 s Under Secretary of the Treasury in the Reagan administration, Paul Craig Roberts helped create and popularize the supply-side economic policy that resulted in the sustained economic boom of the Reagan years. Since that time, he has been an editor of the Wall Street Journal, a columnist for the Washington Times, and most recently a blogger for CounterPunch.com, a kind of “third-way” Web site.
How the Economy Was Lost consists primarily of a series of columns and blog postings that appeared on CounterPunch toward the end of the last decade. It reads much like a real-time history of the financial meltdown that doomed Republican chances in the 2008 presidential election and propelled a little-known and less-experienced "community activist" named Barack Obama into the White House.
Most of the columns were written during the Bush administration, but a few were written after Obama’s inauguration. While there are a few chapters tacked on at the end to bring the book more or less up to date, most of the book is devoted to analyzing Bush’s failures in both domestic and foreign policy.
Some conservatives may object to the Bush-bashing that often seems all too Democrat-like. It is so familiar and has been repeated so often by Democrats and liberals, that you might easily imagine Roberts has gone over to the left. That’s not the case, but one thing is certain: for all of the loyalty Roberts continues to pay to Ronald Reagan, there is no love lost between him and Bush and the neocons.
Roberts’s overall theme is the decline and imminent collapse of the American economy. He traces this decline to two basic sources. One is the “free trade” (he uses quotation marks around the phrase frequently) policy that has led multinational corporations nominally headquartered in the U.S. to offshore its work force or bring in lower-cost workers through the federal H1-B program to replace American workers. To the economists and others who defend this practice as classic free trade, Roberts repeatedly emphasizes that the conditions under which nineteenth-century economist David Ricardo originally defended his concept of free trade no longer apply in a world where services can be instantly provided across thousands of miles by workers employed at a fraction of the wages workers at home would command. When one country employs lower-waged workers in another to produce its goods and services, the hired country is enriched to the degree that the hiring country, many of whose workers are now unemployed, is impoverished.
Roberts makes that argument again and again. To those who claim that the offshoring of manufacturing frees the American workforce to re-educate itself to assume higher-paying higher-tech jobs, Roberts correctly points out that it is precisely those high-tech jobs that are the quickest to be exported. There is no “New Economy,” he says; there is only a new class of over-educated former workers and new college graduates who are reduced to looking for jobs as “waiters and barmen.”
Another major cause of the loss of American economic standing is the exorbitant cost of her imperial wars, according to Roberts. He points out that the U.S. maintains more than 700 military bases around the world, and that Bush and now Obama have continued years-long wars in Iraq, Afghanistan, and now Pakistan, with no end in sight. On the current horizon are both Iran and Korea, with Israel winning fresh enemies and alienating more countries daily throughout the Middle East and the world. Roberts asks, as a practical matter, how much is too much? How much can the U.S. spend on “defense” until it is completely broke, without even enough influence left to persuade our friends much less our enemies to accept our fiat dollars diminishing in value.
The prospect of national bankruptcy looms with the possible loss of the dollar as the world’s reserve currency: the de facto currency in which countries around the world expect to pay their debts and in which they expect their debts to be paid. If that major fallback disappears, the U.S. dollar will become unwanted, and the country will face economic collapse under a mountain of unpayable debt.
Such is the tone of this enlightening but troubling book. Readers of Middle American News have had a chance for many years to become familiar with its author. Unfortunately, in a column shortly after this book’s publication earlier this year, Roberts announced that he was abandoning his post. In a column dated March 24, 2010, he said goodbye to his readership. Using the title “Truth Has Fallen and Taken Liberty With It,” Roberts appears to have declared the war he had been fighting for decades to be finally lost. He foresees a doomsday scenario where the U.S. descends into third world status, with a police state in control at home and myriad wars underway overseas. In such a world, liberty will be no more than a half-forgotten legend. He writes that in that world, the “militarism of the U.S. and Israeli states, and Wall Street and corporate greed, will now run their course. As the pen is censored and its might extinguished, I am signing off.”
And with that his regular column was gone.
Whether one’s view of America’s prospects is as jaundiced as Roberts’s, there is no denying the value of his insights. Dismantling the industrial superstructure of America, shipping her best jobs overseas, and swamping her native population with the skilled from Asia and the unskilled from central America, cannot possibly augur well for America's future.
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No relation to Paul Craig Roberts, James Guy Roberts is a writer of fiction and a political commentator. You can read his blog, On Patrol in the Wasteland, at jamesguyroberts.com/blog. |
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