The above link will take you to an article by Dr. Peter Morici, University of Maryland professor and former Chief Economist at the U.S. International Trade Commission. The gist of Morici’s article is that while Wall Street is experiencing a rebound, there will be none for Main Street. I found Morici’s comments on the trade deficit most significant:
Dollars spent on imports that do not return to purchase exports can’t be spent on American products. That saps demand for American-made products, keeps factories and offices shuttered, and idles workers.
The trade deficit is mostly oil and Chinese consumer goods. Export more, import less, or the economy flops.
Although I take issue with his emphasis on China, since our trade deficit in manufactured products with China, when put into per capita terms, is dwarfed by those with many other countries like Japan and Germany – this last sentence says it all: “export more, import less, or the economy flops.” In other words, get rid of the trade deficit. Actually, Dr. Morici, a small correction is in order. The economy has already flopped. It’s been in a state of “flop” for a long time and will remain there until your advice is heeded.
As former Chief Economist at the U.S. International Trade Commission, Morici shares some of the blame for trade policy that got us into this mess. It would be nice if he would now offer ideas for changes to trade policy that will get us out. It’s easy to say, “export more, import less,” but saying it doesn’t make it happen. Obviously, some move toward protectionist policy is required to drive such a shift. We need economists with the guts to come out and say it.