Wall Street economists I speak to feel pretty confident that -- for all the news about housing prices falling, gas prices rising and the stock market zig-zagging and a possible downgrade of US -- the chances of a "double dip" recession are pretty remote. After all, companies are still profitable two years after the financial collapse, and judging by the job listings even at banking basket-case Citigroup, people are finding work on Wall Street.Most businesses will simply march in place until they know whether the future holds hope of improvement. Why commit to new employees if the cost thanks to Obamacare or other regulatory issues will overwhelm their ability to be profitable?
But that doesn't mean the broader economy, defined by how many people are working, is getting noticeably better anytime soon. In fact, don't expect any major hiring sprees by corporate America in the next two years -- and, if policies don't change in Washington, possibly not in our lifetimes.
The problem for the average American worker: Businesses have learned to make money by cutting costs (i.e., jobs) or relocating to China and India. And it's not merely that it's cheaper to operate overseas; a huge part of the problem is the fear that it's going to keep getting more expensive to hire here.
Both small-business owners, and analysts who cover these companies tell me that many American businesses would like to stay here, but they see no letup in sight in the endless stream of taxes and regulations coming from an administration most of them consider anti-business.
And now the weakness of the Republican presidential field raises the chances for President Obama's re-election in 2012 -- and even more Washington-imposed woes.
Should Obama be defeated all this will change the day after the election.
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Nice try, Rick, but this predates Obama by a decade:
Nobel Laureate: Globalism Has Been Ruinous for Americans
How Offshoring Has Destroyed the Economy
By PAUL CRAIG ROBERTS
These are discouraging times, but once in a blue moon a bit of hope appears. I am pleased to report on the bit of hope delivered in March of 2011 by Michael Spence, a Nobel prize-winning economist, assisted by Sandile Hlatshwayo, a researcher at New York University. The two economists have taken a careful empirical look at jobs offshoring and concluded that it has ruined the income and employment prospects for most Americans.
To add to the amazement, their research report, “The Evolving Structure of the American Economy and the Employment Challenge,” was published by the very establishment Council on Foreign Relations.
For a decade I have warned that US corporations, pressed by Wall Street and large retailers such as Wal-Mart, to move offshore their production for US consumer markets, were simultaneously moving offshore US GDP, US tax base, US consumer income, and irreplaceable career opportunities for American citizens.
Among the serious consequences of offshoring are the dismantling of the ladders of upward mobility that made the US an “opportunity society,” an extraordinary worsening of the income distribution, and large trade and federal budget deficits that cannot be closed by normal means. These deficits now threaten the US dollar’s role as world reserve currency.
I was not alone in making these warnings. Dr. Herman Daly, a former World Bank economist and professor at the University of Maryland, Dr. Charles McMillion, a Washington, DC, economic consultant, and Dr. Ralph Gomory, a distinguished mathematician and the world’s best trade theorist, understand that it is strictly impossible for an economy to be moved offshore and for the country with the offshored economy to remain prosperous.
read more at http://www.counterpunch.org/roberts05312011.html
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