The US Is Becoming A 3rd World Nation As The Economy Breaks Down: Paul Craig Roberts ~ Special Report Radio

hi and welcome to the x-22 report spotlight today we have a returning guest dr. Paul Craig Roberts dr. Roberts has had careers in scholarship academia journalism public service and business is a chairman of the Institute for political economy President Reagan appointed dr. Roberts assistant secretary of the Treasury for economic policy and he was confirmed in office by the US Senate dr. Roberts latest book is how the economy was lost and I am honored to have dr. Roberts back on the x-22 report spotlight dr. Roberts welcome back to the spotlight is very much hey thanks for being here and I wanted to start off with the economy and we see the Fed right now you know they're raising rate they're telling us the economy is doing well they're talking about unwinding their balance sheet and my question to you is what's changed in the economy that they decided to do this now I thought it may just be talked you know they've been talking about it raising interest rates for what seven years and they've raised them a minuscule amount in fact I would say they haven't raised it at all because the growth of inflation is been far higher than the increase of interest rates so the real rates have actually fallen so when they talk about they're raising the nominal interest rate by 25 basis points we're not talking about anything because the inflation has more than cancels it out by some time Crawford a transfer the other day posted an analysis and what he shows is that in fact our interest rates falling loan rates are falling attendee array such that the gap between the third overnight rate which is the one they point they raised and the tenure right is now and so the real cost of borrowing for people particular people the derivative type things as far and you can see the long rate has fallen consistently so it doesn't mean anything for those reasons first of all again the 25 basis point increase I think they've done twice or something is far lower than the rise inflation and so it's not arised the real rates continue to fall do you think that the economy has improved enough for them to start doing this has anything really changed in the economy well there's no improvement in the economy except the state news they make it look like an improvement for example they say the unemployment rate is four point seven percent or something like that and they can get that figure because they don't count the discouraged workers so if you haven't looked for job in the last four weeks and then do these surveys you're not considered to be in the workforce and so you may have been unemployed for three or four years or five six years you're not counted you're not part of that employees other people who are looking in the last four weeks their job now what just happened the people who are unemployed you know if you go searching for jobs expensive it's expensive in terms you've got to have transportation you've got to look presentable and so it's it's economically expensive to look for done and it's also emotionally expensive because you go from one lack of success to another or you find there's not really any jobs to go interview okay you've mid thirties and so looking for John becomes such a emotional drain and an expense during particularly if you've been unemployed a long time you haven't got any money to drawn to absorb the expenses of job hunting so people will give up but they're not counted as unemployed so if you compare the unemployment rate that they announced with the labor force participation rate that is the percentage of the work force is actually working you see that the leg force dissipation rate is collapsing its fall and I don't believe it is there's ever and our history been a recovery in which the labor force participation rate fell normally if it's a recovery that means their job opportunities and it draws people into the workforce instead they've been leaving so we we know that the four point seven unemployment rate is fake news the that's called the youth free rate efficient they have another official rate which is u6 now u6 includes discouraged workers less than one year so if you've been scared to know for one day short of one year you are included in this work and it's double the four point seven rate now there used to be a rate that included the long term discouraged the government ceased calculating that's too embarrassing John Williams of shuttle stats comm he still estimates the long term under the long term discouraged and includes those and the measure of the unemployment rate and according to John the current unemployment rate United States is twenty three percent so you see what they're telling us it's about a four point seven rate that they're telling us that's about 1/4 the actual rate of unemployment so if it's fake news about Syria and Russia and Iran and Saddam Hussein and Gaddafi there's also fake news about the economic situation there also the Bureau of Labor Statistics also which does them you know the first Friday of every month announces the previous month's payroll employment well it turns out that most of the jobs that they claim that are created they're not not only lowly paid domestic services part-time but they also come from what's called the birth death model and the birth death mall was created by BLS back in the Reagan period when many greatly underestimated the Reagan recovery and we're reporting a job game when there was tremendous Donbas so they came up with a model that's supposed to estimate the unreported lost jobs from business closures and the unreported new jobs from business start and the difference between the two is added to the monthly junk well it turns out that this model was based on the rising economy not falling them and so it looks like about 100,000 of the monthly job report announcement or simply add-ons from this model the jobs aren't really there they're just produced by this estimate so we don't really even know what the job but the months of people the jobs are because of this month which adds is built in boss factor so then what do we know about the economy we know that there's no real growth and median real family income there's no significant growth in retail sales or we see shrinkage the middle class we see a rise and debt burdens we get reports from Federal Reserve that one half of American 25 year olds living home the parents because they can't get a job that supports an independent existence we see other phone reserve reports that there are more people aged 24 to 34 living at home with parents than are living independently so quite clearly there's no strong consumer market we get a lot of reports of large retailers closing stores going out of business shopping centers suffering this is usually blamed on internet shopping we have spying on the shopping center is being old and sick where we're serving what was once a young neighborhood it's growing old and no doubt there's something about but it looks overall like there's not any real consumer spending power and so then that brings you to the stock market we have you know what seems to be historic high p/e ratios and yet there's no strong retail sales is no growth and real consumer median income so what is the basis of that so the whole thing looks like Fox News it everything looks like a house of cards do you think with Trump's policies this he has any economic policies can he turn all of this around is it possible you have to ask yourself who has a power in the country is it elected officials or is it the people who financed the elections in which case the elected officials don't like to go against them who who has benefited from the loss of American manufacturing jobs and American middle-class professional service jobs like software engineering information technology these things have been moved abroad or the wholesale basis and huge numbers so to benefits well if the corporations but could because of the hand news journalists because it drops their life cost and the difference going straight to the bottom line profits so the artists companies has had come from lowering the labor cost by moving jobs offshore the earnings have not come from some booming consumer economy and rising American productivity the results and rise in real wages so if you're getting your profits by killing the domestic consumer that you notice the domestic consumers purchasing power that is lost when you move manufacturing and professional skill jobs overseas so how is this a good economy it's not you get these short-term profits but they come at the expense of destroying the domestic consumer market so what can Trump do can you get some kind of law in place that stops the offshoring of jobs and requires them to come back we're probably not it's probably now in violation of the world trade agreement World Trade Organization and they've got all kinds of rules and probably it would be considered some tariffs then you'd be involved and I'm almost certain to the WTO how can you put in cars so you could have to get them passed and the corporation's are going to tell the house I said it no we don't want that they're going to do a drop Mansour what the people who financed them more so I'm not sure I conceptually something could be done if it could be legislated that would be I think consistent with the WTO and all the other agreements in which we have been meshed you know we're not caught in this net of all these agreements that take away your sovereignty and your ability to act as an independent country in the interest of your country it's very difficult to do you get more needs of treatments but conceptually if it if it could be passed you could cancel out the advantage of all showing the jobs by changing the way you tax corporations you tax them on the basis of the geographical location of where they added value to their products so if they add value to the product domestically it is within the United States they have a low tax rate but if they add value to the product overseas and China India or Indonesia or somewhere and bring these things back into America to sell they would have a high tax rate and so by altering the way you tax them you could eliminate the advantage they get from the low labor costs and other costs environmental regulatory cost from going a ball and search searching for cute labor but of course again you'd have to be able to get that past and do the corporation's won't have higher labor costs and therefore less profits only if they have a long term time horizon and realize that what they have done and are doing by moving jobs offshore is destroying the American consumer so if they ever came to that realization they might say well this really isn't in the long run interest in the shareholders we've helped people make money in the short run it's kind of like flipping real estate in a rising market but look there's no growth and revenue incomes let's move over to retail sales so by moving consumer demand all the countries because we've got American workers lay them all from your Han Chinese and Indians we're killing the domestic market market so possibly you could get that realization if there were enough people making the point it would probably take years because it takes years for the simplest kind of flame to spread intelligent neural understanding and then whoever is present not being able to get Congress to agree to this change and corporations might not close it but other than that I don't think much can be done the United States is actually becoming a third world country if you look at the employment of its labor it's consistently in lowly paid domestic service jobs waitresses bartenders retail clerk hospital orders this is a sense of India 50 years ago and if you look at the BLS the Bureau Labor Statistics projections are where jobs will grow most in the next ten years there's only two places that require any kind of college education one is school teachers and the other is rested nurses which have to have a two-year Community College degree that's it so education is not to answer we have been sitting education they ask education and they all kinds educated people who can't get jobs that they were trained for so no I don't think the economy can be restored what's happening now is that older people in our older Americans are tired who had good company pension plans who also saved and invested at a time when markets were rational and they also have Social Security and they are now supporting their children and their gradual but they've not had any interest income on their savings and since when comprising an eight because of the zero interest rate policy so they've had to draw down their savings and so as these savings are exhausted and of course they won't be there to live to leave to heirs so the system is being emptied on the savings of the past in order to support current existence so I think on the whole United States as an economic system is washed up and then there's nothing that can be done about it just given the nature of how politics are structured and not decisions you made now you mentioned that there were individuals that were not elected and there were individuals that were elected and many of these non elected individuals might be controlling the country even the elected individuals they report maybe to corporations who feed them funds when you look at our country today who's actually in control of the country I mean is it the Trump administration you mentioned past interviews about neocons we have the central bank some people call another group a deep state who do you see being in control of the United States right now well on the military security complex is probably the most powerful you know President Eisenhower warned us about the danger to democracy from the words of security complex in 1961 so that is more than a half-century girl and of course now it's even more entrenched if you look at its annual budget and your budget on military security complex is about 1 trillion 100 billion that's an annual budget that's tremendous profit in power in that budget and they're not going to turn this of it and that's why you see truck completely unable to lessen the tensions that the clinton george w bush and obama regimes created and prussia these tensions now go far beyond anything had ever existed during the Cold War two three weeks ago the high command when the Russian military and that's publicus that they had now been convinced by Washington the Watsons playing a is to a surprise nuclear attack on Russia nothing like this ever happened the Cold War so we're on the edge just some kind of miscalculation when the world goes up and thermonuclear plane so that is a very popular to see they were able to eat it Trump's national security adviser on the grounds that he was 200 to the Russians Trump is under full-scale assault in the media by a special prosecutor a former head of the FBI who is in with military complex and he's and even though there's no charge and crime because there's no evidence then they're investigating for obstruction of justice so how do you obstruct justice when it's not a crime so clearly they intend either to drive Trump them office or to impeach him or to create in the public's mind that he's some kind of a Russian agent and use this to block him from lessening the tensions and it appears as nothing trunk can do about that instead of nothing another powerful group is Israel on the Israel lobby is so powerful that nobody in the house of the Senate will dare stand against them if they want something they get it it's unanimous and what does Israel on people and wants to use the United States to overthrow Syria and Iran it used us to overthrow Iraq why because Israel wants the water resources in southern Lebanon this is a big river there they've twice twice simply destroy the army in to occupy southern Lebanon and twice they were driven out by Hezbollah a militia which is twice defeated the vaulted vaulted Israeli army and sent them screaming running fear for their lives so this is a humiliation to Israel but it also is a great frustration because they want that war well who supports Hezbollah Syrian Iran and Iraq that's where they get the arms money support so this is the reason we wanted to look closer we've gotten rid of right now when you're going to sit in this is why they keep going on about Iran ran around we never hit the end of that despite the agreements so there's room Lobby is extremely powerful you can't go against no elected official has ever survived taking stance against the truth and then of course we have the big banks and Wall Street the big banks essentially run the film the operating arm and some reservists and your covers everybody who are the border actus of the New York Fed but they're the executives and bikes too big to fail so the Fed was created in order to serve the banks it's always served the bikes and it that's what it's been doing since the financial crisis of 2007 2008 the so-called quantitative easing the Fed pain and the financial media reported was to stimulate the economy for interest rates to stimulate the county of course it never has it hasn't we've had the longest period stimulated monetary policy in our history and there's no sign of it because the purpose of it was to raise the prices of the debt instruments on the big bikes books the balance sheets were in trouble see all debt moves together so lauralee interest rate the higher the price of a debt instrument and so you got all these bogus mortgage derivatives and every other calendar in currants and who knows on your books and they've taken a hit and you're in solvent the Fed can fix that simply by driving interest rates to zero so that the prices of the debt instrument tracks and lo and behold you solve it again so that is been the whole purpose of the feds so-called easy now why would they be changing well maybe after I'm going to do this events but almost ten years right ten years they've been flooding the banks with money yeah that's it there oh seven its 2017 ten years the spouse is ten years old well maybe the bank's there or back in the feet and so now the Fed has a different word the dollar the dollar is the basis of the power that the United States has because it's the reserve currency most international trade transactions are conducted in towns and this means and we can pay our bills by printing money because it's the reserve currency of the world so what is ten years of creating enormous amounts of dollars but not goods and services to absorb them what's been the result when results been to drive up the prices of financial assets stocks and knots and wristlet so how is the Fed protected the dollar during this whole period well they got the bike Japan the bike of England the European Central Bank could be the same thing they all print - they all have quantitative easing - so if all the reserve currencies are printing the exchange rates stay relatively equal to stay relatively saying the dollars not dropping relative to the others because they're all pretty good that even force the Swiss to do this well then what about the gold price because may remember a few years ago no price to 1,900 miles an ounce and then what started happening well then what started happening was the bulging bikes the agents of the Federal Reserve began dumping naked short in the hugest market for both unlike the stock market if you short the stock market you've got to bar in stock you've got to cover the short but not in the gold futures market because the contracts are settling cash and so the bullion banks can create an enormous supply paper gold and just sit there turn up futures contracts and then at some opportune time when the trading is practically zilch they can not huge amounts of these shorts in the market and drives down price well the price of gold is determined in the paper gold market the futures market does not return in the physical market where people actually buy and sell the boolean itself it's determined in the straightest market relay trade paper contracts and there's no real limit on how many paper contracts you can print done so they'll use that to drive gold price down and now you can watch it every time it starts rising this up close to 1300 foot there they coming in massive amounts of shorts and the price goes down and of course the bully Mike's it can always cover these shorts easily because when they does the shorts in then the hedge funds who have gold holdings or going to keep their formulas balanced the stop-loss supporters come into effect okay and that selling ads and the price goes further than margin cause it goes frozen then the banks who caused all this can buy them up below you know where they entered and make a killing on the whole day so that's how that works that's how they control the gold price so now then we see bit corn getting bit up well what's the explanation of that well I don't know but one possible explanation is that people have realized it's the only thing that the Fed can't control they can't be any more bitcoins I think there is a futures market but it has to be covered you can't print naked that corn contracts like you can go so maybe that's the explanation people who are trying to find some section against the vast increase in fiat currencies that happened in the last ten years say okay then bitcoins answer is only so many they can't make anymore and the Fed can't control it so that's my general overview of the situation of course there are other important private interests and pharmaceuticals you know agribusiness or Monsanto's extremely powerful player but I think the three biggest of what I said military security complex Israel are baku and wall street in the big marks the generals that Trump has taken on mattis he's taken on others within his administration and they keep talking about how they're going to do they're going to do things differently than Obama out in Afghanistan out in Syria where they were explaining how the Obama administration they weren't really hitting the Islamic state targets they weren't really hitting the terrorists and now they're going to go out and actually hit these targets do you see them actually going after the terrorist groups now or is this just another play on words and trying to convince us that this is what they're really doing the reason know there is an Isis answer is that Obama here with Senator Isis is what the Obama regime used to overthrow Gaddafi and you may well remember Obama was poised to invade Syria you know we had this state news about Assad's use of chemical weapons against his own people and he had finally crossed the red line or whatever the line installed and the bummer was to parent invasion sir just like they had invaded Iraq of course it had nothing to do with Assad or chemical weapons it had to do with getting rid of a supporter of Hezbollah who blocks Israel's test of Salah Lebanon well two things happened the British Parliament voted no and so all the sudden we didn't air in the cover and the other thing that happened was the Russians said no we'll fix it diplomatic we're going to take any chemical weapons that are in Syria and turn one review you can destroy so this blocked Obama from invading and so hearing in the neocons and the CIA it's okay we'll just an Isis to do the job so that's that story we've always supported Isis an American weapon Isis and so what is happening now that the Russians and Syrians have won the war we are pretending to be fighting Isis so we can get troops in Syria we were trying to petition the country so that we could keep the fake rebellion going and keep this pressure on Assad in Syria and definitely maybe tar out the Russians or whatever but that's with the planets and so so far we don't really see any evidence of us attacking Isis we see evidence of the United States attacking Syrian troops the other day they shot down a Syrian airplane that was attacking Isis and so what is happening is where is Obama on it sort of said well we're not going to be able to get Syria knocked off for Israel Trump the Trump group is saying or we're going to somehow have to rescue the situation by pretending that we are fighting Isis but what they're really trying to do is to get troops and equipment stuff there that they can use to tition the country and keep part of it under our control so we can continue to film in so-called rebels and that's what that situation is now the Russians in my view miscalculated they've had the war won several times and then they stop and they do this because they have this crazy hope the eventually the Americans are going to cooperate with Russia in the fight against charl but of course we've got we're not going to do any such thing so every time they stop we rush in more we get more involved and the last time when they hesitated hoping to get some kind of an agreement with us to fight terror together because they're trying to in some way to reduce these tensions we have escalated we restart trypsin and then the other day when we shut down that Syrian plane this seemed to across a Russian line and they announced as best as I can understand it and no fly also and they said if you come into territory in which the Russians seem only are operating you're going to be target so no one knows whether this means they're just going to lock on and make pilots worried or whether this means they're going to bold bold American planes out of the sky I suspect the latter because they said whether it was an aircraft or unmanned drones so there wouldn't be any point of just locking on an unmanned drone it wouldn't worry pilot doesn't have one so I think here the Russians have finally realized that they were kind of stupid to think that they were going to get any kind of cooperation from Washington in fighting Isis and that they would not be able to use this type of corporation to smooth over all the tensions that have been raised by the neoconservatives and Obama and George W Bush and Clinton that's been going on for years decades action and and so now I think they when they make this type of announcement I think they mean it I don't think the Russians Bluff to say something they're very slow to do anything that's provocative but if they draw a line then it's real that's monkey so now we have to see what will the idiots in Washington do man they're all idiots that's all the other idiots they're low-grade idiots that's how our government is if they say oh well we don't care about the Russians then poof out of the Skog of some American palate and what happens that's it looks like they're getting ready to do something because from an anonymous source of course coming out of The Associated Press someplace in the White House they're saying that Syria and Russia are preparing another chemical attack and they see signs of this which is really absolutely ridiculous I mean why would they do this at this point we know that the other chemical attacks were completely fake but to me it looks like they're getting ready to do something else in Syria with this type of warning well it's not clear exactly what they can do other than start warm Russia because the Russians clearly have air superiority not just because their fighters are far superior to ours but because they have all these ground air based system successes 300s form they don't fail so what really I think yeah there can be another false flag attack I'm sure Washington will arrange that and they prepare the public for it by telling them in advance the Russians are going to do I mean how would they know that it wouldn't know that furthermore anyone when the grain of sense knows that these chemical weapons are not very effective and is imported by luring them and that's why they're seldom used they're just not very effective and so clearly the Russians and Syrians are not going to do in such thing this is just part of the demonization so it deepens the hostility of the Western population who still believe the media against Russia and that makes it easier for the United States to implement some risky or unjustified policy so that's what that's about you know they say the Russians and Syrians are going to use chemical weapons is to cause a kind of hysteria and hatred for the Russians that's now associated with chemical weapons and therefore all the populations in Europe and England Karen Australia the United States they say all these mean dirty Russians and so they accept whatever kind of policy Washington comes up with about how irresponsible or provocative or dangerous but what policy can they do I just don't I don't know at this point the the military in the United States still has some intelligent generals and I think they realize that helping is related works nuclear war and I think that they understand that Russia can't be pushed around when they have vital interest involved so the other reason we have for attacking serum is if we can overthrow Assad then we can unleash these so called jihadist forces on Iran and if we can then do the same thing to Iran you know we started Iraq and Lybia we got we knock those two countries off in the movement it looks like we're going to be defeated in Syria but the reason for other than clearing the path with Israelis and Lebanon other reasons is to spread jihadism and to destabilizing it when because then that exposes Russia Russia has a large Muslim population and then they can spread that into the Russian Federation and that way weakened in the country that can block American unilateral action that's the new conservative strategy that while we were locked away for years and Wars and the Middle East that the neocon said we're going to be 3-week cakewalk now it's sixteen years now some cakewalk the Russians brought themselves back up and now they can tell us no well the neocons can't stand that anybody can block American roulette ilysm that's inconsistent with their ideology of American being we work with the hegemonic power wall so then getting rid of Syria is a way of spreading them into Iran and from there into Russia and causing so much turmoil within the Russian Federation itself that the Russians simply can't function as a check on American imperialism so the Russians are not going to let go no matter what we do plus it's been a big successful there's been a reassertion of their power and influence it's made an impact all over the world it's made the Russians feel like they're back again now that even though the Soviet Union collapsed and they became they went from being some body to being no body but man again there's somebody and so that's not something the Russian government is going to turn themselves and if the people in Washington too stupid to know that it's going to be a war thank you very much for being on the x-22 Report spotlight I really appreciate it once again how can people see your work I just go to my website it's just www.craigslist.org o-r-g fantastic thank you very much for being on the spotlight I really appreciate it you certainly walk all the best you too thank you [Music] you you [Music] you

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