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Aug. 24, 2009 - Freedomain Radio - Stefan Molyneux

12:09

1441 True News 50: Ten Lost Years

What happened to your income over the past decade, and why.

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	Hi everybody, it's Stefan Molyneux from Free Domain Radio.
	This is True News, current events clarified, number 50, 21st August 2009.
	Ten lost years grabbing the wheel of the sinking ship.
	The pattern. So here we're going to be talking about economic growth, particularly within the United States.
	And we're going to differentiate growth.
	Some growth is like height and some is like the I can take on 10 cups PCP or I can pull my arms off lifting a truck steroids.
	Some is healthy and positive and some is artificial and boosty and results in significant hangovers and addictions and roid rage.
	It's like going to therapy to become happy versus snorting some cocaine.
	Both will make you happy, one is a little more sustainable.
	So let's take a look at your last 10 or so years.
	For 97-07 yearly GDP growth, 2.8% in the United States.
	Ooh, look, 3.8% in Canada.
	Now, this has not been steady growth from the production of real goods and services in a free market economy, but from manias, such as the dot-com housing and commodity bubbles.
	And for those who know the history of 17th century Holland, this is equivalent to getting all kinds of crazy trading tulips.
	So let's look at the money boom versus the actual fact.
	So as any decent person who's well-versed in economics knows, printing money It causes booms and crashes.
	It is an artificial overstimulant, like cocaine, to the economic body itself.
	Printing money in excess of the economic growth makes those who print money very rich because it makes you very rich to be able to type whatever you want into your bank account.
	It makes those furthest from the center of power, i.e.
	the poor and disenfranchised, much, much poorer.
	And this is going to be the case that I'm going to make.
	This is what has been going on. What are the real indicators?
	1997 to 2007, U.S. workers with college degrees got a 3.2% increase in median wages after inflation in 10 years.
	In 10 years!
	That is shockingly stagnant.
	And this conflates public and private sector employment, which we'll get to in a sec.
	Since the 1970s, leisure time in America has plunged by almost one third.
	So why are you making more money?
	If you are making more money, because you're working harder.
	And this, of course, is catastrophic to families and marriages and friendships and all of the other kinds of good things in the world.
	Between June 1999 and June 2009, only 550,000 private sector jobs were created in 10 years in the US, which has a population of hundreds of millions.
	This is essentially no growth whatsoever in the private sector.
	The only real lasting gains in the US have been in the public sector.
	Now, I'm going to include in this, and I'm not alone in including this, the healthcare field, which is so heavily regulated and controlled and subsidized by the government that it is more in the public sector than the private sector.
	The US government has essentially, quote, grown the economy over the last decade by borrowing money from China and using it to create new jobs in healthcare and education and other government fields.
	And in government-derived fields, Such as the guys who do all the financial wangdiggory around futures and derivatives and all those other kinds of financial instruments.
	This is all stuff that occurs when you print lots and lots and lots and lots of money.
	So the private sector engine of the economy essentially died over a decade ago, and the only growth that has been occurring in the US is China-financed public sector employment.
	Here's an example, a chart that's a little chilling from shortly after the post-war period, 1949 to May 2009.
	We can see that in the 40s and 50s, it was 40% growth in private sector jobs over 10 years, 40%, 35%.
	As the government began to grow, it began to decline.
	And here we can see that as of the turn of this century, it has just plunged completely off the map to virtually zero.
	That is... When the government gets so large that, like a cancer, it overwhelms the healthy cells and the entire organism begins to die.
	So health, education and government, the place to be, changes in jobs over the past 10 years.
	Thousands of jobs. In healthcare, education and government, job growth has been 7 million or so.
	Sorry, yeah, 7 million.
	And in the rest of the economy, it's plunged by almost 4 million.
	Right? So this is public sector eating like a vampire taking his victim down into the grave the rest of the economy.
	This is the guns taking over the handshakes.
	Here's a graph I put together.
	U.S. change 99 to 2009.
	Thousands of jobs by category.
	I will just describe this briefly for those listening to the audio.
	Healthcare, food and drinking places, government, education, professional and business services, those are largely financial services, government except healthcare and education, all showing healthy growth, social assistance, private education.
	A private education is driven by the lack of quality in public education, of course, and these have all shown healthy growth.
	Unfortunately, what has lost out?
	Things like transportation and warehousing retail, wholesale, construction, IT, and, catastrophically, the largest drop of all, Just shocking is the manufacturing sector.
	So we're no longer making stuff.
	We're applying government band-aids.
	We are training children, which again is a good thing to do, but it's still a status occupation or is derived from statism in that people have to send their kids to private schools so they don't get Bad educations or bullet wounds.
	So this is a strong example of how when you use the violence and the power of the state to manage the economy, you get growth in state occupations at the entire expense of that which actually drives the economy and the tax base, which is the private sector.
	And why do I say this is occurring because of the growth?
	Now, this is from ShadowStats.com.
	I'm no economist. I'm certainly no mathematician.
	You can take these with all the grains of salt in the world that you want.
	They seem to me fairly reliable.
	But again, I'm no expert. Please look these things up on your own if you like.
	Annual US money supply growth, M1, M2, M3. You can look these up as well.
	They're on Wiki. We can see that year-to-year change since 2003 has been growing, growing, growing to the point where a 16% growth in certain aspects of the money supply, a 16% growth with a virtually flat economy.
	That is going to result in a whole series of booms.
	Then the money supply was cut back because when you have a very high money supply, you get enormous rampant inflation.
	And of course, when the money supply was cut back, what happened?
	Well, money supply was cut back.
	Unemployment went through the roof.
	Official unemployment rate just under 10%.
	It's been calculated anywhere from 16 to upwards to 40% under employment and unemployment because, of course, the government doesn't count people who stopped looking for work or who are working part-time but really want full-time or who are underemployed relative to their previous jobs and so on.
	So you can measure this anyway, but as you can see from the graph here, it is catastrophic.
	When you throttle back the money supply, you produce the hangover of unemployment.
	14.5 million people in the U.S. are currently unemployed or have been out of work for 27 weeks or more.
	The highest ever unemployment.
	People too discouraged to look for work or forced to look for work only part-time is 16.3%.
	6.7 million jobs have disappeared since the recession began in December 2007, and these have largely disappeared, of course, in the private sector.
	Manufacturers account for nearly one-third of the loss.
	In order to cut down unemployment, jobs would have to be created at the rate of 100,000 every month just to keep up with the net additions.
	That would be to just keep unemployment stable at 16 to 40 percent.
	But if we want to reduce it, it's going to have to be that much more.
	Since the private sector is not creating jobs, it is clear that this is not going to occur.
	Or if it is going to occur, it's going to occur in the public sector, which is only going to add to debt and the future economic catastrophe.
	In 1980, a dollar of new debt produced a dollar of GDP growth because it was invested largely in the private sector and actually did produce growth.
	As of 2007, every one dollar of gross domestic product growth took five dollars in debt because the growth has been occurring through the government rather than through the private sector, so it's much more inefficient.
	That is catastrophic.
	So what has been gained in the economy is not productivity, but debt financing, i.e.
	China translates to public sector jobs, translates to future economic collapse.
	And this has been going on for some time.
	Some of the enormous growth, and I've talked about this in other shows, some of the enormous growth in the economy that occurred in the 50s, 60s and 70s came from women entering the workforce, which of course is not a bad thing if that's what they want to do, of course, but we got a whole lot more cows to milk as far as the state went, and that is why there was such growth.
	It wasn't all to do with private sector economic productivity, but the growth came from women entering the workforce because of course the work that women do at home or do at home is not.
	Counted in the GDP, but as soon as they put out a job application, suddenly it's magic economic growth.
	So it wasn't quite as real as it seems.
	And of course, this is not going to happen again unless we start conscripting child labor, which is not likely to happen, fortunately.
	But there's not a huge pool of untapped workers.
	There are going to be fewer workers in the future rather than more, which is why we can see this whole mess, this whole thing called the state is entirely unsustainable.
	So what is the moral? Well, my friends, I think it's just we have to accept the ship hit the iceberg decades ago.
	Government power grew so substantially, particularly in the 50s through the military-industrial complex and the Cold War and then the 60s through the Lyndon Johnson's Great Society programs, the massive expansions of the welfare state, and so on, that the future potential of private sector job growth and sustainability of the economy was toasted decades and decades ago.
	I mean, I know lots of people are struggling, ah, let's turn this thing around.
	It's like, no, no, no. It's like, let's...
	And you're already underwater.
	It's not your fault. It's not your country.
	It's not your government, right?
	You're just taxed livestock, and the farmers have been on a bender, and things are falling down around your ears, and it's not your fault.
	If you're unemployed or underemployed, my absolute deepest, deepest sympathies, I really do understand, I really do sympathize, but don't take it personally.
	This is just what happens when we use the violent power of the state to attempt to solve social problems.
	Things get worse and worse and worse and worse.
	People get mad on the government.
	To me, this is like yelling at a guy eight minutes away from dying from lung cancer to quit smoking.
	Doesn't do any good. I mean, he's at the end of his life.
	Statism, as a philosophy, is dead.
	The state as an entity, particularly in the United States, is at the end of its lifespan.
	Yelling at a guy six minutes away from expiring from lung cancer that he should quit smoking is just a waste of time.
	What we want to do, in my opinion, is use...
	The death of the state to instruct people on how violence should not be used to solve complex social problems.
	Violence is only appropriate in self-defense and should not be used for social engineering.
	Violence should not be used to control the money supply.
	Violence should not be used for charity because then it's no longer violence but theft.
	Violence should not be used to educate children.
	Violence should not be used to shovel healthcare practitioners and providers around the world.
	Or at least around the country.
	And violence should not be used to herd the population around.
	Because violence grows like a cancer.
	Violence is the human cancer.
	And violence corrupts everyone that it touches.
	And when we have institutionalized violence like the state, it will always go this way.
	Thank you so much for watching and listening.

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