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Monday, November 21, 2011

Spain - the fifth victim to fall in Europe’s arc of depression

As union leader Javier Dos put it, the EU-imposed austerity plans of the incoming Partido Popular are “nothing more than the continuation of policies leading Europe toward disaster”.

The new government of Mariano Rajoy has precious few policy levers at its disposal and cannot alone do anything at this late stage to prevent a death spiral within the strait-jacket of EMU.

The immediate destiny of his country lies entirely in the hands of Germany, the AAA creditor core, the EU authorities, and the European Central Bank, the nexus of policy-making power that together dictates whether Spain will be thrown a lifeline or be pushed further into depression and social catastrophe.

What can the quiet Galician do to stop Spain’s 22.6pc unemployment rate – or 46pc for youth – from ratcheting higher this winter as the combined effects of fiscal austerity and a credit crunch together do their worst? How can he stop real M1 deposits contracting at a 5pc rate.

Spain is a disquieting story for northern neo-Calvinists, still clinging their morality tale of what went wrong with monetary union, a belief that feckless Greco-Latins borrowed their way to disaster, and that Teutonic virtue for all is the path to redemption.

Philip Whyte and Simon Tilford argue in a paper for the Centre for European Reform (CER) that this is a “damagingly partial and self-serving” version of events.

“It wrongly assigns all the blame for peripheral indebtedness to government profligacy; it makes no mention of the far from innocent role played by creditor countries in the run-up to the crisis. The result was an explosion of current-account imbalances inside the eurozone. As a share of GDP, these imbalances were far bigger than those between the US and China,” they said.

More than any other country, Spain exposes the lie behind this German narrative. It did not cheat, like Greece. It did not breach the Maastricht Treaty’s 60pc debt ceiling like Italy (or Germany itself). Its public debt was 36pc of GDP before the Great Recession. It ran a budget surplus of almost 2pc of GDP in 2007 and 2008.

We can all agree that Spain has been far too slow to dismantle its Franco-era apparatus of labour privileges, or to end the inflation-linked wage rises eating away at intra-EMU competitiveness. But that is just one aspect of the story.

“The eurozone crisis is as much a tale of excess bank leverage and poor risk management in the core as of excess consumption and wasteful investment in the periphery,” said the CER paper.

Indeed, Spain has been the biggest victim of cheap capital from German, Dutch, and French banks. It was further destabilized by the loose policies of the European Central Bank.

Lest it be forgotten, the ECB allowed the eurozone’s M3 money supply to rise at double-digit rates in the middle of the last decade (against a target of 4.5pc) in order to lift Germany out of slump. It tilted policy to German needs, blighting the South.

ECB monetary policy led to real interest rates of minus 2pc for Spain, fuelling a destructive credit bubble despite the heroic efforts of the Bank of Spain to contain the damage. Yes, Spain would have had a crisis anyway. A fast-growing catch-up economy needs a higher interest rate structure, but all Europe seemed to have forgotten that elemental truth on E-day.

This credit excess is the reason why there is now an overhang of 1.5m homes on the market or still being built, according to data from consultants RR de Acuña. Property prices have already dropped 28pc. The firm predicts further falls of 20pc.

It is why Spain’s international investment balance has swung wildly negative to over €1 trillion, or 90pc of GDP.

Given that the structure of EMU itself caused the North-South imbalances that lie behind the crisis, the EU authorities and the creditor states surely have a duty of care to the countries now trapped in slump. Instead, we heard last week from Brussels that the Spain must “help itself”, and from Germany the usual mantra of reform.

“Some of the governments imposing measures ought to apply the same medicine to themselves,” said the PP’s finance chief Cristóbal Montoso.

The Rajoy team hopes this will be a replay of 1996 when the party took over a prostrate economy from the socialists, and unemployment was almost as high. It tightened then with Prussian discipline, stunning Europe by meeting the entry terms for EMU.

“Spain is going to take the lead in economic stability once again, as we did in the 1990s: the situation is not so different now,” said Mr Montoso.

One admires the grit, but this is nothing like the mid-1990s, when the world was growing briskly, and the devalued peseta was super-competitive against the D-Mark. Today the whole of Europe is tipping back into recession and Spain is 30pc less competitive against Germany.

My own view is that Spain is still fundamentally “saveable” within EMU. Spanish exports rebounded from the 2008-2009 crash almost as fast German exports, outperforming Italy and France.

But this cannot be achieved as long as fiscal and monetary policy are set on slow grinding slump; nor if the burden of adjustment falls entirely on the weaker states as in the 1930s, forcing these countries to slash themselves into a Grecian vortex of self-feeding recession.

German finance minister Wolfgang Schauble – the most dangerous man in the world – is imposing a reactionary policy of synchronized tightening on the whole eurozone through the EU institutions, invoking a doctrine of “expansionary fiscal contractions” that has no record of success without offsetting monetary and exchange stimulus. What is abject is that EU bodies should acquiesce in this primitive dogma.

“Too much virtue has become a collective vice. The collective outcome of all member-states tightening fiscal policy has proved brutally contractionary for the region as a whole,” said the CER paper.

“Household and business confidence is crumbling rapidly across the currency union. On current policy trends, a wave of sovereign defaults and bank failures are unavoidable. Much of the currency union faces depression and deflation.”

It Germany genuinely wishes to save Spain and Italy, it must allow EMU-wide reflation and mobilize the ECB as a lender of last resort to halt the bond crisis, since the EFSF rescue fund does not exist.

To create a currency without such a backstop is criminally irresponsible. If this role is illegal under EU treaty law – and that is arguable – then EU treaties must be changed immediately.

If Germany cannot accept this for understandable reasons of sovereignty or ideology, it should accept the implications and prepare an orderly break-up of monetary union. That is the only honourable course.

In the meantime, one can only watch with grim foreboding as the fifth successive government collapses in Europe’s arc of depression, to be replaced by saviours who can save nothing.
The Telegraph

Britain 'will join euro before long’, says German finance minister

Wolfgang Schäuble

Wolfgang Schäuble said that, despite the current crisis in the eurozone, the euro will ultimately emerge as the common currency of the entire European Union. He said he “respects” Britain’s decision to keep the pound, but insisted that the survival and eventual stabilisation of the euro will convince non-members to join the currency club. “This may happen more quickly than some people in the British Isles currently believe,” he added.

Mr Schäuble also said Germany will stand firm on its call for a financial transaction tax that Britain believes would badly harm the City of London.

Fears over the eurozone crisis saw stock markets fall again yesterday. The FTSE 100 closed down 1.1 per cent. French and German shares also fell.

Meanwhile, a leaked document seen by The Daily Telegraph yesterday showed Berlin has drawn up radical plans for an intrusive new European body which will be able to intervene directly in beleaguered countries.

Sir John Major, the former prime minister, warned last night that the growing integration of the eurozone nations threatens democracy in those countries. He told Al Jazeera television that richer euro members led by Germany and France will “insist on moving towards what we call fiscal union. By that I mean common control over budgets and fiscal deficits”.

Sir John, who advises David Cameron on foreign policy issues, also described the banking transaction tax as “a heat-seeking missile proposed in continental Europe, aimed at the City of London”.
The Telegraph

Iran may have sent Libya shells for chemical weapons

The Obama administration is investigating whether Iran supplied the Libyan government of Moammar Gaddafi with hundreds of special artillery shells for chemical weapons that Libya kept secret for decades, U.S. officials said.

The shells, which Libya filled with highly toxic mustard agent, were uncovered in recent weeks by revolutionary fighters at two sites in central Libya. Both are under heavy guard and round-the-clock surveillance by drones, U.S. and Libyan officials said.

The discovery of the shells has prompted a probe, led by U.S. intelligence, into how the Libyans obtained them; several sources said early suspicion had fallen on Iran. “We are pretty sure we know” the shells were custom-designed and produced in Iran for Libya, said a senior U.S. official, one of several who spoke on the condition of anonymity because of the sensitivity of the accusation.

A U.S. official with access to classified information confirmed that there were “serious concerns” that Iran had provided the shells, albeit some years ago. In recent weeks, U.N. inspectors have released new information indicating that Iran has the capability to develop a nuclear bomb, a charge Iranian officials have long rejected. Confirmed evidence of Iran’s provision of the specialized shells may exacerbate international tensions over the country’s alleged pursuit of weapons of mass destruction.

Mohammed Javad Larijani, an adviser to Iran’s supreme leader and the brother of Iran’s former negotiator on nuclear issues, denied the allegation. “I believe such comments are being fabricated by the U.S. to complete their project of Iranophobia in the region and all through the world. Surely this is another baseless story for demonizing [the] Islamic Republic of Iran,” he said in an e-mail.

The stockpile’s existence violates Gaddafi’s promises in 2004 to the United States, Britain and the United Nations to declare and begin destruction of all of Libya’s chemical arms, and it raises new questions about the ability of the world’s most powerful nations to police such pledges in tightly closed societies.

Gaddafi’s government was “sitting on stuff that was not secure, and the world did not know about it,” a third U.S. official said. “There were no seals and no inventories” by international inspectors, the official added.

During the recent civil conflict, some foreign powers and Libyan rebels worried that Gaddafi might use chemical weapons, but they were aware only of a previously declared stockpile of mustard agent in bulk storage at a remote desert site. They were unaware of the filled artillery shells, which posed a much greater threat.

This newly discovered stockpile will need to be protected from theft by militia groups or others in the politically unsettled nation. Disposal of the munitions poses an additional challenge for Libya’s new government and allied Western powers, because the chemical-filled shells cannot be readily relocated and, according to some estimates, may take as long as a year to destroy in place.

The Wasington Post

Under pressure to act on syria, Turkey rules out intervention

As voices from within Syria's opposition movement increasingly call for a Turkish “civilian protection” mission in Syria's eight-month-old conflict, Turkish officials have denied speculation that Turkey is discussing a no-fly zone with opposition groups and say that peaceful methods must first be exhausted in the Syrian conflict.

“There exist no military plans between Turkey and Syrian opposition, and no plans for a Turkish move have even been discussed,” a Turkish official told Sunday's Zaman. The official, who spoke on the condition of anonymity due to the fragile nature of a possible military move against Syria, insisted that a possible Turkish mission to intervene in conflict between president Bashar al-Assad and anti-regime protesters was a “one-sided” plan. The official's words come as opposition forces increasingly called for some form of outside intervention in a conflict that the UN estimates has claimed over 3,500 lives.

The official’s words come as opposition forces increasingly called for some form of outside intervention in a conflict that the UN estimates has claimed over 3,500 lives. Earlier in the week, opposition figure and member of Syria’s Muslim Brotherhood Mohammad Riad Shaqfa told Reuters that the establishment of a “buffer zone” is urgently needed to dampen the ongoing violence in Syria. “If the international community procrastinates then more is required from Turkey as a neighbor to be more serious than other countries to handle this regime,” the opposition figure said earlier this week.

Opposition members have been caught in recent weeks between waiting for the slowly coalescing international effort to isolate Assad and the urgent need to find a way to halt the daily killing of protesters. “The Syrian regime is committing atrocities -- war crimes in fact -- against its own people. Because of this, our main focus now is on civilian protection by any means,” commented rights campaigner and member of the Turkey-based Syrian National Council (SNC) Wael Mirza in an interview with Sunday’s Zaman. Mirza, who supports the official non-violent stance of the SNC, a diverse coalition of anti-Assad forces, nevertheless maintains that international efforts must be focused on protecting civilians “by any means.”

For Mirza, civilian protection currently “means focusing on getting observers from the Arab League and the global media to see what is happening.” Mirza hopes that such a move would suffice to protect civilians “because the Assad regime will not be able to act as it has with so much international pressure there.” The call to admit observers from Arab League countries comes in the wake of last week’s failed ceasefire deal between Syria and the Arab League, which voted to suspend Syria’s membership on Sunday. The league did so after violence against protesters continued at the hand of Syrian security forces, which the agreement had required to vacate opposition cities and cease violence.

The Arab League now plans to send observers to Syria, demanding that the regime accept observers lest it face the league’s support for United Nations sanctions in the coming months. On Friday, a senior Syrian official told Reuters that Syria “agreed in principle to the Arab League proposal (for observers),” but opposition leaders say that such promises should be received skeptically, given the regime’s brazen violation of the ceasefire deal.

Given the possibility that the observer deal may stall or prove ineffective at stopping violence, experts say that the conflict risks a long “draw” between the international community and an entrenched regime in Damascus. In such a case, opposition members say that military interference may be the only option to stop the regime’s escalating violence against anti-Assad protesters. In such a scenario, Western countries may look to Turkey to take action against the growing conflict in its southern neighbor.

“The entire world is looking at Turkey,” Joshua Landis, a Syria expert and director of Middle East Studies at the University of Oklahoma told Sunday’s Zaman in an interview last week. “If the West and Turkey are serious about deposing Assad and bringing about a successful revolution, it is increasingly likely that somebody will go first militarily. The West wants Turkey to take on the role.” In the face of such expectations, Landis cautions against Turkish commitment, stating that even a limited commitment could draw Turkey into a war with Syria, an outcome which the expert says would be “foolish.”

Foreign Minister Ahmet Davutoğlu has hinted that Turkey would consider limited intervention in the future, remaining vague on Ankara’s exact plans but stressing to the press that “protecting citizens is the responsibility of every state.” Davutoğlu has said that Turkey will first seek diplomatic and economic measures against the regime, but stated on Friday that “other options must be evaluated later.”

Oytun Orhan, a Syria expert at the Ankara-based Center for Middle Eastern Strategic Studies (ORSAM), told Sunday’s Zaman that events in Syria are critical for Ankara, given the two nations’ shared cultural history and common 1,000 kilometer border. “A heavy wave of migration might hit Turkey once the conflict between the regime and protestors spirals out of control, which could force the country into establishing a buffer zone,” Orhan said, as he described a buffer zone, which would be a “safe” territory for Syrian civilians and a haven for Syria’s growing military opposition. Orhan called the buffer zone “a new Benghazi, in a sense.”

Orhan nevertheless emphasizes that such a scenario would only be considered in extraordinary circumstances, stating that “an unstable Syria does nothing but hurt Turkey; once you open that box you never know what will come out of it.” He says that before Ankara risks any form of military interaction, “Turkey may rather utilize more political and diplomatic pressure on Syria, such as establishing an office for the SNC, and providing more coverage into the refugee camps in Hatay.” Orhan suggested that Turkey will also remain committed to securing UN support for any actions it takes in the future.

Another difficult decision for Ankara is when to enact sanctions against Damascus, a measure which Orhan also states will be deeply harmful to Turkish businesses. Orhan says the economic impact of sanctions would multiplied by the possibility that such measures would be followed by Syrian forces’ closing of a highway which is Turkey’s only land route to the greater Middle East. Orhan states that the implementation of such measures is sure to precede the last resort option of military action. “Armed conflict would be the last, last thing to do for the country,” Orhan stated.

Todays Zaman

Iran army tests defenses as nuclear tensions rise

TEHRAN - The Iranian army is conducting a four-day training exercise
to test its defenses, Press TV reported on Saturday, amid rising
international tensions over Iran's nuclear program.

Iranian state television reported that the war games started on Friday
and were taking place over 800,000 square km in the east of the country.

"The initial stage of the drills will assess the units' performance in setting up primary and secondary command centers and stationing tactical and swift reaction divisions," Press TV said.

Both Israel and the United States say they do not rule out striking Iran militarily if other means fail to stop the nuclear work that Tehran says is entirely peaceful.

However, US Defense Secretary Leon Panetta has played down talk of any such action, warning that a war with Iran would harm the world economy.

The United Nations' nuclear watchdog has expressed "increasing concern" about Iran's nuclear program, after a UN report said the Islamic state appeared to have worked on designing an atom bomb, a charge Iran has repeatedly denied.

Powers united in opposition to nuclear Iran

The White House said on Saturday that Iran is facing an unprecedented degree of isolation, with major world powers united in their opposition to Tehran getting a nuclear weapon.

"Russia, China and the United States I can tell you share a similar goal, and that is to not seeing the Iranians move toward the development of nuclear weapons," US national security adviser Tom Donilon told reporters.

"The degree of isolation really is unprecedented," he said, referring a Friday vote by the United Nations nuclear watchdog IAEA expressing concerns about Iran's nuclearprogram.

US President Barack Obama discussed Tehran's nuclear ambitions with Russian and Chinese leaders last week during an Asia-Pacific summit he hosted in Hawaii.

Jerusalem Post

US Democrats Reject Latest Deficit-Cutting Plan

A high-profile congressional effort to trim stubborn U.S. budget deficits appeared near collapse Friday as Democrats rejected a scaled-back proposal from Republicans that contained few tax increases.

Allan Baxter | Digital Vision | Getty Images

With Democrats and Republicans on a deficit-cutting "super committee" deadlocked ahead of a Wednesday deadline, House of Representatives Speaker John Boehner, R-Ohio, floated an offer to try to break the logjam on tax increases and benefit cuts.

The plan would save $643 billion over 10 years, about half of the panel's goal of $1.2 trillion — but the two sides were unable to even agree what was in the plan.

Boehner aides said it included $229 billion in new revenues and fees. Democrats said it would only generate $3 billion in new revenue from closing a tax break for corporate jets.

"To have something on the table that does not ask the wealthiest people in the country to share (the burden) ... is unconscionable," said Senator John Kerry of Massachusetts, a Democratic member of the super committee.

The panel will need to have a deal in place well before its Wednesday vote.

The panel will work through the weekend if necessary, said Republican Representative Jeb Hensarling of Texas, a committee co-chair. "We are painfully aware of the deadline and it is staring us in the face," he told reporters.

A senior Democratic aide said the two sides are nowhere near an agreement.

But a House Democratic leadership aide said talks were continuing on ideas other than Boehner's plan.

Unlike budget standoffs in April and August, failure would not lead to a government shutdown or a sovereign debt default.

Instead, automatic spending cuts of $1.2 trillion over 10 years, split evenly between military and domestic programs, would kick in starting in 2013.

Congress is already facing rock-bottom approval ratings after a year of down-to-the-wire budget battles, and failure to reach a deal would likely incite further disgust among voters as the 2012 election season heats up.

Bush Tax Cuts A Factor

Many Republicans worry the automatic cuts to military programs could compromise national security. Democrats feel less urgency as programs for the poor and the elderly, such as Medicare and food stamps, would be largely shielded from the cuts.

They also see an advantage as temporary tax cuts enacted under President George Bush are due to expire at the end of 2012 and Republicans are eager to forge a deal that would overhaul the tax code before that time in order to avoid a higher tax burden on the wealthy.

Some Republicans have said they could support tax increases in return for an overhaul of benefits like Medicare , expected to expand dramatically as the population ages. But they face fierce opposition within their own party.

Democrats also hope to include measures to stimulate the struggling economy.

The panel must release any plan it comes up with at least 48 hours before a vote. That would point to Monday as a final deadline, but lawmakers must give budget analysts time to crunch the numbers as well.


Did you know that an average of 23 manufacturing facilities were shut down every single day in the United States last year?

Did you know that an average of 23 manufacturing facilities were shut down every single day in the United States last year?  As World War II ended, the United States emerged as the greatest industrial power that the world has ever seen.  But now America's industrial might is being gutted like a fish and both political parties seem totally unconcerned.  Yes, we will always need trading relationships that are fair and balanced with other countries that have economic systems that are similar to our own.  However, the truth is that most of our trading relationships are neither "fair" nor balanced.  For example, China manipulates currency rates so that Chinese products are much cheaper than they should be, they brazenly steal our technology and we let them get away with it, they deeply subsidize their most important industries and they exploit their citizens by allowing them to be paid slave labor wages.  How in the world does that resemble the "free market" at work?  Predatory nations such as China do everything that they can to distort the free market.  So why in the world would any rational economist ever recommend that we should keep trading with other countries that are cheating us blind?  After you read the facts in this article about the gutting of America's industrial might, hopefully you will get very angry.  We need the American people to start getting very upset about these very important issues.
Both major political parties promised us that globalization would be wonderful for the U.S. economy.  Well, in the first decade of this century less net jobs were created than in any other decade since the Great Depression.
The "free trade" polices of the globalists have been an abysmal failure.  Tens of thousands of factories, millions of jobs, and hundreds of billions of dollars of our national wealth have gone to countries that engage in predatory trade practices and that exploit slave labor pools.
How in the world are American workers supposed to compete against workers that make less than a dollar an hour (with no benefits) on the other side of the globe?
If you support the version of "free trade" that most of our politicians are promoting, then you are supporting the one world economic system that the global elite are trying to establish.  In this one world economic system, American workers will increasingly be forced to compete for jobs with the cheapest labor on the planet.  This will continue to force the standard of living of American workers way, way down and it will continue to absolutely destroy the middle class.
The following are 35 facts about the gutting of America's industrial might that should make you very angry....
#1 According to U.S. Representative Betty Sutton, America has lost an average of 15 manufacturing facilities a day over the last 10 years.
#2 Sadly, it looks like this trend is picking up momentum.  During 2010, an average of 23 manufacturing facilities a day were shut down in the United States.
#3 Since 2001, the U.S. has lost a total of more than 56,000 manufacturing facilities.
#4 According to the Economic Policy Institute, the U.S. economy losesapproximately 9,000 jobs for every $1 billion of goods that are imported from overseas.
#5 The United States has had a negative trade balance every single yearsince 1976, and since that time the United States has run a total trade deficit of more than 7.5 trillion dollars with the rest of the world.
#6 Back in 1979, there were 19.5 million manufacturing jobs in the United States.  Today, there are 11.6 million.  That represents a decline of 40 percentduring a time period when our overall population experienced tremendous growth.
#7 Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.
#8 Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of all jobs in the United States are manufacturing jobs.
#9 The United States has lost an average of 50,000 manufacturing jobs per month since China joined the World Trade Organization in 2001.
#10 The Economic Policy Institute says that since 2001 America has lost approximately 2.8 million jobs due to our trade deficit with China alone.
#11 All over the United States, road and bridge projects are being outsourced to Chinese firms.  Just check out the following excerpt from a recent ABC News article....
In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.
In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.
In Alaska, there is a proposal for a $190 million bridge project.
These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.
"When we subsidize jobs in China, we're not creating any wealth in the United States," said Scott Paul, executive director for the Alliance for American Manufacturing.
#12 If you can believe it, the United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.
#13 The U.S. trade deficit with China rose to an all-time record of 273.1 billion dollars in 2010.  This is the largest trade deficit that one nation has had with another nation in the history of the world.
#14 The U.S. trade deficit with China in 2010 was 27 times larger than it was back in 1990.
#15 The new World Trade Center tower is going to be made with imported glass from China and imported steel from Germany.
#16 The new MLK memorial on the National Mall was made in China.
#17 Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe?  Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts of $110 billion.
#18 In 2010, South Korea exported 12 times as many automobiles, trucks and parts to us as we exported to them.
#19 Even in high technology products we are being destroyed.  In 2002, the United States had a trade deficit in "advanced technology products" of $16 billion with the rest of the world.  In 2010, that number skyrocketed to $82 billion.
#20 China has now become the world's largest exporter of high technology products.
#21 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Ten years later, the United States had less than 15 percent and China's share had soared to 20 percent.
#22 Manufacturing employment in the U.S. computer industry was actually lower in 2010 than it was in 1975.
#23 In 2008, 1.2 billion cellphones were sold worldwide.  So how many of them were manufactured inside the United States?  Zero.
#24 The United States now has 10 percent fewer "middle class jobs" than it did just ten years ago.
#25 Today, American workers are bringing home a much smaller share of economic pie.  Over the past decade, the ratio of wages to GDP has been declining very steadily.
#26 Now that millions of our jobs have been exported, there aren't nearly enough jobs left for all of us.  Right now, the average amount of time that a worker stays unemployed in the United States is approximately 39 weeks.
#27 There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million extra people to the population since then.
#28 If you gathered together all of the workers that are "officially" unemployed in the United States today, they would constitute the 68th largest country in the world.
#29 According to one study, between 1969 and 2009 the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
#30 As the number of good paying jobs declines, America's middle class is rapidly shrinking.  In 1970, 65 percent of all Americans lived in "middle class neighborhoods".  By 2007, only 44 percent of all Americans lived in "middle class neighborhoods".
#31 In the United States today, corporate profits are at a record high, and yet employment numbers have still not rebounded.  Obviously something is structurally wrong.
#32 The Obama administration says that there are certain things that "we don't want to make in America" anymore.  If you don't believe this, just check out what U.S. Trade Representative Ron Kirk recently told Tim Robertson of the Huffington Post about the Obama administration's attitude toward keeping manufacturing jobs in America....
Let's increase our competitiveness... the reality is about half of our imports, our trade deficit is because of how much oil [we import], so you take that out of the equation, you look at what percentage of it are things that frankly, we don't want to make in America, you know, cheaper products, low-skill jobs that frankly college kids that are graduating from, you know, UC Cal and Hastings [don't want], but what we do want is to capture those next generation jobs and build on our investments in our young people, our education infrastructure.
#33 Jeffrey Immelt, the head of Barack Obama's highly touted "Jobs Council",has shipped tens of thousands of good jobs out of the United States.
#34 According to Professor Alan Blinder of Princeton University, 40 millionmore U.S. jobs could be sent offshore over the next two decades.
#35 One recent poll found that 41 percent of all Americans believe that "the American Dream has been lost".
Yes, it is fun to go out and fill up our shopping carts with "cheap products" from the other side of the world, but when we do that it destroys our jobs, our businesses and our communities.
Our addiction to cheap foreign products is incredibly self-destructive.  Essentially what we are doing is that we are ripping apart pieces of our own home and throwing them into the fire in an attempt to keep it going.  Eventually we will cannibalize our entire home.
And we never really think about what it is like for the slave laborers that make all these cheap products for us.  The following is from an article in the Telegraph about what conditions at one major Chinese manufacturing facility are like....
So far, at least 16 people have jumped from high buildings at the factory so far this year, with 12 deaths. A further 20 people were stopped by the company before they could attempt to kill themselves.
The hysteria at Longhua, where between 300,000 and 400,000 employees eat, work and sleep, has grown to such a pitch that workers have twisted Foxconn’s Chinese name so that it now sounds like: “Run to your Death”.
If we stay on this current path, even more of our formerly great manufacturing cities will turn into post-industrial hellholes.
Once upon a time, I also bought the "free trade" propaganda hook, line and sinker.  But then I opened up my mind and I learned the truth.
This nation is losing jobs, factories and wealth at a pace that is almost unbelievable.
Something desperately needs to be done.

Economic collapse