Economy

10 Reasons Why Conservatives Should Be Against Unfair Trade With China And 10 Reasons Why Liberals Should Be Against Unfair Trade With China

There are very few things that the top politicians in both political parties agree on these days, but one of the things that that they do agree on is that free trade with China is a good thing.  George W. Bush, Dick Cheney, John McCain, Barack Obama, Nancy Pelosi and Harry Reid have all fully supported our trade relationship with China.  In this day and age, virtually anyone who even dares to question how fair our “free trade” is with China is immediately labeled as a “protectionist” and is dismissed as a loon.  But when you sit down and really analyze it, there are a whole lot of very good reasons why both conservatives and liberals should be fundamentally against our unfair trade relationship with China.  But you won’t hear these reasons being talked about on CNN, MSNBC or Fox News.  You won’t hear many members of Congress get up and give speeches about how trade with China is bleeding our economy dry.  Both major political parties have completely and totally bought into “the benefits” of globalism and free trade and there isn’t even much of a national debate about our trade policies anymore.

But there should be a national debate.  Unfortunately, most conservatives are just going to accept whatever their leaders tell them to believe.  Conservatives have been convinced that to be against unfair trade is to be “anti-business” and no conservative ever wants to be anti-business.

Similarly, most liberals blindly follow whatever Obama, Pelosi and Reid tell them to believe.  Millions of hard working Democrat voters have lost their jobs due to our nightmarish trade relationship with China, but they are still convinced that Obama is their savior and that they must not ever say anything that he does is wrong.

Well, I have a message to members of both political parties….

WAKE UP!  YOU HAVE BEEN LIED TO!  

If you are truly a conservative, there is no way that you should ever support our trade relationship with China.

If you are truly a liberal, there is no way that you should ever support our trade relationship with China.  

Globalism has allowed the big global corporations that dominate our economy to make huge amounts of money, but it has also forced American workers into one gigantic global labor pool. 

Are you willing to work 12 hours a day for less than $2.00 an hour in sweatshop conditions?  

Well, that is your new competition.

The top 1 percent of all Americans is using globalism to make huge profits, but the standard of living for the rest of us is slowly but surely being forced down toward the rest of the world.

Is that what you really want?

If after reading the reasons below you can still consider yourself a good “conservative” or a good “liberal” and still support our current trade relationship with China please leave a comment to this article.  I would love to hear your reasoning.  

10 Reasons Why Conservatives Should Be Against Unfair Trade With China

1 – Conservatives are supposed to be all about creating jobs.  But millions upon millions of good paying middle class jobs have been shipped off to China and they are never coming back.

2 – Once upon a time, conservatives were opposed to communism.  But our trade relationship with China has enabled the largest communist economy in the world to go from third world status to superpower status.  China is now the second largest economy in the world, and that would have never happened without our cooperation.

3 – Conservatives are supposed to be concerned about national security.  But thanks to the massive amount of money they have made from us, the Chinese have been able to dramatically upgrade and modernize their military.  At the top levels of the Chinese government, most officials still believe in the ultimate worldwide triumph of communism, and now thanks to us they have a world class military with which to advance that agenda.

4 – China has a very strict one-child policy which should be absolutely abhorrent to any true conservative.  

5 – China uses mobile abortion vans to help enforce the one-child policy.  How any social conservative can justify trade with China after learning this is a total mystery. 

6 – If Republicans actually started fighting to protect American jobs from going overseas they could win the “angry working class vote” and take both houses of Congress and the White House in 2012.

7 – Conservatives don’t like when other countries try to take advantage of the American people.  Yet China is taking advantage of the American people by keeping their currency artificially low and most conservatives are strangely quiet about this.  This currency manipulation has put large numbers of U.S. small businesses at a huge competitive disadvantage and has forced many of them to shut down.  Essentially, this currency manipulation has enabled China to get us down on the mat and continually beat the stuffing out of us.  Meanwhile, our politicians stand by and do nothing.     

8 – Our trade deficit with China has enabled them to accumulate about a trillion dollars of our debt.  This gives them tremendous leverage over us and is a very serious threat to our economy and to our national security.

9 – Conservatives are traditionally very protective of national sovereignty and state sovereignty.  But a global economy governed by the G20, the WTO, the IMF and the World Bank is a giant step toward world government and a giant step away from national sovereignty and state sovereignty.

10 – The giant trade deficit that the United States runs is making us poorer as a nation each and every month.  Each year, somewhere around half a trillion dollars of our national wealth gets transferred out of the United States.  Much of that gets transferred to China.  The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  The transfer of wealth that this represents is absolutely mind blowing.  China is literally bleeding us dry.

10 Reasons Why Liberals Should Be Against Unfair Trade With China

1 – Liberals are supposed to defend unions, yet our trade relationship with China has done more to hurt unions than anything else and most liberal politicians don’t seem to care.  Globalism has put the average American worker in direct competition with the cheapest labor in the world.  Unemployment is going to continue to increase unless something is done to stop the offshoring and outsourcing of our jobs.

2 – Liberals are supposed to care about the environment.  But our trade relationship with China means that thousands of factories and businesses leave our shores and end up in China where the environmental regulations are not nearly as strict.  In fact, China has become a complete and total environmental nightmare at this point.  If liberals truly cared about the environment they would want to keep factories and businesses here.

3 – Our trade relationship with China (and with the rest of the world) has caused the income inequality gap in America to explode.  The top 1% of all Americans have done very well in this environment while the rest of us suffer.  For much more on this phenomenon, please see my recent article entitled “Winners And Losers“.

4 – Dangerous products from China are pouring into the United States. Liberals should be horrified that so many of our products are now made outside the United States far from the watchful eyes of our regulatory agencies.  Over the past couple of years, there has been headline after headline about dangerous products made in China.  The following is just one example of this: 10 Babies Die Mysteriously At Fort Bragg: Toxic Drywall From China Used In Base Homes The Culprit?

5 – In a global economy, every piece of legislation that Democrats intend to help American workers with ends up backfiring.  For example, a rise in the minimum wage or a law increasing worker benefits causes American workers to become even more expensive and gives corporations even more incentive to move jobs overseas.

6 – “Free Trade” has been the most destructive in the inner cities where Democrats have traditionally gotten a tremendous amount of support.  Shiny new factories are going up all over China while at the same time formerly great manufacturing cities such as Detroit have degenerated into rotting war zones.  This is not good for liberals.

7 – Democrats won’t get elected if there are no jobs.  Each month, more jobs leave the United States for China and the growing number of long-term unemployed workers in the U.S. is not going to be inclined to keep the same politicians in office if this continues.  If liberal politicians value their jobs they should start protecting the jobs of average Americans.

8 – Free trade with China threatens to ruin our social safety net.  It is a good thing to help those in need, but there comes a point where too many people jump on to the net and it breaks down.  Already, one out of every six Americans is enrolled in at least one anti-poverty program.  Over 40 million Americans are on food stamps.  These are not good numbers for liberals.

9 – True liberals should be absolutely horrified by the exploitation of labor in China.  In China, millions of people work in horrific conditions for what is essentially slave labor pay.  The fact that big global corporations are getting rich from this should make the stomach of every liberal turn.   

10 – The giant trade deficit that the United States runs is making us poorer as a nation each and every month.  Each year, somewhere around half a trillion dollars of our national wealth gets transferred out of the United States.  Much of that gets transferred to China.  The United States spends approximately $3.90 on Chinese goods for every $1 that the Chinese spend on goods from the United States.  The transfer of wealth that this represents is absolutely mind blowing.  China is literally bleeding us dry.

Liberals and conservatives should both be able to agree that it is not a good thing for millions of American jobs to leave the United States and go to China.

Liberals and conservatives should both be able to agree that it is not a good thing that billions of dollars in wealth gets transferred from the United States to China every single month.

But will our leaders wake up and start pursuing a more logical approach to China?

Don’t count on it.

Helicopter Ben Bernanke Says Everything Is Going To Be Okay

Don’t worry everybody. Federal Reserve Chairman “Helicopter Ben” Bernanke says that the U.S. economy is going to be just fine, and that if it does slip up somehow the Federal Reserve is ready to rush in to the rescue. That was essentially Bernanke’s message to an annual gathering of central bankers in Jackson Hole, Wyoming on Friday. Bernanke insisted that even though the Federal Reserve has already cut interest rates to historic lows it still has plenty of tools that could be used to stimulate the U.S. economy if necessary. Well, considering Bernanke’s track record, the “don’t worry, be happy” mantra is just not going to cut it this time. After all, if Bernanke and his team were such intellectual powerhouses the “surprise” financial crisis of 2007 and 2008 would not have caught them with their pants down. The truth is that just before the “greatest financial crisis since the Great Depression” Bernanke was telling everyone that the economy was just fine. So are we going to let him fool us again?

But Bernanke insists that this time is different.  This time the Federal Reserve really has got a handle on things.  During his remarks at Jackson Hole, Bernanke said that the Fed will adopt “unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.”

Unconventional measures?

Could that be a thinly veiled way of saying that Helicopter Ben and his pals will do as much “quantitative easing” as they feel is necessary to keep the economy moving forward?

Unfortunately, most Americans have absolutely no idea what quantitative easing is.

Basically, when quantitative easing takes place the Federal Reserve creates money “ex nihilo” (out of thin air) and uses that money to buy stuff like U.S. government bonds and mortgage-backed securities.  By pumping money into the economy like this, the hope is that banks will start lending more and people and businesses will have more money to spend. 

As far back as 2002, Bernanke has been openly advocating “easy money” policies as a way to stimulate the U.S. economy out of troubled times….

“The U.S. government has a technology, called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at no cost.”

Now, before we go on and discuss some of the problems with quantitative easing, it must be noted that the statement by Bernanke above is absolutely rife with errors. 

It is absolutely frightening that someone like Bernanke has more power over the U.S. economy than any member of Congress or even the president of the United States.

First of all, the U.S. government does not issue our dollars.  They are issued by the Federal Reserve.

Just pull out a dollar bill right now.  It says “Federal Reserve Note” on it right at the top.

Secondly, the U.S. government cannot produce as many dollars as it wants.  Whenever it wants more U.S. dollars it has to give U.S. Treasuries to the Federal Reserve in exchange.

If the U.S. government could produce as many dollars as it wants, it could just print up $13 trillion and pay off the national debt tomorrow. 

But under the current system, it cannot do that.  The Federal Reserve controls the currency, and the truth is that the Federal Reserve is a private central bank that is about as “federal” as Federal Express is.

Thirdly, there is always a cost for producing more dollars.  We’ll talk about inflation in a moment, but first it must be noted that any time “the printing presses are fired up” the U.S. government goes into more debt, and every time the U.S. government goes into more debt, more interest must be paid on that new debt.

So there is a very high cost involved in the creation of more dollars.

In addition, every time a new U.S. dollar is created, every other U.S. dollar becomes a little bit less valuable.  Essentially, the more dollars there are in existence, the less purchasing power each dollar is going to have.  This phenomenon can be masked or delayed for a while, but inflation will always triumph in the end when the money supply is constantly expanded.

The U.S. dollar has lost over 95 percent of its value since the Federal Reserve was created in 1913.  This has not been a mistake.  The Federal Reserve system is designed to slowly but surely inflate the U.S. dollar.  What they do want to avoid, however, is doing it too quickly.

And this is exactly what is in danger of happening in the years ahead.  As the U.S. money supply dramatically expands in response to the exploding U.S. national debt we are eventually going to be dealing with some very, very serious inflation.

Right now, the Bush and Obama administrations have been getting the United States into so much debt that there aren’t enough buyers in the world to absorb it all (at least at the current super low interest rates on U.S. government debt).  So, instead of raising interest rates to a point where U.S. debt would be suitably attractive to investors, the Federal Reserve is stepping in and is “buying” (once again with money created out of thin air) all the excess U.S. Treasuries that don’t sell.  This is essentially a Ponzi scheme and it keeps interest rates on U.S. Treasuries artificially low.

In addition, the Federal Reserve has been handing gigantic sacks of cash to very large banks and financial institutions such as Goldman Sachs, JPMorgan Chase, Bank of America and Citigroup at almost zero percent interest and those big banks and financial institutions have been turning around and investing a large percentage of that cash in U.S. Treasuries.  This has created a gigantic U.S. Treasury carry trade bubble, and it has enabled many of these giant financial monsters to make massive piles of essentially risk-free cash.  This is another Ponzi scheme.

But these Ponzi schemes are not sustainable and they cannot last forever.  Right now Bernanke and his cohorts have been able to finance trillions in U.S. government debt and still keep interest rates on U.S. Treasuries and inflation very, very low.  At some point, their juggling act will come to an end and we will have a gigantic mess on our hands.

But for right now, Bernanke seems quite please with himself.  The following is how Bernanke concluded his speech at Jackson Hole….

As I said at the beginning, we have come a long way, but there is still some way to travel. Together with other economic policymakers and the private sector, the Federal Reserve remains committed to playing its part to help the U.S. economy return to sustained, noninflationary growth.

In Bernanke’s fantasy world, the U.S. economy is going to roar back to life and will soon be stronger than it ever has been.

But don’t you believe him.

The truth is that every single month the U.S. economy is seeing large numbers of jobs leave the country.

The truth is that thanks to our exploding trade deficit, the U.S. economy is poorer at the end of every single month than it was at the beginning.

The truth is that every single month the U.S. government (along with the vast majority of state and local governments) gets even deeper into debt.

The United States economy is not on the road to prosperity.

The United States economy gets poorer and deeper in debt every single month and is slowing bleeding to death.

Ben Bernanke can run around all he wants and try to convince us that “the sky isn’t falling”, but at some point the American people are going to wake up and simply not believe him anymore.

This Economy Is Ripping The Dignity Of Millions Of Unemployed Americans To Shreds

If you can still put a roof over your head and food on the table for your family, you should consider yourself to be very fortunate.  There are millions of Americans out there right now that are really, really suffering.  The cold, hard reality of it is that there aren’t even close to enough jobs out there for everyone right now.  It is almost as if we are all caught in a really bizarre game of musical chairs where the losers get stripped of their tickets to the middle class.  What this horrible economy is doing to the dignity of millions of middle class Americans is incredibly saddening.  There are a lot of very highly educated and very hard working Americans who cannot seem to get jobs no matter what they do and now find themselves doing whatever they can just to survive.  It can be really hard to keep your dignity when you played by all the rules and you worked as hard as you could all your life and now you find yourself a half step away from being homeless.  Those of us who are still doing okay should never look down on those who are struggling in this economy, because the truth is that any of us could be next.   

If you really want to read some horror stories about what long-term unemployment is doing to some people in America, you should go spend an hour or two over at Unemployed-Friends some time.  It is a great forum with a lot of great resources for the unemployed, but it also contains dozens and dozens and dozens of heartbreaking stories from middle class Americans who have had their lives shattered by this economic downturn.      

The following is a typical story on Unemployed-Friends.  It is from a 48 year old Air Force veteran who has lost everything and is now sleeping in his vehicle.  It turns out that Scott48’s job was shipped off to India and now he has been out of work for over two years….

“I am a 48 year old USAF Vet. I got my house in 1996 with the help of the VA. In 2009 the company I worked for went out of buisness(gone to India) I then became a 99er. I notified Wells Fargo that I lost my job and they said they would work with me, the next mortgage statement I got they conveniently increased my mortgage! With what I got from UE was enough for the house but I had to cut out the luxury of food, gas, utillities, insurance, entertainment and alcohol. That was it for me, so the forecloser ball was in motion. I had to give my dog to my cousin so he would get fed, I took everything I owened to the auction( execpt tools, clothes, pictures, tech manuals and my Saxophone) and sold it. I went to a half-way house the VA recomended for a week and it was joke, so my cousin said I could stay with her. After 4 months she diecided that I wasnt looking hard enough and kicked me out, and Ive applied for everything except selling myself. This summer I was staying in an abandoned house due to forecloser and the real estate company has now put it on the market, and I am now on the street sleeping in my vehicle or a friend here and there. Keeping clean is going to be a challenge cuz the Flying J truck stops charge $10 for a shower, rip-off. What a country!”

The truth is that this economy is driving many Americans to the brink of desperation.  Even recent college graduates are becoming desperate enough to actually consider suicide.  The following story is from an Unemployed-Friends user known as 08pacollegegrad….

“I could just take any job like working at fast food places, but I hear people who try can’t even get hired there. I went to Wendy’s for lunch the other day and I thought of picking up an application…but the slot where they keep the applications was completely empty. That should say it all. Plus, I feel like if I take just any job…I will be set back further and never be able to gain experience in my chosen fields.

I follow up on job applications, but employers ignore me for the most part when I try to contact them. I sent five follow up e-mails last week and got no responses. I contacted an employer expressing my interest in working for them, but all they gave me is the link to their online application system that I have never gotten a job from.

I am thinking of applying for more internships (I have already done two), but I don’t want employers to think why I am applying for an internship when I should have had a full fledged job by now.

I have almost killed myself over my situaion and am taking anti-depressants right now. I see a psychiatrist every 4-6 weeks, but I still have days where I feel so empty. I am sick of sitting at home searching for jobs and praying for a response that never comes.”

Many Americans spend day after day after day looking for a job that never comes.  The sense of hopelessness that can build after doing this for a few years is almost indescribable.  The following is another incredibly sad story from an Unemployed-Friends user known as feuxdejoie….

“I lost my job in June 2008, my husband was working but sentenced to prison for 4 years, for DUI, no accidents or injuries. I had been using my unemployment to pay bills but my last check came June 12, 2010. I’m alone and scared. The city that I live in has the highest unemployment in the State, Illinois. Our children are grown and I sit alone all day searching for jobs. My husband can only call once a month because of the outrageous rates for telephone calls. I’m at the end of my rope and don’t know where to turn if they don’t pass a tier V for unemployment or open up some jobs.
I turned 50 in April and had worked all of my life, starting at age 14 with a work permit! My employer stated to me that they needed someone bilingual and terminated me even after I told them that I would take classes to learn.  I signed up for college and began classes in January then unemployment told me that I wasn’t elgible for unemployment while attending school.”

There are millions of Americans who believe that their lives are over because they can’t get decent jobs.  When you lose your job, your home, your car, your health insurance and then finally your unemployment insurance runs out, it is easy to lose all hope as an Unemployed-Friends user named Ember has done….

“so i feel pretty much hopeless. been unemployed since July 2008. in over two years i haven’t even been called for an interview. tired of looking and applying for jobs outside of my field that require experience i don’t have. it’s all for naught. i have two bachelor of science degrees. my BS degrees, cuz that’s what they’re worth. since losing my job i’ve gotten divorced. lost my house. lost my health insurance. totalled my car and sustained chronic back pain. and moved in with my mom. and did i mention, when all this started i was a new mom, just back from maternity leave? so (now) i’m raising a toddler on my own, with no income. my unemployment insurance ran out a few weeks ago. i don’t even know what to do now. i just want to disappear. i’m tired of trying. i’m tired of being a burden on everyone. if i didn’t have the responsibility to take care of my child i wouldn’t be around anymore.”

This final example is from an Unemployed-Friends user identified as Faith1028.  Be warned that this one will shake you to your core if you have any sensitivity at all.  As you read this, keep in mind that this kind of thing is literally happening to millions of Americans these days…. 

“HI, y’all! This is my story. I’m from Chicago.

I lost my job 11.06.09 – I did my best to remain positive & confident that I would get a job by the end of November.

December 2009 – Still no job. I’m getting food stamps (LINK card) & Unemployment Benefits. Not much money at all, but I’m surviving. Thanks to all this stress, my stomach has been burning and/or been painful daily for all December. I puked my guts out on the 26th.

January 2010 – My stomach is still hurting every day. I had to close out my savings account. I haven’t told my slumlord or my fellow tenants that I lost my job; I go on pretending I’m still going to work everyday. Unfortunately on the 26th, I got my eviction notice. I called the office to ask why. The response was “I don’t know.” I became hysterical. I’ve no job, no money, no family/friends to help. (I have many *relatives*, but no *family*.) I truly believed my only alternative was suicide. I wanted to say good-bye to my brother (my only sibling), but we haven’t spoken to each other for over 4 years; I no longer have his address/phone number. I found him on Facebook. I didn’t bring up my situation because I felt he wouldn’t care. We exchanged a few messages and that was it. I haven’t heard from him since. Good riddance.

February 2010 – Someone found a family that I can stay with for only $250/month! My own room! They turned out to be aquaintances of mine. Vegetarian, too! At least I have a place to stay. I’d rather live alone, but, hey, I’m desperate! — And I’m not too crazy about the bedbugs. OW!

June/July 2010 – Thanks to daily/nightly use of citrine crystals since 30 May, I have no more stomach problems!
Thanks to weekly use of a natural (green!) pesticide from PlusNaturalEnzymes.com, I no longer have a problem with bedbugs! However…
Mid-June, my Unemployment Benefits ran out. Of course, I’m still looking for a job! What am I supposed to do – put a gun to someone’s head and force them to hire me? As of this date, I have $12 left to my name; $0 in my chequeing account. I recently reapplied for and am now receiving food stamps. Before I got my food stamps back, I’ve eaten whatever (Vegetarian!) food I can get, even stuff I’m allergic to. As a result, I’ve become sick: cold-like symptoms, pain in lower intestines…and a rash over my arms, legs, & neck. Oh, does it itch! At least my food allergies are not life-threatening.
Needless to say, my depression has gotten worse.

I am really trying hard to remain positive — and alive.
But why? Is it really all worth it?

I haven’t paid July’s rent, and the people I’m staying with are getting very *impatient*; I fear I’ll be evicted again! The money is coming! It’s not my bloody fault!

Someone on Twitter sent me a link to this site. I know I’m not the only one suffering; some folks have already committed suicide. I don’t want to die, but I don’t want to be homeless, either. I am so bloody scared.
Just give me money that my tax dollars paid for!
–Or better yet: GIVE ME A BLASTED JOB!!”

The really sad thing is that there are countless other stories just like these being posted all over the Internet all the time.

People are hurting.

People are losing hope.

So how did we get here?

Well, it turns out that the “haves” have figured out that they really don’t need the “have nots” after all.  Incredible advances in technology have increasingly enabled employers to replace humans with machines and computers.  In addition, as we have detailed previously, millions upon millions of middle class American jobs are being shipped off to China and to dozens of third world nations where workers are more than happy to work for less than a tenth of what an American worker would make.

All of those jobs that have been lost to technology and that have been sent overseas are not going to come back.  The hordes of long-term unemployed that we are seeing now is just the beginning.  It is going to get a lot worse.

So the next time you hear a hard luck story from an unemployed American, don’t look down on that person.

You might be next.

We Killed The Goose That Laid The Golden Egg And Now The Number Of Americans Receiving Long-Term Unemployment Benefits Has Risen A Whopping 60 Percent In Just One Year

For middle class Americans, the new global economy has provided mountains of cheap products made in China, India and dozens of other nations, but it has also killed the goose that laid the golden egg.  Millions of American workers have been discovering that the price for all of those inexpensive foreign-made goodies is their jobs.  Now we have so many long-term unemployed workers in the United States that we are inventing new terms (such as “the 99ers”) to describe them.  Unemployment is on the rise again (we’ll get to the figures in a minute) and everyone seems perplexed at the continuing inability of the “greatest economy in the world” to provide jobs for everyone.  But the truth is that this has been coming for a long time.  The debt-fueled prosperity of the past couple of decades allowed us to live far beyond our means and provide very high levels of employment for a while, but now economic reality is setting in.  The millions of middle class jobs that have been shipped overseas are never coming back.  Unfortunately, the existence of a large class of chronically unemployed Americans that are struggling just to survive is going to quickly become “the new normal”.

This week the U.S. Labor Deparment announced that for the week ending August 14th, new applications for unemployment insurance benefits reached the half-million mark.  That was the first time since last November that the psychologically important 500,000 threshold had been hit.  Most economists had predicted that unemployment claims would actually decline, but instead they experienced their fourth increase in the past five weeks.

But the increase in new applications for unemployment benefits is only part of the story.  It is not such a bad thing to be unemployed if you can find another job in a couple of weeks or a couple of months.  But in 2010, there are millions of Americans that cannot seem to find a job no matter what they do month after month after month.

In fact, the number of Americans that have exhausted their state unemployment benefits and that are collecting long-term federal unemployment benefits has increased 60 percent over the past year.  The following is how a recent article on CNBC recently described the situation….

“Claimants under the Emergency Unemployment Compensation provision—who have exhausted their state benefits—surged 260,105 to 4,753,456 for the week ended July 31 (the data lags the weekly claims by two weeks). While that represents a weekly increase of 0.5 percent, the total is 60.5 percent higher than the 2009 figure of 2,961,457.”

So what will the figure be at this time next year?

6 million?

7 million?

And what happens if the U.S. Congress finally decides to cut off the long-term unemployment benefits at some point?

The truth is that things are getting really frightening out there.

“There’s a red flag being waved right now that says ‘Danger,’” Bloomberg quoted Mark Vitner, a senior economist at Wells Fargo Securities LLC as saying recently. “Growth is going to slow in the second half and we might face something a little more ominous than that.”

The reality is that there are not nearly enough jobs out there for everyone.  According to one recent survey, 28% of U.S. households have at least one member that is looking for a full-time job.

Just think about that.

Almost 30 percent of all U.S. homes have someone who is looking for a full-time job.

That is not just a problem.

That is a national crisis.

But it is not just those who are unemployed who are suffering.  The reality is that this economic downturn has hurt most of us in one way or another.  A recent Pew Research survey found that 55 percent of the U.S. labor force has experienced either unemployment, a pay decrease, a reduction in hours or an involuntary move to part-time work since the recession began.

Millions of Americans are putting up with increased workloads, pay decreases and benefit cuts right now because the alternative is joining the hordes of jobless Americans that are fighting tooth and nail over the few jobs that are actually available. 

Once you lose your job in this economy there is no telling when you are going to be able to get another one.  In America today, the average time needed to find a job has risen to a record 35.2 weeks.

Could you imagine being unemployed for 35 weeks?

The truth is that in 2010, it is employers that have all the power and all the leverage.

In fact, when you really analyze it, it is a wonder that companies are hiring new workers at all.  It is a massive pain in the rear end to hire a new worker in America today.  The thousands upon thousands of regulations that must be complied with, the big pile of forms that need to be filled out and the elaborate bookkeeping that must be maintained make hiring someone a major headache.  One top of that, tax contributions, benefit packages and health insurance premiums make each worker a very expensive proposition.

There is a reason why so many companies are trying to squeeze more out of the employees that they already have or are only hiring temporary employees right now.

But the biggest reason why there is such a lack of jobs is because millions upon millions of good jobs have been shipped overseas.  Globalism and “free trade” have put middle class American workers into a situation where they are in direct competition for jobs against the cheapest labor in the world.

Why in the world should U.S. companies hire American workers when they can hire very willing workers on the other side of the world who will do the same job for less than one-tenth the cost?

Those who once warned us about “the great sucking sound” that globalism would create were right, and the truth is that the U.S. has already been bleeding good jobs for years.  According to one analysis, the United States has lost 10.5 million jobs since 2007, and the truth is that unless something is done things are going to get even worse.

But what can get lost in all of these statistics is the very real pain that so many millions of Americans are now experiencing.

Losing a job and watching everything that you have worked for crumble can be extremely soul crushing.  In fact, this economy is pushing some Americans completely over the edge.

The following is an excerpt from an actual letter to U.S. Representative Anthony Weiner….

“My dad, S, killed himself March 16, 2009 because he ran out of money and could not find work. My whole family had been devastated by the economy. He was 61 years old and could not take it anymore. He could not figure out how to keep the electric on, buy food, or keep a roof over his head. A day before his electric was to be shut off, and 2 weeks away from eviction, my dad took the hardest walk of his life. He left a note on the dining room table for my sister and I. His suicide letter said ‘I love you. I had to do this. I ran out of money. I wish you both luck in your lives’. He left the door unlocked with the door key left in the lock. He carefully laid out two suits for us to pick from to bury him in.”

Could you imagine if that was your father?

As the economy continues to deteriorate, many more Americans are going to be pushed to the edge of despair.

Life is not about paying our bills or about the things that we own, but there is no denying the pain that comes when you run completely out of money and you feel totally helpless.

But nobody should ever give up.  There is always hope.  Things can always be turned around.

Unfortunately, we have entered a time when there are always going to be a large number of unemployed Americans because there are just not nearly enough jobs to go around.

Anyone who thought that we could merge American workers into a massive global labor pool and still be able to maintain our middle class lifestyles was living in fantasy land. 

No, the truth is that globalism has killed the goose that laid the golden egg and now tens of millions of Americans are going to pay the price.

The Horrific Derivatives Bubble That Could One Day Destroy The Entire World Financial System

Today there is a horrific derivatives bubble that threatens to destroy not only the U.S. economy but the entire world financial system as well, but unfortunately the vast majority of people do not understand it.  When you say the word “derivatives” to most Americans, they have no idea what you are talking about.  In fact, even most members of the U.S. Congress don’t really seem to understand them.  But you don’t have to get into all the technicalities to understand the bigger picture.  Basically, derivatives are financial instruments whose value depends upon or is derived from the price of something else.  A derivative has no underlying value of its own.  It is essentially a side bet.  Originally, derivatives were mostly used to hedge risk and to offset the possibility of taking losses.  But today it has gone way, way beyond that.  Today the world financial system has become a gigantic casino where insanely large bets are made on anything and everything that you can possibly imagine. 

The derivatives market is almost entirely unregulated and in recent years it has ballooned to such enormous proportions that it is almost hard to believe.  Today, the worldwide derivatives market is approximately 20 times the size of the entire global economy.

Because derivatives are so unregulated, nobody knows for certain exactly what the total value of all the derivatives worldwide is, but low estimates put it around 600 trillion dollars and high estimates put it at around 1.5 quadrillion dollars. 

Do you know how large one quadrillion is?

Counting at one dollar per second, it would take 32 million years to count to one quadrillion.

If you want to attempt it, you might want to get started right now.

To put that in perspective, the gross domestic product of the United States is only about 14 trillion dollars.

In fact, the total market cap of all major global stock markets is only about 30 trillion dollars.

So when you are talking about 1.5 quadrillion dollars, you are talking about an amount of money that is almost inconceivable.

So what is going to happen when this insanely large derivatives bubble pops?

Well, the truth is that the danger that we face from derivatives is so great that Warren Buffet has called them “financial weapons of mass destruction”.

Unfortunately, he is not exaggerating.

It would be hard to understate the financial devastation that we could potentially be facing. 

A number of years back, French President Jacques Chirac referred to derivatives as “financial AIDS”.

The reality is that when this bubble pops there won’t be enough money in the entire world to fix it.

But ignorance is bliss, and most people simply do not understand these complex financial instruments enough to be worried about them.

Unfortunately, just because most of us do not understand the danger does not mean that the danger has been eliminated.

In a recent column, Dr. Jerome Corsi of WorldNetDaily noted that even many institutional investors have gotten sucked into investing in derivatives without even understanding the incredible risk they were facing….

A key problem with derivatives is that in the attempt to reduce costs or prevent losses, institutional investors typically accepted complex risks that carried little-understood liabilities widely disproportionate to any potential savings the derivatives contract may have initially obtained.

The hedge-fund and derivatives markets are so highly complex and technical that even many top economists and investment-banking professionals don’t fully understand them.

Moreover, both the hedge-fund and the derivatives markets are almost totally unregulated, either by the U.S. government or by any other government worldwide.

Most Americans don’t realize it, but derivatives played a major role in the financial crisis of 2007 and 2008.

Do you remember how AIG was constantly in the news for a while there?

Well, they weren’t in financial trouble because they had written a bunch of bad insurance policies.

What had happened is that a subsidiary of AIG had lost more than $18 billion on Credit Default Swaps (derivatives) it had written, and additional losses from derivatives were on the way which could have caused the complete collapse of the insurance giant.

So the U.S. government stepped in and bailed them out – all at U.S. taxpayer expense of course.

But the AIG incident was actually quite small compared to what could be coming.  The derivatives market has become so monolithic that even a relatively minor imbalance in the global economy could set off a chain reaction that would have devastating consequences. 

In his recent article on derivatives, Webster Tarpley described the central role that derivatives now play in our financial system….

Far from being some arcane or marginal activity, financial derivatives have come to represent the principal business of the financier oligarchy in Wall Street, the City of London, Frankfurt, and other money centers. A concerted effort has been made by politicians and the news media to hide and camouflage the central role played by derivative speculation in the economic disasters of recent years. Journalists and public relations types have done everything possible to avoid even mentioning derivatives, coining phrases like “toxic assets,” “exotic instruments,” and – most notably – “troubled assets,” as in Troubled Assets Relief Program or TARP, aka the monstrous $800 billion bailout of Wall Street speculators which was enacted in October 2008 with the support of Bush, Henry Paulson, John McCain, Sarah Palin, and the Obama Democrats.

But wasn’t the financial reform law that Congress just passed supposed to fix all this?

Well, the truth is that you simply cannot “fix” a 1.5 quadrillion dollar problem, but yes, the financial reform law was supposed to put some new restrictions on derivatives.

And initially, there were some somewhat significant reforms contained in the bill.  But after the vast horde of Wall Street lobbyists in Washington got done doing their thing, the derivatives reforms were almost completely and totally neutered.

So the rampant casino gambling continues and everybody on Wall Street is happy.

For now.

One day some event will happen which will cause a sudden shift in world financial markets and trillions of dollars of losses in derivatives will create a tsunami that will bring the entire house of cards down.

All of the money in the world will not be enough to bail out the financial system when that day arrives.

The truth is that we should have never allowed world financial markets to become a giant casino. 

But we did.

Soon enough we will all pay the price, and when that disastrous day comes, most Americans will still not understand what is happening.

The American People Don’t Need More Handouts – What They Need Are Good Jobs

Without millions more good jobs, the U.S. economy is simply never, ever going to recover.  But at this point, there is every indication that the U.S. economy is going to continue to bleed jobs.  In the past, employment would bounce up and down as the economy went through various cycles.  But today what we are witnessing is something much different.  Over the past 30 or 40 years, literally millions of good jobs have been shipped off to China, India and to dozens of third world nations where half-starving workers are more than happy to slave away for big global corporations for less than a dollar an hour.  In the new “global economy” that we were promised would be so good for us, the expensive American worker is obsolete.  The giant global predator corporations that now dominate our economy do not exist to provide you and your family with a nice home, two cars and college educations for all your children.  No, their goal is to keep costs as low as possible so that their profits will be as high as possible.  For many of these giant global predator corporations, that means that paying workers as close to zero as possible is the best decision for the bottom line. 

The truth is that the American people were never told that “free trade” and a “global economy” would mean that they would soon be lumped into a giant global labor pool and would be forced to compete for jobs with people on the other side of the globe.

No, we were just told that we should enjoy all of the cheap plastic crap made overseas that all of the “big box” retail stores were pushing us to buy.

Well, the party was fun while it lasted.  Americans ran up unprecedented amounts of debt on their credit cards buying all this stuff, while our once great manufacturing cities degenerated into rotted-out war zones.

But isn’t it a good thing to get all these products at such a cheap price?

After all, who wants to pay substantially more for things?

Well, running an economy this way is kind of like tearing off pieces of your house in order to keep your fire going.  Sure the fire will burn brightly for a while, but eventually you will have torn down your entire house.

One way or another, we end up paying dearly for the jobs we have shipped overseas.

You see, the millions of Americans who are now chronically unemployed because of “free trade” have to be supported by the U.S. government.

That means that it is the U.S. taxpayers who end up footing the bill.

You didn’t think that we were going to let all of those unemployed workers starve in the streets, did you?

Without good jobs, an increasing number of Americans are becoming completely dependent on government handouts.

Already, state governments across the United States are going broke trying to pay out unemployment benefits to the hordes of Americans who don’t have a job and can’t find a job.

In addition, for the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.

Also, according to one new study, somewhere around 21 percent of all children in the United States are living below the poverty line in 2010, which is the highest rate in 20 years.

The truth is that more Americans are dependent on direct payments from the federal government than ever before.

But how long can we afford to support the millions upon millions of Americans who have been impoverished by this new “global economy”?

The U.S. government budget deficit was a record $1.4 trillion in 2009.  Now the White House says that we will exceed that figure in 2010 and again in 2011.

So just how long can we afford to run deficits equivalent to 10 percent of GDP?

Anyone with half a brain knows that these kind of debts are not anywhere close to sustainable.

So where is the money going to come from to pay for these exploding government programs?

Well, from you of course.

Recently I dubbed 2011 “the year of the tax increase”.  A whole slew of new taxes is scheduled to go into effect starting next year that will impact every single American taxpayer.

It is almost enough to make you want to stop working and start collecting government handouts instead.

But the American people don’t need even more handouts.

Handouts are only a temporary solution to a long-term problem.

What the American people need are good jobs.

But where in the world are these jobs going to come from?

The reality is that in the new “global economy”, the United States is a very unattractive place to do business.

If you were a global corporation, would you rather open a new facility in the third world where there are very few rules and regulations and where people will work for less than a dollar an hour, or would you rather open a new facility in the United States where there are literally thousands of laws and regulations to comply with and where you are going to have to pay workers at least ten times as much?

It doesn’t take a genius to see where all of this is headed.

For decades, an increasing number of Americans have been forced into lower paying service jobs, but now there aren’t even nearly enough of those to go around. 

But it isn’t just the jobs that have been shipped overseas that are depressing wages and causing unemployment to skyrocket.  The millions of illegal immigrants that have flooded unchecked across the border have depressed wages and fundamentally changed the employment picture in industries such as construction and food service. 

Not only that, but in this environment not even high tech workers are safe.  In fact, there are some corporations in the high tech industry that have been openly abusing worker visas to ship in large numbers of foreign workers to replace more expensive American employees.

What all this means is that it is becoming much more difficult to live a middle class lifestyle in the United States.

Perhaps that is why one of my articles struck such a nerve recently.  An article that I originally wrote for The American Dream blog and adapted by Business Insider has gone mega-viral and has ended up on Yahoo Finance.  The article was entitled “The Middle Class In America Is Radically Shrinking – Here Are The Stats To Prove it” and it has received over 9000 comments on Yahoo.

So why did it provoke such an extraordinary response?

Well, because it hits people where they live.

Today, millions of American families are really struggling.  Record numbers of middle class Americans are receiving foreclosure notices and record numbers of middle class Americans are going bankrupt.

In fact, more Americans than ever find themselves just trying to survive.

According to a poll taken in 2009, 61 percent of Americans “always or usually” live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

You see, the truth is that most American families are not concerned with saving for retirement or even with planning for next year.  In this economic environment, most American families are worried about how they are going to survive until next month.

So who has been doing well in the new global economy?

The very, very wealthy of course.

According to Harvard Magazine, 66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

Now, the truth is that there is absolutely nothing wrong with making money, but by any reasonable standard an economic system that produces such skewed results is horribly broken.

So will “redistributing the wealth” solve things?

No, it won’t.

At best, “redistributing the wealth” is only a temporary solution and it always ends up creating a lot of long-term problems.

What the American people really need are millions more good jobs.

But as we have seen, the current imbalances in the new “global economy” make it more likely that the American people will continue to lose millions more good jobs rather than gaining them.

Unless something is done, the standard of living for middle class Americans will continue to be forced down as labor increasingly becomes a global commodity.

So are you just going to accept that, or are you going to start demanding that your representatives change things?

The choice is up to you.

Shipping Our Economy, Our Jobs And Our Prosperity To China

As the U.S. economy continues to implode, large American corporations are investing billions upon billions of dollars in China.  But all of this investment comes at a price.  Over the past several decades, hundreds of factories and manufacturing facilities that would have been constructed in the United States, along with millions of decent paying jobs, have ended up going to China instead where labor is so much cheaper.  In the process, China has become a massive economic powerhouse, while once thriving manufacturing cities in the United States such as Detroit are now rusted-out corpses.  In fact, China’s economy has grown so rapidly that it is being projected that in 2010 China will replace Japan as the world’s second-largest economy.  Not only that, but China has already overtaken Germany and is now the biggest exporter of goods in the entire world.  But none of this growth in communist China would have been possible without all of the globalism and free trade that U.S. politicians from both parties have been pushing on us for the last 40 years.  When they were selling us on the benefits of “free trade” they didn’t tell us that we would end up shipping our economy, our jobs and our prosperity over to China. 

American consumers never seemed to be able to put two and two together.  As we were busy running out and filling up our shopping carts with cheap plastic crap made in China, we didn’t seem to realize that a “global economy” meant that we would be competing for jobs and wages with workers on the other side of the world.

So now the U.S. economy, with its high wages and repressive government regulations, is suffering while China’s economy is thriving.

So just how much money are U.S. corporations pouring into China?

Well, according to the U.S.-China Business Council, U.S. corporations combined for $3.6 billion in direct foreign investment in China in 2009.  That was substantially up from $2.9 billion in 2008.

As U.S. companies pour increasingly large amounts of money into China, the economies of the U.S. and China are becoming inextricably linked.

In fact, some of the biggest “American” success stories are now manufactured in China.

For example, have you purchased an Apple iPhone?  Well, if you have, there is a really good chance that it was made in China.  Of course what Apple doesn’t tell you is that ten workers at the facility in China where the iPhone is manufactured have committed suicide in the past year by jumping off buildings at the factory.  Perhaps they were depressed over their low pay – the workers at the factory work very long hours but make less than 300 hundred dollars a month.

How would you like to work for 300 dollars a month?

But things could be even worse.

Reuters recently described the ordeal of one Chinese worker who spends at least eight hours a day standing on an assembly line putting together locks for Honda cars….

“Each year is the same. It makes me sick in the stomach. There’s no freshness to things anymore,” he said of his job which pays around 30 yuan (US$5) per day.

How in the world can American workers be expected to compete with someone who makes 5 dollars a day?

But some Chinese workers toil in even more difficult conditions.  According to the Toronto Star, employees at the Pingdingshan Cotton Textile Company work grueling two day shifts and yet only make 65 cents an hour.

These low wages have enabled big global corporations to make huge profits, and they have helped provide lots of low price products for American consumers, but in the process they are cannibalizing U.S. jobs, factories and businesses.

In fact, it is getting quite hard to find things that are made in the United States anymore.  Even many of the “organic foods” that you are buying at organic food stores are now actually made in China.

As tens of millions of American workers sit at home collecting unemployment checks, U.S. companies are busy making plans to invest billions more in China.

According to Pacific Epoch, a China-focused research firm based in Shanghai, Pepsi “has committed $1 billion over the next four years to build 14 new beverage production plants, in a move that will almost double its production capacity in the country.”

Couldn’t we use a few of those beverage production plants in the United States?

But who wants to pay U.S. workers 12 dollars an hour when they can pay Chinese workers 2 dollars an hour?

But Pepsi is far from alone.  Forbes recently detailed the massive investments that some of the major car companies are making in China….

General Motors and Volkswagen have invested billions in China, starting more than a decade ago. Ford is rushing to catch up by adding production capacity and expanding its dealer network in China. Ford and its joint-venture partner, Chang’an Ford Mazda Automobile, plan to start producing next-generation Ford Focus models at a new, $490 million plant in Chongqing in 2012.

Meanwhile, once thriving American manufacturing cities such as Detroit and Flint, Michigan are so dilapidated and run down that they literally look like war zones.

But it is not just U.S. companies that are investing in China.  According to China’s Ministry of Commerce, overall direct foreign investment in China rose 14 percent to approximately $39 billion in the first five months of 2010.  Nearly half of that money was spent on building or expanding factories.

The implications of all this are staggering.

First of all, nobody can deny any longer that China has become a superpower.  China now has one of the largest economies in the world, their military has been dramatically upgraded and modernized and they have developed a network of economic and diplomatic contacts around the globe that would have been unthinkable 20 or 30 years ago.

Meanwhile, the United States has an economy that is imploding, a reputation that has been deeply tarnished and a debt that is the largest in the history of the world. 

In fact, China owns about a trillion dollars of U.S. government debt.

Yes, the United States is falling and China is rising.

So now that China’s economy and manufacturing base has been built up so dramatically, what happens when someday the communist Chinese government decides that it doesn’t want to be such great friends with the United States anymore?

If relations between the two nations really go south someday, could U.S. corporations suddenly lose the billions upon billions that they have poured into China? 

Also, many Chinese military strategists believe that it is inevitable that there will be a war between the United States and China someday.  So could China end up using all of the technology and manufacturing capacity that they have gained at our expense against us someday?    

The truth is that all of the money and technology that we have poured into China could end up being one of the greatest national security blunders of all time. 

China is not a democracy.  The Communist Party runs China, and most of their leaders still believe in the ultimate worldwide triumph of communism.

So in the end the United States may look back and realize how incredibly stupid it was to build up communist China at the expense of our own economy.

But this is the world our leaders have built for us.  A world where globalism and “free trade” force us to compete for jobs against sweatshop laborers around the globe.

The reality is that this “new world” is not very good at all for the American middle class.  The economic realities of the 21st century are very cruel for Americans who are seeking to live a middle class lifestyle. 

Gradually, everyone in the world is being pushed into two economic groups.  The massive global corporations that dominate everyone and everything, and the worldwide mass of expendable labor that serves those global corporations.

It is this kind of “neo-feudalism” that we must avoid at all costs.  If the American people would just wake up this trend towards increasing globalism could be reversed.

But will they wake up?

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