America Lost to a Theory

Paul Craig Roberts, an economist who was a member of the Reagan administration, wrote a clear and concise summary of the state of US economic affairs. Essentially, it's another chapter of Capitalism Gone Wild. It's the story of America's decline due to unbridled greed and the corruption of an economic theory. Here's an excerpt from America's Lost Hegemony:

"The historian who chronicles America’s decline will lay the blame on free market ideology.
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This development is taking a huge toll on America’s human resources in manufacturing skills, engineering and science. The first American victims were blue collar workers. Millions of them lost their jobs and experienced sharp declines in the quality of their lives. But as research, engineering, design, and innovation followed manufacturing abroad, now it is white collar workers in information technology and university graduates in engineering and physics who are being displaced.

American university enrollments in science and engineering are declining because there are no jobs for graduates. It is pointless to invest money, sweat and toil in an education that has no payoff. Markets do work. Markets are working to shrink the demand for, and supply of, American engineers and scientists.

The next impact is going to be on project manager jobs, practically the sole remaining source of career related employment for many engineers and technical people. Project management jobs require people experienced with the technology of the job. The loss of technical and engineering jobs empties the pipeline of people who have the experience to assume management positions. Far from being able to innovate, the US will even lack the human resources to manage technical and scientific projects.

Many uninformed people believe the problem is that America doesn’t produce enough scientists and engineers. Manufacturing & Technology News reports that “a group of 15 US business organizations has launched a national campaign aimed at doubling within 10 years the number of bachelor’s degrees in science, technology, engineering and mathematics.”

What is the point of this when there is a huge supply of unemployed engineers and technical people who have been displaced by offshore outsourcing and by H-1b and L-1 work visas for foreigners? I know an American software engineer in his thirties whose job was outsourced. After searching fruitlessly for a job for four years, he took a job in Thailand writing software programs for $850 per month.

The anecdotal stories are legion. Yesterday, a friend reported to me that the service technician who repaired his garage door opener said his company was flooded with resumes from college graduates and engineers who cannot find work and are willing to take jobs installing garage doors.

US executives, with an eye to quarterly earnings and their bonuses, continue to spend considerable resources lobbying for increases in work visas that enable them to replace their American engineers, scientists, and technical people with lower cost foreigners. These executives lie through their teeth when they assert the lack of qualified Americans for the jobs. The fact of the matter is, the executives force their American employees to train their foreign replacements and then fire their American workers.

In a word, American capitalism is destroying itself by dismantling the ladders of upward mobility that have made large income inequalities acceptable. By rewarding themselves for destroying American jobs and manufacturing, engineering and scientific capabilities, US executives are sowing a whirlwind. American political stability will not survive the turning of an American university degree into a worthless sheet of paper. Libertarians and free market ideologues who rejoice in freedom should open their eyes to freedom’s destruction."