A sane jobs policy - end foreigner work visas

Good article in the Epoch Times about the details of visa programs that bring in foreign workers to take domestic jobs.    In this time of super-high unemployment, why is this still going on? 

 

Of course, the answer to that question is obvious: it lowers costs for corporations. 

 

Read up on the details of the programs.   It is quite amazing that there are no provisions within these programs to protect American workers, or even requiring that corporations prove that domestic workers are unavailable.  The programs are simply blank checks for corporations to undermine domestic wages   

 

Will Obama's eagerly awaited new jobs policy include this basic step?    We shall see, but his established preferential treatment of corporate interests leaves scant basis for optimism. 

 

quoting from the article:

 

The unemployment rate in the United States still hovers around 9.1 percent, yet the U.S. federal government still allows companies to bring in foreign workers under its foreign worker programs with the excuse that local talent is not available.

The most debated programs are the H-1B, H-2B, L-1, OPT, J-1, and B-1 visas, under which a U.S. company can employ a foreign worker for up to six years. Each visa designation addresses a different need, with the H-2B visa allowing a company to bring in a foreign worker who lacks the qualification for a specific job but can be trained within a reasonable time.

During good economic times these programs helped people come to the Unites States, but over the years, and especially during the recent economic downturn, these programs stop Americans from getting jobs because they are lost to foreign workers that entered the country on the above foreign worker programs, according to a 2011 report by the Government Accountability Office (GAO).

 

"Loopholes in these programs have made it too easy to bring in cheaper foreign workers with ordinary skills, who directly substitute for, rather than complement, workers already in America. They are clearly displacing American workers and denying them both current and future opportunities," testified Ronil Hira, professor at Rochester Institute of Technology, before a U.S. Senate subcommittee hearing in July.

The 2011 GAO report suggested that lax oversight and statutory changes are undermining the original intent and value of the foreign guest worker program. Besides, it has become easy to perpetrate fraud.

"A recent Department of Homeland Security study reported that 21 percent of the H-1B petitions they examined involved fraud or technical violations," said the GAO report.

Over the past years, the programs have been watered down significantly and it gives an unintended competitive advantage to companies that outsource well-paying and high-tech jobs to foreign shores.

"For at least the past five years the employers receiving the most H-1B and L-1 visas are using them to offshore tens of thousands of high-wage, high-skilled American jobs," testified Hira.

read more:

 

http://www.theepochtimes.com/n2/business/the-curious-case-of-vanishing-us-jobs-60964.html

 

 

 

Harvard economist Kenneth Rogoff calls for (almost) Jubilee to defeat the Debt-caused Depression

All analysis is in agreement about the basic macroeconomic problem: too much debt.  The need to write off massive amounts of debt is macro-economically obvious.  Interestingly, Rogoff is facing the exact same stale arguments that I faced years ago when I formulated the Jubilee plan:

 

Rogoff understands this objection, and doesn't dispute that what he's proposing is on some level unfair. But ultimately, he argues, this contraction is dragging us all down together, and even those lenders and savers will be better off if America's debt overhang is taken care of swiftly. Once that happens, and the economy starts to recover properly, we'll be able to focus on designing better policies that will make us less vulnerable to financial crisis in the future.  "One way or another," said Rogoff, "we're going to be doing things we would not dream we would ever do before this is over."

 

Now the irony of Rogoff's statement is that he really isn't proposing anything "we would not dream we would ever do".  After all, cranking up a little bit of inflation is hardly world-shaking.  The Jubilee solution is a true example of something that most people have never dreamed. 

 

The Jubilee Solution

The Jubilee solution is radical in the sense of "creative" and "out-of-the-box", but it actually avoids most of the objections he is facing.

--For example, the Jubilee solution does not defraud any creditors or violate any contracts.  In fact, it is based on the idea of honoring all of them and paying them off.

--Nor would the Jubilee solution cause any inflation, as raising reserve ratios would soak up the potential extra liquidity, trapping it within the banking system.  

Again quoting from the Boston.com article, we see that Rogoff shares the same analysis as myself (and other fringe economists like Steve Keen) of our current economic problem:

 

It's an argument that Rogoff himself admits is "radical," and one he says he'd rather not be making. But as he sees it, what's holding the country back from recovery is not just a lack of consumer confidence or suppressed demand, as in a normal recession, but an immense overhang of debt: thanks to the collapse of the real-estate bubble, millions of American families owe so much to banks that they're focusing all their energy on paying down their debts instead of spending their money on new investments. There will be no recovery until the painful process of working through that debt is behind us, Rogoff argues.

The full article here http://articles.boston.com/2011-08-28/news/29938939_1_inflation-rate-financial-crisis-economy

 

Jubilee Solution Summarized

Federal government issues electronic checks to pay off all debt.  Simulaneously raising banking reserve requirements by a proportionate amount to soak up the money.

Viola.  All debts paid, economy reset and primed to soar again.

It is really that simple. 

The only thing lacking is general knowledge of the plan and the political will.  

[The people in charge of the gov't now, who are the rentier/creditor class, don't care at all about anything but personal enrichment, which the current debt deflation is accomplishing marvelously by liquidating the assets of the masses into the hands of the creditors and cash-holders, i.e. themselves.]

 

 

 

Loss of Manufacturing Equates to Loss of Innovation

Excellent article over at Forbes on why high-tech manufacturing is so important to keep "in-house", yet the standard rules of business lead to the economically-destructive practice of out-sourcing.

http://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/

excerpt:

Dell accepted the proposal (to outsource circuit boards) because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. On successive occasions, ASUSTeK came back and took over the motherboard, the assembly of the computer, the management of the supply chain and the design of the computer. In each case Dell accepted the proposal because from a perspective of making money, it made sense: Dell’s revenues were unaffected and its profits improved significantly. However, the next time ASUSTeK came back, it wasn’t to talk to Dell. It was to talk to Best Buy and other retailers to tell them that they could offer them their own brand or any brand PC for 20% lower cost. As The Innovator’s Prescription concludes:

Bingo. One company gone, another has taken its place. There’s no stupidity in the story. The managers in both companies did exactly what business school professors and the best management consultants would tell them to do—improve profitability by focus on on those activities that are profitable and by getting out of activities that are less profitable.

The Truth about the $1.2 Trillion Bank Bailout - government of, by, and for the Rich

First, the amount: 1.2 Trillion dollars.  Quite a sum of money.  To put it in perspective, that is just a bit over $10,000 per household in the U.S.    In other words, instead of bailing out the banks (many of them foreign banks, btw), the Fed could have given over 10K to each and every household in the country to stimulate the economy.

 

This money wasn't a gift though, it was a loan, so, in fairness, we can't compare it to a "stimulus check" program.   To put it in a personally meaningful analogy, here is what happened:

 

A Real-world Analogy of the Lending Program 

 

Imagine that you hit a financial "rough patch" and can no longer generate the cash to pay your bills.   The bill collectors are calling every day, but you don't have the money to pay them, and the bank, seeing what poor condition you are in, refuses to give you a short term loan to cover your expenses. 

 

In short, your income has fallen and your credit has dried up, and you cannot pay your bills.  You are about to face bankruptcy, forced liquidation, and financial ruin.    

 

But.... imagine then the Fed steps in, and tells you about a new program they have: you can borrow money directly from them, at around 1% interest.  The only catch is, you need to put up some collateral. 

 

Your house and your car are already mortgaged, though, so you don't really have much good collateral to lend against.  The Fed says, no problem, we'll let you use "non-standard" collateral.  So you start listing whatever you've got: a couple TVs, your furniture, your DVD collection, your old fridge, whatever.   Amazingly, lo and behold, violating all the standard rules for acceptable collateral, the Fed accepts it!  

 

So: the Fed lets you write the value of all your junk as collateral on their 1% loans.   You then take their money at 1%, use the money for living expenses, and pay off your bills. 

 

It's pretty cool, because you pay off your high-interest mortgage, car loan, and credit cards with the low-interest Fed loan.  You are even able to live on the loans during your extended period of unemployment.   It takes awhile, but within a year, you land another job and your finances improve.  You start paying off the Fed loan, and two years later, the Fed loan is paid off.  

 

That is precisely what the Fed lending program amounted to, although, of course, it was done for the benefit of the wealthy bankers, not for any urban peasant such as yourself.    

 

Good Thing?  or Bad Thing?

 

As noted by other analysts, this is a classic case of "Welfare for the Rich, Harsh Capitalism for the Rest."    But, nonetheless, we may ask, was it the right thing to do?  Did it save society from some sort of economic apocalypse?  

 

The short answer is NO.  Banking and lending are parasitic economic activities, meaning, they do not create wealth.  Keeping them alive is like providing life-support to the colony of fleas on the dog.   Even if you don't understand the economic theories, you can see the results since 2008: years of economic decline and stagnation, incomes falling, inflation and unemployment rising.   

 

Meanwhile, wealth concentration at the top is at an all-time high.  Hardly surprising, is it, when the official policy is so friendly to the financial elite?

 

The Alternative - a People's Bailout

 

Bloomberg notes, the 1.2 trillion dollars is "about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages."     In other words, the Fed could have chosen to bailout homeowners, but chose not to.  

 

The hardworking people of our country were left in the cold, at the mercy of their creditors in a deflationary depression.  Meanwhile, the creditors themselves, who created the deflationary depression with their reckless and unregulated money and debt creation practices, were fully shielded from the consequences of their destructive actions. 

 

If this doesn't exactly describe "the failure of democracy", I'm not sure what else it would take....  "Government by the rich, of the rich, and for the rich", exactly describes the dystopia in which we live.  

 

 

see additional info here http://www.bloomberg.com/news/2011-08-21/wall-street-aristocracy-got-1-2-trillion-in-fed-s-secret-loans.html

 

 

 

Venezuela transfers gold, for "international reserves" - End of dollar dominance near

The monetization of gold as international reserve currency under Chinese/Russian control is proceeding according to (their) plan.  The latest signpost: Venezuela's decision to bring their gold out of Western banks, bringing some of it home and putting some of it into banks in Russia and China (Pravda's coverage here http://english.pravda.ru/world/americas/19-08-2011/118801-chavez_venezuela-0/)  

 

Chavez said specifically that his gold will be used to create international reserves: "We're going to nationalize gold and we're going to convert it, among other things, into international reserves," he said.

Converting gold to international reserves???  That should raise eyebrows among anyone who is using their critical thinking skills.  Chavez is speaking of the future here, because prior to now, international reserves were in dollars, and there was no way to "convert" gold into dollars, except by selling the gold.  

 

Upcoming Gold-backed International Reserve Currency 

What Chavez is referring to is the ongoing effort of China and Russia to create a new international currency backed by gold.  The gold reserves will be monetized, meaning, they will be used as collateral for the issue of the new currency. 

 

By the way, this is not a conspiracy theory, as this is not a secret plan.  It is, in fact, spoken of openly by Russian and Chinese authorities.  See, for example, this summary of Putin 2009 speech at Davos http://news.goldseek.com/GoldenJackass/1235063702.php) and Russian President Medvedev unveiled the prototype gold international currency coin in 2009 (http://www.breitbart.com/article.php?id=CNG.4eb2c06b46ea42dece225df0a3ec3799.641).    Heck, Putin has been talking of gold as an alternative to dollars as early as 2005 (see: http://groups.yahoo.com/group/vladimir_putin/message/899). 

 

For some reason, the Russian-Chinese dollar replacement plan just hasn't made much publicity in Western news sources.   I attribute this partly to a cover up by the Western financial elite that controls the media, and partly to the simple fact that most people are completely ignorant and apathetic about monetary news or issues.  

 

This ignorance and apathy is unfortunate, because the end of "dollar dominance" will have profound negative consequences on the average American citizen.  As I have said repeatedly in the past, it will entail a massive inflation and economic collapse involving extreme unemployment.

 

Of course, Russian and Chinese leaders know perfectly well that the end of dollar dominance will have catastrophic consequences on the power of the United States, as the weakened economy is reflected in a weakened military and reduced foreign influence.  That is, after all, precisely why they are doing it! 

 

 

Interestingly, we can add Venezuelan President Hugo Chavez as one of the prophets of our current economic doom.  As the Fox story puts it:

 

"At a summit in 2008, he urged his Latin American allies to begin pulling their reserves out of U.S. banks, warning of a looming economic crisis in the United States."

 

quotes:  http://www.foxnews.com/politics/2011/08/18/chavez-recalls-gold-held-in-us-europe-amid-plan-to-nationalize-industry/#ixzz1VVciXLLD 

AU at all-time high: Thought for the Day

Apropos of an oz. of AU reaching 1830 USD/FRN today:

 

"Gold is the money of kings, Silver is the money of gentlemen, Barter is the money of peasants, DEBT is the money of slaves."

 

 

 

Is American a parasite on the global economy?

Vladamir Putin tells it like it is: http://news.yahoo.com/putin-says-u-parasite-global-economy-191447751.html

 

Many economically educated citizens are familiar with the idea that inflation is an attack on savers.  Of course, that is true, but in today's economic world, that means American inflation is an attack on the rest of the world, primarily.  Most Americans don't realize that the rest of the world holds their savings in dollars, far more so than Americans save themselves. 

 

It is difficult to calculate the total benefits that accrue to Americans because the dollar is the international currency.  The primary benefit is that our stores are flooded with cheap goods.  It also means we can run huge budget deficits, and thus rely on government to keep us employed.

 

Basically, it means Putin is correct: we are living high on the hog, consuming far more than we produce, essentially like a parasite on the productive work of others.  

 

The primary downside to our situation is that our industrial/productive base gets wiped out by cheap foreign goods.  The high value of the dollar also spurs foreign immigration, because they can make so much more working here than at home.

 

In all, you can easily see, it is not a good system for Americans.  Bigger government, less jobs, more immigrants, all in exchange for cheap foreign goods...    Jeez, hardly seems like any upside when you look at it like that.

 

Oh yeah, and lets not forget the Islamic angle: the whole system is predicated on our military support for Saudi Arabia and other oil-rich authoritarian states.  Thus we get flooded with waves of "Religion of Peace" propaganda funded by Arabian wealth, while betraying our democratic and Christian ideals. 

 

When the Dollar Breaks

 

Russia, along with China, are working steadily to get off the dollar.   If and when they manage to break the dollar, the American economy will undergo a severe shock.   

 

When it happens we will see:

-a huge inflationary spike (with possible hyperinflation)

-a massive downsizing of government

-a huge wave of unemployment

 

We will have to start from scratch, rebuilding our productive economy to earn import trade, rather than just receive it as the beneficiary of being the world's ultimate privileged consumer (trading our paper money and debt for their real goods).  We will all be poverty-stricken compared to today. 

 

It will happen eventually.  The longer we degrade our industrial capacity, and the more we depend on government employment, the worse off we will be when it finally happens.