JOBS AND FAILED POLICY
From 1950 to 2000, the job growth of the United States was impressive. (All figures are millions.)

Year             Population            Labor Force         Employed           Unemployment         Jobs Added
                                                                                                                    Rate                Previous Decade
1950                152,271                    62,208                  58,918                     5.3%
1960                180,671                    69,628                  65,778                     5.5%                          6,860
1970                205,052                    82,771                  78,678                     4.9%                        12,900
1980                227,726                   106,940                 99,303                     7.1%                        20,624
1990                250,132                   125,840                118,793                    5.6%                        19,490
2000                282,194                   142,583                136,891                    4.0%                        18,098
2010, Aug.      309,653                   154,678                139,919                     9.6%                         3,028
2011, Aug.                                      154,344                139,627                     9.1%

Data from US Bureau of Labor Statistics.

Every year the American economy creates and loses jobs. This process is best evaluated by changes in
the "Employed" column. Those changes are found in the "Jobs Added Previous Decade" column.

As you can see, the years from 1970 through 2000 were very good years for America, with an average
annual increase in the number of jobs that was almost 2 million a year. Since 2000, the average increase
in the number of jobs has been only about 300 hundred thousand a year. No wonder our economy is in
trouble!

Every year on this chart, the American population has grown by 2 to 3 million people. This growth in
America's population can either be positive or negative. It's positive if those of age to work get jobs and
pay taxes and negative if they can't find jobs and require government assistance. So strong job growth
is absolutely critical to America.

Why has our economy lost the power to not only replace lost jobs, but also to add almost 2 million jobs a
year? The answer is failed policy.

The most obvious failed policy was the Bush tax cuts. These were the Economic Growth and Tax Relief
Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003. These tax cuts
were due to expire in December, 2010. Obama and Congress extended them for two more years in the
Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010.

These tax cuts assumed that cutting taxes would generate money to be invested in "economic growth"
and "jobs and growth." Based on the results above, they did not work. Between 1979 and 2007, the
income of the top 1% of Americans more than tripled. (2007 dollars, Source, Congressional Budget
Office.) Investment by the rich may have helped create jobs between 1980 and 2000, but America's job
creation machine is broken now. Now there is hard evidence that cutting taxes will only make the rich
richer and increase the National Debt. Cutting taxes will not fix the jobs machine.

Another failed economic policy is stimulus spending. President Bush's Economic Stimulus Act of 2008
put money into the pockets of tax payers to encourage them to keep spending. President Obama's
American Recovery and Reinvestment Act of 2009 was intended to create new jobs and save existing
ones and spur economic activity and invest in long-term growth.

The Recovery Act provided $288 billion in tax cuts and benefits for millions of working families and
businesses, $224 billion in increased federal funds for entitlement programs, such as extending
unemployment benefits, and made $275 billion available for federal contracts, grants and loans.

While the Recovery Act may have averted some economic misery, it was not effective in stopping job
loss. At the high point in November 2007 America had 146.584 million jobs. In August 2011, there were
139.627 million jobs. That's almost 7 million lost jobs.

And 7 million lost jobs is only part of the problem. There are more than twice that many people in
America in the debit column, most on public assistance, who want to have a job so that they can be an
asset to America. Tragically we don't have jobs for any of them.

At this point it is obvious that quick fixes are not going to work. Perhaps it's time to study the actual
problem. Richard McCormack is an expert on lost jobs. He is author of the book, “Lean Machines:
Learning from the Leaders of the Next Industrial Revolution.” And he is the editor of the new book,
“Manufacturing A Better Future for America,” for which he wrote the first chapter, “The Plight of
American Manufacturing.”

"For American manufacturers, the bad years didn’t begin with the banking crisis of 2008. Indeed, the U.
S. manufacturing sector never emerged from the 2001 recession, which coincided with China’s entry
into the World Trade Organization. Since 2001, the country has lost 42,400 factories, including 36
percent of factories that employ more than 1,000 workers (which declined from 1,479 to 947), and 38
percent of factories that employ between 500 and 999 employees (from 3,198 to 1,972). An additional
90,000 manufacturing companies are now at risk of going out of business." (Richard McCormack, "The
Plight of American Manufacturing," The American Prospect, December 21, 2009). Note: things have only
gotten worse since 2009.

Richard McCormack also explains why stimulus spending doesn't work. "Without an industrial base, an
increase in consumer spending, which pulled the country out of past recessions, will not put Americans
back to work." (Ibid).

Infrastructure can provide jobs but not generate income. It's simple really, if you invest in paving your
driveway, you will have a pretty driveway, but you won't generate any income. In order to generate
income you must invest in something you can sell at a profit. Obama seems to have accepted this point.
He invested in some green companies.

The Energy Department has awarded $8.36 billion in loan guarantees to 17 developers and
manufacturers, and made conditional commitments worth $10.4 billion. But there were disasters.
Solyndra drew $527 million from its $535 million in federal loan guarantees, then filed bankruptcy. Also,
the market may not be ready for these company's green products.

Before you can sell anything, you must have a buyer. The fastest way to generate a lot of buyers is to
give millions of Americans long term, full time jobs. These jobs should be in industries which have
proven tract records for generating products people want and need.

The oil industry is a good example. Everyone hates Big Oil because its environmentally dirty, but
America needs energy independence and estimates I've heard suggest there would be a million jobs for
Americans if the government took the brakes off Big Oil. Why not deregulate them for five years with a
renewal if they effectively police themselves?

But a million jobs are not nearly enough. In the decade from 1970 to 1980 the economy added over 20
million jobs. In the decade from 1980 to 1990 the economy added over 19 million jobs. In the decade
from 1990 to 2000 the economy added over 18 million jobs. We should have had perhaps 17 million jobs
added in the last decade. We only got 3 million. We need the other 14 million.

But wait, unemployment statistics suggest only about 14 million people in America are looking for work.
(See the chart at the beginning of the article.) Could we even fill 14 million more jobs with qualified
applicants? This brings us to a quirk in the unemployment figures. They don't count discouraged
workers, those who have given up looking for work because there are too few jobs and too many better
qualified applicants. When those who have given up the hope of employment are added in, Americans
could probably easily fill 20 million jobs.

A lot has been said lately about China being the cause of lost jobs. Here are an expert's comments on
the situation.

Peter Navarro is a business professor at University of California at Irvine, a CNBC contributor and the
coauthor with Greg Autry of "Death by China: Confronting the Dragon — A Global Call to Action." Here
are excerpts from an article that he published in The Los Angeles Times.

"We must puncture the myth that China's main manufacturing edge is solely its cheap labor. Indeed,
while low labor costs are a factor, when you carefully research the biggest source of China's
manufacturing advantage, it is actually a complex array of unfair trade practices, all of which are illegal
under free-trade rules.

"The most potent of China's "weapons of job destruction" are an elaborate web of export subsidies; the
blatant piracy of America's technologies and trade secrets; the counterfeiting of valuable brand names
like Nike and Chevy; a cleverly manipulated and grossly undervalued currency; and the forced transfer
of the technology of any American company wishing to operate on Chinese soil or sell into the Chinese
market.

"Each of these unfair trade practices is expressly prohibited both by World Trade Organization rules as
well as rules established by the U.S. government, e.g., the Treasury Department has sanctions against
currency manipulation (which, alas, the Obama administration refuses to use against China despite
campaign promises to do so)." (Peter Navarro, "How China unfairly bests the U.S." The Los Angeles
Times, Op-Ed, June 21, 2011).

"All of these real economic weapons have led to the shutdown of thousands of American factories and
turned millions of American workers into collateral damage, all under the false flag of so-called free
trade." (Ibid).

That brings us to another failed policy. Some might say that this occurred in 2000, when President
Clinton granted most favoured nation status to China. Personally, I think the whole trade policy has
been flawed since the start of multinational agreements, because it has never concerned itself with the
welfare of the third world poor, who are a huge untapped market that needs almost everything. But that
just me (and maybe you), the World Trade OOrganization certainly works for the rich.

Consider the history of America's multinational trade policy. From 1945 to 1995, international trade was
guided by the General Agreement on Tariffs and Trade (GATT), but there was no formal international
trade organization. In essence, Congress retained its power to control America's foreign trade. "The
Congress shall have power... to regulate Commerce with foreign Nations..." (The United States
Constitution, Article I, Section 8, Clause 3).

In 1995 the World Trade Organization (WTO) was established. WTO members agree to use the WTO
system of settling disputes instead of taking action unilaterally. As a founding member of the WTO,
Congress ceded its right to regulate American trade to a group of international bureaucrats on January
1, 1995.

I grew up with my father's landscape and nursery company in the front yard. One of the rules was simple,
only members of the family could use the cash register to ring up sales. There was no paper inventory
kept, so a family member was always there to check that the plants loaded were all invoiced and paid
for. The people with the most to lose if the business lost money took care of the business.

I would have to say that my parents were smarter than Clinton and the Congress. My parents kept their
income source in their own hands. Clinton and the Congress put the welfare of America's income
source, the American people, in the hands of international bureaucrats, who may not even be honest. In
much of the world, bribery is an expected business practice. Perhaps that is why the WTO is so slow to
rule against Chinese violations of trade rules.

At any rate, membership in the WTO is a failed policy. It is the worst failed policy of the three mentioned
in this article. Stimulus and tax breaks for the rich don't cost Americans their jobs, but America's
membership in the WTO does. Continuation of these failed policies will insure that the American people
experience years and years of economic misery.

In general our candidates are singing the wrong song. The Republicans (except Buddy Roemer) still
think giving the rich lower taxes will help the economy. The Democrats want to throw more money into
the National Debt hole to "stimulate" the economy. Most (except Buddy Roemer and Ron Paul who
support fair trade and curbing China) want to continue free trade.

The US Treasury has just delayed a ruling on whether China manipulates its currency to gain an unfair
trade advantage, effectively stalling congressional action to declare China a currency manipulator. But
as business expert Peter Navarro points out (see his comments above) China has a pocket full of unfair
trade tricks.  

Like the Titanic, the American ship of state is heading for the iceberg, full speed ahead. If the American
people don't fire the captain (for his failed "stimulus" policy), and fire every member of the crew they
hear spouting praise of failed "stimulus" policy or failed "lower taxes for the rich" policy or failed free
trade policy, most are going to wake up freezing in ice water. (The rich will be in the life boats.)  

Amo Paul Bishop Roden

P.S. I don't actually hate the rich, the few I've met have been quite pleasant. I am just totally, completely
and absolutely fed up with the suffering of the poor in general, and with Americans being pushed out of
the middle class into poverty in particular. If you're mad as hell and not going to take it anymore, check
out Buddy Roemer and help him.

P.P.S. Coming soon, more about jobs: Suggestions, Solutions And Wild Ideas.