What he calls socialism I would call communism, but other than that I think he's correct.
http://www.opednews.com/articles/How-the-Economy-Was-Lost-by-Paul-Craig-Roberts-090223-753.html">How the Economy Was Lost
The American economy has gone away. It is not coming back until free trade myths are buried six feet under.
Americas 20th century economic success was based on two things. Free trade was not one of them. Americas economic success was based on protectionism, which was ensured by the union victory in the Civil War, and on British indebtedness, which destroyed the British pound as world reserve currency. Following World War II, the US dollar took the role as reserve currency, a privilege that allows the US to pay its international bills in its own currency.
World War II and socialism together ensured that the US economy dominated the world at the mid 20th century. The economies of the rest of the world had been destroyed by war or were stifled by socialism.
The ascendant position of the US economy caused the US government to be relaxed about giving away American industries, such as textiles, as bribes to other countries for cooperating with Americas cold war and foreign policies. For example, Turkeys US textile quotas were increased in exchange for over-flight rights in the Gulf War, making lost US textile jobs an off-budget war expense.
In contrast, countries such as Japan and Germany used industrial policy to plot their comebacks. By the late 1970s, Japanese auto makers had the once dominant American auto industry on the ropes. The first economic act of the free market Reagan administration in 1981 was to put quotas on the import of Japanese cars in order to protect Detroit and the United Auto Workers.
Eamonn Fingleton, Pat Choate, and others have described how negligence in Washington DC aided and abetted the erosion of Americas economic position. What we didnt give away, we let be taken from us while preaching a free trade doctrine at which the rest of the world scoffed.
Fortunately, our adversaries at the time, the Soviet Union and China, had unworkable economic systems that posed no threat to Americas diminishing economic prowess.
The proverbial hit the fan when Soviet, Chinese, and Indian socialism collapsed around 1990, to be followed shortly thereafter by the rise of the high speed Internet. Suddenly, American and other first world corporations discovered that a massive supply of foreign labor was available at practically free wages.
To get Wall Street analysts and shareholder advocacy groups off their backs, and to boost shareholder returns and management bonuses, American corporations began moving their production for American markets offshore. Products that were made in Peoria are now made in China.
As offshoring spread, American cities and states lost tax base, and families and communities lost jobs. The replacement jobs, such as selling the offshored products at Wal-Mart, brought home less pay.
Free market economists covered up the damage done to the US economy by preaching a New Economy based on services and innovation. But it wasnt long before corporations discovered that the high speed Internet let them offshore a wide range of professional service jobs. In America, the hardest hit have been software engineers and information technology (IT) workers.
The American corporations quickly learned that by declaring shortages of skilled Americans, they could get from Congress H-1b work visas for lower paid foreigners with whom to replace their American work force. Many US corporations are known for forcing their US employees to train their foreign replacements in exchange for severance pay.
Chasing after shareholder return and performance bonuses, US corporations deserted their American workforce. The consequences can be seen everywhere. The loss of tax base has threatened the municipal bonds of cities and states and reduced the wealth of individuals who purchased the bonds. The lost jobs with good pay resulted in the expansion of consumer debt in order to maintain consumption. As the offshored goods and services are brought back to America to sell, the US trade deficit has exploded to unimaginable heights, calling into question the US dollar as reserve currency and Americas ability to finance its trade deficit.
As the American economy eroded away bit by bit, free market ideologues produced endless reassurances that America had pulled a fast one on China, sending China dirty and grimy manufacturing jobs. Free of these old economy jobs, Americans were lulled with promises of riches. In place of dirty fingernails, American efforts would flow into innovation and entrepreneurship. In the meantime, the service economy of software and communications would provide a leg up for the work force.
Education was the answer to all challenges. This appeased the academics, and they produced no studies that would contradict the propaganda and, thus, curtail the flow of federal government and corporate grants.
The free market economists, who provided the propaganda and disinformation to hide the act of destroying the US economy, were well paid. And as Business Week noted, outsourcings inner circle has deep roots in GE (General Electric) and McKinsey, a consulting firm. Indeed, one of McKinseys main apologists for offshoring of US jobs, Diana Farrell, is now a member of Obamas White House National Economic Council.
http://www.opednews.com/articles/How-the-Economy-Was-Lost-by-Paul-Craig-Roberts-090223-753.html">More...
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