Jobs: Bush's Rhetoric and Reality

Bush is currently threatening to veto spending bills if Congress does not sufficiently reign in the federal deficit. This move appears more of a concern for Bush's promise to cut the deficit in half before the end of his second term. We have already been offered a taste of what kind of programs will be targeted by spending cuts the GOP-led Congress will consider: health care for the elderly and education. Don't expect any new thinking and look for even more budget cuts in these areas should Congress heed the President's demand.

But just as Bush insists that spending must be cut, he refuses to allow his tax cuts for capital gains and dividends to expire, telling us that they are crucial to continue the asserted booming job growth:

To keep our economy creating jobs and opportunity, Congress needs to show its trust in the American people and make the tax relief permanent.

Bush claims that some 5.1 million new jobs have been created in last five years. This number, apparently, does not reflect the 3 million jobs that have been lost during his presidency but only the total gross number of jobs created. Despite the rosy rhetoric, the White House continues to tout the make-believe notion that the jobs picture in American is grand. But as Paul Craig Roberts details, the five million jobs figure is a standard White House fiction: this number does represent the net jobs gain, which is far less:

According to the Bureau of Labor Statistics payroll jobs data, from January 2001 - January 2006 the US economy created 1,054,000 net new private sector jobs and 1,039,000 net new government jobs for a total five-year figure of 2,093,000.

A net 2 million jobs have been created during Bush's cited time period, half of which were new government positions under his bloating federal bureaucracy. But the numbers don't begin to tell the real story, which is far, far bleaker than one simple number can convey. While Bush insists on continued tax cuts to keep things "moving forward," the reality is that his presidency has one of the worst job creation records in history.

During Bush's presidency the US has experienced the slowest job creation on record (going back to 1939). During the past five years private business has added only 958,000 net new jobs to the economy, while the government sector has added 1.1 million jobs. Moreover, as many of the jobs are not for a full work week, "the country ended 2005 with fewer private sector hours worked than it had in January 2001."

[Ed: the discrepency between the number immediately above, 958,000, and the previous cited jobs number was due to Labour Department readjustment of figures. Either number still represents historically poor job growth.]

But things get far worse as we drill down:

McMillion reports that during the past five years of Bush's presidency the US has lost 16.5% of its manufacturing jobs. The hardest hit are clothes manufacturers, textile mills, communications equipment, and semiconductors. Workforces in these industries shrunk by 37 to 46 percent. These are amazing job losses. Major industries have shriveled to insignificance in half a decade.

During Bush's presidency, the US has lost its trade surplus in manufactured Advanced Technology Products (ATP). The US trade deficit in ATP now exceeds the US surplus in Intellectual Property licenses and fees. The US no longer earns enough from high tech to cover any part of its import bill for oil, autos, or clothing.

This is an astonishing development. The US "superpower" is dependent on China for advanced technology products and is dependent on Asia to finance its massive deficits and foreign wars.

Should some doubt the claim that advanced technology is now coming from China, it is given support by the story of Magnequench, an Indiana company that specializes in sintered magnetics and whose devices are used, among other applications, in guidance systems for cruise missiles and JDAM bombs. In September, 2004, Magnequench shuttered its doors, fired its 450 employees and shipped its tools to China. More amazing is that Magnequench has been owned and controlled by Chinese firms closely tied to the Chinese government. And the Pentagon has been, and is, Magnequech's biggest customer.

This is what is happening to the high tech sector of the American economy, the one so proudly cited by the administration as the one area indicative of the future capacity of the American economy. Will Bush ever tell Americans what is really going? This is an entirely rhetorical question, to be sure, and it is based on a reality with which Bush would prefer not to deal.