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CounterPunch
March 10, 2005
Turning Chinese
So Much for the New Bush Economy
By PAUL CRAIG ROBERTS
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review
How bad will things have to get before economists realize that outsourced jobs are not being replaced? Indeed, many American companies are ceasing to have any presence in the US except for a sales force.
Cisco's CEO, John Chambers, declared recently: "What we're trying to do is outline an entire strategy of becoming a Chinese company." Cisco is establishing a new R&D center in Shanghai. The US corporation manufactures $5 billion of products in China where it employes 10,000 people.
That is just one company, and there are many doing the same thing. The result is abandonment of the American work force by American corporations. Little wonder the Bush administration is the first administration in 70 years to have a net loss of private sector jobs.
If one US company or a few move offshore, their profits improve and consumer prices are lower. However, when work in general moves offshore, American lose the incomes associated with the production of the goods they consume. Domestic production is turned into imports, with the result that America draws down its accumulated wealth in order to pay for the imports on which it is dependent.
The dollar's value and status as reserve currency cannot forever stand the trade and budget deficits that are now part and parcel of America's economic policy. Unless there are major changes soon, America's economic future is a third world work force with a banana democracy's worthless currency.
http://www.counterpunch.org/roberts03102005.html
March 10, 2005
Turning Chinese
So Much for the New Bush Economy
By PAUL CRAIG ROBERTS
Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review
How bad will things have to get before economists realize that outsourced jobs are not being replaced? Indeed, many American companies are ceasing to have any presence in the US except for a sales force.
Cisco's CEO, John Chambers, declared recently: "What we're trying to do is outline an entire strategy of becoming a Chinese company." Cisco is establishing a new R&D center in Shanghai. The US corporation manufactures $5 billion of products in China where it employes 10,000 people.
That is just one company, and there are many doing the same thing. The result is abandonment of the American work force by American corporations. Little wonder the Bush administration is the first administration in 70 years to have a net loss of private sector jobs.
If one US company or a few move offshore, their profits improve and consumer prices are lower. However, when work in general moves offshore, American lose the incomes associated with the production of the goods they consume. Domestic production is turned into imports, with the result that America draws down its accumulated wealth in order to pay for the imports on which it is dependent.
The dollar's value and status as reserve currency cannot forever stand the trade and budget deficits that are now part and parcel of America's economic policy. Unless there are major changes soon, America's economic future is a third world work force with a banana democracy's worthless currency.
http://www.counterpunch.org/roberts03102005.html
