Will Obama Exploit the Unemployed as Recruits for a Ramped Up War in Afghanistan?

By Paul Craig Roberts, CounterPunch. Posted February 11, 2009.

Is there intelligent life in Washington, D.C.?  Not a speck of it.

The U.S. economy is imploding, and President Barack Obama is being led by his government of neoconservatives and Israeli agents into a quagmire in Afghanistan that will bring the U.S. into confrontation with Russia, and possibly China, America's largest creditor. 

The January payroll job figures reveal that last month, 20,000 Americans lost their jobs every day. 

In addition, December's job losses were revised up by 53,000 from 524,000 to 577,000. The revision brings the two-month job loss to 1,175,000. If this keeps up, Obama's promised 3 million new jobs will be wiped out by job losses.

Statistician John Williams (shadowstats.com) reports that this huge number is an understatement. Williams notes that built-in biases in seasonal adjustment factors caused a 118,000 understatement of January job losses, bringing the actual January job loss total to 716,000 jobs. 

The payroll survey counts the number of jobs, not the number of employed, because some people have more than one job. The Household Survey counts the number of people who have jobs, and it shows that 832,000 people lost their jobs in January and 806,000 in December, for a two-month count of Americans who lost jobs at 1,638,000.

The unemployment rate reported in the U.S. media is a fabrication. Williams reports that in changes since 1980, particularly in the Clinton era,

" 'Discouraged workers' -- those who had given up looking for a job because there were no jobs to be had -- were redefined so as to be counted only if they had been 'discouraged' for less than a year. This time qualification defined away the bulk of the discouraged workers.  Adding them back into the total unemployed, actual unemployment, [according to the unemployment rate methodology used in 1980] rose to 18 percent in January, from 17.5 percent in December."

In other words, without all the manipulations of the data, the U.S. unemployment rate is already at depression levels.

How could it be otherwise, given the enormous job losses from jobs sent overseas? It is impossible for a country to create jobs when its corporations are moving production for the American consumer market offshore. When they move the production offshore, they shift U.S. gross domestic product to other countries. The U.S. trade deficit over the past decade has reduced U.S. GDP by $1.5 trillion dollars. That is a lot of jobs.

I have been reporting for years that university graduates have had to take jobs as waitresses and bartenders. As over-indebted consumers lose their jobs, they will visit restaurants and bars less frequently. Consequently, those with university degrees will not even have jobs waiting on tables and mixing drinks.

U.S. policymakers have ignored the fact that consumer demand in the 21st century has been driven, not by increases in real income, but by increased consumer indebtedness. This fact makes it pointless to try to stimulate the economy by bailing out banks so that they can lend more to consumers. The American consumers have no more capacity to borrow.

With the decline in the values of their principal assets -- their homes -- with the destruction of half of their pension assets, and with joblessness facing them, Americans cannot and will not spend.

Why bail out GM and Citibank when the firms are moving as many operations offshore as they possibly can?

Much of U.S. infrastructure is in poor shape and needs renewing. However, infrastructure jobs do not produce goods and services that can be sold abroad.

The massive commitment to infrastructure does nothing to help the U.S. reduce its huge trade deficit, the financing of which is becoming a major problem. Moreover, when the infrastructure projects are completed, so are the jobs.

See more stories tagged with: economy, afghanistan, depression, recession, financial crisis

Paul Craig Roberts was assistant secretary of the Treasury in the Reagan administration. He is co-author of The Tyranny of Good Intentions. He can be reached at: PaulCraigRoberts@yahoo.com.

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