In an exclusive interview with FNA, Roberts said the US workers have to take recourse and part-time jobs with low wages, resulting in losing the ability of the US consumers to drive the economy.
Commenting on the US President’s tax cuts policies, he added, “The profits caused the companies to buy back their shares, just driving up the shares prices and benefiting again only the owners of the companies and their managements.”
Paul Craig Roberts, Ph.D. of Economics, taught at Stanford University and the University of New Mexico before working as an analyst and adviser at the United States Congress. He was the United States Assistant Secretary of the Treasury for Economic Policy in 1981.
Below is the full text of the interview:
Q: How do you view the economic situation of Americans?
A: Most of Americans have no discretionary income; they are unable to save. According to the Federal Reserve Bank, about half of Americans are unable to raise 400 dollars in cash without selling their personal assets.
Q: Why are significant number of the Americans paid low wages, and a limited number of Americans receive fortune?
A: Throughout the last 20 years, the US economy has benefitted the owners of the companies. This is because the manufacturing jobs have been offshored to Asia. So that the American work force has been displaced by the move of the jobs to China and other countries in Asia. This has seriously reduced Americans’ wages and these workers have had to take recourse and part-time jobs which are poorly paid. Therefore the ability of the American consumers to drive the economy no longer exists.
On the other hand, the profits from the lower labor costs have increased the prices of the stocks shares, and therefore the capital banks shareholders pay the bonus payments to the management.
Q: Why has not Trump’s economic policies resulted in an elevation in workers’ wages?
A: The tax cuts mainly benefit the corporations. The plan was that would cause the corporations to bring their profits which are held abroad back to the United States. Therefore, the rerun of those profits would lead to more domestic investments, and to higher productivity and wages for workers. But in fact, the profits caused the companies to buy back their shares, just driving up the shares prices and benefiting again only the owners of the companies and their managements.
Q: without a considerable economic growth, why is the official employment rate so high?
A: The very low reporter rate of the unemployment is obtained by not counting discouraged workers. The way the American unemployment statistics are derived is by asking if the worker has looked for a job in the past four weeks. Workers who have given up looking for jobs, because they cannot find jobs, are not considered as a part of the workforce. Therefore their unemployment is not counted. When you count all of the discouraged workers, the unemployment rate is around 20%.