[Mb-civic] America has undergone "regime change," not Iraq

[William Swiggard]

 > Subject: Not Iraq, but America has undergone "regime change," from  
democracy to delusion

> Date: Mon, 21 Mar 2005 19:30:42 +0000
>
> March 21, 2005
>
> Soma Nation
> A Threat Greater Than Terrorism
> By PAUL CRAIG ROBERTS
>
> Delusion has settled over America. Washington cannot tell fact from 
> fantasy. Neither can sycophantic media nor nothink economists.
>
> The Bush administration is the first government in history to initiate 
> a war based entirely on fantasy--fantasy about nonexistent "weapons of 
> mass destruction," fantasy about nonexistent "terrorist links," 
> fantasy about "liberating" a people from their culture, fantasy about 
> a "cakewalk" invasion, fantasy about America's omnipotence.
>
> Reality has yet to penetrate the Oval Office or America's "red state" 
> consciousness. The gratuitous invasion of Iraq, the torture and the 
> war crimes have made America despised the world over. Our once 
> formidable alliances are shattered.
>
> The Muslim world, which perceives America as Israel's enabler of 
> Palestine's oppression, has uniformly turned against us.
>
> $300 billion--red ink to the last cent--has been wasted in a pointless 
> war and occupation that has emboldened Islamic revolutionaries, who 
> will be more successful than the US in changing the face of the Middle 
> East.
>
> Bush's invasion of Iraq has proved the limits of America's "hegemonic" 
> military power: Eight heavily armored high tech US divisions are tied 
> down by a few thousand lightly armed insurgents who control most of 
> the roads and many towns and cities.
>
> Any Iraqi collaborator with the US occupation who is foolish enough to 
> leave the heavily fortified "Green Zone" is shot down or blown up in 
> the streets.
>
> Such an outcome is proclaimed a "success" by the White House, 
> Republican politicians and a cheerleading media.
>
> The reality is that an ignorant and blundering Bush administration has 
> created a Shi'ite crescent from Iran to Lebanon that is 
> revolutionizing the Middle East. The reality will not penetrate the 
> Bush administration. Reality contradicts Bush fantasy and is "against 
> us." Facts that don't support Bush fantasy are "liberal" and 
> "anti-American." Truth is dismissed as anti-Bush propaganda.
>
> It is America that has undergone regime change. The Bush 
> administration constitutes a Jacobin revolution. Its fanatics have 
> declared world war on political diversity. The first victim of Bush's 
> "war on terror" is the Bill of Rights. In its place we have an 
> incipient police state.
>
> One might easily conclude that Bush is first among the deluded, but 
> the more one observes economists' romance with outsourcing, the more 
> one wonders if economists are not the most deluded of all.
>
> Outsourcing converts domestic supplied goods and services into 
> imports. It divorces Americans from the incomes and careers associated 
> with the production of the goods and services that Americans consume.
>
> That divorce is highly detrimental for Americans. As foreign labor is 
> substituted for US labor in the production of tradable goods and 
> services, the displaced US work force seeks employment in domestic 
> services that cannot be outsourced. This increases the supply of 
> labor, thus depressing wages, in those labor markets already impacted 
> by the entry of high rates of legal and illegal immigration.
>
> By turning domestic production into imports, outsourcing increases the 
> trade deficit. America pays the import bill by turning over the 
> ownership of her wealth, and the income streams that wealth produces, 
> to foreigners. Thus, Americans not only lose jobs and careers but also 
> the ownership of their companies, real estate, corporate and 
> government bonds. The incomes from these lost assets pass from 
> Americans to foreigners.
>
> Today America's consumption and the government's budget deficits are 
> financed by foreigners, principally Asians. There are now so many 
> dollars in foreign hands that the willingness of foreigners to hold 
> more is declining. For the past three years foreign central banks have 
> been diversifying their reserve holdings away from dollars into other 
> currencies.
>
> The result has been to drive the value of the dollar down sharply 
> against many other currencies. As prices adjust to the changed 
> currency values, Americans become poorer.
>
> When economists preach that America benefits from outsourcing, they 
> deny all the hard facts, just as do Republicans when they proclaim 
> "success" in Iraq. How does America benefit from a process that 
> destroys jobs, lowers incomes, and reduces the exchange value of the 
> dollar?
>
> What outsourcing is doing for America is destroying entire sectors of 
> US manufacturing, entire high tech occupations, the value of a college 
> education, . the design and innovative capabilities of the US economy, 
> and the dollar as reserve currency. This is a lot of destruction. It 
> goes far beyond what terrorists can inflict.
>
> So far in the 21st century, the US has experienced a net loss of jobs. 
> Fewer Americans are employed today than when President Bush was first 
> inaugurated. This has not happened since the Great Depression in the 
> 1930s.
>
> When economists claim that the US is made better off by outsourcing, 
> they ignore the evidence of job loss, stagnant incomes, and a 
> collapsing dollar.
>
> A perfect example is a recent "study" by three economists reported in 
> the March 21 issue of Barron's. The economists used economic models to 
> calculate the benefits to Americans of outsourcing. An economic model 
> is comprised of assumptions about relationships. Many relationships 
> are historical and reflect America's post-World War II economic 
> dominance, which is no longer the reality.
>
> The economists concluded that the benefits to Americans from 
> outsourcing ranged from $7,100 to $12,900 per household.
>
> According to the Bureau of Labor Statistics, the average hourly wages 
> of private, nonfarm, nonsupervisory production workers produced an 
> annual income of $33,072 as of February 2005.
>
> Only economists completely detached from reality could believe that 
> American households owe such a large percentage of income to 
> outsourcing, which is threatening them with a depreciating currency 
> and the loss of their jobs and careers.
>
> One of the dumbest defenses of outsourcing is the claim that history 
> shows that America benefits from free trade. First of all, there has 
> been precious little free trade. Economists mean that America has 
> benefitted from trade during the decades following World War II when 
> the rest of the world was recovering from war or smothered in 
> socialism. It is easy to benefit from trade when you are the only 
> economy.
>
> Second, outsourcing is not trade; it is labor arbitrage. Outsourcing 
> is a new phenomena birthed by the collapse of world socialism and the 
> rise of the high speed internet. It reflects the operation not of 
> "comparative advantage" but of "absolute advantage" --the flow of 
> capital and technology across borders to the cheapest labor. 
> Outsourcing is the substitution of foreign labor for domestic labor. 
> It reduces the demand for domestic labor and drives down incomes.
>
> Paul Craig Roberts was Assistant Secretary of the Treasury in the 
> Reagan administration. He was Associate Editor of the Wall Street 
> Journal editorial page and Contributing Editor of National Review. He 
> is coauthor of The Tyranny of Good Intentions.He can be reached at: 
> pcroberts at postmark.net
>
>

-- 
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* Professor and Director
* School of Communication
* Annenberg School for Communication
* University of Southern California
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