.  This puts fiscal policy on the right path and allows regressive income taxes to be repealed. Taxing cancers like unearned income is a necessary component of fiscal policy, not done today.  There should be no free lunch.

In future, once new tax base is installed, then income taxes can be repealed.

What about those folks that aren’t mortgage debt holders?  They get a MEFOBILL that specifies channeling payment into new desired American Industry, to thus help renewal.  For example, the bill says that x amount can be spent on American made consumption goods, and x amount on a bond; where said bond channels against new industrial activity.  Maybe America wants to recover its former Solar Cell Industry?

Hjalmar Schacht had his MEFOBILLS examined to make sure that Germany goods were produced; and American version would have the bills examined to make sure they are spent in accordance with their specification.  This mechanism is how Germany avoided the Great Depression.

NOTE HOW CHANNELING can direct economic outputs to get a desired response, while general demand (money) cannot.   Just helicoptering money to then be spent on China crap, would be most unhelpful.   China recycles their trade surplus dollars to buy TBills, thus a helicopter could actually increase debt positon.Of course, don’t expect bankers to be helpful, their business model is to make money from money by spreading debt and taking usury.

America could renew itself practically overnight with the right policies; the money system is the main problem facing mankind and it has to be addressed. The money power should not be privately held.

Ultimately, money power needs to be put into its legal box, where it belongs, where it can be audited, and where it can be viewed clearly.   Law has the ability to go after Fraud.   Back room deals for profits on the creation of credit money are a guaranteed fraud mechanism.

 

www.sovereignmoney.eu

Sat, 10/31/2015 - 01:26 | 6733429 PoasterToaster
PoasterToaster's picture

Or we could shitcan all those control systems and not have aristocrats in charge for a change.

Sat, 10/31/2015 - 02:12 | 6733458 OldPhart
OldPhart's picture

I'm in favor of shit-canning the aristocrats.  Fuck the control systems, we can hang those controllers later. (Odd to hear me type that, I AM a corporate controller.)

Let's just be careful to hang the ones we really want, the globalists and their owners. There's a lot of small business that seem like big business to local people.  We've got to be very careful in what we do.

Sat, 10/31/2015 - 06:07 | 6733578 Elliott Eldrich
Elliott Eldrich's picture

"Let's just be careful to hang the ones we really want, the globalists and their owners. There's a lot of small business that seem like big business to local people. We've got to be very careful in what we do."

The problem is that once you get to that point, concepts like "careful" go flying out the window, and you instead end up with unbridled terror as the rage that has built over decades is unleashed. The owners of this empire have sown disaster, and they shall reap a whirlwind. 

Sat, 10/31/2015 - 08:15 | 6733675 bunnyswanson
bunnyswanson's picture

One step ahead of us is what we do know.  The manipulation of ALL of our nations, Canada, Australia, UK, EURO have a long range plan.

https://www.youtube.com/watch?v=THaBGUDvR8g&feature=youtu.be&t=1863 Very Good!

Lecture by Nazemroaya re:  Syria - the ME plan (create antagonism, fracture/divide, move in, steal it)

America is a victim.  The murdered and ruined politicians are clear proof, as is the strategies employed to destroy the harmony and tranquility within a nation, community, home and heart of man.  Replacing with despair, self doubt, a state of confusion and unnatural existence that alcohol, tobacco, drugs, and extreme activities (eating, sports, sex, criminal life).  Honor and respect for the human condition is completely absent, not  trace of compassion to be found, only contempt in a form that incites mobs to act.  Despicable human beings who would require reprogramming to function normally in a sound society with a functioning infrastructure.

Sat, 10/31/2015 - 08:51 | 6733708 bunnyswanson
bunnyswanson's picture

Discreet if nothing else.  Mankind has spent enough man hours on this neverending misery.  Life is such a gift and our world so beautiful.  Peace is the last thing on the mind of the entity funding this madness.

https://www.youtube.com/watch?v=SdGmCfGBnvk Egypt.  TV host interview with history Professor at an Egyptian university  suggests how to solve problem, and the fact it is out there says it is already too late.  Brace yourself.

Sat, 10/31/2015 - 06:05 | 6733576 reinhardt
reinhardt's picture

i predict market crashes

the foundation of which is outsourcing and the history of same

r

https://enronnext101.wordpress.com/

Sat, 10/31/2015 - 07:00 | 6733598 falak pema
falak pema's picture

Hahaha, I love PCR's punchline on the consequences of the demise of the USSR :

The collapse of the Soviet Union was the worst thing that ever happened to the United States. The two main consequences of the Soviet collapse have been devastating. One consequence was the rise of the neoconservative hubris of US world hegemony, which has resulted in 14 years of wars that have cost $6 trillion. The other consequence was a change of mind in socialist India and communist China, large countries that responded to “the end of history” by opening their vast under-utilized labor forces to Western capital, which resulted in the American economic decline that this article describes, leaving a struggling economy to bear the enormous war debt.

My comment : Those whom the Gods wish to destroy they first drive mad in unbridled HUBRIS. And, they  the Oligarchs then OPEN Pandora's box!

Oh the Bush/Clinton family wars of unbridled hubris-- the one all bent on NWO fed Clash of Civilization Mantra abroad--all for black gold of energy-- the other all bent on outsourcing to slave labour (in line with the end of history mantra)--all for Oligarchy superprofits-- : American Optimates meet their counterparts of American Populares in an internal social war! Just like Hegemonial Rome after fall of Carthage and Corinth in 146 BC.

All roads led to Rome and the Kings of the World lost their fighting edge of excellence in irrational exuberance built on slave labour.

History does rhyme. Carthago delenda est... Cato's call to destroy the enemy then reversed and destroyed those who sang the song of Hegemony, as victims of their own Hubris in thinking that "Evil is the OTHER guy"...

Sat, 10/31/2015 - 07:57 | 6733634 Wow72
Wow72's picture

I totally agree, this article is the truth. There is  a giant sucking sound going on and its jobs and incomes leaving the country and going into the elite's pockets. Its very simple the liquidation of America by the elite.  Things wont get better till this changes, they will continue to prop everything up with fiat till its too late.  Because the people wont rise up pre-emptively they are doomed.  It wont be long before the dollar is no longer recognized by the international community.  Americans currently are comfortable with their fiat, little do they know there will be an expiration date.

 

Dont believe me? http://www.zerohedge.com/news/2015-10-29/100-us-ceo-have-greater-retirement-assets-116-million-american-workers   I cant imagine why there is no velocity, when you have a few sucking the life from everyone else?  its not balanced and sustainable.  Big problem that is being ignored. Time at this point is Americas biggest enemy.  Unless people rise up we are on a path that is destine to fail.  Completely out of balance, not good.

 

When you send 28.7 million jobs out of the country since 92, families and children suffer while those at the top hoard what they dont need. It represents nothing more than massive waste. http://www.zerohedge.com/news/2015-10-27/free-trade-vs-american-jobs   Its a waste and a disgrace of the human character.  Dont feel free to move  about the cabin because Greed Rules Now.  "Suffering" is the word of the next few decades because our goverment thinks they can print money, but they really cant.

To those who think everything is "peachy" reality is coming in time.

This is the problem with fiat currency, greed insists on taking it all.  We are living proof of this reality.  Its solely the human trait of Greed that rips society down everytime.  Its pathetic more dont see it. How is anyone of them even able to make a percent at those levels? By wiping American families OUT.

If your not in the top 1000 richest people you may want to start worrying because your not exempt.

Sat, 10/31/2015 - 10:09 | 6733881 Wow72
Wow72's picture

A negative rate and cashless society will only put more of your money in jeopardy of being hoarded by one of the elite.  Kind of like a thorough vacuum cleaning.  Negative rates and cashless agitate whats left of the money up to the vacuum.  At that point they are just taking from us.  Not Good.

Sun, 11/01/2015 - 03:09 | 6736396 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

I agree.  And it has been going on for some time.  USA is already a third world country albeit still at the top of the pile. Its descent will continue I am sure.  

My husband and I knew this and got out fast.  We went there in the early 1990s and left in 2011.  Interesting, in that the conversations we had with people the few years beore we left were similar to the conversations  we had with people years back in India.  Now Indians are coming up (slowly), and Americanos are going down.  

We are now in a REAL first world country - Singapore - and have never regretted moving.  I wish you well. 

Sat, 10/31/2015 - 07:25 | 6733641 graspAU
graspAU's picture

What's interesting to me is that high level US managers are given goals of dollar amounts to cut from their US expenses (employees) and then told to shift jobs to Asia, but in some cases they actually lose productivity and raise expenses in doing so. They have certain US based employees working 12-16 hour days, hooked to their work smart phone 24 hours a day, being on-call, etc (afraid to lose their job to Asia). So yes, the salary is 1/3 in Asia, but you will also find the attitude of shift work in Asia, meaning for that 1/3 you get and 8-9 hour shift max, and then they are gone until the next shift start. From my perspective there is also a loss in quality based on not only experience, and institutianal knowledge, but relationships that help get things done better and faster. If the high level managers meet their reduction numbers for US based expenses, they are rewarded for it with outstanding cash bonuses and stock rewards. Where is it all headed? Exactly where the article says. There will be the extremely wealthy, and the extremely poor, and almost no one in between. Even families that have built much wealth and handed it down to the now adult generation will see that wealth used in a single generation, trying to maintain a middle-class lifestyle with what was a gift from their departed parents. It's not just IT jobs, now its the goose that lays the golden egg (big bonuses to high level managers), so it is any professional job that does not require physical customer facing, you name it, its leaving for Asia.

Sat, 10/31/2015 - 07:26 | 6733642 truthalwayswinsout
truthalwayswinsout's picture

Here is the issue. It may have been off shoring that made the first inroads into our way of life. However, that is no longer true. Off shoring is now coming back on shore with a major vengence in the form of high tech but very low employment with robotic manufacturing. You can see the peripheral of this process when the idiots in various states raise their minimum wages to $15 and now robotics will be taking those jobs.

So offshoring or even reonshoring will never be the answer.

In the past our world has always absorbed such processes by the fact that it was still the age of discovery with plenty of living space available for those who could move and put their manual labor capital to work.

That is no longer true.

The morons who lead us need to restart that process by really doing something about space exploration. Simply taking NASA public would do the trick. It would create 2 million extremely high tech jobs, pay off the national debt within 15 years and start a never ending outlet to alllow standards of living to raise for everyone and not just those gaming the closed end system that now exists.

 

Sat, 10/31/2015 - 07:39 | 6733650 SamEyeAm
SamEyeAm's picture

How would privatizing NASA help? Sounds like creating more artificial demand to create jobs.

Maybe some medicines could be produced in space, but I don't see much else right now.

Plus, where would we get the money? Print it, borrow is from Asia?

 

What they need to do is eliminate half a dozen federal departments altogether, shrink the rest by half or more, turn over most of the functions of the federal gubment to individual states, close the borders and stop importing poverty/low wage workers, and unwind the entitlements (promises) that never could be kept.

Unfortunately, the laws of mathematics and economics will pay off the national debt, Argentina or Greece style.

Sat, 10/31/2015 - 08:12 | 6733667 NoPension
NoPension's picture

Shrink the Federal Government?

I would speculate that somewhere around 25% of the jobs in our economy that are considered " good" are from government. Fed, state and local.

This would include, for example: teachers, cops, firefighters, post office, inspectors, anyone who works for a Military Industrial supplier whose business model is 95% government contracts, judiciary, prisons, road work and private contractors whose business model is 95% government contracts, park rangers, Homeland security, Armed forces, politicians, etc.

As I type that, I'm reconsidering. It might be as high as 40%.

If the Eagle stops shitting, millions will be on the street. Of course, they will then demand their Gold Plated Pensions and retirement benefits.

Sat, 10/31/2015 - 09:02 | 6733751 silverer
silverer's picture

So let me get this straight: We can make those $750.00 Daraprim pills now with robots in space? 

Sat, 10/31/2015 - 09:09 | 6733763 Neochrome
Neochrome's picture

Agree, they should let Disney do "space exploration", that way we can have literally a "Mickey Mouse Space Program".

Sat, 10/31/2015 - 07:36 | 6733647 Ouagadoudou
Ouagadoudou's picture

The eco-nobel prize Benoit Mandelbrot said the same things for years and received the same coverage in the MSM than PCR. A shame.

Sat, 10/31/2015 - 08:15 | 6733673 localizer
localizer's picture

The collapse of the Soviet Union was the worst thing that ever happened to the United States. 

 

It's rather ironic, but come to think of it this is actually the truth... when there is no balance (i.e. monopoly) the hegemonic power becomes sloppy and eventually collapses under its own weight.

Sat, 10/31/2015 - 08:35 | 6733697 kappal_toba_dhu...
kappal_toba_dhurr_ne_thook's picture

On the road?????     On the road????  I have news for you deekras (dears), USA has already entered Third World Territory (TWT).  Don't  believe me?  Just take a look around you and you will see.  OR better yet, take a trip abroad to any REAL "first world" country and you will see what a ca-ca hole USA has become.  

 

A very damned shame, as USA was a good country. 

Sat, 10/31/2015 - 08:38 | 6733700 adr
adr's picture

What I am trying to figure out is how home prices can continue to go up and how corporations can continue to grow revenue when 75% of working people make less than $50k a year. 

A $120k home with $3000 a year in property taxes is a stretch to afford on $50k a year. You throw in health insurance and the utilities that have doubled over the last six years and you are easily over your take home income.

If 75% of the population makes under $50k a year, how can you have a median home price above $200k? Where I live the median price for a shithole 1950s prefab is $275k. I have seen trailer parks with a median price of $90k. For 75% of the population only the trailer park is affordable. So how are all these people affording to live in these homes? Interest only loans? I don't get it.

Based on IRS receipts, I am in the top 15% of wage earners. That means I should be living in the top 15% of zip codes nationally. I should be living in a home that 75% of the people envy. Being in the top 15% should mean luxury cars, great vacations, perhaps a country club membership. 

Nope, the top 15% of homes in my area are above $750k. Hell half of the homes are above $500k. A new development starts at $525k for a 2000sq ft fiberboard piece of shit. Half a million dollars isn't affordable until you are comfortably in the six figures. Putting you in the 1% range of wage earners.

If all of these homes are only affordable to the top 1%, HOW THE FUCK TO THEY MAKE OVER 50% OF AVAILABLE INVENTORY!!!!!!

If I make over what 85% of the rest of America makes, why is it that the only place I can comfortably afford is located in a very low class town. Towns taken over by Mexicans have homes selling for $175k that should be condemned. Really, what the hell is going on?

Sat, 10/31/2015 - 09:31 | 6733813 SmallerGovNow2
SmallerGovNow2's picture

Awesome...

Sat, 10/31/2015 - 12:47 | 6734532 DipshitMiddleCl...
DipshitMiddleClassWhiteKid's picture

i grew up in one of those areas where home prices were and are north of a million dollars and my parents were upper middle class.

 

I make about 70k a year now and live in my parents basement. I have no debts and realize that I cannot afford to live where I grew up or even anywhere around it without spending most of my paycheck to live there.

 

The people who live in these homes are part of the deep state (upper corp management, govt jobs like police officer or administration jobs in the state or own medium sized businesses)

 

I am stacking all of my shekels and waiting for the collapse. There is no future..atleast not the in the America I grew up in and what most of you spent your optimal career years in.

 

Sat, 10/31/2015 - 08:40 | 6733706 Puncher75
Puncher75's picture

I stopped reading at "Chuck Schumer".

Sat, 10/31/2015 - 15:59 | 6735012 Blankenstein
Blankenstein's picture

This.  There is NO WAY IN HELL that Schumer supported Ross Perot in 1992, he was no doubt a backer of fellow dem, Slick Willy.  Why wasn't he joining with Perot to keep jobs in the US if he was so concerned about the American worker?  Then 12 years later, he writes an op-ed decrying offshoring as being bad for America.  No shit Schumer - just another career politician that needs to be in jail for treason. 

Sat, 10/31/2015 - 08:58 | 6733737 silverer
silverer's picture

The American economy is still a productive economy.  The question is, what's happening to the wealth it produces?  Well, it's pretty simple.  The government confiscates over 2 trillion dollars a year from the producers to run out and spend on marble floors for Washington elevators, and to pay people not to work.  Not capital investment, but comsumption. They create byzantine rules, regulations, and laws that destroy business and investment.  They waste money by the boatload.  Misallocated capital is what is destroying the US.  Look at any country in the world, any other economy you see, and ask what would happen to it if you put a needle in its arm and sucked out 2.2 trillion dollars a year to waste, year after year.  Would it improve, or stagnate and die?

Sat, 10/31/2015 - 09:07 | 6733756 sam site
sam site's picture

 

As Peter Schiff said, "America is uncompetitive because of government regulations and taxes - not wages" as most believe.

Roberts blames NAFTA and not our uncompetitive attitudes, regulations and taxes for the jobs loss.

American "exceptional" workers are in for a rude wake up when they lose the advantage of scams like the dollar reserve currency

and petro dollar that no longer prop up our corrupt economy and we have to compete on a level playing field in the global economy.

Sat, 10/31/2015 - 09:08 | 6733761 Neochrome
Neochrome's picture

Facts are, companies nowadays have no "nationality", they are trans-national. They simple don't have allegiance to any country.

They will ALWAYS do what is deemed to be in their best interest, and not what is "right thing to do" or what is just. If they can have people work for $0 they will be happy, If they can have slaves they would be happier. If they can make people pay to them in order to work for them they would be ecstatic.

They are incompatible with democracy by the simple virtue of not being beholden to any "constituents" but instead playing off one constituency against the other. They corrupt political process, ignore interest and wishes of people and  will actively change political landscape when convenient (see "regime change").

Let's face it, we ARE ruled by lizard people wearing corporate logos.

 

Sat, 10/31/2015 - 09:12 | 6733772 gregga777
gregga777's picture

The elites have committed treason against the American People on a massive scale. The elites will get their just rewards when the masses wielding pitchforks and nooses come for them.

Sat, 10/31/2015 - 09:35 | 6733825 Wow72
Wow72's picture

We can only hope. Problem is they still have most distracted with fiat, free food, idevices, Ophones, toys etc.  The people are literally still in La La Land from what I can see.

Sat, 10/31/2015 - 09:21 | 6733785 rejected
rejected's picture

PCR is spot on but nothing will change until the whole thing crashes. What the PTB are trying to do is create a nation out of the entire world. All present countries would be in effect individual states, subservient to the global federation. Like a manufacturing plant in Iowa is a part of the USA,,, a manufacturing plant in China would be a part of the global federation.

Bottom line.... no more individual sovereign nations with independent economies, just one enormous planet wide federal government and economy. Something on the order of the United Nations. 

In order to accomplish this one world economy there will have to be a single world currency and tax system. Also there will have to be a leveling of living standards which is what we are witnessing in the western nations that have agreed to this course with the USA leading the charge. As an analog,,, one tank of water full,,, one tank empty. Run a pipe between them and they will both settle to 1/2 full.

The pols in the beltway and the other feral governments have agreed to destroy their economies and their peoples living standard for this one world government religion. This is the reason for all the problems in the West. First they offshore the productive part of the nations economy (the full water tank) to a third world nation (the empty water tank), then destroy the currency and flood the nation with third world people in an attempt to nullify any nationalistic responses from the native populations. Look around, this is happening all over.

If some nations or religions are resisting then they are destroyed a la the Middle East. Russia is resisting and is therefore an enemy of the world wannabe powers which is why the west is antagonizing and sanctioning her. China and the BRIC nations took the production but are now balking at the integration and are siding with a very strong and now assertive Russia which is throwing a wrench into their plans and therefore are enemies also.

There are a lot of missing elements in my assertion for brevity's sake. I just want to point out that the problems the nations that have governments willing to destroy their economies and culture are not happenstance. They are deliberate calculated moves to accomplish their world government goal.

Think about this, then look around, their whole scheme is hidden in plain sight. It answers all the questions that cannot be answered any other way. If their scheme is not stopped humans will be controlled and abused in every way imaginable until the end of time.

The choice is ours and will be only available for a short period of time.

Sat, 10/31/2015 - 10:36 | 6734010 BernankeHasHemo...
BernankeHasHemorrhoids's picture

Keep chanting "USA Number 1" you fucking morons while you descend into poverty. Americans are the stupidest fucking morons on the planet. Like Argentina's descent in the twentieth century from a rich country in 1900 to a Third World one in 2000 so will the US descend. Why? When offered two alternatives by always choosing the worst one for long term success. And if you think voting for Trump is going to change this you're a fucking idiot who deserves the ass fucking you're going to get!

Sat, 10/31/2015 - 11:38 | 6734301 Wow72
Wow72's picture

"Trump is going to change this you're a fucking idiot who deserves the ass fucking you're going to get!"

 

Who else should I pick for "change"?  Who really will "change" things? Tell me Id like to vote for them.  I just dont see anyone capable?

Sat, 10/31/2015 - 11:54 | 6734351 Jim Leyritz
Jim Leyritz's picture

Jews never called America home.

Sat, 10/31/2015 - 12:08 | 6734399 venturen
venturen's picture

Schumer would prefer everyone be in a public union and everyone other than Democrat leaders make $100k and retire at 45 years of age....of course he has no way to pay for it. Schumer is a socialist corrupt democrat of the first order. It is shear luck he picked a worthy issue. Our troubles currently have little to do with offshoring...it has to do with a BAD TAXCODE...and a fiancial system designed to give ALL REWARDS to a select few money men. Ecplain why capital is taxed only at realization at a much lower rate? Why criminal bankers can gamble away savers money?? Schumer represents the interest of criminal bankers from his STATE! 

Sat, 10/31/2015 - 15:40 | 6734960 Herdee
Herdee's picture

The truth is that the banking cartels or cabals don't have any allegiance to the United States or any other country either.Anybody that doesn't get that must be delusional.They thrive off of debt from both governments and people.Politicians are nothing more than ideological financial slaves to this organised racket and their beliefs play into the hands of bankers.Anyone who says that they are either a democrat or republican today doesn't have the faintest clue as to what is going on in the world and how bankers are responsible for being the financiers of the military-industrial complex that President Eisenhower warned all Americans about.Bankers and politicians today aren't your friends,they're the enemies of The Constitution.The mainstream media is its' propaganda machine.When you understand that the NeoCon Washington machine is out of control in order to keep up its' imperialist world domination ideology in the name of freedom and justice and the so-called American way then you begin to understand the problems around the globe and who's causing them.

Do NOT follow this link or you will be banned from the site!