Paul Craig Roberts: Who Does America Really Belong To?

Authored by Paul Craig Roberts,

Not to Americans...

The housing market is now apparently turning down. Consumer incomes are limited by jobs offshoring and the ability of employers to hold down wages and salaries.  The Federal Reserve seems committed to higher interest rates - in my view to protect the exchange value of the US dollar on which Washington’s power is based.  The arrogant fools in Washington, with whom I spent a quarter century, have, with their bellicosity and sanctions, encouraged nations with independent foreign and economic policies to drop the use of the dollar.  This takes some time to accomplish, but Russia, China, Iran, and India are apparently committed to dropping  or reducing the use of the US dollar. 

A drop in the world demand for dollars can be destabilizing of the dollar’s value unless the central banks of Japan, UK, and EU continue to support the dollar’s exchange value, either by purchasing dollars with their currencies or by printing offsetting amounts of their currencies to keep the dollar’s value stable.  So far they have been willing to do both.  However, Trump’s criticisms of Europe has soured Europe against Trump, with a corresponding weakening of the willingness to cover for the US.  Japan’s colonial status vis-a-vis the US since the Second World War is being stressed by the hostility that Washington is introducing into Japan’s part of the world.  The orchestrated Washington tensions with North Korea and China do not serve Japan, and those Japanese politicians who are not heavily on the US payroll are aware that Japan is being put on the line for American, not Japanese interests.

If all this leads, as is likely, to the rise of more independence among Washington’s vassals, the vassals are likely to protect themselves from the cost of their independence by removing themselves from the dollar and payments mechanisms associated with the dollar as world currency.  This means a drop in the value of the dollar that the Federal Reserve would have to prevent by raising interest rates on dollar investments in order to keep the demand for dollars up sufficiently to protect its value.

As every realtor knows, housing prices boom when interest rates are low, because the lower the rate the higher the price of the house that the person with the mortgage can afford.  But when interest rates rise, the lower the price of the house that a buyer can afford. 

If we are going into an era of higher interest rates, home prices and sales are going to decline.

The “on the other hand” to this analysis is that if the Federal Reserve loses control of the situation and the debts associated with the current value of the US dollar become a problem that can collapse the system, the Federal Reserve is likely to pump out enough new money to preserve the debt by driving interest rates back to zero or negative. 

Would this save or revive the housing market?  Not if the debt-burdened American people have no substantial increases in their real income.  Where are these increases likely to come from? Robotics are about to take away the jobs not already lost to jobs offshoring. Indeed, despite President Trump’s emphasis on “bringing the jobs back,” Ford Motor Corp. has just announced that it is moving the production of the Ford Focus from Michigan to China.  

Apparently it never occurs to the executives running America’s offshored corporations that potential customers in America working in part time jobs stocking shelves in Walmart, Home Depot, Lowe’s, etc., will not have enough money to purchase a Ford.  Unlike Henry Ford, who had the intelligence to pay workers good wages so they could buy Fords, the executives of American companies today sacrifice their domestic market and the American economy to their short-term “performance bonuses” based on low foreign labor costs.

What is about to happen in America today is that the middle class, or rather those who were part of it as children and expected to join it, are going to be driven into manufactured “double-wide homes” or single trailers.  The MacMansions will be cut up into tenements.  Even the high-priced rentals along the Florida coast will find a drop in demand as real incomes continue to fall. The $5,000-$20,000 weekly summer rental rate along Florida’s panhandle 30A will not be sustainable.  The speculators who are in over their heads in this arena are due for a future shock.

For years I have reported on the monthly payroll jobs statistics.  The vast majority of new jobs are in lowly paid nontradable domestic services, such as waitresses and bartenders, retail clerks, and ambulatory health care services. In the payroll jobs report for June, for example, the new jobs, if they actually exist, are concentrated in these sectors: administrative and waste services, health care and social assistance, accommodation and food services, and local government.

High productivity, high value-added manufactured jobs shrink in the US as they are offshored to Asia.  High productivity, high value-added professional service jobs, such as research, design, software engineering, accounting, legal research, are being filled by offshoring or by foreigners brought into the US on work visas with the fabricated and false excuse that there are no Americans qualified for the jobs.

America is a country hollowed out by the short-term greed of the ruling class and its shills in the economics profession and in Congress.  Capitalism only works for the few. It no longer works for the many.

On national security grounds Trump should respond to Ford’s announcement of offshoring the production of Ford Focus to China by nationalizing Ford.  Michigan’s payrolls and tax base will decline and employment in China will rise. We are witnessing a major US corporation enabling China’s rise over the United States. Among the external costs of Ford’s contribution to China’s GDP is Trump’s increased US military budget to counter the rise in China’s power.

Trump should also nationalize Apple, Nike, Levi, and all the rest of the offshored US global corporations who have put the interest of a few people above the interests of the American work force and the US economy.  There is no other way to get the jobs back.  Of course, if Trump did this, he would be assassinated.  

America is ruled by a tiny percentage of people who constitute a treasonous class. These people have the money to purchase the government, the media, and the economics profession that shills for them. This greedy traitorous interest group must be dealt with or the United States of America and the entirety of its peoples are lost.

In her latest blockbuster book, Collusion, Nomi Prins documents how central banks and international monetary institutions have used the 2008 financial crisis to manipulate markets and the fiscal policies of governments to benefit the super-rich.

These manipulations are used to enable the looting of countries such as Greece and Portugal by the large German and Dutch banks and the enrichment via inflated financial asset prices of shareholders at the expense of the general population.

One would think that repeated financial crises would undermine the power of financial interests, but the facts are otherwise. As long ago as November 21, 1933, President Franklin D. Roosevelt wrote to Col. House that “the real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson.”

Thomas Jefferson said that “banking institutions are more dangerous to our liberties than standing armies” and that “if the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks . . . will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.”

The shrinkage of the US middle class is evidence that Jefferson’s prediction is coming true.

Comments

lock-stick NidStyles Sat, 08/04/2018 - 01:35 Permalink

ONE whackjob obsessed SPAMMER -- with numerous log-ons!!!

•• Free This  (same WHACK JOB -- used to be "Mr Hankey" -- also banned)

•• sanctificado  (DON'T CLICK THE LINKS!!! --  Biblicism SPAMMER -- banned as powow/Wadolt/ravolla/lloll/pier/etc.)

•• More Sun (it's the JOOS!! -- whack job extraordinaire)

•• Annanuki  (another imaginary friend)

•• Jumanji1959 (another imaginary friend)

•• Adolfsteinbergovich  (another imaginary friend)

•• Cryptopithicus Homme  (another "imaginary friend")

 

spamming ZH for seven years --- dozens and dozens of banned log-ons

 

ONE DEEPLY DISTURBED INDIVIDUAL 

 

Write to the Tylers ::  abuse@zerohedge.com

In reply to by NidStyles

rtb61 besnook Fri, 08/03/2018 - 02:44 Permalink

Not accurate, basically, you have genetic defects running the country, a government of the pyschopath, by the psychopath and for the psychopath, all of you are the consumables as are you children, to be used, abused, tortured and kill to feed the ego's and lusts of the psychopaths.

As multi-national corporations are involved, yes it is treason. It is going to get worse before it get better, just a matter of how much worse.

In reply to by besnook

Dutti sanctificado Fri, 08/03/2018 - 00:48 Permalink

Usually I like PCR's political opinion pieces. However, in his "economic" writings he shows that he is pretty clueless.

PCR writes: "Trump should also nationalize Apple, Nike, Levi, and all the rest of the offshored US global corporations..."

Does he really believe that if the US gov. would run Apple, it could remain a successful company and compete against the likes of Samsung and Huawei?

 

In reply to by sanctificado

Hubbs Dutti Fri, 08/03/2018 - 01:27 Permalink

I might dig myself in a hole with this one. No, the govt should not take over Apple, but if corporations enjoy the intellectual, property and patent protections, rule of law, ( I know , I know- what rule of law?)and where arguably even the military guards the trade, shipment and commmerce which nutures these companies as they develop and prosper, they should not be allowed to suddenly say "see ya" and transport their operations overseas without paying a hefty exit tax if not only that but also some sort of compensatory tariff if they want to turn around and sell their stuff back here in US. No. I am NOT stating Obama's ridiculous statement that "you did not create that company" or something like that. I am saying that the US has proven to be very fertile ground for the development of future mega corporations. Why is that? In contrast, we know why they want to leave the US after they get their "legs."

If these companies don't like it? Fine. See how far you get trying to strart your business in Russia and China or Africa and see how much protection your industry really enjoys in a relatively less stable country and see how much it grows there. I know there are exceptions but a lot of the "development" and "new industry"  in China was first developed in the US and only then stolen or  bought by the Chinese.

 

In reply to by Dutti

Farqued Up Hubbs Fri, 08/03/2018 - 07:51 Permalink

This would solve itself if the Gov didn’t tilt the playing field to the giants. The laws and regulations are all designed to crunch the small competitor which would devastate the giant vultures the Congressional pedophiles have created.

As soon as dumb fuck Republicans wake up and realize that they are the problem, maybe we will see more free markets, equal treatment under the law, more individual freedom, and death to the -isms. Gov is 100% of our problems, and I’m sure the Reprobates will go full ostrich. FAIL.

Republicans have morphed into RINO’S.At one time long ago you could even hear guttural mumbling that Repropublicans believe in smaller less intrusive Gov. No more because they never believed their myth from the start.

Trump is an autocrat but he’s exactly what’s needed to wreck the evil, corrupt, controlled oligarchal system that evolved. How did it? Fear porn by the the MIC controlled CIA, they require a booger to whip up the populace, spying against Samsung won’t feed that King Kong monkey.

JUST SAY NO TO YOUR -ISM

In reply to by Hubbs

icedoc Hubbs Fri, 08/03/2018 - 13:55 Permalink

I am nauseous saying this but the magic negro did have a point and you just didn't connect it but ran in circles around it in that the fertile ground for innovation in the US came at a price that should be compensated when a company offshores its operations. It is cheaper elsewhere mostly because of what we have built here costs money on top of all the regulations. But privatize the profits, socialize the losses is the present game.

In reply to by Hubbs

Gatto Dutti Fri, 08/03/2018 - 15:58 Permalink

EXACTLY!

"Capitalism only works for the few. It no longer works for the many.

On national security grounds Trump should respond to Ford’s announcement of offshoring the production of Ford Focus to China by nationalizing Ford."

"These people have the money to purchase the government,"

CRONY capitalism is NOT capitalism, and his PCR's calls for more government intervention in the economy will only make matters much much worse!  The stupidity of wanting to put all these private companies in the hands of the government that he admits and knows is owned and controlled by the elite exposes PCR as either insanely stupid or a member of the deep state elites as this is exactly what they would want! 

In reply to by Dutti

NiggaPleeze NVTRIC Fri, 08/03/2018 - 01:05 Permalink

 

Certainly the Trumpster won't do it.  Hell he just gave US corporations the largest tax break in history for being traitorous and off-shoring jobs.  He should have rather changed the law so off-shore profits are taxed (at a higher rate) whether repatriated or not.  Just like my wages are.  But I'm just a dumb US corporate SLAVE, not one of the Bolshevik rulers whose balls the Trumpster loves to fondle.

US' downfall is much deserved.  A murderous, bullying, supremacist (euphemized as "exceptional") people (in general) who murder and destroy for sport and are too fucking stupid to see what is happening.  Losers.

In reply to by NVTRIC

PitBullsRule falconflight Fri, 08/03/2018 - 00:48 Permalink

America belongs to its citizens. The citizens elect a president to protect it. Unfortunately these citizens elected Trump, Trump is removing the environmental protections that kept the country pristine, and he is tilting the tax system in favor of the rich and against the citizens. So the citizens elected the wrong guy, but the constitution will save us because it forces us to have another election every 4 years, and it balances the house and the senate against the president. So we elect a better president next time. Thats all there is to it.

Or we just shoot this fucker through the skull.

In reply to by falconflight

NiggaPleeze PitBullsRule Fri, 08/03/2018 - 01:08 Permalink

to have another election every 4 years, and it balances the house and the senate against the president

Hey, retard, nobody's balanced against anybody else as they are all on the same payroll, and there's also no elections, there's a run-off vote among the elites' puppets so dumb fucking morons like you can crow on about "elections" and "democracy".  Fucking idiot.

In reply to by PitBullsRule

not dead yet PitBullsRule Fri, 08/03/2018 - 02:14 Permalink

Trumps EPA has put a priority on cleaning up Superfund sites and other pollution while Obama's EPA was shoveling buckets of cash to activists and scientists for the fake Man Made Climate Change agenda that is a power grab for the NWO. The Obama EPA and their waterways act as written would have controlled even the smallest of ponds thus giving the EPA huge authority over the whole country if passed. The Paris agreement had damn little to do with the environment but plenty for wealth distribution from the first world countries to totally corrupt shitholes where the crooks lived the good life while their people lived in squalor.

In reply to by PitBullsRule

slyder wood not dead yet Fri, 08/03/2018 - 10:04 Permalink

Pruitt’s claim EPA was able to delist superfund sites was because of work done by both Bush and Obama. IOW, there’s a lag effect and Trumps EPA tried to take credit by claiming “accelerated” cleanup. Look, I don’t know why you idiots don’t want a clean environment. Do you shit in your own nest? It shouldn’t be politicized, it’s common sense. I remember the EPA bashing when the Animas/San Juan rivers were contaminated by a bursting mine waste pond - put there by private enterprise when there were no regulations. 

In reply to by not dead yet