Paul Craig Roberts explains the origins of Labor Day versus what it is today. Most Americans know little of the story ...including the blogger, who hopes you will also visit his preceeding post with an additional little known story of U.S. history.

---

Labor Day

---

June , 2016 | Original Here | If you wish to receive his newsletter via email go to Original and sign up at bottom.

Paul Craig Roberts

Labor Day—what is it? Perhaps not many Americans any longer know, so here is my explanation.

In my time Labor Day was the unofficial end of summer, because school began after Labor Day.

Today school begins almost a month before. When I was in school that would not have been possible, especially in the South. The schools were not air-conditioned. If school had started in August no one would have showed up. It was difficult enough getting through May before school was out in June.

As most Americans probably thought of Labor Day as the last summer holiday, now that Labor Day has lost that role, what is Labor Day? The holiday originated as an apology capitalists tossed to labor to defuse a standoff.

Workers understood that labor was the backbone of the economy, not Wall Street moguls or bankers in their fine offices. Workers wanted a holiday that recognized labor, thus elevating labor in public policy to a standing with capital. Some states created labor day holidays, but it wasn’t until 1894 that Labor Day was made a federal holiday.

Congress created the federal holiday in response to the murder of strikers by US Army troops and federal marshalls during the Pullman strike of 1894. The factory workers who built Pullman railway cars lived in the company town of Pullman. George Pullman provoked a strike by lowering wages but not the rents charged in the company town.

President Grover Cleveland relied on Attorney General Richard Olney to restore capitalist control. Olney, a former railway attorney, sent in the federal violence to break up the strike. Olney still received a retainer from his railway company that was larger than his salary as US Attorney General. So we know whose side he was on. The presstitute media portrayed the beaten down strikers as unpatriotic foreigners, and the strike leader, Eugene Debs, was sentenced to federal prison. The experience radicalized Debs and turned him into a socialist.

The obvious injustice created more sympathy for labor than capitalists could stomach, so Congress defused the situation by creating Labor Day. President Cleveland washed his hands of the blood on them by signing the legislation.

Officially what we are celebrating on the first Monday of September is American labor, but what is really being celebrated is the success of capitalists again flummoxing the people and avoiding a real social revolution.

The labor movement, which gave us Labor Day, is no longer with us. The American labor movement died about ten years after the death of its most famous leader, George Meany of the AFL-CIO. Meany, born in 1894, died in 1980.

I remember when labor was at the center of politics and policy. There was even a field of economics called “labor economics.” The political influence of labor ended with the offshoring of US industrial and manufacturing jobs. For years US capitalists tried to avoid a fair shake for labor by locating their facilities in Southern states that had right to work laws. But with the collapse of the Soviet Union and the change in attitude of India and China toward foreign capital, capitalists learned that they could increase profits by using foreign labor offshore to produce the goods and services that they sold to Americans. The difference in labor costs flowed directly into profits, executive bonuses, and shareholder capital gains.

Free market economists, who live in a make-believe world, pretend that the lower labor costs flow into lower US consumer prices and that consumers beneift despite the loss of well-paying jobs. The problem with free market economics is that a priori reasoning takes precedence over empirical fact. For free market economists, the way the world should be prevails over the way that the world actually is.

As a consequence of jobs offshoring, industrial and manufacturing cities became semi-ghost towns with declining populations. Municipal and state governments, deprived of tax base, found themselves under duress to make pension payments. To avoid immediate bankruptcy, cities such as Chicago sold off public assets such as 75 years of parking meter revenues for a one time payment.

The Democratic Party, which had been the countervailing power against the Republican business party, was deprived of union funding as the jobs that paid union dues were no longer in America. By moving production offshore, capitalists turned the Democrats into a second capitalist political party dependent on funding from the business sector.

Today we have one party with two heads. The competition between the parties is about which party gets to be the whore for the capitalists for the next political term. As Democrats and Republicans swap the whore function back and forth, neither party has an incentive to do anything different.

The offshoring of high productivity, high value-added US jobs has destroyed the labor movement. How much luck will labor leaders have organizing people who hold part-time jobs as waitresses, bartenders, hospital orderlies, and retail clerks? As I have pointed out for years in my reports on the monthly payroll jobs reports, the United States now has the labor profile of a Third World country. The absence of jobs that can support an independent existence and family life is the reason that more Americans aged 24-34 live at home with parents than live independently. The absence of jobs is the reason the labor force participation rate has declined for years. The absence of jobs that pay sufficiently to provide discretionary income is the reason the economy cannot grow.

Looking at last Friday’s BLS payroll report, the jobs are in the lowly paid, part-time service sector. The goods producing sector of the economy lost 24,000 jobs. The jobs are in retail trade, health care and social assistance, waitresses and bartenders, and government which is tax supported employment.

Whether Washington policymakers realize it or not, the American work force smells like India’s of a half centruy ago. Whatever deranged Hillary and her neoconservatives claim, there is no evidence in the compositon of the US labor force that the US is a superpower. Indeed, what the employment statistics show is that the United States is a third world country, a country whose leaders are so out of their minds that they are picking fights with first world countries—Russia and China.

The United States of America is on its last legs. As there is no willingness to recognize this, nothing can be done about it. America’s last function is to cause World War 3 in which all of us will expire.

---

In my previous posts of Paul Craig Roberts exposure of the Bureau of Labor Statistics' (fake) December Payroll Jobs Report. Here is a detailed report of the suffering of American families three years ago. And clearly they are worse off today than they were then. Meanwhile the despicable mainstream media are handsomely paid to repeat the government's lies.

---

37 Facts About How Cruel This Economy Has Been To Millions Of Desperate American Families

By The Economic Collapse                                                                                                                               Region: USA

Global Research, December 23, 2015                                                                           Theme: Poverty & Social Inequality

The Economic Collapse and Global Research 28 October 2012             

First published in October 2012

Have you ever laid in bed awake at night with a knot in your stomach because you didn’t know how your family was possibly going to make it through the next month financially?  Have you ever felt the desperation of not being able to provide the basic necessities for your family even though you tried as hard as you could?  All over America tonight, there are millions of desperate families that are being ripped apart by this economy.  There aren’t nearly enough jobs, and millions of Americans that actually do have jobs aren’t making enough to even provide the basics for their families.

When you have tried everything that you can think of and nothing works, it can be absolutely soul crushing.  Today, one of my regular readers explained that he was not going to be online for a while because his power had been turned off.  He has been out of work for quite a while, and eventually the money runs out.  Have you ever been there?  If you have ever experienced that moment, you know that it stays with you for the rest of your life.  If you are single that is bad enough, but when you have to look into the eyes of your children and explain to them why there won’t be any dinner tonight or why they have to move into a homeless shelter it can feel like someone has driven a stake into your heart.  In this article you will find a lot of very shocking economic statistics.  But please remember that behind each statistic are the tragic stories of millions of desperately hurting American families.
Over the past decade, things have steadily gotten worse for American families no matter what our politicians have tried.  Poverty and government dependence continue to rise.  The cost of living continues to go up and incomes continue to go down.  It is truly frightening to think about what this country is going to look like if current trends continue.

The following are 37 facts that show how cruel this economy has been to millions of desperate American families…

1. One recent survey discovered that 40 percent of all Americans have $500 or less in savings.

2. A different recent survey found that 28 percent of all Americans do not have a single penny saved for emergencies.

3. In the United States today, there are close to 10 million households that do not have a single bank account.  That number has increased by about a million since 2009.

4. Family homelessness in the Washington D.C. region (one of the wealthiest regions in the entire country) has risen 23 percent since the last recession began.

5. The number of Americans living in poverty has increased by about 6 million over the past four years.

6. Median household income has fallen for four years in a row.  Overall, it has declined by more than $4000 over the past four years.

7. 62 percent of middle class Americans say that they have had to reduce household spending over the past year.

8. According to a survey conducted by the Pew Research Center, 85 percent of middle class Americans say that it is more difficult to maintain a middle class standard of living today than it was 10 years ago.

9. In the United States today, 77 percent of all Americans are living to paycheck to paycheck at least some of the time.

10. In the United States today, more than 41 percent of all working age Americans are not working.

11. Since January 2009, the “labor force” in the United States has increased by 827,000, but “those not in the labor force” has increased by 8,208,000.  This is how they have gotten the unemployment numbers to “come down”.

12. Sadly, 60 percent of the jobs lost during the last recession were mid-wage jobs, but 58 percent of the jobs created since then have been low wage jobs.

13. Today, about one out of every four workers in the United States brings home wages that are at or below the federal poverty level.

14. Right now, the United States actually has a higher percentage of workers doing low wage work than any other major industrialized nation does.

15. At this point, less than 25 percent of all jobs in the United States are “good jobs”, and that number continues to shrink.

16. There are now 20.2 million Americans that spend more than half of their incomes on housing.  That represents a 46 percent increase from 2001.

17. According to USA Today, many Americans have actually seen their water bills triple over the past 12 years.

18. Electricity bills in the United States have risen faster than the overall rate of inflation for five years in a row.

19. In 1999, 64.1 percent of all Americans were covered by employment-based health insurance.  Today, only 55.1 percent are covered by employment-based health insurance.

20. Health insurance premiums rose faster than the overall rate of inflation in 2011 and that is happening once again in 2012.  In fact, it has been happening for a very long time.

21. According to one recent survey, approximately 10 percent of all employers in the United States plan to drop health coverage when key provisions of the new health care law kick in less than two years from now.

22. Back in 1983, the bottom 95 percent of all income earners had 62 cents of debt for every dollar that they earned.  By 2007, that figure had soared to $1.48.

23. Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

24. Total consumer debt in the United States has risen by 1700 percent since 1971.

25. Recently it was announced that total student loan debt in the United States has passed the one trillion dollar mark.

26. According to one recent survey, approximately one-third of all Americans are not paying their bills on time at this point.

27. Right now, approximately 25 million American adults are living at home with their parents.

28. The percentage of Americans that find that they are able to retire when they reach retirement age continues to decline.  According to one new survey, 70 percent of middle class Americans plan to work during retirement and 30 percent plan to work until they are at least 80 years old.

29. The U.S. economy lost more than 220,000 small businesses during the recent recession.

30. In 2010, the number of jobs created at new businesses in the United States was less than half of what it was back in the year 2000.

31. Back in 2007, 19.2 percent of all American families had a net worth of zero or less than zero.  By 2010, that figure had soared to 32.5 percent.

32. Approximately 57 percent of all children in the United States are living in homes that are either considered to be either “low income” or impoverished.

33. In the United States today, somewhere around 100 million Americans are considered to be either “poor” or “near poor”.

34. In October 2008, 30.8 million Americans were on food stamps.  Today, 46.7 million Americans are on food stamps.

35. Approximately one-fourth of all children in the United States are enrolled in the food stamp program.

36. Right now, more than 100 million Americans are enrolled in at least one welfare program run by the federal government.  And that does not even count Social Security or Medicare.

37. According to the U.S. Census Bureau, an all-time record 49 percent of all Americans live in a home where at least one person receives financial assistance from the federal government.  Back in 1983, that number was less than 30 percent.

What makes all of this even more frightening is that many homeless shelters and food banks around the nation are so overloaded at this point that they are already over capacity.  Just consider this example…

When Janice Coe, a homeless advocate in Loudoun County, learned through her prayer group that a young woman was sleeping in the New Carrollton Metro station with a toddler and a 2-month-old, she sprang into action.
Coe contacted the young woman and arranged for her to take the train to Virginia, where she put the little family up in a Comfort Suites hotel. Then Coe began calling shelters to see who could take them.
Despite several phone calls, she came up empty. Coe was shocked to learn that many of the local shelters that cater to families were full, including Good Shepherd Alliance, where Coe was once director of social services.
“I don’t know why nobody will take this girl in,” Coe said. “The baby still had a hospital bracelet on her wrist.”

Keep in mind that Loudoun Country is smack dab in the middle of one of the wealthiest areas of Virginia.

So if things are that bad in the wealthy areas, exactly how bad are things getting in many of the poorer areas?

Unfortunately, things continue to get worse for this economy.  DuPont has just announced plans to eliminate 1,500 jobs.  There are more major layoff announcements almost every single day.  So how bad will things get when our crumbling economic system finally collapses?  When kind of chaos will be unleashed all over the nation when millions upon millions of Americans finally lose all hope?

In the introduction to this article, I mentioned that one of my regular readers has had his lights turned off.  The following is how he described his situation…

No gas, no water, no electricity at my house. Couldn’t pay the bills. I’m broke. Desperately searching for any means of income, or at least enough cash to get the juice (electricity) restored.
Typing this missive in a dark house using the battery on my laptop. Feels like I’m camping out at home. Hope to get this situation fixed tomorrow… somehow. Needless to say, I *…. hate this.
I was ready for this, but it is still a major league inconvenience. For those of you who DO have power, etc. – and are not ready… oh brother. You need to get ready. Seriously, you do. Because what I’m going through is just an inconvenience. It may someday be a normal occurence. Ugh. (expletives deleted)

Hopefully a way can be found to get his situation turned around, but the truth is that there are tens of millions of other similar stories out there in America today.
 
What about you?  What are things like in your neck of the woods? 

The original source of this article is The Economic Collapse and Global Research

Copyright © The Economic Collapse, The Economic Collapse and Global Research, 2015

THIS WOULD BE GOOD NEWS FOR THE EXPLOITED CHINESE WORKERS -- PROVIDED FOXCONN MANAGEMENT DOES NOT CONTINUE CHEATING. IN EITHER EVENT, PRICES FOR iPHONES WILL PROBABLY RISE.

Blogger's Note: China's most egregious exploitation of workers in high-tech factories like Foxconn Technologies is due to their being cheated by the company's management. Although expressly forbidden by Chinese law and perfectly transparent to regulators (if there are any), no company CEO or manager has ever been prosecuted.

---

Foxconn, which recruited workers at a 2010 job fair in Shenzhen, China, said Saturday it would sharply raise its wages.

By DAVID BARBOZA and CHARLES DUHIGG

Published: February 19, 2012

BEIJING — The announcement Saturday that Foxconn Technology — one of the world’s largest electronics manufacturers — will sharply raise salaries and reduce overtime at its Chinese factories signals that pressure from workers, international markets and concerns among Western consumers about working conditions is driving a fundamental shift that could accelerate an already rapidly changing Chinese economy.

Trainees at a Foxconn industrial park in Shenzhen,
China, walked beneath a poster of Terry Gou,
chairman of Foxconn's parent, Hon Hai Precision
Industry.

But the true meaning of Foxconn’s reforms, analysts say, will depend in part on how effectively the company can remake an economic system that has relied for much of the last decade on luring migrants to work cheaply for long hours in mammoth factories building smartphones, computers and other electronics.

Plants depend on workers’ being at assembly lines six or seven days a week, often for as long as 14 hours a day. Such facilities have made it possible for devices to be turned out almost as quickly as they are dreamed up. 

For that system to genuinely change, Foxconn, its competitors and their clients — which include Apple, Hewlett-Packard, Dell and the world’s other large electronics firms — must convince consumers in America and elsewhere that improving factories to benefit workers is worth the higher prices of goods.

Foxconn employees in Shenzhen. The company has
announced plans to invest in automation.

“This is the way capitalism is supposed to work,” said David Autor, an economist at the Massachusetts Institute of Technology. “As nations develop, wages rise and life theoretically gets better for everyone.

“But in China, for that change to be permanent, consumers have to be willing to bear the consequences. When people read about bad Chinese factories in the paper, they might have a moment of outrage. But then they go to Amazon and are as ruthless as ever about paying the lowest prices.”

Foxconn, with 1.2 million Chinese employees, is one of China’s largest employers. It assembles an estimated 40 percent of the smartphones, computers and other electronic gadgets sold around the world. Foxconn’s decisions set standards other manufacturers must compete with.

The announcement by Foxconn, which said that it would raise salaries as much as 25 percent, to about $400 a month, came after an outcry over working conditions at its factories. In recent weeks, labor rights groups have staged coordinated protests in various countries after reports that some of Apple’s Chinese suppliers operate harsh, abusive and dangerous facilities. To stem criticism, Apple hired a nonprofit labor group to inspect the plants it uses.

Workers welcomed the announced raises and overtime limits, though some were skeptical they would cause much real change. “When I was in Foxconn, there were rumors about pay raises every now and then, but I’ve never seen that day happen until I left,” said Gan Lunqun, 23, a former Foxconn worker. “This time it sounds more credible.”

By bowing to such demands, Foxconn has conceded that employees and consumers have gained a sway once possessed only by Chinese bureaucrats and executives at the global electronics firms that hire Foxconn to build their products.

Foxconn’s announcement also reflects how quickly China’s economy is shifting. Many of the country’s employers are facing labor shortages, which also puts upward pressure on wages, as do inflation and government demands to raise minimum wages.

Over 100 million migrant workers returned to their village homes this month to celebrate China’s Spring Festival, otherwise known as the New Year. Traditionally, factories have had no problem luring those workers back. But many Chinese cities are still confronting serious labor shortages, even though the holiday ended weeks ago. A recent Chinese government report said this year’s labor shortage was more pronounced than those in previous years.

And just as China’s exporters are struggling to cope with labor shortages in coastal regions, they are also confronting higher raw material costs and a strengthening Chinese currency, which makes Chinese goods more expensive in other nations.

“China can’t guarantee the low wages and costs they once did,” said Ron Turi of Element 3 Battery Venture, a consulting firm in the battery industry. “And companies like Foxconn have developed international profiles, and so they have to worry about how they’re seen by people living in places with very different standards.”

No other company in the world has quite the manufacturing scale of Foxconn. Nearly every global electronics company has some tie to the manufacturing giant, and while much of its work can be done cheaply, with low-skilled workers, the sheer volume of goods and scale of its operations make it China’s single biggest exporter.

Some of its campuses are considered small cities, with as many as 200,000 workers. Many are housed in dormitories near the assembly lines and are expected to be ready to rush into work should new orders flow in.

The Foxconn model, though, is under pressure. While most companies operate with similar dormitories, wage structures and work schedules, staffing Foxconn’s large sites has grown increasingly difficult. A new generation of young people in China are more reluctant to migrate to coastal cities, live in factory dorms and toil long hours. Many are staying closer to home, because of new opportunities in inland provinces. That has created labor shortages on the coast.

Social scientists say young people here are also less willing to accept factory jobs for long periods. Meanwhile, demographic changes have meant China has fewer young people to join the work force.

If the workers will not move to the coast, the logic is that the coastal factories ought to move to where the workers are living. Big manufacturers like Foxconn have responded to such challenges by moving factories inland.

And worried that the old model is dying, Foxconn has announced plans to invest in millions of robots and automate aspects of production.

David Barboza reported from Beijing, and Charles Duhigg from New York.

Paul Craig Roberts argues that both the left-leaning Keynesian economists and those on the right who he terms the "let them eat cake school of economics" haven’t a clue as to how to finance the U.S. deficit.

Death By Globalism

Economists haven’t a clue

By Paul Craig Roberts

September 01, 2010 "Information Clearing House" ---Have economists made themselves irrelevant? If you have any doubts, have a look at the current issue of the magazine, The International Economy, a slick endorsed by former Federal Reserve chairmen Paul Volcker and Alan Greenspan, by Jean-Claude Trichet, president of the European Central Bank, by former Secretary of State George Shultz, and by the New York Times and Washington Post, both of which declare the magazine to be “ahead of the curve.”

The main feature of the current issue is “The Great Stimulus Debate.” Is the Obama fiscal stimulus helping the economy or hindering it?

Princeton economics professor and New York Times columnist Paul Krugman and Moody’s Analytics chief economist Mark Zandi represent the Keynesian view that government deficit spending is needed to lift the economy out of recession. Zandi declares that thanks to the fiscal stimulus, “The economy has made enormous progress since early 2009,” an opinion shared by the President’s Council of Economic Advisors and the Congressional Budget Office.

The opposite view, associated with Harvard economics professor Robert Barro and with European economists, such as Francesco Giavazzi and Marco Pagano and the European Central Bank, is that government budget surpluses achieved by cutting government spending spur the economy by reducing the ratio of debt to Gross Domestic Product. This is the “let them eat cake school of economics.”

Barro says that fiscal stimulus has no effect, because people anticipate the future tax increases implied by government deficits and increase their personal savings to offset the added government debt. Giavazzi and Pagano reason that since fiscal stimulus does not expand the economy, fiscal austerity consisting of higher taxes and reduced government spending could be the cure for unemployment.

If one overlooks the real world and the need of life for sustenance, one can become engrossed in this debate. However, the minute one looks out the window upon the world, one realizes that cutting Social Security, Medicare, Medicaid, food stamps, and housing subsidies when 15 million Americans have lost jobs, medical coverage, and homes is a certain path to death by starvation, curable diseases, and exposure, and the loss of the productive labor inputs from 15 million people. Although some proponents of this anti-Keynesian policy deny that it results in social upheaval, Gerald Celente’s observation is closer to the mark: “When people have nothing left to lose, they lose it.”

The Krugman Keynesian school is just as deluded. Neither side in “The Great Stimulus Debate” has a clue that the problem for the U.S. is that a large chunk of U.S. GDP and the jobs, incomes, and careers associated with it, have been moved offshore and given to Chinese, Indians, and others with low wage rates. Profits have soared on Wall Street, while job prospects for the middle class have been eliminated.

The offshoring of American jobs resulted from (1) Wall Street pressures for “higher shareholder returns,” that is, for more profits, and from (2) no-think economists, such as the ones engaged in the debate over fiscal stimulus, who mistakenly associated globalism with free trade instead of with its antithesis--the pursuit of lowest factor cost abroad or absolute advantage, the opposite of comparative advantage, which is the basis for free trade theory. Even Krugman, who has some credentials as a trade theorist has fallen for the equation of globalism with free trade.

As economists assume, incorrectly according to the latest trade theory by Ralph Gomory and William Baumol, that free trade is always mutually beneficial, economists have failed to examine the devastatingly harmful effects of offshoring. The more intelligent among them who point it out are dismissed as “protectionists.”

The reason fiscal stimulus cannot rescue the U.S. economy has nothing to do with the difference between Barro and Krugman. It has to do with the fact that a large percentage of high-productivity, high-value-added jobs and the middle class incomes and careers associated with them have been given to foreigners. What used to be U.S. GDP is now Chinese, Indian, and other country GDP.

When the jobs have been shipped overseas, fiscal stimulus does not call workers back to work in order to meet the rising consumer demand. If fiscal stimulus has any effect, it stimulates employment in China and India.

The “let them eat cake school” is equally off the mark. As investment, research, development, etc., have been moved offshore, cutting entitlements simply drives the domestic population deeper in the ground. Americans cannot pay their mortgages, car payments, tuition, utility bills, or for that matter, any bill, based on Chinese and Indian pay scales. Therefore, Americans are priced out of the labor market and become dependencies of the federal budget. “Fiscal consolidation” means writing off large numbers of humans.

During the Great Depression, many wage and salary earners were new members of the labor force arriving from family farms, where many parents and grandparents still supported themselves. When their city jobs disappeared, many could return to the farm.

Today farming is in the hands of agri-business. There are no farms to which the unemployed can return.

The “let them eat cake school” never mentions the one point in its favor. The U.S., with all its huffed up power and importance, depends on the U.S. dollar as reserve currency. It is this role of the dollar that allows America to pay for its imports in its own currency.

For a country whose trade is as unbalanced as America’s, this privilege is what keeps the country afloat.

The threats to the dollar’s role are the budget and trade deficits. Both are so large and have accumulated for so long that the prospect of making good on them has evaporated. As I have written for a number of years, the U.S. is so dependent on the dollar as reserve currency that it must have as its main policy goal to preserve that role.

Otherwise, the U.S., an import-dependent country, will be unable to pay for its excess of imports over its exports.

“Fiscal consolidation,” the new term for austerity, could save the dollar. However, unless starvation, homelessness and social upheaval are the goals, the austerity must fall on the military budget. America cannot afford its multi-trillion dollar wars that serve only to enrich those invested in the armaments industries. The U.S. cannot afford the neoconservative dream of world hegemony and a conquered Middle East open to Israeli colonization.

Is anyone surprised that not a single proponent of the “let them eat cake school” mentions cutting military spending? Entitlements, despite the fact that they are paid for by earmarked taxes and have been in surplus since the Reagan administration, are always what economists put on the chopping bloc.

Where do the two schools stand on inflation vs. deflation? We don’t have to worry. Martin Feldstein, one of America’s pre-eminent economist says: “The good news is that investors should worry about neither.” His explanation epitomizes the insouciance of American economists.

Feldstein says that there cannot be inflation because of the high rate of unemployment and the low rate of capacity utilization. Thus, “there is little upward pressure on wages and prices in the United States.” Moreover, “the recent rise in the value of the dollar relative to the euro and British pound helps by reducing import costs.”

As for deflation, no risk there either. The huge deficits prevent deflation, “so the good news is that the possibility of significant inflation or deflation during the next few years is low on the list of economic risks faced by the U.S. economy and by financial investors.”

What we have in front of us is an unaware economics profession. There may be some initial period of deflation as stock and housing prices decline with the economy, which is headed down and not up. The deflation will be short lived, because as the government’s deficit rises with the declining economy, the prospect of financing a $2 trillion annual deficit evaporates once individual investors have completed their flight from the stock market into “safe” government bonds, once the hyped Greek, Spanish, and Irish crises have driven investors out of euros into dollars, and once the banks’ excess reserves created by the bailout have been used up in the purchase of Treasuries.

Then what finances the deficit? Don’t look for an answer from either side of The Great Stimulus Debate. They haven’t a clue despite the fact that the answer is obvious.

The Federal Reserve will monetize the federal government deficit. The result will be high inflation, possibly hyper-inflation and high unemployment simultaneously.

The no-think economics establishment has no policy response for economic armageddon, assuming they are even capable of recognizing it.

Economists who have spent their professional lives rationalizing “globalism” as good for America have no idea of the disaster that they have wrought.

Dr. Roberts was educated at Georgia Tech, the University of Virginia, the University of California, Berkeley, and Oxford University where he was a member of Merton College.. He is the author or coauthor of 9 books and has published many articles in journals of scholarship. He served in the Congressional staff and was Assistant Secretary of the U.S. Treasury. He was awarded the Treasury’s Silver Medal for “outstanding contributions to the formulation of U.S. economic policy.” In 1987 the President of France recognized him as “the artisan of a renewal of economic science and policy” and awarded him the Legion of Honor.

Roberts was associate editor of the Wall Street Journal and columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He was Senior Research Fellow at the Hoover Institution, Stanford University, and William E. Simon Chair of Political Economy, Center for Strategic and International Studies, Georgetown University. He has been a columnist for French, German, and Italian newspapers. Today he is followed worldwide over the Internet.