America Doesn’t Work

Keynesianism Kills America Dream
Keynesianism Kills America Dream

The Bureau of Labor Statistics has issued a new set of monthly numbers. We get the following according to CNSNews.

A record 94,610,000 Americans were not in the American labor force last month — an increase of 579,000 from August — and the labor force participation rate reached its lowest point in 38 years, with 62.4 percent of the U.S. population either holding a job or actively seeking one.

This occurred because the economy added far fewer jobs than were previously forecasted. This is despite that the widely reported U3 statistic remained predictably disingenuous at a 5.1% rate of reportable unemployment. Here’s what was previously forecasted.

Economists surveyed by Reuters forecast U.S. payrolls outside of farming rose by 203,000 last month, bouncing back from softer job growth in August despite worries a China-led global economic slowdown is sapping America’s strength. “The U.S. economy is alive and kicking,” said Phil Lachowycz, an economist at Fathom Consulting in London. The jobless rate was expected to hold steady at 5.1 percent in September because some workers who gave up jobs hunts in harder times were expected to return to the labor force.

Here is what is really happening in America. For the 3rd month in a row the BLS reports that native-born Americans saw their employment numbers decrease while people from overseas were hired in increasing numbers. The employer-driven replace America agenda continues apace. Here’s how things have gone the last quarter of a year.

Over the past three months, the job numbers for native-born have dropped by nearly 1 million, exactly the number of jobs President Obama promised to add when he ran for re-election in 2012. During that period, jobs for immigrants grew 218,000.

So of course, the Fed will probably hold off on raising interest rates and ending policies designed to enact quantitative easing. Whether Janet Yellin intends to or not, she is following a policy that John Maynard Keynes once described as “The Euthanasia of The Rentier.

Thus it is to our best advantage to reduce the rate of interest to that point relatively to the schedule of the marginal efficiency of capital at which there is full employment. There can be no doubt that this criterion will lead to a much lower rate of interest than has ruled hitherto; and, so far as one can guess at the schedules of the marginal efficiency of capital corresponding to increasing amounts of capital, the rate of interest is likely to fall steadily,… yet it would mean the euthanasia of the rentier, and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. Interest today rewards no genuine sacrifice, any more than does the rent of land. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital


What this ultimately accomplishes is the euthanasia of the saver. When will wages start to pick up? You are joking if you think the answer is soon. Return on investment no longer comes from saving or from investment in capital. There are no interest rates currently available that justify putting large sums of capital at risk. This means that profits are made through the reduction of costs.

The number one cost of most post-industrial enterprises is human capital. You avoid that cost by avoiding the use of human capital. Or you can economically substitute into cheaper versions of human capital. These two basic axioms explain why so much of the American workforce isn’t finding employment. It also explains why those who hire would rather do so by immigration visa in order to maximize their power over the worker while minimizing their costs.

Getting rid of the workers just makes good business sense. It is what the current regime of economic policy rewards most fruitfully. As long as this is the case, U3 unemployment will be a meaningless statistic and the workforce participation rate will continue to plummet whether or not Bay Boomers manage to successfully afford retirement.

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