The above-linked CNBC article reports that Obama has a plan for boosting exports to Asian nations, a plan he’ll unveil in his upcoming trip to the region.
President Barack Obama said on Thursday he planned to discuss a strategy with Asia Pacific leaders calling on their countries to import more U.S. goods and the world to rely less on exporting to the United States.
“In the coming days, I’ll also be meeting with leaders abroad to discuss a strategy for growth that is both balanced and broadly shared,” Obama said before leaving on an Asia trip that includes a meeting of APEC (Asia Pacific Economic Cooperation) leaders in Singapore.
“It’s a strategy in which Asian and Pacific markets are open to our exports, and one in which prosperity around the world is no longer as dependent on American consumption and borrowing, but rather more on American innovation and products,” Obama said.
Since boosting exports is something over which the U.S. has absolutely no control, I smell a rat. Exports are a function of foreign demand for U.S. products and we have no control over that. We’ve been trying for decades – cutting our manufacturing costs, complaining about exchange rates, filing complaints with the WTO (World Trade Organization), boosting “innovation” – all to no avail. If our trading partners are unwilling or, more precisely, unable to import more American products, they won’t. So what’s the plan? Does President Obama plan to send container ships-full of American products to Asia and then dump them in the ocean? Hey, I have a plan to boost book sales, too. I can advertise and cut the price of the book all I want but, unless I put a gun to your head, you won’t buy the book unless you want to.
Well, perhaps there is another way. I could give you $20 to buy the book, which retails for $16.95. Who wouldn’t jump at that deal? Of course, I’d have to just print money to keep that offer going for very long, but at least I could delude myself into believing that book sales are going gangbusters and, as long as you’re willing to overlook the fact that the money is couterfeit, then you’ll be happy too. And my printer will be happy as a clam.
Could it be that Obama’s plan is something similar? We’ve seen that he and Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke have no qualms about cranking up the printing press to boost the economy. The problem has been that Americans then use that money to fund the purchase of imports, boosting foreign economies and not our own. So wouldn’t a more effective use of that money be to just give it to China, Japan and Korea on the condition that they use it to buy American products?
Yeah, yeah, I know: it’s a stupid idea that’s doomed to failure, once mountains of American products pile up on the wharves at their ports, and once we realize that those funds are being diverted to expand China’s military. But it would boost American manufacturing in the short term, for maybe a few years, which is all President Obama needs to win a second term and to claim a legacy of having revitalized the manufacturing sector of America’s economy. Publicly, both Obama and the Asian nations will claim that this money is a “loan” from the U.S., but privately they will agree that it’s nothing of the sort; just printed money that’s never to be repaid.
If this isn’t the president’s plan, then something equally twisted is likely to emerge. If our leadership isn’t smart enough to fix our broken trade policy in a way that’s within our control, by returning to the sensible application of tariffs that once built this nation into the world’s preeminent industrial powerhouse, then its only alternative is to strike preposterous deals that gloss over our trade imbalance and give the appearance having done something meaningful.