Let me say at the beginning that I am not a fan of Pat Buchanan. There is precious little that he writes that I can agree with. On the other hand, his column titled Our Hollow Prosperity, date line 15 Feb 06, is worth reading.*    

His topic is how the free trade policies of the US have affected the general prosperity of the US. With extensive research in US government reports, he details that while the total GDP (Gross Domestic Product) of the US increases, it is in the distribution of that prosperity that things go askew. While the top end of the distribution structure shows great increase, the middle and lower classes show that wages actually fell by 0.5% over the last year, after falling 0.7% over the prior year after adjustment for inflation.

     The touted jobs creation data (4.6 million jobs created since 2003) and the low unemployment of 4.7% hides other factors - namely that the entire job creations have been in the service sector.

In the last 7 years, the US has lost 17% of the "goods producing" jobs. In other words the manufacturing sector, where the largest wages are paid, is plummeting. Those jobs, including those in the "information technology" are disappearing, mainly to off shore companies. And it is those jobs that do the most for national prosperity.

On top of this, immigrants (read Mexicans) that are willing to work for lower wages are taking the lower paying service sector jobs.

But now, let's play a little game. Let's do some substitutions and refiguring for some fun. First, change the name of the country to México. Now, re-proportion the figures to account for the GDP of México (1.0 Trillion dollars) from the 12 Trillion US GDP. Then look at what the increase of jobs has been in México over the same period. Instead of the "service sector", the jobs increase in México has been in the "informal" sector (the unofficial jobs sector that pay no taxes, receive no benefits, and are the true bottom level of our economic society).

As far as manufacturing jobs in México, it remains flat or dropping by Mexican government data. And México also, is exporting better jobs off shore. Even the rise of employment in the "maquila" (the border assembly plants) is offset by the loss of manufacturing jobs in the interior. The per capita portion of the GDP is not increasing over all, and while the upper end rises, the rest is dropping.

As of now, the US rank in the world of GDP per capita is #4. Japan is #22. Europe is #31. México ranks #86 while China ranks #118 and India is #155. The GDP per capita in the US is at $41,800 dollars and México is at $10,000. China is $6,200 and India is at $3,400. That is per year. I thank one of my readers for this research. And readers can figure out where they fit into to the scheme.

Of course, part of México's "solution" is the exportation of low paid labor to the North where the "low" pay up there is much better than at home. It comes down to exporting jobs out of México.  It also generates a bunch of money coming back to México as "remittances", which constitute our second largest source of foreign income. On top of this, México also has an illegal immigrant problem with illegals from our southern border taking many of our "service" sector jobs (maids and so on). Many of these also have a language problem here.

The only good thing about México's gross economy is that México has been able to maintain a balanced budget and is keeping the trade balance in general good order. But some of our financial thinkers have stated that México should start investing in the infrastructure here to start increasing our national productivity. Note that they say, "invest" as in investment. Invest to make a return on investment.

Carlos Slim, a Mexican, and one of the richest men on the globe, points out that the annual 3% economic growth that México is posting is "insufficient". He says that México has the internal resources to make the investment to increase growth if we had the national will to do the needed structural reforms necessary to encourage investment. This is contained in the National Agreement for Unity, Law and Order, Development, Investment and Employment, later called the Chapultepec Accord of which Slim is a member. But this is something that our presidential candidates here have yet to address. Their only promises are to "increase" employment, but don't address the how. Or, for that matter, the quality of jobs. And as a side comment, if the Law and Order is not addressed, the rest falls to the way side. Without that, nothing will work.

We note that the US ambassador to México, in a letter to the Mexican government, stated that México's present policy of exporting "surplus" labor to the US is an "unsustainable" policy. Someone should tell the US that their policies of job "creation" (or loss), federal deficit, trade imbalance and wealth distribution is unsustainable also. The ambassador has also been on record for warnings to US travelers to México to be aware of dangers lurking in México. His latest message is a 16-page "book" posted on the web as the México Counselor Sheet, USDOS titled Mexidata.Info.  Something about pointing out the state of law and order in México.

The bottom line is that figures don't lie, but liars figure. But in the financial data above, the liars are the politicians of both countries. While the majority of people in México say that they are no better off (or even worse) now than before, the same thing is happening in the US.

Buchanan closes his column with this statement: "The affluent free-traders, whose wealth resides in stocks in global companies, are enriching themselves at the expense of their fellow citizens and sacrificing the American worker on the altar of the Global Economy."

Just substitute "Mexican" for "American" and Buchanan can join many of México's center and center left politicians. Welcome to México Mr. Buchanan!

 _____________________________________
Richard N. Baldwin T., a HispanicVista.com (http://www.hispanicvista.com/) contributing columnist, lives in Tlalnepantla, Edo de México. E-mail at: R1041643422@aol.com

* It can be found at http://www.creators.com/.