The above graph shows the latest manufacturing employment numbers. Unemployment overall went up from 9.7% in August to 9.8% in September while non-farm employment declined by another 263,000 jobs in September. There is absolutely no evidence of a recovery in these dismal numbers.
President Bush's and President Obama's policy, recommended by their incompetent advisors, was to stimulate the economy without addressing the trade deficits. As I predicted, repeatedly, it will fail. For example, on October 7, 2008 I wrote on my Trade and Taxes blog:
Whoever gets elected president will probably continue the policy begun by the Bush administration of borrowing ever-increasing amounts of money from foreign governments to fund giveaways in hopes of stimulating the U.S. economy. The foolish $150 billion stimulus package earlier this spring and the foolish $850 billion Wall Street Bailout last week are examples of what to expect.
These giveaways will decrease our domestic savings which will cause our trade deficits to grow. The eventual result will be that the United States will lose many of its remaining manufacturing industries, the U.S. government's credit rating will eventually deteriorate, and eventually the United States will be forced to repudiate or inflate-away its debt. That's when things will get really bad in the United States.
Exactly what I predicted is continuing to occur. Our trade deficits have been increasing, with our trade deficits with China increasing especially rapidly. We are heading straight toward the deterioration in the US government's credit rating that I predicted, and still our leaders rely upon economists who didn't see this recession coming, still don't understand what is happening, and don't have the faintest idea of how to solve it.
Disclosure: No Positions
