# Paul Craig Roberts: The economy won't recover because there is no more economy left. **URL:** \ **Category:** Great Debates\ **Created:** [August 9, 2009, 12:37am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785 "2009-08-09T00:37:42Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [August 14, 2009, 1:13am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/21 "2009-08-14T01:13:51Z")
> [@Mighty\_Mouse](#): > > Except that we are still consuming manufactures like crazy. And the USA is the world’s largest manufacturer. Again, we have to return to two critical points: 1. The United States still has an enormous manufacturing base, by far the world’s largest. 2. Trends do not continue unabated. It would be stupid to assume that because U.S. manufacturing has been on a bit of a slide lately, that it will always be on a slide. > [@](#): > > Given the current wage levels, productivity levels and regulatory schemes (worker safety, environmental concerns) virtually everything can be more cheaply produced in China than in the US. So except for services that must be delivered on site (home construction, haircuts, surgery etc) everything else can be imported either by tranport or by electronic transmission. Theoretically. But in practice, that doesn’t happen; the U.S. is still better at making a great many things. If you’re worried about anything, worry about the federal debt. ---
**Author:** ![athelas](https://avatars.discourse-cdn.com/v4/letter/a/5e9695/32.png) [@athelas](https://boards.straightdope.com/u/athelas)\ **Post date:** [August 14, 2009, 1:35am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/22 "2009-08-14T01:35:58Z")
It takes a Chinese worker lots of sweat to make a $5 T-shirt. But it takes an American company to advertise, market, and [sell](http://www.halfsigma.com/2005/06/j_mclaughlin_vs.html) it for $88. America’s strength (and Western Europe, for that matter) now is persuasion, marketing, and services, not manufacturing. It’s a little more ethereal than making cars, but it’s vastly more profitable for less work. I am not completely sanguine about its sustainability but if you think about it, it’s a hell of a bargain, one that this recession has not destroyed. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 14, 2009, 2:56am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/23 "2009-08-14T02:56:07Z")
> [@athelas](#): > > It takes a Chinese worker lots of sweat to make a $5 T-shirt. But it takes an American company to advertise, market, and [sell](http://www.halfsigma.com/2005/06/j_mclaughlin_vs.html) it for $88. America’s strength (and Western Europe, for that matter) now is persuasion, marketing, and services, not manufacturing. It’s a little more ethereal than making cars, but it’s vastly more profitable for less work. I am not completely sanguine about its sustainability but if you think about it, it’s a hell of a bargain, one that this recession has not destroyed. But the market for goods are disappearing here. As our wages and standard of living drop, we become less important in the world market. ---
**Author:** ![Try2B\_Comprehensive](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/try2b_comprehensive/32/65_2.png) [@Try2B\_Comprehensive](https://boards.straightdope.com/u/Try2B_Comprehensive)\ **Post date:** [August 14, 2009, 3:39am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/24 "2009-08-14T03:39:07Z")
> [@](#): > > Nothing in Obama’s economic policy is directed at saving the US dollar as reserve currency Is that really true? > [@](#): > > Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. So he should know what he’s talking about, right? Other people dispute his credibility nonetheless. ---
**Author:** ![torie](https://avatars.discourse-cdn.com/v4/letter/t/77aa72/32.png) [@torie](https://boards.straightdope.com/u/torie)\ **Post date:** [August 14, 2009, 4:40am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/25 "2009-08-14T04:40:26Z")
I know this isn’t GQ, but I am having trouble understanding what Robert’s means when he says this: > [@](#): > > Already America’s largest creditor, China, is admonishing Washington to protect China’s investment in US debt and lobbying for a new reserve currency to replace the dollar before it collapses. What would this new currency be, exactly? I understand that this is a bad thing as it indicates that the dollar isn’t worth what it was. But if the dollar was replaced by another currency as the reserve, what does this mean exactly for the American people? ---
**Author:** ![MOIDALIZE](https://avatars.discourse-cdn.com/v4/letter/m/e274bd/32.png) [@MOIDALIZE](https://boards.straightdope.com/u/MOIDALIZE)\ **Post date:** [August 14, 2009, 4:51am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/26 "2009-08-14T04:51:40Z")
I think **RickJay** has it right. As for the article, while I don’t agree that the “New Economy” was a bunch of smoke and mirrors, I think the “make-believe economy” is all too real. When regulation is lax and incentives become skewed, too much of our productive energy (and borrowed money) is spent inflating bubbles that burst painfully. Loss of traditional industries isn’t what is causing our present anxiety. People adapt to normal change; when our economy veers into a completely wrong direction and ends up crashing into a brick wall, that tends to cause a panic. My only hope is that we’ll finally stop fetishizing deregulation and discredited economic theories, and start remembering our history. ---
**Author:** ![E-Sabbath](https://avatars.discourse-cdn.com/v4/letter/e/e19adc/32.png) [@E-Sabbath](https://boards.straightdope.com/u/E-Sabbath)\ **Post date:** [August 14, 2009, 10:25am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/27 "2009-08-14T10:25:18Z")
> [@torie](#): > > What would this new currency be, exactly? I understand that this is a bad thing as it indicates that the dollar isn’t worth what it was. But if the dollar was replaced by another currency as the reserve, what does this mean exactly for the American people? They were lobbying for a ‘basket of currencies controlled by the UN’. Which, to be honest, ain’t gonna fly. I suspect strongly the long goal is to recenter the global economic market around their currency when they free it. (a very long goal) As they will assume financial leadership step by step, etcetera. If they just wanted to dump the dollar, they’d pump the Euro. Which they’re not. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 15, 2009, 2:54am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/28 "2009-08-15T02:54:17Z")
> [@msmith537](#): > > So when you go into the grocery store, are there groceries there? > If you need your car fixed, can you find a mechanic? > Are you able to find a doctor to treat you when you are sick? > **gonzomax** , the imporant metric is the volume of production, not the number of jobs. The simple fact is that because of technological advances over the past 42 years, we can produce 33% more per citizen using roughly the same number of plants we had in 1967. Those 3 million workers have long since moved onto jobs in other sectors. What does that have to do with the fact we have outshored a big chunk of our manufacturing. That would indicate that the amount of manufacturing has gone up globally and we gave that away. The jobs went with it. We would not have such an enormous unemployment problem. Those people are unemployed or have stepped down to poorer paying jobs. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [August 15, 2009, 3:51am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/29 "2009-08-15T03:51:45Z")
[QUOTE=gonzomax] What does that have to do with the fact we have outshored a big chunk of our manufacturing. That would indicate that the amount of manufacturing has gone up globally and we gave that away. The jobs went with it. We would not have such an enormous unemployment problem. Those people are unemployed or have stepped down to poorer paying jobs. [/QUOTE] Seriously…huh? How do you figure we ‘gave’ it away exactly? Leaving aside the fact that you’ve been shown that our manufacturing productivity has actually increased over the last 30 years, do you think that had we kept all of that manufacturing here in the US that those jobs would still be here? Seriously? Who would be buying those products today? Let’s say that clothing manufacturing companies in the US had stayed here, for example. Who do you suppose would be buying the higher cost products of those manufactures today? Or do you suppose that no one else in the world would have moved THEIR outdated manufacturing to cheaper labor locations and be flooding our markets with their lower cost goods? You seriously don’t have even a tenuous grasp of how business works Gonzo. Seemingly you believe that had evil US corporations not moved their manufacturing offshore that all of those jobs would somehow magically still be here and still in business just the same as before. As if all it takes is US know how and ingenuity to keep US manufacturing pumping out goods and services and high paying jobs with oodles of benefits…and for all I know magical ponies shitting out gold and oil tossed in too. If only Big Business™ would cooperate, instead of blocking all of this goodness in an effort to maximize those evil profits. Or something. -XT ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [August 15, 2009, 4:22am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/30 "2009-08-15T04:22:44Z")
> [@gonzomax](#): > > What does that have to do with the fact we have outshored a big chunk of our manufacturing. That would indicate that the amount of manufacturing has gone up globally and we gave that away. The jobs went with it. We would not have such an enormous unemployment problem. Those people are unemployed or have stepped down to poorer paying jobs. Our current unemployment problem has little to nothing to do with outsourcing. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 15, 2009, 5:15am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/31 "2009-08-15T05:15:58Z")
> [@msmith537](#): > > Our current unemployment problem has little to nothing to do with outsourcing. The segment that is in manufacturing and production has very much to do with outsourcing. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [August 15, 2009, 4:27pm UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/32 "2009-08-15T16:27:40Z")
> [@gonzomax](#): > > The segment that is in manufacturing and production has very much to do with outsourcing. Unemployment did not just jump from 5% to almost 10% in the past year because all of a sudden the business world just discovered outsourcing. That has been a steady trend for the past 40 years. Unemployment increased because of a general recession across the entire economy. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 15, 2009, 6:35pm UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/33 "2009-08-15T18:35:48Z")
> [@msmith537](#): > > Unemployment did not just jump from 5% to almost 10% in the past year because all of a sudden the business world just discovered outsourcing. That has been a steady trend for the past 40 years. Unemployment increased because of a general recession across the entire economy. That is true but has nothing to do with the subject. Manufacturing job outsourcing results in unemployment beyond the people who lose jobs. If the big three folded up the job loss would go far beyond just those working there. It was not a trend. It was a plan. A trend implies that is a natural order of things. But, it was a deliberate plan to take advantage of lower labor costs and little environmental regulation. part of the calculus was doing damage to the US. But they did not care. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [August 16, 2009, 4:11pm UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/34 "2009-08-16T16:11:33Z")
> [@gonzomax](#): > > It was not a trend. It was a plan. A trend implies that is a natural order of things. But, it was a deliberate plan to take advantage of lower labor costs and little environmental regulation. part of the calculus was doing damage to the US. But they did not care. You mean that companies planned to take advantage of lower labor costs overseas in some bizarre conspiracy to make greater profits? Yes that is correct. It also happens to be a trend because a lot of companies that manufacture stuff are doing it. People have shown you evidence that a significant amount of manufacturing is still performed in the US, but don’t let that stand in the way of your angry rhetoric. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 17, 2009, 4:52am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/35 "2009-08-17T04:52:33Z")
A lot of manufacturing is done in America. But a lot is being done by American companies, in third world countries. As a matter of fact, more and more all the time. That work used to be done here. The companies moved it there ,not caring about the impact on the country. Do American Companies owe anything to the country? Do you think their only need is to increase profits? Polluting another country and exploiting their workers is fine by you? ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [August 17, 2009, 1:23pm UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/36 "2009-08-17T13:23:11Z")
> [@gonzomax](#): > > ``` > That work used to be done here. The companies moved it there ,not caring about the impact on the country. Do American Companies owe anything to the country? Do you think their only need is to increase profits? Polluting another country and exploiting their workers is fine by you? > > ``` Giving people jobs is exploiting them? So if they brought the jobs back, would they be exploiting Americans? Gosh, you just can’t win; if you employ someone they’re exploited, if you don’t you hate America. Believe it or not there are benefits to outsourcing, and one significant benefit is that the jobs being outsourced to India usually make the Indians doing the jobs richer. Outsourcing of call centre work, to use that example, has given untold thousand of Indians fantastic jobs; the pay might be cheap to us but over there it’s a sweet deal that lets people live a good lifestyle. Richer Indians means Indians will want to buy more stuff, which means more opportunity for Americans to sell them stuff. I mean, shit, we’ve been importing stuff from overseas forever. Where do you think coffee and bananas come from? Any metal products you made are highly likely to have been fabricated on machines made in Japan or Italy. We could talk about the pros and cons of international trade all day and I’m sure you would refuse to acknowledge the benefits, but let me try this. You live in Michigan, I believe. The economy’s not great there right now but it’s still better than most places in the world. Suppose Michigan were to become its own country and immediately put up trade barriers against the rest of the world. No trade with the other 49 states, no trade with Canada; by God, Michigan companies should employ Michigonians. Do you think Michigan’s economy would get better or worse? ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 17, 2009, 3:25pm UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/37 "2009-08-17T15:25:49Z")
They are exploiting them because they pay them practically nothing. They remove safety equipment. They work long, long hours and in unsafe conditions. They provide no benefits. And you simply declare they are giving them a job and the worker is so happy . Yes, if you have nothing , a bad job, dangerous job is an opportunity. They do not know how badly exploited they are. Some crappy job is better than none. We were supposed to have environmental, safety, and wage regulation as part of NAFTA. It was quickly killed . If they actually had the regulation in place I might be more understanding of using foreign labor. But we are there to exploit labor and escape environmental reg. That is exploitive. The people in Bhopal were happy to have jobs too. How did that work out? ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [August 18, 2009, 3:57am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/38 "2009-08-18T03:57:45Z")
> [@gonzomax](#): > > They are exploiting them because they pay them practically nothing. Who’s “they” and who’s “them”? What specific companies are you talking about? In what countries? > [@](#): > > We were supposed to have environmental, safety, and wage regulation as part of NAFTA. It was quickly killed. Those poor, exploited Canadians. > [@](#): > > The people in Bhopal were happy to have jobs too. How did that work out? The people killed in Bhopal weren’t the employees, for Christ’s sake. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 18, 2009, 4:35am UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/39 "2009-08-18T04:35:38Z")
A lot of them were for Christ sake and it was corporate malfeasence that killed them. A complete and utter disregard for environmental and safety standards and the safety of workers. They poisoned the whole damn town for money, but at least they had jobs ,right. I bet they are all warm and fuzzy remembering the tiny paychecks as they buried their families and friends. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [August 18, 2009, 1:31pm UTC](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785/40 "2009-08-18T13:31:51Z")
> [@gonzomax](#): > > They are exploiting them because they pay them practically nothing. They remove safety equipment. They work long, long hours and in unsafe conditions. They provide no benefits. And you simply declare they are giving them a job and the worker is so happy . Yes, if you have nothing , a bad job, dangerous job is an opportunity. They do not know how badly exploited they are. Some crappy job is better than none. I’m sure those Indian call center jobs are very dangerous.:rolleyes: Those people are happy to have those jobs. Here’s the problem. People like you with your fat, entitled, middle class American lifestyle have become spoiled on the notion that someone should just magically provide that lifestyle to everyone. People in those third world countries generally have nothing. Now while I’m sure that you feel they would be better living off UN handouts and philanthropy, companies are actually providing them with jobs where they can create value. And by the standards of their local economy they are pretty good ones that for the most part, Americans don’t want to do anyway. So yes, when you live in a mud hut, a crappy job is a lot better than nothing. [Previous page](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785.md?page=1) [Next page](https://boards.straightdope.com/t/paul-craig-roberts-the-economy-wont-recover-because-there-is-no-more-economy-left/505785.md?page=3)