by Dr. Paul Craig Roberts
People want to know where the economy is headed. What they should be asking is does the US still have an economy? My answer is no, it doesn’t. I will explain why.
For a quarter century I have pointed out the destructive effect of moving American investment and jobs to China and other points abroad. Offshoring served the interests of corporate executives and shareholders. The lower labor costs raised profits and, thereby, executive bonuses and the prices of the stocks, resulting in capital gains for shareholders.
These benefits accrued to a small percentage of the population. For everyone else these closely held benefits imposed huge external costs many times greater than the rise in profits. The American manufacturing workforce was devastated, as was the tax base of cities, states, and the federal government. The middle class shrunk and the populations of St Louis, Detroit, Cleveland, Pittsburgh, South Bend and Gary Indiana, Flint Michigan and other cities declined as much as 20%. The hopes and aspirations of millions of Americans were crushed. Once thriving American cities became blighted. Supply chains and real estate values collapsed.