US economic problems date back to the 1980s and Reagan
‘US economic woes date back to Reagan’
Mon, 06 May 2013 16:48:36 GMT
The US economic problems date back to the 1980s, and have their roots in former president Ronald Reagan’s failed policies, an analyst tells Press TV.
“What we are talking about here are the long term affects of the Reagan revolution and the Paul Volcker tenure at the head of the Federal Reserve System beginning in the 1980s,” E. Michael Jones, editor of Culture Wars online magazine told Press TV.
““The inflation was a problem in the 1970s. Paul Volcker became head of the [Federal Reserve System] and what he did was to raise interest rates to astronomical heights, between 15-21 percent. Once you have interest rates that high, there is no point in manufacturing anything,” said Jones.”
The journalist went on to say that the move provided an opportunity for capitalists to purchase and cannibalize ailing US companies, while diverting profits into US treasury notes instead of reinvesting them back into the economy.
“What happened during ‘79, ‘80, ’81 is the wholesale looting of the manufacturing base of the United States to pay for this huge military buildup that we are still paying off,” Jones added.
On May 4, a report published by the Alliance for American Manufacturing (AAM) showed that the manufacturing sector failed to produce any jobs in April, after the sector lost 3,000 jobs in March.
This comes as a setback for US President Barack Obama who promised adding one million positions during his second term.
Obama set the goal during his last presidential campaign after the country lost 5.5 million manufacturing jobs between 2000 and 2009.
“The United States has never gotten out of that hole because it destroyed its manufacturing base in order to raise short-term cash,” concluded Jones.