As the Economy Slides Down a Hole

Paul Craig Roberts

by Paul Craig Roberts: Putin
Is Demonized While Democracy Fails in Amerika

payroll jobs report says that 96,000 new jobs were created in August
and that the unemployment rate (U.3) fell from 8.3% to 8.1%. As
96,000 new jobs are not enough to keep up with population growth,
the decline in the U.3 unemployment rate was caused by 368,000 discouraged
job seekers giving up on finding employment and dropping out of
the work force as measured by U.3. Discouraged workers are not included
in the U.3 measure of unemployment, which makes the measure useless.
The only purpose of U.3 is to keep bad news out of the news. the
U.3 unemployment rate only measures those who have not been discouraged
by the inability to find a job and are still actively seeking employment.

The government
produces another unemployment measure, U.6, which includes people
who have been discouraged by the inability to find a job and have
been out of the work force for less than a year. This measure of
unemployment is 14.7%, a number that would get attention if reported.

When the long-term
(more than one year) discouraged workers are included, the US unemployment
rate is about 22%. In other words, the real US rate of unemployment
is almost three times higher than the reported–headline rate–of

What is the
purpose of reporting an unemployment rate that is about one-third
the real unemployment rate? The only answer is deception through
Happy News.

have a look at those 96,000 jobs. What kind of high-tech, high-income
super jobs is “the world’s only superpower, the indispensable
nation, the world’s greatest economy and capitalist heaven”
creating? The answer is lowly paid third world jobs, which is why
there is not and cannot be an economic recovery. All the good jobs
have been moved offshore in order to maximize the incomes of the

to the US Bureau of Labor Statistics
(BLS), 28,300 of the 96,000
jobs or 29% are waitresses and bartenders.

Health care
and social services, primarily ambulatory health care services and
home health care services, provided 21,700 jobs or 22.6% of the

So, 52% of
the new jobs created by the American superpower are lowly paid waitresses,
bartenders, practical nurses, and hospital orderlies.

Highly paid
manufacturing jobs declined by 15,000. The incomes lost by these
jobs most likely exceed the income gains from the waitresses, bartenders,
and hospital orderlies jobs.

Where did the
other 46,000 jobs come from?

Formerly, in
hard times government employment would expand, but, despite Republican
propaganda, not today in todayÂ’s mean times. Government (federal,
state and local) lost 7,000 jobs.

and business services gained 28,000 jobs, primarily in computer
systems design and related services (mainly Indians on H-1B work
visas) and management and technical consulting services (mainly
former corporate professional employees who now eke out a living
by consulting, without pension or health benefits, with their former
employers; in other words, they are working the same for less).

These three
categories account for 81% of the new jobs.

Where are the

A few thousand
jobs in finance and insurance, jobs that absorb consumer incomes
but produce no product. Telephone, cable, water, electricity, and
heating produced 8,800 jobs. Transportation and warehousing to store
unsold goods produced 5,700 jobs. Retail trade, primarily food and
beverage stores (alcohol), produced 6,100 jobs.

And there you
have it. The “powerful American economy” is an economy
that cannot produce its own clothes and shoes, or the manufactured
products, including high technology products, that it consumes,
or its own energy, all of which it imports by issuing more debt.

The “great
hegemonic American economy” is on the verge of total collapse,
because the only way it can pay for the imports that sustain it
is by issuing more debt and printing more money. Once the debt and
money creation undermine the dollar as world reserve currency, the
US will become overnight a third world country, much to the relief
of the rest of the world.

Last week Mr.
Draghi, the head of the European Central Bank, announced for propaganda
purposes that the ECB would buy up the sovereign debt of the troubled
EU member governments if, and only if, the assisted member governments
agreed to the conditionality that would be imposed.

other words, Draghi told Greece, Spain, and italy that the ECB will
buy your bonds if you do what we tell you. DraghiÂ’s conditions
are a combination of austerity on the countriesÂ’ populations
and the surrender of the countriesÂ’ financial sovereignty.
Since the troubled debtor countries already had that option, DraghiÂ’s
scheme doesnÂ’t change anything. However, the NY StockExchange
used DraghiÂ’s announcement to gin up day-trading profits.

Draghi says
that the money that the ECB will pour into purchasing Greek, Italian
and Spanish bonds will be offset by draining reserves from the European
banking system, hardly a helpful operation to stressed banks and
European recession.

It is difficult
to image worse news than DraghiÂ’s. Yet, stock markets rose.
This result is more evidence that financial markets are not to be

But you will
never, ever, hear this fact from the financial press.

A financial
system based on lies and deceptions cannot forever last.

10, 2012

Craig Roberts, a
former Assistant Secretary of the US Treasury and former associate
editor of the Wall Street Journal, has been reporting shocking cases
of prosecutorial abuse for two decades. A new edition of his book,

Tyranny of Good Intentions
co-authored with Lawrence Stratton, a documented account of how
americans lost the protection of law, has been released by Random
House. Visit his website.

© 2012 Paul
Craig Roberts

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