NY Times, Some Call It Recovery, Paul Krugman, Nobel Prize Winning Economist

PAUL KRUGMAN'S ARTICLE IN TODAY'S NY TIMES AUGUST 23, 2009

"Some call it recovery"

Reading comments, I see that some readers think that by saying that we may be in a recovery by the usual definition, even though jobs are still being lost, I’m either (a) shilling for Obama (b) radically changing my views.
Um, no.
I didn’t invent the standard definitions of recession and recovery. The real problem here is that the standard language doesn’t make much allowance for the ki nd of gray zone we’re now in; that’s because in the pre-1990 era recessions tended to be V-shaped, so that jobs snapped back as soon as GDP turned around. I don’t think what we’re going through is good news — but GDP is almost surely rising, so the recession, as normally defined, is over.
And the current situation is no better — actually, worse — that I thought it would be when arguing that the Obama economic plan was inadequate. Read this, and bear in mind that the unemployment rate is now 9.4%.
The stimulus has helped, and the conventional recession is over. But the economy is not recovering in the most crucial area, job creation, and the stimulus won’t be enough to restore prosperity.

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Dr. Phillip's Commentary to Dr, Paul Krugman's article in Todays NY Times, August 23, 2009, "Job Restoration"

Thanks again Paul Krugman for revisiting “recovery” and putting job creation at the top of the list, an excellent article. If the U.S. recession continues unabated, then jobs or lack thereof are at the nexus of this problem, words and platitudes will not change that fact. Today, August 23rd, the lead story in the LA Times emphasizes the 11.9 per cent unemployment rate in the area. It’s time for corporate C.E.O.’s to finally be confronted with the need for Job Restoration. These folks live in America, their children and grandchildren attend American schools, they utilize American services to the fullest, it’s time these C.E.O.’s consider the nation that gave them and their companies a future, envied by the rest of the world.Recently, Bob Herbert of the Times, reminded all Americans, recovery is still about the national economy. “The American people are worried sick over the economy, which may be sprouting shoots from Ben Bernanke’s lofty perspective but not from the humble standpoint of the many millions who are unemployed or those who are still working but barely able to pay their bills and hold onto their homes.” I personally remain concerned about U.S. job losses to China without regard for their repacement at home. In the woods when you harvest a tree you plant another, this is not happening on the jobs front..

Americans need to read the article in yesterda y’s Financial Times (of London) concerning the “Shopping habits of China’s suddenly wealthy” (August 21). The “Baofahu” as they are called, have become the suddenly wealthy. “Big flashy cars like the PorschePanamera and the Geely GE, otherwise known as the Baby Rolls-Royce, are just a couple observations concerning their tastes. Add to the list their appetites for Gold, Barbies, Spirts and the finest wines, Ivory, Dairy, Dried seahorses for aphrodisiacs, they are still labeled by the author as “penny pinching, ruthless, suspicious shoppers.” This is a must read for Americans being admonished to drive smaller callers, use less energy, be careful in wasting healthcare, and support even greater participation in global trading.

The Financial Times also has reported “Caterpillar chief hits at “buy American.” “Addressing the Chicago Council on Foreign Affairs, Jim Owens also attacked the ‘buy American’ position in the stimulus, saying it had prompted ‘a wave of concern throughout the world.” The paper observed that Mr. Owen’s words carry weight in both Washington and globally…The Caterpillar chief is also a member of Mr. Obama’s Economic Advisory Board and is close to both the President and,…the transportation secretary…Mr. Owens stated that “we cannot be a great country by building a wall down the southern border.” (April 29, 2009, Financial Times, Hal Weitzman) August 22, 2009, FT highlighted the story that Caterpillar holds China truck talks (Justine Lau), “The talks come just months after Caterpillar announced that it would expand its joint venture with Navistar to produce commercial vehicles outside North America…Caterpillar also said it would withdraw from being an engine supplier for U.S. truck makers because of declining sales in the U.S. market.
It should be noted that Caterpillar is not the only American company exporting jobs to China.

There have been some nations, however, who are to be commended for investing dollars and plants in the United States. Several auto plants are the result of Japanese, German, South Korean and other nations who understand the reciprocity inherent in international trade. Businesses and nations must all yield to a free exchange on labor and production.Much has been said in recent years about “job creation.” Whether small businesses, the federal government, corporations or even the U.S. Coast Guard, estimates can range from 30,000 to over 400,000 to create a new job.

Job restoration is quite a different matter and at some future date in time with a new administration, there will be a commission appointed to review all corporate efforts to return jobs to this nation. The Government for many years has been the en gine for the new China, with its rising employment and middle class job growth, increasing spendable income for many of its citizens. The time has come, with growing U.S. unempl oyment, when trading internationally, to make it clear that the China America relationship must observe a new reality, fairness, when it comes to American job losses.Whirlpool announced on April 7, 2009 that it was to close a Washing Machine Plant in Shanghai, resulting in the elimination of 600 jobs. In the article, however, it was also stated that “the closure of the Shanghai factory will result in the elimination of about 600 positions. Whirlpool has established several measures in accordance with Chinese labor laws to provide support to all affected employees during the change…Moving forward, production of washing machines will be consolidated into the company’s Hisense-Whirlpool joint venture facility, located in the Changxing Economic Development Zone, in the ZheJiang Province. The facility, which also manufactures refrigerators, will create 900 new jobs by the end of 2009."

Why not send those extra 300 jobs to a plant in Arkansas or Tennessee? A retrospective comment for the CEO of Caterpillar, Mr. Owens, I strongly support the “Buy American” concept, and I want some of the Caterpillar jobs which the company would claim were created in China, returned to the United States, If we want true recovery, corporate responsibilty is the key.