Employment Myth

[agman]

During the past week most of you have been made aware that job growth slowed during May to 78,000 new jobs per the Payroll Survey. What was not mentioned was that the Household Employment Survey reported 376,000 new jobs being created during the month of May. The latter includes new startups and small business hirings from firms generally less than two years old.

Unemployment is now at 5.1%, at or near a "full employment" level. You would not gather that information from the news or headlines. Rather you are being deceived into believing the economy is weak by none other than the political bashers who simply never get it right. A first quarter growth rate of 3.5% is hardly weak. At that growth rate our economy, the world's largest, would double in 20 years to $23 trillion.

While I have made this post to counter the reams of misinformation in the press I must say I am looking for economic growth to slow towards 2.5% over the next year. This is a designed slowdown being engineered by the Fed in order to control inflation. I will not get into the details of this process. Longer term that action will prove to be very "bullish'" the U.S. economy by keeping interest rates down. In turn, low inflation levels will bolster real earnings which is the cornerstone of improving beef and meat demand. That should sound like music to those who consider themselves members of the beef industry. Play your fiddle Haymaker! All of you, have a great day in this greatest of all countries. andy

 

[the chief]

A Threat Greater Than Terrorism



By PAUL CRAIG ROBERTS



Delusion has settled over America. Washington cannot tell fact from fantasy.
Neither can sycophantic media nor nothink economists.



One might easily conclude that Bush is first among the deluded, but the more
one observes economists' romance with outsourcing, the more one wonders if
economists are not the most deluded of all.



Outsourcing converts domestic supplied goods and services into imports. It
divorces Americans from the incomes and careers associated with the
production of the goods and services that Americans consume.



That divorce is highly detrimental for Americans. As foreign labor is
substituted for US labor in the production of tradable goods and services,
the displaced US work force seeks employment in domestic services that
cannot be outsourced. This increases the supply of labor, thus depressing
wages, in those labor markets already impacted by the entry of high rates of
legal and illegal immigration.



By turning domestic production into imports, outsourcing increases the trade
deficit. America pays the import bill by turning over the ownership of her
wealth, and the income streams that wealth produces, to foreigners. Thus,
Americans not only lose jobs and careers but also the ownership of their
companies, real estate, corporate and government bonds. The incomes from
these lost assets pass from Americans to foreigners.



Today America's consumption and the government's budget deficits are
financed by foreigners, principally Asians. There are now so many dollars in
foreign hands that the willingness of foreigners to hold more is declining.
For the past three years foreign central banks have been diversifying their
reserve holdings away from dollars into other currencies.



The result has been to drive the value of the dollar down sharply against
many other currencies. As prices adjust to the changed currency values,
Americans become poorer.



When economists preach that America benefits from outsourcing, they deny all
the hard facts, just as do Republicans when they proclaim "success" in Iraq.
How does America benefit from a process that destroys jobs, lowers incomes,
and reduces the exchange value of the dollar?



What outsourcing is doing for America is destroying entire sectors of US
manufacturing, entire high tech occupations, the value of a college
education, the design and innovative capabilities of the US economy, and the
dollar as reserve currency. This is a lot of destruction. It goes far beyond
what terrorists can inflict.



So far in the 21st century, the US has experienced a net loss of jobs. Fewer
Americans are employed today than when President Bush was first inaugurated.
This has not happened since the Great Depression in the 1930s.



When economists claim that the US is made better off by outsourcing, they
ignore the evidence of job loss, stagnant incomes, and a collapsing dollar.



A perfect example is a recent "study" by three economists reported in the
March 21 issue of Barron's. The economists used economic models to calculate
the benefits to Americans of outsourcing. An economic model is comprised of
assumptions about relationships. Many relationships are historical and
reflect America's post-World War II economic dominance, which is no longer
the reality.



The economists concluded that the benefits to Americans from outsourcing
ranged from $7,100 to $12,900 per household.



According to the Bureau of Labor Statistics, the average hourly wages of
private, nonfarm, nonsupervisory production workers produced an annual
income of $33,072 as of February 2005.



Only economists completely detached from reality could believe that American
households owe such a large percentage of income to outsourcing, which is
threatening them with a depreciating currency and the loss of their jobs and
careers.



One of the dumbest defenses of outsourcing is the claim that history shows
that America benefits from free trade. First of all, there has been precious
little free trade. Economists mean that America has benefitted from trade
during the decades following World War II when the rest of the world was
recovering from war or smothered in socialism. It is easy to benefit from
trade when you are the only economy.



Second, outsourcing is not trade; it is labor arbitrage. Outsourcing is a
new phenomena birthed by the collapse of world socialism and the rise of the
high speed internet. It reflects the operation not of "comparative
advantage" but of "absolute advantage" --the flow of capital and technology
across borders to the cheapest labor. Outsourcing is the substitution of
foreign labor for domestic labor. It reduces the demand for domestic labor
and drives down incomes.



The Great Depression took a terrible toll on the credibility of economists,
who failed to grasp that the Federal Reserve had shrunk the supply of money
by one-third. Outsourcing the American economy will take a larger toll on
economists' reputations. Once the economy is outsourced, America is a third
world country.



Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan
administration. He was Associate Editor of the Wall Street Journal editorial
page and Contributing Editor of National Review.

 

[agman]

A Threat Greater Than Terrorism



By PAUL CRAIG ROBERTS



Delusion has settled over America. Washington cannot tell fact from fantasy.
Neither can sycophantic media nor nothink economists.



One might easily conclude that Bush is first among the deluded, but the more
one observes economists' romance with outsourcing, the more one wonders if
economists are not the most deluded of all.



Outsourcing converts domestic supplied goods and services into imports. It divorces Americans from the incomes and careers associated with the production of the goods and services that Americans consume.



That divorce is highly detrimental for Americans. As foreign labor is
substituted for US labor in the production of tradable goods and services,
the displaced US work force seeks employment in domestic services that
cannot be outsourced. This increases the supply of labor, thus depressing
wages, in those labor markets already impacted by the entry of high rates of legal and illegal immigration.



By turning domestic production into imports, outsourcing increases the trade deficit. America pays the import bill by turning over the ownership of her wealth, and the income streams that wealth produces, to foreigners. Thus, Americans not only lose jobs and careers but also the ownership of their companies, real estate, corporate and government bonds. The incomes from these lost assets pass from Americans to foreigners.



Today America's consumption and the government's budget deficits are
financed by foreigners, principally Asians. There are now so many dollars in foreign hands that the willingness of foreigners to hold more is declining. For the past three years foreign central banks have been diversifying their reserve holdings away from dollars into other currencies.

The result has been to drive the value of the dollar down sharply against
many other currencies. As prices adjust to the changed currency values,
Americans become poorer.


When economists preach that America benefits from outsourcing, they deny allthe hard facts, just as do Republicans when they proclaim "success" in Iraq.
How does America benefit from a process that destroys jobs, lowers incomes, and reduces the exchange value of the dollar?


What outsourcing is doing for America is destroying entire sectors of US
manufacturing, entire high tech occupations, the value of a college
education, the design and innovative capabilities of the US economy, and the dollar as reserve currency. This is a lot of destruction. It goes far beyond what terrorists can inflict.



So far in the 21st century, the US has experienced a net loss of jobs. Fewer Americans are employed today than when President Bush was first inaugurated. This has not happened since the Great Depression in the 1930s.



When economists claim that the US is made better off by outsourcing, they
ignore the evidence of job loss, stagnant incomes, and a collapsing dollar.


A perfect example is a recent "study" by three economists reported in the
March 21 issue of Barron's. The economists used economic models to calculate the benefits to Americans of outsourcing. An economic model is comprised of assumptions about relationships. Many relationships are historical and reflect America's post-World War II economic dominance, which is no longer
the reality.



The economists concluded that the benefits to Americans from outsourcing
ranged from $7,100 to $12,900 per household.



According to the Bureau of Labor Statistics, the average hourly wages of
private, nonfarm, nonsupervisory production workers produced an annual
income of $33,072 as of February 2005.


Only economists completely detached from reality could believe that American households owe such a large percentage of income to outsourcing, which is threatening them with a depreciating currency and the loss of their jobs and
careers.



One of the dumbest defenses of outsourcing is the claim that history shows that America benefits from free trade. First of all, there has been precious little free trade. Economists mean that America has benefitted from trade during the decades following World War II when the rest of the world was recovering from war or smothered in socialism. It is easy to benefit from trade when you are the only economy.



Second, outsourcing is not trade; it is labor arbitrage. Outsourcing is a new phenomena birthed by the collapse of world socialism and the rise of the high speed internet. It reflects the operation not of "comparative advantage" but of "absolute advantage" --the flow of capital and technology across borders to the cheapest labor. Outsourcing is the substitution of foreign labor for domestic labor. It reduces the demand for domestic labor
and drives down incomes.



The Great Depression took a terrible toll on the credibility of economists,
who failed to grasp that the Federal Reserve had shrunk the supply of money by one-third. Outsourcing the American economy will take a larger toll on economists' reputations. Once the economy is outsourced, America is a third world country.



Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan
administration. He was Associate Editor of the Wall Street Journal editorial
page and Contributing Editor of National Review.

His comments are interesting except they and you keep missing the point. The economy has not tanked nor will it tank for the reason cited. What will tank the economy; "stupid protectionism".

How many jobs are being created despite his claim? How many net jobs when in-sourcing is counted are actually lost? What is the rate of economic growth? What is the rate of inflation? I am willing to bet when the dollar was strong, "overvalued" by most estimates he complained about that also. Have our exports increased or decreased, contrary to his expectation? What is our rate of economic growth versus other countries which post a trade surplus? Facts and results are what count, not unsubstantiated rhetoric.

On virtually every point that he makes he would be shot so far out of the saddle you would never hear for him again.

 

[Anonymous]

"Statistics are like a bikini- what they reveal is suggestive, but what they conceal is vital."

An Unknown Reformed Beancounter

 

[Anonymous]

Chief,

If "free trade" is bad for the cattlemen, why did we have an average 7 year trade surplus in live cattle, beef, beef variety meats, and hides to the tune of $1.3 "BILLION" dollars prior to BSE closing the Canadian border to live cattle???

HOW CAN THAT BE POSSIBLE listening to the "gloom, dispair, and agony on me" song of the "isolationists"?????

The facts from the Dept. of Commerce - Bureau of Census shatters the NAFTA lies told by those who are "afraid to trade".




~SH~

 

[agman]

"Statistics are like a bikini- what they reveal is suggestive, but what they conceal is vital."

An Unknown Reformed Beancounter

You are right, and in the case of Mr Roberts he fails to address what is vital-RESULTS. You can bitch and moan all day OT but the RESULTS defy the predicted outcome from his claims. At what point do you realize that the economic naysayers are simply wrong? When do FACTS and RESULTS outweigh rhetoric? The RESULTS on virtually every position he describes and takes prove him wrong. RESULTS trump rhetoric every time unless one is such an ideologue that they remain blinded to the actual outcome. For me, I will pay attention to and focus on the results.
You can continue with your daily ritual of negativism.

 

[Tam]

Outsourcing converts domestic supplied goods and services into imports. It divorces Americans from the incomes and careers associated with the production of the goods and services that Americans consume.

By turning domestic production into imports, outsourcing increases the trade deficit.

How does America benefit from a process that destroys jobs, lowers incomes, and reduces the exchange value of the dollar?
What outsourcing is doing for America is destroying entire sectors of US manufacturing, entire high tech occupations, the value of a college
education, the design and innovative capabilities of the US economy, and the dollar as reserve currency. This is a lot of destruction. It goes far beyond what terrorists can inflict.

Once the economy is outsourced, America is a third world country.

Like in BEEF, when the Government tried to stop the outsourcing of the Packing industry jobs, R-CALF took them to court and now even more US jobs are being outsourced. Canada'a packing industry is still growing and soon will not need any of the slaughter capacity that the US once supplied to harvest the Canadian cattle herd. In time we may even be processing US cattle. What will it do to the US economy? It is not just the government that is responcible for outsourcing jobs. These outsourced jobs were caused by the greed of a protectionist group that can't see pass they own calf check and see what they are doing to their economy. Canada will come out of this with a up to date high tech slaughter industry and the US will have to compete with Canada in the World markets instead of beneifiting from our over supply of cattle. R-CALF keeps it up and you will be one step closer to the third world status this guy talks about.

 

[the chief]

Question to chief: If "free trade" is bad for the cattlemen, why did we have an average 7 year trade surplus in live cattle, beef, beef variety meats, and hides to the tune of $1.3 "BILLION" dollars prior to BSE closing the Canadian border to live cattle???


What percentage of that "surplus" belonged to the "producer" PRIOR to BSE in Canada? Weren't most producers "breaking even" prior to the BSE event?

But I'm sure I'm wrong.

As for the above editorial, it is someone's opinion based on that economists' analysis. But since it doesn't agree with your belief, then he MUST be wrong. :wink:

 

[Anonymous]

Chief: "What percentage of that "surplus" belonged to the "producer" PRIOR to BSE in Canada?"

All of it minus processing expenses and a small profit margin per head for packers.

If you don't think the packers pass on additional profits then perhaps you would like to explain why live cattle prices track with boxed beef prices?

Want to know what the GIPSA per head profit data was for the 5 major packers through the 90's?

$3.88 per head and you packer blamers bitch about that?

Heck, I used to give up $20 a head to the Livestock Marketing Police before I started retaining ownership on my calves to capture an additional $50 + the $20 per head I didn't have to give the checkoff blamers.


Chief: "Weren't most producers "breaking even" prior to the BSE event?"

Yes and what has happened to consumer demand since then?

Want proof?

Look no further than the fact that fat cattle prices continued to rally after Canadian boxed beef imports resumed?

That fact doesn't fit your import blaming mindset does it?


Chief: "But I'm sure I'm wrong."

You are!


Chief: "As for the above editorial, it is someone's opinion based on that economists' analysis. But since it doesn't agree with your belief, then he MUST be wrong."

It all comes down to facts and truth. Everyone is entitled to their opinion but there is only one right opinion and that's the opinion that facts will support.




~SH~

 

[agman]

Question to chief: If "free trade" is bad for the cattlemen, why did we have an average 7 year trade surplus in live cattle, beef, beef variety meats, and hides to the tune of $1.3 "BILLION" dollars prior to BSE closing the Canadian border to live cattle???


What percentage of that "surplus" belonged to the "producer" PRIOR to BSE in Canada? Weren't most producers "breaking even" prior to the BSE event?

But I'm sure I'm wrong.

As for the above editorial, it is someone's opinion based on that economists' analysis. But since it doesn't agree with your belief, then he MUST be wrong. :wink:

It is not a question of whether I agree with him or not. It is a question whether the facts and ultimate results confirm or support his opinion. As I previously stated, on virtually every account the actual results differ from the experted outcome per his opinion. Does that make the results wrong or do those results make his opinions wrong? It is clearly the latter. Only an ideologue would fail to recognize and acknowledge the expected results failed to materialize.

Regarding your question as to who shared in the net trade surplus. The entire beef industry did in that overall prices were higher than would otherwise have existed. You will soon find this out once domestic beef production starts to increase and we no longer capture the benefit of added value. By closing the boarder protectionists have ceded a large portion of the previously earned benefits from "added value" to the Canadian beef industry.

 

[the chief]

Chief: "What percentage of that "surplus" belonged to the "producer" PRIOR to BSE in Canada?"

SH: All of it minus processing expenses and a small profit margin per head for packers.



Did you ever consider writing for Jay Leno? :lol: :lol: :lol:

 

[agman]

Chief: "What percentage of that "surplus" belonged to the "producer" PRIOR to BSE in Canada?"

SH: All of it minus processing expenses and a small profit margin per head for packers.



Why do you think you should recieve any of the benefits at all
if you did nothing to capture the "added value"?

 

[Sandhusker]

Mike posted a very good article on the antiquity of our grading system. If a producer took note and went thru the expense of improved genetics, handling systems, ect.... and the feeder also changed their operation, it seems the packer would benefit along with them when more folks got a better beef experience and came back for more - and what would they have done to justify a share in this added value?

 

[agman]

Mike posted a very good article on the antiquity of our grading system. If a producer took note and went thru the expense of improved genetics, handling systems, ect.... and the feeder also changed their operation, it seems the packer would benefit along with them when more folks got a better beef experience and came back for more - and what would they have done to justify a share in this added value?

Their added return should be proportional to their added contribution. Why do you think so many progressive producers are involved in marketing agreements? If it did not pay they would not be involved-it no more complicated than that.

 

[Sandhusker]

Agman, "Their added return should be proportional to their added contribution."

OK. So a producer spends on high quality replacements and starts buying pricy bulls or goes to the added expense and labor of AIing - what is the packer's added contribution?

 

[Anonymous]

Let's analyze your "HUGE PACKER PROFIT" blaming logic shall we?


Chief (original question regarding our trade surplus position prior to BSE): "What percentage of that "surplus" belonged to the "producer" PRIOR to BSE in Canada?"

SH (in response): "All of it minus processing expenses and a small profit margin per head for packers."

Chief (in response): "Did you ever consider writing for Jay Leno?"


As always, when the packer blamer finds himself caught short with facts to support his position, which is the norm, they resort to some discrediting statement as opposed to supporting their position with facts.

Same-O packer blamer's "comfort zone".


By your response it's safe to assume you believe that packers maintain this trade surplus for themselves right?

Lets analyze that!

Amazingly, you flip flop and contradict that position with your position on "M"COOL returning the value of U.S. "born, raised, and processed in the U.S. beef" to the producer.

To stay consistant in your arguments, am I to believe that you support "M"COOL for the packer's benefit?

If not, then the packer obviously passes added value on to the producer in the form of higher cattle prices.

ANOTHER CONFLICTING ARGUMENT FROM THE PACKER BLAMING CROWD.


Why do the packers pay a $4/cwt premium for CAB on the grids if they keep the added value for themselves?

Why does live cattle prices track with boxed beef prices?

If you are so convinced that the packers are making "HUGE PROFITS" off the backs of hard working independent producers, why haven't you invested your money in a packing company like Mike Callicrate did?

If packers and retailers are making the $400 per head that Mike Callicrate talks about, why is Mike only paying a top premium of $50 per head for fat cattle and charging 10% - 15% more money for the beef and yet to realize a profit?

Are you going to try to convince me that he is $400 per head less efficient than the larger packers?

Better yet, why has Mike's "Born, Raised, and Processed in the U.S." branded beef products suffered from "consumer apathy" according to an interview with Mike in R-CULT's publication when you guys have stated that consumers would prefer U.S. product?

Mike didn't lie in the R-CULT publication like he did under oath in Pickett did he?

If packers do not have to pass added value on to the producer, WHY DO FAT CATTLE PRICES RAISE? Periods of packer generosity?


You won't answer any of these questions.

It's obvious why you resort to discrediting statements rather than entering the debate from a factual merit.

YOU CAN'T SUPPORT YOUR POSITION because you have nothing to support it with but packer blaming rhetoric.


You better continue talking about me instead huh?


~SH~