The State of the Spinon

The State of the Union is spinning and weaving a tall economic tale to avoid offending corporate donors and super rich pals. spinInstead of confronting China on currency manipulation and trade barriers, we get almost identical recommendations that Bush made. Community colleges can fix it all, Americans can compete with anyone, more bad trade deals, we'll just simply innovate our way out of this, and finally the claim that somehow Americans are not educated when employers offshore outsource job after job, including the jobs which require that very advanced education. Education is once again being touted as a cure all, ignoring the fact unemployed Americans already have those skills and some of them have 20 years or more of direct experience. To make the situation worse, Obama touts an agenda to flood our labor markets and educational system with more foreign workers instead of hiring Americans who need a job and guaranteeing more Americans have an opportunity to go to the college of their choice.

Paul Krugman calls it The Competition Myth:

Meet the new buzzword, same as the old buzzword. In advance of the State of the Union, President Obama has telegraphed his main theme: competitiveness. The President’s Economic Recovery Advisory Board has been renamed the President’s Council on Jobs and Competitiveness. And in his Saturday radio address, the president declared that “We can out-compete any other nation on Earth.”

Even business leaders have made it clear, while innovation is great, it simply does not scale to create a strong middle class. One must require production and manufacturing to occur in the United States with U.S. citizens as workers. Even more important, manufacturing actually spawns innovation, not the other way around. The two go hand in hand.

On labor markets, we have this statement in the speech:

One last point about education. Today, there are hundreds of thousands of students excelling in our schools who are not American citizens. Some are the children of undocumented workers, who had nothing to do with the actions of their parents. They grew up as Americans and pledge allegiance to our flag, and yet live every day with the threat of deportation. Others come here from abroad to study in our colleges and universities. But as soon as they obtain advanced degrees, we send them back home to compete against us. It makes no sense.

Now, I strongly believe that we should take on, once and for all, the issue of illegal immigration. I am prepared to work with Republicans and Democrats to protect our borders, enforce our laws and address the millions of undocumented workers who are now living in the shadows. I know that debate will be difficult and take time. But tonight, let's agree to make that effort. And let's stop expelling talented, responsible young people who can staff our research labs, start new businesses, and further enrich this nation.

While Americans cannot get jobs Obama wants to turn our educational system into an automatic free immigration ticket. This will enable labor arbitrage on steroids, displacing even more Americans and enabling more technology transfer to India and China. Having U.S. taxpayer dollars be used to make sure your kid cannot even get into college, not even get accepted, due to all of the foreigners getting the seats, much less a job upon graduation, is an astounding denial of labor economics. There is a reasond why localities have taxpayer funded educational systems for their residents. Universities are already high rejection rates for acceptance, some hitting 90%, in addition to not being affordable. Only 24% of new college graduates obtained jobs in their area of study in 2010. 85% had to move back home.

Are you dizzy yet? Obama is claiming pushing more bad trade deals will create jobs and even claims labor has endorsed them, which from the reports, doesn't appear to be true. These are trade deals started by the Bush Administration.

To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 - because the more we export, the more jobs we create at home. Already, our exports are up. Recently, we signed agreements with India and China that will support more than 250,000 jobs in the United States. And last month, we finalized a trade agreement with South Korea that will support at least 70,000 American jobs. This agreement has unprecedented support from business and labor; Democrats and Republicans, and I ask this Congress to pass it as soon as possible.

Before I took office, I made it clear that we would enforce our trade agreements, and that I would only sign deals that keep faith with American workers, and promote American jobs. That's what we did with Korea, and that's what I intend to do as we pursue agreements with Panama and Colombia, and continue our Asia Pacific and global trade talks.

The Korean trade agreement is projected to lose 159,000 American jobs. The China deals do nothing for American jobs.

Even worse, Obama touts a subtle deregulation and we noted his example, saccharin, is made in China.

The Alliance of American Manufacturing also point to trade and manufacturing as the real way to grow the United States economy:

The president needs to state clearly in his State of the Union address that we face another "Sputnik moment" with implications that may be far more consequential than the launch of that satellite in 1957. He needs to change the debate. In the current political environment, we really have no answer to the rise of China, when, in fact, it should be an issue that unites Americans to a common purpose.

One look at the trade deficit or the U.S. GDP, it's clear beyond reducing the financial sector, the United States must grow production and manufacturing. . The trade deficit with China is massive and the United States has lost 2.4 million jobs just from 2001-2008.

Another studies show the U.S. Treasury loses $100 billion in revenues due to tax havens and with the Bush Panama and Columbia trade deals in the mix, which Obama wants to also pass, the trade deficit is projected to increased $16.8 billion dollars.

This is no way to create 11.5 million jobs. More frustrating, the American people are screaming from the rooftops at this point on the way to create American jobs. They vote for it and of course are betrayed once that person gets into office. This administration is no exception.

The rest of the speech has some basics about cutting the deficit, including being open to reforming social security. There is infrastructure and a strange agenda to create high speed rail across the country. There is no doubt we need infrastructure rebuilding and jobs, although the high speed rail practicality particulars are yet to be seen. Gas lines that do not blow up, bridges that do not collapse, levees that do not break and water mains that do not spew toxins might be a good start.



Where's the hope?

In the campaign, Obama said "trust me" and have "hope." Then he won, promptly appointed Geithner/Summers/Goldman Sachs and carried on where Bush left off overseas.

He was very charming and inspirational for a few months (for the uninitiated). Now people see him for what he is, a functionary put in place by The Money Party. He doesn't have to deal with reality, it's dictated to him; and it's not our reality.

That's a comprehensive rebuttal to the speech. I think you would have done a much better job than the Republican responder (was it Michel Bachmann?, no way).

Thank you and good night.

Hope ????

Where's the "Hope", you asked? "The Hope" is that voters will eventually awaken from their deep affliction caused by "Blind Patriotism", and "Stop" re-electing "professional politicians" to serve in Washington. Until then, look for more of the same ol' same ol'. In the U.S.A., we have some of the most brilliant and educated minds in the world, except on election day. On election day, "Stupid" becomes the "order of the day". Thus the sad shameful and pathetic shape this nation is in today. We elect professional politicians ( crooks, thieves, egotists ) on election day, then basically give them "Carte Blanche" to exert their will, and not the will of the people.

What has happened to this once great nation, didn't happen by accident or chance. It happened because we allowed it to happen through our gullibility to swallow hook, line, and sinker, the campaign rhetoric of silver tongued smooth talking professional politicians. And now, we're paying a heavy price for our stupidity.

We can blame profressional politicians, or we can blame the American voters that allow them the opportunity to destroy a nation.

The "hope" is that enough concerned citizens will awaken to the cold hard facts before it's too late.

Because you can do wrong, and get away with it, doesn't make it right

Well Well Well

It is nothing more than "business as usual" in Washington. In the first place, did anyone really expect anything except more of the smooth talking silver tongued political rhetoric? I certainly didn't. Something is seriously wrong "if" citizens haven't figured out the game yet. Washington politics is nothing more than a cruel game played against the citizens of this country. Face the facts folks, we've been sold out for many decades now.

Robert, nice write-up. It echoes exactly what I've been saying for years now.

As far as jobs go, our past history and present determination to send jobs abroad, says it all. Shortly after WWII when we began to rebuild Japan, the wheels were set in motion for what we're seeing today. Our efforts to build and strengthen foreign economies has been at the expense of our own. Our present import and energy dependency is a testament to the "selling of America". The obvious damage inflicted, and forced, on our workforce, by unfair, unjust, and one-sided foreign trade agreements and policies, is at the roots of the majority of our economic woes.

On the other side of the coin, education is not the problem where employment is concerned. America has no problems when it comes to technology and innovations. Alot of the technology used around the globe was developed here in the U.S.A. But, as you've stated, higher education is becoming unaffordable for most. While higher education is very important, we must also realize and understand that employment opportunities must cover all education and skill levels. We all can't be doctors and lawyers. Someone has to sweep the floor and empty the waste basket.

The bottom line and solution is to enact fair, equal, and balanced foreign trade agreements and policies. This will allow America to produce more of what America uses and consumes. Our dependency on cheap foreign imports is a "jobs killer".

On the political front, we must stop re-electing professional politicians to office. In addition, we must become more active on the political scene between election cycles. Our voice and vote are all we have to fight the anti-America corrupt Washington Brotherhood. It's also obvious that we must unite as one America, and end the harmful and fruitless political division that favors one party over the other. In reality, there's no difference between the two parties, and both parties have had a hand in our economic decline over the past sixty plus years.

Economically, government spending and higher taxes are not the answer. Through waste, fraud, corruption, no-bid government contracts, subsidies, foreign aid ( give-aways ), wasteful projects such as the "Fence" and looking for water on the surface of Mars, the government has proven to be very poor stewards of taxpayers' dollars as is. Also, we must take into consideration that at present, government debt is the only catalyst keeping our economy afloat.

Regardless of political speeches, "Main Street America" holds the "truths", and is aware of the economic pain and misery caused by a negligent government guilty of dereliction of duty.

Because you can do wrong, and get away with it, doesn't make it right

other reactions to SOTU

William Black points out the reason American lead in innovation was the government and some of the direct agencies. He mentions NASA but to me the most successful one was/is DARPA.

If anyone sees any others, at least people are piping up who are not rewriting history.


Hi Robert,

I enjoy your blog on a regular basis, but I need a little help understanding some of your conclusions in this post. You write:

"While Americans cannot get jobs Obama wants to turn our educational system into an automatic free immigration ticket. This will enable labor arbitrage on steroids, displacing even more Americans and enabling more technology transfer to India and China. Having U.S. taxpayer dollars be used to make sure your kid cannot even get into college, not even get accepted, due to all of the foreigners getting the seats, much less a job upon graduation, is an astounding denial of labor economics."

Forgive my lack of understanding, but how would Obama's policies "turn our education system into an automatic free immigration ticket"? And how would allowing immigrants into the system enable "more technology transfer to India and China"? Most children of illegal immigrants in this country are from Mexico and South and Central America, not India and China, are they not?


F-4 Visa, or "Go to School, get a green card"

This is a never ending corporate lobbyist agenda to give a free green card by attending U.S. educational system, some proposals are just for "higher education", yet unfortunately the MSc is being counted as a U.S. Masters, which it's much less than a typical U.S. Masters in difficulty, time and depth.

Other proposals have gone all the way to Kindergarten. In other words, attend any U.S. school, some proposals are just enroll, don't actually complete and wala, you get an automatic green card, or permanent residency.

Basically the U.S. has a lot of international students.

Many, many from China & India. These graduates currently use the H-1B Visa, but it's not what you think. Often they eventually get U.S. citizeship but that doesn't mean loyalty to the U.S., it's more like a great feather in the resume, for one now can create businesses in the U.S., usually offshore outsourcing, labor arbitrage models, and they start businesses back in their original countries, or offshore outsource the jobs.

They also displace U.S. workers, in particular this practice is used to age discriminate.

So, this is different from the Dream Act, which has it's own set of absurdities contained within.

When you hit this topic, the rhetoric does not match the actual legislative text. One needs to read the actual legislative text to see that they intent on tying U.S. immigration policy and law to the already overburdened and underfunded U.S. educational system....a system whose primary charter is to education it's citizens...
just like every other nation on Earth for their students.

What that does is bias the educational system with ulterior motives. You cannot expect Academic excellence when the pay out is a green card, think of how that will bias every thing from entrance to grades on tests. Not good. The demand for entrance into the U.S. is still so high, literally that will flood the educational system, just as the USCIS is currently flooded and backlogged.

This is the idea that instead of increasing stipends and making sure Americans get those college seats, especially in graduate school, they want to flood the university system on the promise of an instant green card.

This will displace U.S. students. Right now graduate school stipends are often below the poverty line. A PhD is taking 8 years, frankly without rich parents or support, making it through graduate school for Americans has become almost impossible and this isn't difficulty, this is financial.

U.S. companies as well as India body chops, now Chinese, use foreign nationals to get training here and then take that expertise and technology transfer it out of the U.S.

The F-4 will make it more easy to do that. These people are here for career, money, business, not to actually become loyal to the U.S., create jobs hiring Americans, build up the U.S. economy. It's ridiculous, while companies get sued for hiring only white people....we have FCDC in the form of Indian body shops, where the majority or workers, as in 90%, are on guest worker Visas from the home country. So in other words, it is already "no American need apply" to a company operating in their own country!

We already have a reduction of tech jobs, overall, they are offshore outsourced in droves and use of guest worker Visas to labor arbitrage, wage arbitrage and displace U.S. workers.

53% of female STEM are out of the field in 10 years. So, it's not just age discrimination going on, it's also sex discrimination...

when one has a never ending supply of labor, that causes wages to be repressed and other labor rights to erode.

One needs to look at the statistics in a cold hard view and not bring their personal philosophy to the excel spreadsheet and graphs.

There are exceptions to the above, which actually match the rhetoric, but from a large high up view, this is once again about global labor arbitrage.

If you want to invest in Americans, you have to guarantee your tax dollars are going to opportunities for Americans, first and foremost.

Even Tesla (who was an immigrant and clearly Obama doesn't know his inventors because he mentione Edison instead), worked long and hard to obtain his education....

Tesla by the way would come over today on an "O" Visa and we do indeed want the Teslas of the world.

One more question...

I'm trying to find the citation for these figures in your entry in the EPI Briefing paper:

"Universities are already high rejection rates for acceptance, some hitting 90%, in addition to not being affordable. Only 24% of new college graduates obtained jobs in their area of study in 2010. 85% had to move back home."

I can't find the spot in the paper where it discusses rejection rates, and I can't find the 24% figure for new graduates getting jobs in their area of study, or the 85% moving back home. I don't doubt you, I just have someone who wants to know where the figures came from who is asking me, because I like this blog.

Thanks again,

rejection rates, from U.S. News, World Report

This post lists some for engineering.

U.S. News & World Report lists rejection rates for all colleges, as if somehow denying opportunity to > 70% who want it is a badge of honor.

I cannot find the 2010 figure I quote but for 2009, it was 19.7% new college graduates who landed a job in their field of study.

One can assume that 24% is probably on target as the job market slightly improved for NCGs in 2010.

The Education and Competition Myths

See USA Today report:

Unemployment rate for college grads is highest since 1970

Sad. Very sad. Obama has turned into George Bush. He's destroying the middle class. There are so many smart, productive, college educated people (and their families) out there that are really hurting ...

Think about it

The entire globe could come into the U.S. educational system and get an instant green card. That puts Americans in further direct competition and frankly the U.S. higher educational system is already increasingly biased against Americans, through financial support and actual Academic/educational opportunities, as it is.

So, the cream of the cream Americans actually graduate in those circumstances, they now have to compete for jobs in their own country.....against the globe's workforce.

How many American Teslas, the guy who brought you AC electricity, the radio and TV, modern communications, will be lost? Odds on many, many. As it is they throw away how many patents, innovations have already been lost by this practice? You are not going to innovate without opportunities and some work experience in your area and believe, most people do not have the financial resources to sit in some dorm room where the school charges $80k a year in fees to skip classes and write up some new website or social networking technology. Some of the best innovators never had a 4.0 GPA, many didn't have a 3.0 GPA, and many never even went to graduate school.

More importantly, most truly earth shattering innovations require very expensive labs, support, equipment and a hell of a lot of time....this myth that innovation occurs in a week is a takes years with a lot of support and a lot of resources.

Believe me, AT&T Bell Labs in the old days didn't have some guy walk in, tie a few strings together and invent the transistor in a couple of days.

It will be a disaster for Americans.

Public Citizen fact check on trade SOTU

Just glad they spoke up. Public Citizen wrote up facts and figures on Obama's New NAFTA style trade agenda.

The real skill of the politician ...

... is to feed you what you want to hear. They have focus groups and psychologists with response meters tuned into what "increases favorability" - so why wouldn't they use that data to do just that? They all SOUND good, especially Obama, but I'm sure there's a post in this blog that attempts to count the number of broken promises in just two years (I keep losing track, as more and more seem to be broken weekly).

As far as "education as the cure all" it's another one that sounds nice, and it certainly fits in with the program. But it gets a little creepy when you see how deeply the Trilateral infiltration of "higher education" really is, and where it all begins. Your readers may find "the program" shocking. I would like to think, and really HOPE that what is contained in these videos is NOT as widespread as it seems, and yet I have never really thought of Minnesota as one of our more "progressive" states.

Prepare to be sickened, and for those with rose colored glasses, better not click below, you might not make it through dinner without back-up Pepto and a seltzer chaser.

There are few eyeballs on the NSF, Academia

I've seen worse. They literally are accepting much "less" international degrees, claiming they are equivalent, grade scales are equivalent, when they are not. Academia was noted for labor arbitrage with Post Docs. Yes, we have too many PhDs in the U.S. and major salary repression, other abuses.

We have universities opening up "campuses" around the globe, I will assume using our tax dollars to educate foreigners and what happens with *that*, i.e. do these people get a soup-can label "MIT" degree with lessor teachers, lessor standards? or even worse, what is the inter-campus transfer policy under these conditions....

I'd say probably the worst promoter of global labor arbitrage through the U.S. higher educational system has to be Duke university.

The thing is, when it comes to higher education, there ia nary a mention of any of their doings, their labor arbitrage agenda, their systemic reduction and dilution of the value of a Bachelors degree, regardless that it takes as long and is the same number of credit hours as this so called MSc or foreign "Masters"....

I've seen similar "focus" groups that are truly absurd, say to get more women one needs to make hard science and engineering more touchy feeling. BS! What they need is to get discrimination and harassment out of the field, esp. in industry itself.

How many have seen the intern be viewed as eye candy and a potential date instead of a new brilliant engineer or scientist? Anybody from tech, comment on that statement.

A good overview post on the true state of Academia in this country might be in order...

I really want to call Obama the outsourcing President..might as well add to it Congress, after all, it seems lobbyists are not only writing their legislation and bills, but are clearly writing even their talking points.

If you want to take it on and do a cross post to help people find your own site and other pieces, please I'd love it. Only so many outrages one can analyze per day here.

Jobs and Foreign Trade

"Mr. Speaker, the trade deficit is at $10 billion a week, $40 billion a
month, a half trillion dollars a year. Unbelievable. Japan continues to take
$60 billion out of our economy a year, and China is now taking over $100
billion a year out of America, and both Japan and China continue to keep
American products out.
Now, if that is not enough to neuter your dragon, China has missiles
pointed at us.
Beam me up. A Nation that buys more than they sell will go bankrupt, and a
Nation that allows illegal trade destroys all American industry.
I yield back the bankruptcy of America's steel industry. Day after day the
filings continue to mount up."

February 7, 2001

Rep. Jim Traficant (D-OH).

Because you can do wrong, and get away with it, doesn't make it right


Someone went back and compares a Herbert Hoover SOTU speech to Obama, with frightening similarity.

Read it here.

"On the political front, we

"On the political front, we must stop re-electing professional politicians to office. In addition, we must become more active on the political scene between election cycles. Our voice and vote are all we have to fight the anti-America corrupt Washington Brotherhood. It's also obvious that we must unite as one America, and end the harmful and fruitless political division that favors one party over the other. In reality, there's no difference between the two parties, and both parties have had a hand in our economic decline over the past sixty plus years."

So sick of hearing this tired, facile "analysis" - professional politicians have always existed and will always exist. The key is to just keep pressure on them to follow through on their promises. Peron was perhaps the quintessential career politician and yet he actually made things better for the masses, simply because they pressured him. Give up on the idea of some noble, objective technocrat - slacking off from your duties is endemic to human nature, and the key is to just use citizen mobilization to pressure people into keeping their word. We need leaders.

And the whole "harmful and fruitless political division" thing is just stupid, too. While the average citizen A probably has some common ground with the average citizen B, people do have very different ideas about what gov't is, should be and should not be. America is a fairly heterogeneous nation, politically speaking, and ignoring that is part of the problem, not the solution (the solution being to handle more things at the community level.)

This kind of centrist wonkery is just not productive or interesting or critical enough. Parroting David Brooks/Tom Friedman/some other pseudo-libertarian garbage is no different than parroting a corrupt politician.

we need economists/engineers to run for office

The problem is the entire system is rigged, an inside job, backed with huge corporate and special interest money. I mean I wonder "who" is behind Obama's "China ambassador"
Presidential run probe...

Did SCOTUS just say foreign nations can advertise in political elections/proceedings in the U.S.?

We cannot seem to get good people, even into the primaries never mind into the main parties and the system is so rigged, a third party has zero chance.

That's why this site, we try to keep "economic fiction" off of the site and I'm a huge stickler in posts to be accurate (comments anything goes).

We cannot get out there what even basic metrics mean, such as GDP or even get out there how little "Stimulative" effect tax cuts have...

so how the hell are we going to get real economics, based on real statistics and theory, to architect a trade policy that is actually in the national interest?

So, so corrupt!