Spinning Unemployment Figures in a Collapsing Empire

by: Dr. Paul Craig Roberts

Global Research
January 10, 2011

The Bureau of Labor Statistics (BLS) reported Friday that the economy gained only 103,000 new jobs in December--not enough to keep up with population growth--but the rate of unemployment (U.3) fell from 9.8% to 9.4%. If you are confused by the report, you are among the many.

In truth, what fell was not the number of unemployed people but the number of unemployed people who are actively looking for work. Those who have become discouraged and have ceased looking for work are not considered to be in the work force and are not counted as unemployed in the U.3 measure. The unemployment rate fell because discouraged workers increased, not because employment rose.

The BLS counts short-term discouraged workers (less than one year) in its U.6 measure of unemployment. That unemployment rate is 16.7%. When statistician John Williams (shadowstats.com) adds the long-term discouraged, the US unemployment rate as of December 2010 was 22.4%.

The question to ask yourself is: why does the media focus on the unemployment measure that does not count any discouraged workers? The answer is that the U.3 measurement only counts 42% of the unemployed and makes the situation appear to be a lot better than it is.

Where are the 103,000 new jobs? As I have reported for years, the jobs are in non-tradable domestic services: waitresses and bar tenders, health care and social assistance (primarily ambulatory health care services), and retail and wholesale trade.

Today the United States has only 11,670,000 manufacturing jobs, less than 9% of total jobs. Yet, despite America’s heavy dependence on foreign manufactures and foreign creditors, the idiots in Washington think that they are a superpower standing astride the world like a colossus.

John Williams reports that “the level of payroll employment still stands below where it was a decade ago, despite the U.S.population growing by more than 10% in the same period. The structural impairments to U.S. economic activity continue to constrain normal commercial activity, preventing any meaningful recovery in business activity.”

Another way of saying this is that American corporations have taken American jobs offshore and given them to the Chinese. So much for big business patriotism.

Williams also reports that, unless it is finagled, next month’s BLS benchmark revision of payroll employment data will lower the level of previously reported employment by more than 500,000.

Federal Reserve chairman Ben Bernanke used his testimony before the Senate Budget Committee last Friday to warn that the U.S. government must get its budget deficit under control or “the economic and financial effects would be severe.” Here Bernanke is acknowledging that the Federal Reserve cannot indefinitely print money in order to finance wars and bailouts of the mega-rich.

But how is the government to get its budget under control? The U.S. government, regardless of political party or president, is committed to American hegemony over the world. The Congress has just passed the largest military budget in history, and there is no indication that any of America’s wars and military occupations are near an end.

The financial crisis is not over, with more foreclosures and more losses for the financial sector that will result in more taxpayer bailouts for those “too big to fail.” John Williams says that the double-dip is already happening, just disguised by faulty statistics, and that the deficit implications are horrendous and are likely to result in hyperinflation as the Federal Reserve will have to monetize the otherwise un-financeable deficits.

The dollar is also in danger, its role as reserve currency undermined by the Federal Reserve’s creation of more and more dollars. Temporarily, the dollar is buttressed by the grief that Wall Street’s sale of fraudulent derivative financial instruments to Europe has caused the euro.

The Republicans will try to destroy Social Security and Medicare in order to pay for wars and bailouts. If Americans are capable of realizing that they are threatened on a much greater level by the Republicans’ evisceration of the social safety net than they are by terrorists, the Republican assault on what they call “the welfare state” will fail.

The fallback target will be private pensions, assuming any survive plunder by the Wall Street investment banks. Pension funds could be required to invest in Treasury debt or they could face a levy. In the Clinton administration, Assistant Secretary of the Treasury Alicia Munnell proposed confiscating 15% of all pension assets on the grounds that they had accumulated tax free. Certainly Washington will steal Americans’ pensions, just as Washington has stolen Americans’ civil liberties, in order to continue the empire’s wars of hegemony.

Increasingly, the rest of the world views America as the single source of its financial and political woes. While the superpower massacres Muslims in the Middle East and Central Asia, people in the rest of the world have learned from WikiLeaks that the U.S. government manipulates, bribes, threatens, and deceives other governments in order to have those governments serve the U.S. government’s interest at the expense of the interests of their own peoples.

The American Imperial Empire rests on puppet governments that are increasingly distrusted and hated by the peoples under their rule. Like the Soviet Union’s Eastern European empire, the American Empire is ruled not directly but through puppet states.

Puppet governments are caught between the empire’s power and the power of the local population. To the extent that Europeans have a moral conscience, they will find America’s foreign policy increasingly repugnant. To the extent that Muslim solidarity grows, the Muslim puppet governments that support America’s and Israel’s massacres of Muslims will find themselves threatened from within.

The American Empire is on the rocks, (Editor's bold emphasis throughout) despite its vast arsenal of nuclear weapons and its control over the foreign and domestic policies of its subservient puppet states in Western and Eastern Europe, the United Kingdom, Canada, Australia, parts of Africa, the Middle East, Japan, Thailand, Indonesia, the Baltic states, Georgia, Kosovo, Mexico, Central America, Columbia, and, no doubt, others.

A country that is the font of war and oppression, whose dominance rests on the weak reed of puppet states, and whose economy is collapsing will not long remain dominant.

Why Washington Hates Hugo Chavez

By Mike Whitney

Global Research
January 2, 2011

In late November, Venezuela was hammered by torrential rains and flooding that left 35 people dead and roughly 130,000 homeless. If George Bush had been president, instead of Hugo Chavez, the displaced people would have been shunted off at gunpoint to makeshift prison camps--like the Superdome--as they were following Hurricane Katrina. But that's not the way Chavez works. The Venezuelan president quickly passed "enabling" laws which gave him special powers to provide emergency aid and housing to flood victims. Chavez then cleared out the presidential palace and turned it into living quarters for 60 people, which is the equivalent of turning the White House into a homeless shelter. The disaster victims are now being fed and taken care of by the state until they can get back on their feet and return to work.

The details of Chavez's efforts have been largely omitted in the US media where he is regularly demonized as a "leftist strongman" or a dictator. The media refuses to acknowledge that Chavez has narrowed the income gap, eliminated illiteracy, provided health care for all Venezuelans, reduced inequality, and raised living standards across he board. While Bush and Obama were expanding their foreign wars and pushing through tax cuts for the rich, Chavez was busy improving the lives of the poor and needy while fending off the latest wave of US aggression.

Washington despises Chavez because he is unwilling to hand over Venezuela's vast resources to corporate elites and bankers. That's why the Bush administration tried to depose Chavez in a failed coup attempt in 2002, and that's why the smooth-talking Obama continues to launch covert attacks on Chavez today. Washington wants regime change so it can install a puppet who will hand over Venezuela's reserves to big oil while making life hell for working people.

Recently released documents from Wikileaks show that the Obama administration has stepped up its meddling in Venezuela's internal affairs. Here's an excerpt from a recent post by attorney and author, Eva Golinger:

"In a secret document authored by current Deputy Assistant Secretary of State for Western Hemisphere Affairs, Craig Kelly, and sent by the US Embassy in Santiago in June 2007 to the Secretary of State, CIA and Southern Command of the Pentagon, along with a series of other US embassies in the region, Kelly proposed "six main areas of action for the US government (USG) to limit Chavez's influence" and "reassert US leadership in the region".

Kelly, who played a primary role as "mediator" during last year's coup d'etat in Honduras against President Manuel Zelaya, classifies President Hugo Chavez as an "enemy" in his report.

"Know the enemy: We have to better understand how Chavez thinks and what he intends...To effectively counter the threat he represents, we need to know better his objectives and how he intends to pursue them. This requires better intelligence in all of our countries". Further on in the memo, Kelly confesses that President Chavez is a "formidable foe", but, he adds, "he certainly can be taken". (Wikileaks: Documents Confirm US Plans Against Venezuela, Eva Golinger, Postcards from the Revolution)

The State Department cables show that Washington has been funding anti-Chavez groups in Venezuela through non-governmental organizations (NGOs) that pretend to be working for civil liberties, human rights or democracy promotion. These groups hide behind a facade of legitimacy, but their real purpose is to topple the democratically elected Chavez government. Obama supports this type of subversion just as enthusiastically as did Bush. The only difference is the Obama team is more discreet. Here's another clip from Golinger with some of the details on the money-trail:

"In Venezuela, the US has been supporting anti-Chavez groups for over 8 years, including those that executed the coup d’etat against President Chavez in April 2002. Since then, the funding has increased substantially. A May 2010 report evaluating foreign assistance to political groups in Venezuela, commissioned by the National Endowment for Democracy, revealed that more than $40 million USD annually is channeled to anti-Chavez groups, the majority from US agencies....

Venezuela stands out as the Latin American nation where NED has most invested funding in opposition groups during 2009, with $1,818,473 USD, more than double from the year before....Allen Weinstein, one of NED’s original founders, revealed once to the Washington Post, “What we do today was done clandestinely 25 years ago by the CIA...” (America's Covert "Civil Society Operations": US Interference in Venezuela Keeps Growing", Eva Golinger, Global Research)

On Monday, the Obama administration revoked the visa of Venezuela’s ambassador to Washington in retaliation for Chávez’s rejection of nominee Larry Palmer as American ambassador in Caracas. Palmer has been openly critical of Chavez saying there were clear ties between members of the Chavez administration and leftist guerrillas in neighboring Colombia. It's a roundabout way of accusing Chavez of terrorism. Even worse, Palmer's background and personal history suggest that his appointment might pose a threat to Venezuela's national security. Consider the comments of James Suggett of Venezuelanalysis on Axis of Logic:

"Take a look at Palmer's history, working with the U.S.-backed oligarchs in the Dominican Republic, Uruguay, Paraguay, and Sierra Leone, South Korea, Honduras, "promoting the North American Free Trade Agreement (NAFTA)." Just as the U.S. ruling class appointed an African-American, Barack Obama to replace George W. Bush with everything else intact, Obama in turn, appoints Palmer to replace Patrick Duddy who was involved in the attempted coup against President Chávez in 2002 and an enemy of Venezuelans throughout his term as U.S. Ambassador to Venezuela." Venezuela is already crawling with US spies and saboteurs. They don't need any help from agents working inside the embassy. Chavez did the right thing by giving Palmer the thumbs down.

The Palmer nomination is just "more of the same"; more interference, more subversion, more trouble-making. The State Dept was largely responsible for all of the so-called color-coded revolutions in Ukraine, Lebanon, Georgia, Kyrgyzstan etc; all of which were cookie cutter, made-for-TV events that pitted the interests of wealthy capitalists against those of the elected government. Now Hillary's throng want to try the same strategy in Venezuela. It's up to Chavez to stop them, which is why he's pushed through laws that "regulate, control or prohibit foreign funding for political activities". It's the only way he can defend against US meddling and protect Venezuelan sovereignty.

Chavez is also using his new powers to reform the financial sector. Here's an excerpt from an article titled "Venezuelan National Assembly Passes Law Making Banking a “Public Service”:

"Venezuela's National Assembly on Friday approved new legislation that defines banking as an industry “of public service,” requiring banks in Venezuela to contribute more to social programs, housing construction efforts, and other social needs while making government intervention easier when banks fail to comply with national priorities."...

The new law protects bank customers’ assets in the event of irregularities on the part of owners... and stipulates that the Superintendent of Banking Institutions take into account the best interest of bank customers – and not only stockholders... when making any decisions that affect a bank’s operations."

So why isn't Obama doing the same thing? Is he too afraid of real change or is he just Wall Street's lackey? Here's more from the same article:

"In an attempt to control speculation, the law limits the amount of credit that can be made available to individuals or private entities by making 20% the maximum amount of capital a bank can have out as credit. The law also limits the formation of financial groups and prohibits banks from having an interest in brokerage firms and insurance companies.

The law also stipulates that 5% of pre-tax profits of all banks be dedicated solely to projects elaborated by communal councils. 10% of a bank´s capital must also be put into a fund to pay for wages and pensions in case of bankruptcy.

According to 2009 figures provided by Softline Consultores, 5% of pre-tax profits in Venezuela's banking industry last year would have meant an additional 314 million bolivars, or $73.1 million dollars, for social programs to attend the needs of Venezuela’s poor majority."

"Control speculation"? Now there's a novel idea. Naturally, opposition leaders are calling the new laws "an attack on economic liberty", but that's pure baloney. Chavez is merely protecting the public from the predatory practices of bloodthirsty bankers. Most Americans wish that Obama would do the same thing.

According to the Wall Street Journal, "Chávez has threatened to expropriate large banks in the past if they don't increase loans to small-business owners and prospective home buyers, this time he is increasing the pressure publicly to show his concern for the lack of sufficient housing for Venezuela's 28 million people."

Caracas suffers from a massive housing shortage that's gotten much worse because of the flooding. Tens of thousands of people need shelter now, which is why Chavez is putting pressure on the banks to lend a hand. Of course, the banks don't want to help so they've slipped into crybaby mode. But Chavez has shrugged off their whining and put them "on notice". In fact, on Tuesday, he issued this terse warning:

"Any bank that slips up...I'm going to expropriate it, whether it's Banco Provincial, or Banesco or Banco Nacional de Crédito."

Bravo, Hugo. In Chavez's Venezuela the basic needs of ordinary working people take precedent over the profiteering of cutthroat banksters. Is it any wonder why Washington hates him?

Ed Schultz: "Unfortunately, Big Corporations Run this Country not Congress"

It is rare when one hears truth from a member of the elite media. In the wake of President Obama's press conference on the Gulf Oil Spill today, Ed Schultz on his MSNBC program tonight just admitted that the large multi-national corporations control the USA not Congress or the President. He joins Dylan Ratigan also of MSNBC in being willing to risk unemployment in order to speak the truth.

So far, it appears the "Top-Kill" attempt to stop the oil from leaking appears to have been unsuccessful. BP just announced that it has ceased the effort in order to assess the affect. I predict that BP will soon admit that the attempt failed.


--Dr. J. P. Hubert

"Free" Market Capitalism--the Imploding Myth

I wrote in a recent post re: the notion that markets are truly free in America is a common economic fiction due to the artificial protection (i.e. corporate welfare and lobbyist secured monopolies) afforded some in the "Big-business" community.

A minor but not insignificant example is the Gulf (of Mexico) Coast Sports-Fishing/Charter Boat business. Large commercial fishing interests and their lobbyists have succeeded in limiting the "red-snapper" season so severely (next year the season will be significantly shortened) for sport fishermen and charter boat small businesses that these are becoming economically nonviable while large commercial fishing concerns are being treated to increasingly monopolistic and predatory control of the Gulf salt water fishing economy. Under the false guise of protecting red snapper fish populations from over-fishing, commercial fishermen have been delivered a veritable bonanza of these fish through artificial legislative protection while small charter boat businesses and sportsmen languish.

Were a totally "free-market" to exist, all would have the right to compete for the same fish population(s) or in the event that a truly dangerous depletion of a given fish species occurred; commercial fishermen who take far greater numbers of fish would be limited before individual sports fishermen or small charter boat businesses were selectively curtailed. Obviously, the market is not really "free" or unregulated, it is artificially controlled in the interest of those who can afford to employ the most powerful lobbyists. The idea that the United States fosters free market capitalism is simply pablum for the uneducated masses.

All Americans of good will must understand that our markets are heavily regulated not free. Similarly, foreign trade is not free but heavily regulated in favor of large international corporations who enjoy a veritable monopoly which includes access to slave labor (Indian, Chinese, Bangladeshi, Korean etc) in which occupational and environmental conditions are substandard all so that unconscionable profits can be made for an increasingly small number of corporate internationalists. It should be apparent that the present system is highly immoral in the short-term and non-viable in the long term--should it continue the US will complete its rapid descent into third world status.

--Dr. J. P. Hubert

"Made in China" = Social Injustice

Over the past several years it has become painfully obvious that almost everything one purchases in the United States is either made in China, Mexico or Korea. One is hard pressed to find any major consumer article which is not manufactured in part or entirely in one of these three. All have in common the lack of basic worker's rights, environmental protection and adequate levels of financial remuneration for labor. The retail cost of many items in the United States is thus being kept artificially low by disadvantaging the world's poor. In the process of course, millions of American's have lost the manufacturing jobs which once provided them with a middle class standard of living. It is impossible for Americans or anyone else in the “developed” world to compete with what is essentially slave labor.

These developments are directly traceable to “free-trade” (read unfair trade) agreements which now artificially support a global economy pitting an extremely small number of “haves” against a large number of “have-nots.” If it were impossible for multinational American corporations to outsource/off-shore labor and manufacturing costs without incurring a steep tax when importing their products back into the US, the present unjust arrangement would cease. The elite political class has been induced to play along of course because of the extraordinarily large campaign contributions made on behalf of multinational corporations and their lobbyists. Tragically both political parties willingly cooperate.

The present system is inherently unjust and all people of good will should ban together to change what has become a global form of social/economic Darwinism (survival of the ruthless). Only a preciously small elite oligarchy of corporate internationalists benefit financially from the present morally illicit global economic system. In the interim, the once great American manufacturing base has been decimated, high-tech industry is increasingly being transferred to India and China and fewer and fewer people in the United States are able to project an adequate level of subsistence beyond the present generation.

Carried to its logical conclusion, America will rapidly complete its descent into “third-world” status. No nation which is incapable of providing its own goods (not just services) can survive for long. Most of our citizens who have lost manufacturing jobs have replaced them with lower paying “service” sector employment. Eventually, there will be few left in the US to pay for the plethora of foreign made imports especially those of a more costly nature. By then of course the corporate internationalists can simply relocate to other more affluent developed nations and markets, leaving the vast majority of Americans to fend for themselves.

Now more than ever before, it is necessary for all people of good will to think clearly about the future and to ban together in acts of social justice in an attempt to alter unfair and defective social/economic structures. The 2008 presidential election run-up is an ideal time in which to begin.

--Dr. J. P. Hubert