Tuesday, March 27, 2012

More disinformation



Robert Reich was Secretary of Labor in the Bill Clinton Administration.  Robert Reich has over 26,000 followers on Facebook.

Looking recently at comments from a few dozen of his followers, it is evident at least in this small sample that these people really admire him and even want him to run for President in 2016.  Many of the comments also mention Hillary Clinton and how much they admire her and how brave she is.

Reich's followers should look a little more carefully before deciding whom to admire!

A comment by Robert Reich

Reich published an article on February 17, 2012, with the title "Manufacturing Illusions".

About one-third of the way through the article, there is a short paragaph.  Here is the full text of this paragraph:

"Bringing back American manufacturing isn't the real challenge, anyway.  It's creating good jobs for the majority of Americans who lack four-year college degrees."

What Americans understand and believe

Polls show the ordinary people of America understand and believe that we have to greatly increase domestic manufacturing in order to save the economy, and, for that matter, to save America.

Obviously it is difficult to get domestic manufacturing going again, faced with unrestricted imports.  A further challenge is refusal of large stores such as Walmart to at least give consumers a choice by displaying Made-in-USA goods, readily available from thousands of existing American manufacturers, next to displays of Made-in-China goods.

Outrageous disinformation

Where is Reich coming from when he says "Bringing back American manufacturing isn't the real challenge, anyway."?

Reich loves these convoluted sentences that are impossible to understand.  Is he saying it is easy to bring back American manufacturing?  Or is he saying that it is not necesssary and in fact irrelevant to bring back American manufacturing?

Reich's statement is an outrageous example of purposeful disinformation, of purposely injecting confusion into the American debate about jobs and the economy.  Reich's statement is absolutely false on numerous levels.

I say "bringing back American manufacturing" is difficult to accomplish but at the same time it is of life and death importance that we in fact bring back American manufacturing.

"Bringing back American manufacturing" IS the real challenge because manufacturing is the only sector of the economy that provides:

+  value-added effect, subtly but strongly enriching the economy

+  multiplier effect, i.e. business firms that supply the manufacturing facility

+  ripple effect creating jobs throughout the economy, requiring a wide variety of skills and levels of education

+  reduction of the hemorrhage of wealth out of our country, currently running at over $500 billion per year, that pays foreign countries to do our manufacturing for us

Reich's next disinformation howler

In this short two-sentence paragraph, Reich hits us with a second piece of outrageous disinformation:

"It's creating good jobs for the majority of Americans who lack four-year college degrees."

Again the convoluted sentence.  What is Reich trying to say here?  Is he saying that all Americans with four-year degrees have jobs?  And the corollary that only people without four-year degrees are having difficulty finding jobs?

The second sentence in this little two-sentence paragraph is another absolutely false statement from Reich, in and of itself, and when coupled with the first sentence.  The manufacturing sector is exactly and specifically a very good place to create employment for Americans of all skills and educational levels.

To "create good jobs" we have to increase the size of the American domestic manufacturing sector.  Reich and others use the word "good" to mean "good wages".  They try to show that pursuing manufacturing is not worthwhile because new manufacturing jobs won't pay very well.  I say a moderate wage is better than ZERO wages.

Is Reich making the nonsensical statement that Americans who lack four-year degrees have no place in manufacturing?  What about Americans with a two- or three-year technical diploma in design, operation, and maintenance of robotic equipment?  What about Americans with technical training in programming and operation of sophisticated machine tools?

On the subject of college degrees, Reich is either completely out of touch with reality or is purposely making false statements.  I guess Reich has no grandchildren who recently received college degrees.  If he did, he would know that Americans with four-year college degrees, especially recent graduates, are finding it almost impossible to find employment.

Why is Reich pouring out disinformation?

China is very concerned about possible recovery of the American manufacturing sector.

The reason is obvious.  China does not want to lose its best customer.  Even a 10% reduction in American purchases of Made-in-China goods would create havoc in the Chinese economy.

Therefore China has enlisted prominent Americans to "dis" American manufacturing, i.e., create disrespect for American manufacturing and downplay its importance.  In effect, China has hired lobbyists.  Two important lobbyists are Robert Reich and Hillary Clinton.

Downplaying the importance of manufacturing in America is clearly evident in Reich's little two-sentence paragraph.

Of course Reich is not the only American who is working against his or her own country in this way.  There are others.  For an example please see my blog post http://edfarkasjobs.blogspot.com/2012/03/disinformation.html

Reich's disinformation/disrespect event discussed herein is not the first one.  A few months ago, Reich supported an obviously false analysis that tried to show that China's involvement in the American economy is only 2.7%.  Please see my blog post http://edfarkasjobs.blogspot.com/2011/08/new-venture-into-fantasy-land.html for details.

Reich also made the outrageous statement that "China merely assembles".  I say if "assembly" is so "mere", why can't we do the "assembly" here in America?

Bulletin!  Stop the presses!  The American Economics Association has adopted a new rule stating that economists must disclose who funded their work. I say that this new rule is a clear admission that economists are prostituting themselves.

Is Robert Reich funded by China?

Why do I mention Hillary Clinton?

Hillary Clinton made a speech in January 2011 about China.  This speech is full of false and incorrect statements and is essentially a cheerleader speech in favor of China.

In working against her own country in this way, Hillary Clinton puts herself in a conflict of interest in terms of her job as Secretary of State in the United States government.  She can't be simultaneously working for the United States and for China.  She can't operate with divided loyalties.  She must resign from one of her two jobs.

Please see my blog post http://edfarkasjobs.blogspot.com/2011/05/americas-fantasy-relationship-with.html for a complete analysis of Hillary Clinton's speech, childish in many ways but also very dangerous and damaging in terms of the level of disinformation.

What is the bottom line here?

It is only plain common sense that we have to cut imports and increase the size of the domestic manufacturing sector, in order to save America.

Why haven't we moved decisively in this common sense direction?  The reason is that too many Americans, especially Americans who have power or influence, have more loyalty to China and their own wealth and position, than they have to the ordinary people of America.

Tragically, for some reason these people of wealth and power don't understand that they could keep their positions in a prosperous America as well as in the present impoverished America with 25 million unemployed.   



Tuesday, March 6, 2012




Three or four years ago I saw an older gentleman, an economics professor from University of Maryland, interviewed on CNN.  They gave the man about 10 seconds.  He said we have to increase manufacturing in USA to solve our deficit and unemployment problems.

Since then I have not seen or heard even one constructive statement from any economist.  They either keep their heads down, staying out of the most serious economic issue since America was founded, or they come up with disinformation.

Providing disinformation is treason, simple as that.  Disinformation delays solving the problem of deficits and unemployment.  Disinformation creates confusion in the minds of the American people as to what should be done.

What has to be done to solve the problems is cut imports and increase domestic manufacturing, just as the professor from University of Maryland said three or four years ago.  Every day we delay in implementing these ideas damages America in multiple ways. 

Here is what happens every day:

+  Another net $1.4 billion hemorrhaging out of our country to foreign countries to pay them to do manufacturing we could be doing here.

+  China and other foreign countries become richer by $1.4 billion every day while we become poorer by $1.4 billion every day.

+  China and other foreign countries buy up another chunk of our economy and gain further control of our economy.

+  China gains further control of "leaders" in American business and government so that the ordinary working men and women of America have less and less say in our political debate about how to save the American economy.

What do the rich and powerful people of America want?

It seems the rich and powerful people, the heads of corporations, etc., want America to fail.  Why or how they would benefit from a failed and wrecked America I do not know.  I hope they understand that keeping the lid on the true factual situation, and allowing disinformation to run rampant, will cause America to fail.

A new low in disinformation

Or maybe I should refer to it as a new high, because I want to talk about a new case of disinformation which is even more outrageous than previous instances I am aware of.

There was an article in Wall Street Journal (WSJ) on March 3, 2012.  (Or maybe the correct date is March 2.)  Title of the article:

"Economists assail campaign proposals to help factories"

Here are some passages from the first couple of paragraphs of the article:

"Proposals by...(the President and by Republican candidates)...to promote manufacturing are running into skepticism among economists who doubt modern factories can churn out many new jobs."

"Critics of such proposals say the rise in manufacturing employment of the past two years is more a blip than a trend."

The article quotes Susan Lund of the McKinsey Global Institute:  "If job creation is your goal, manufacturing is probably not the sector you'd look to."

One initial comment.  The statement "more a blip than a trend" is absolutely outrageous.  It is gratuitous negativity, with no factual basis.  Only by being a very accurate predictor of the future can anyone tell whether it is a blip or a trend.  It demonstrates my point that there are people who want America to fail.

More generally, I have the strong suspicion that the above three statements come from Americans aligned with China.  China is very afraid of the increasing level of manufacturing in America.

If America were to throw off the chains of China, it could be that other western countries, UK, EU, Canada, Australia, New Zealand, would also get brave and do the same thing.

In numerous western movies, a man finds a valuable gold deposit.  He tries to scare people away from the area by making ghostly noises at night or creating images of fierce animals.  Similarly, the three statements quoted above are transparent and flimsy attempts to scare America away from pursuing increased levels of domestic manufacturing.

Let's look at more gems

The statement that new manufacturing will not create significant numbers of jobs is absolutely false.

At another point in the article Ms Lund says "increasingly factories are not assembly lines with lots of people standing around".  This demeaning and insulting statement is another way of saying the same thing and is irrelevant if not absolutely false.

It is a known principle of economics, stated and re-stated in every textbook, that manufacturing has a ripple or multiplying effect.  Even if it is true that the number of workers in the factory that completes the manufacturing process is smaller, there are still the suppliers.  The suppliers manufacture components and ship them to the factory.  Other suppliers design, manufacture, install, and service the robotic equipment and the automation equipment.

Then the factory itself requires designers, engineers, and personnel in human relations, purchasing, sales, and other categories.

Surely we would rather have all this activity at home here in America, even at a reduced level per unit of output, rather than a ZERO level due to doing the manufacturing in China.

Manufacturing is probably not the sector you'd look to

Ms Lund's statement that "manufacturing is probably not the sector you'd look to" is absolute nonsense.  No other sector in the economy provides the benefits I mention above, and I've hardly begun listing all the benefits!

There is simply no other sector "you'd look to"!

Everyone respects honest work.  The truck driver, the forest ranger, the librarian, the bus driver, the fireman/woman, the hotel chambermaid/man, the gardener, the city clerk helping people, the police officer, the teacher, the nurse, the doctor, do work vital to our well-being.  But in economic terms, these sectors do not provide the benefits provided by manufacturing.

Even if manufacturing returning to America produces fewer new jobs than we might expect, we still get HUGE benefits.

All these people claiming to be economists are clearly not aware of, or don't want to be aware of, a simple fact of economics:

There is a value-added effect, or it can be termed a wealth-creation effect, inherent in manufacturing.  For a given level of output, the value-added effect is the same whether 100 workers or 10,000 workers are required.

The value-added effect subtly but strongly enriches the economy.

In a 50-year fit of insanity, 1962 to 2012, we sent huge amounts of manufacturing activity away to foreign countries.  Thereby we lost a huge amount of the value-added effect of manufacturing.

Result?  We became impoverished while China and other foreign countries became enriched.

Our trade deficit

Our trade deficit in manufactured goods with all foreign countries is over $500 billion per year.

This number is available in publications coming out of the Congressional Research Service and the Bureau of the Census.

$500 billion divided by 365 days in the year provides the $1.4 billion figure (rounded), that I mention above.

Our huge trade deficit is never mentioned by politicians.  Reason: it is too scary to deal with or maybe they don't understand it.  Also, many economists produce the disinformation that the trade deficit is a theoretical figure and is not a real cost we are paying.

All we have to do is look at impoverished America, and compare with rolling-in-money China, to see that the economists are way off base, again.

If we bring manufacturing back to America, and/or if we cut imports to encourage new manufacturing to spring up in America, even if we don't have huge job creation we still lessen the amount of money that hemorrhages out to foreign countries.

Isn't it obvious that reducing the hemorrhage is going to help America?  It's plain common sense!

But the doom/gloom sayers, the people who enjoy seeing failure, the twisted people who want America to fail, don't see it.

PS: I could write an article longer than the WSJ article, demonstrating the nonsense of a dozen more points made in the article.  But maybe the brief discusssion above demonstrates the tone of the article.  Does WSJ want American to fail?