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The Decline & Fall of the US EconomyAlan Caruba / Anxiety Center -- Something is very wrong when the United States, arguably the most dynamic economic machine in the world, is mired in a long Recession while manufacturing jobs are disappearing and agreements like NAFTA that were supposed to bring prosperity north and south of the Mexican border, are having the exact opposite effect.
In April, according to US Department of Labor figures, US employers had cut jobs for the third month in a row. Unemployment rose to six percent, the equivalent of 448,000 people who filed claims. It doesn't take a economist to figure out that something is very wrong---and has been for many years---with our economy, despite the bubble of the 1990s when the stock market went crazy for Internet start-up companies and when major corporations like Enron and Global Crossings engaged in criminal behavior.
I suspect that only a handful of Americans have ever heard of the Free Trade Area of the Americas (FTAA), but let me tell you, it is the North American Free Trade Agreement (NAFTA) on steroids.
Despite all the rosy scenarios being put forth, America's present and future economy is in serious trouble and everyone knows it. It will only get worse.
NAFTA came into being in 1993 and its promised benefits simply did not occur. In fact, the opposite occurred. The US trade surplus in agricultural products, one of the pillars of our economy, has significantly declined in the past decade. The comparison between US exports and imports tells the story. Before NAFTA, between 1991 and 1994, the US agricultural trade surplus with Mexico and Canada increased by $203 million. Since then, it has fallen by over $1.4 billion. Indeed, the trade surplus in agricultural products governed by NAFTA had declined by 70.7% by 2000. Add the Big Lie spread by Greens about genetically modified US farm products and it's no surprise this sector is in trouble.
Those who argued for NAFTA promised increased job creation. In this respect, NAFTA has proven to be a spectacular failure for American workers. NAFTA's backers claimed it would generate 200,000 new jobs. People like Ross Perot who described NAFTA as "the great sucking sound" of job loss were ridiculed. Well, the figures are in. There have been widespread job losses in America. Job growth, where it did occur, was unrelated to NAFTA. Now many of those jobs are being exported. Since the initiation of NAFTA, an estimated 766,000 American jobs have disappeared.
By way of illustration, in a June Insight magazine article, according to market research firms, Gartner Inc. and Forrester Research, more than 300 of the Fortune 500 firms do business with Indian information-technology-services companies. It is predicted that, by 2004, more than 80% of US companies will have considered using offshore IT services. That means the processing of critical credit card and bank financial transactions will be undertaken by foreign citizens working for miniscule wages.
Right now, the United States' trade deficit stands at $500 billion with its trading partners. We are losing business as we export jobs! What kinds of jobs remain behind? Cashiers, waiters and waitresses, janitors, and retail clerks. To make matters worse, the US is doing nothing to stem the tide of illegal aliens, mostly Mexicans, streaming into the nation by the thousands every month. These are people who will take those jobs and others in service industries like lawn care or in construction. Estimates of this illegal, low-paid work force range up to seven million or more.
NAFTA has encouraged US corporations to shut down their operations in America and export them to Mexico where workers are paid barely a dollar or two an hour or less. Instead of raising Mexican living standards, they have plummeted, driving those Mexicans who were supposed to benefit to risk their lives to invade the US in search of a living wage. In doing so, they have negatively impacted the lives of US workers.
Which brings us to the Free Trade Area of the Americas (FTAA), an expansion of NAFTA that few Americans know about. It would expand NAFTA from Canada and Mexico to every country in Central America, South America, and the Caribbean, with the exception of Cuba. Negotiations began immediately after the launch of NAFTA in 1994 and are expected to be completed in 2005.
For all the talk of an economic turn-around in 2004, FTAA, if implemented, would turn the US into an employment dead zone as more and more US corporations would transfer their operations to these nations and/or continue to out-source jobs worldwide. Worse, FTAA would effectively end the ability of these nations to set standards for public health and safety, to safeguard their workers, and to insure these corporations and their own would not create environmental problems where they operate.
In 1998, the Santiago Summit in Chile set up a Trade Negotiations Committee consisting of the vice-ministers of trade from 34 nations and they have been meeting every few months since then. These negotiations have essentially been conducted behind closed doors with no citizen input.
Who is writing the FTAA rules? More than 500 US corporate representatives are advising the US negotiators. And what are some of those rules? The removal of national licensing standards for medical, legal and other key professionals, allowing doctors licensed in one nation to practice in any other, despite differences in the quality of their training or professional standards. FTAA calls for the privatization of public schools and prisons in the US. It calls for the privatization of postal services.
Who is doing this to us? In December 1994, at the first Summit of the Americas in Miami, then-President Bill Clinton proposed establishing a Free Trade Area of the Americas. Both Bush41 and Bush43 have endorsed NAFTA and the latter supports the FTAA negotiations for a free trade zone of the Americas. Bush43 was a vocal supporter for yet another amnesty for millions of illegal aliens until the issue heated up.
While our economy grinds to a slow, incremental decline, American corporations, supported by our elected leaders, are working hard to further undermine it. If you want to watch the United States of America became a Third World nation, you need only stay around for another decade. The Great Depression of 1929 that lasted until the beginning of World War II will look like a picnic.
Alan Caruba is the author of "Warning Signs", published by Merril Press. His weekly commentary is posted on www.anxietycenter.com, the Internet site of The National Anxiety Center.
Copyright, Alan Caruba, 2003