Obama Outlines Strategy to Double Exports

http://www.cnbc.com/id/35816105/comid/1/cache/494#comments_top

No sooner did I click the “publish” button for my previous post when along comes this article (above link) about Obama’s plan for doubling exports.

President Barack Obama, anxious to spur growth and tackle high unemployment, Thursday laid out a plan for tougher enforcement of trade laws, government advocacy and credit assistance to double U.S. exports in five years.

Obama also prodded China to move to a “more market-oriented exchange rate,” which he said would make a big contribution to putting the global economy on a healthier path after the worst economic downturn in decades.

All of this focus on strengthening the yuan is a complete waste of time.  No trade deficit has ever been reversed by changes in exchange rates.  Ever.  That’s because exchange rates stabilize at a level where unemployment is equal, not at a rate where trade is balanced. 

“We have to rebuild our economy on a new, stronger, more balanced foundation for the future, a foundation that will advance the American people’s prosperity at home, and support American leadership in the world,” Obama said in prepared remarks at the U.S. Export-Import Bank’s annual conference.

That means the United States cannot “stand on the sidelines” as other countries are busy negotiating trade deals, said Obama, who first announced his goal of doubling exports in his State of the Union speech in January.

Uh oh.  Here comes more trade deals that begin with the U.S. showing good faith by opening our markets first.

High U.S. unemployment is fueling anxiety about trade and trade agreements, which many of the president’s fellow Democrats blame for million of manufacturing job losses. Obama recognized that concern, but said the U.S. economic future depended on producing more to export abroad.

Export?  To whom?  Whose needs for manufactured goods aren’t already being met by China, Germany, Japan, Korea or a host of others?  There’s no untapped markets out there. 

“There’s no question that as we compete in that global marketplace, we’ve got to look out for our workers. But to look out for our workers, we’ve got to compete in the global marketplace. Because it’s never been as important an opportunity for America,” he said. “Ninety-five percent of the world’s customers and the world’s fastest-growing markets are outside our borders.”

Right.  And those markets are smart enough to insist that American companies build their plants there instead of exporting.

But when the United States negotiates trade deals, it must aggressively enforce those agreements to make sure other countries honor the commitments they make, Obama said.

So we find an unfair issue, file a complaint with the World Trade Organization.  A year or so later, the WTO issues a preliminary finding, which is then challenged by the offending nation.  Two years later, the WTO issues a final ruling, perhaps authorizing retaliatory measures by the U.S.  By then, the offending nation has moved on to other practices that assure their surplus of trade.  And the process starts all over.  We’ve seen this played out hundreds of times over the past decades.  And where has it gotten us? 

We’re consistently played for fools in international trade.  Obviously, nothing is going to change under this administration.

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13 Responses to Obama Outlines Strategy to Double Exports

  1. Robert says:

    Pete,

    I’m stating the obvious here but our leaders, both current and previous have got to be complete idiots. The solutions are so obvious that anyone with a lick of common sense would put these guys to shame, sheesh. I continue to follow your blog hoping that you can point out where our leaders might be getting a clue. Thanks for your commentary.

  2. Mark Hall says:

    SIMPLY CLUELESS!!!!!!!

    Five years from now and 75 million unemployed Americans later a typical fry cook position at McDonalds will command a post graduate degree to apply.

  3. Mark Hall says:

    Looks like we are getting “Bush-whacked” for a 3rd time.

    And this 3rd time ain’t no charm!

  4. Mark Hall says:

    When the administration cites that their #1 Goal is Jobs, Jobs, Jobs; they must be referring to “Steve Jobs” because it sure isn’t American Jobs.

  5. Mark Hall says:

    The Japanese may be having “Brake” problems, but, the U.S. is having major “Steering” problems.

    Which is better?

    Going off the cliff because the brakes failed.

    or

    Going off the cliff because you steered yourself off the cliff.

  6. Mark Hall says:

    The ONLY guarantee that I see developing from this strategy is guaranteed hopelessness for American workers.

  7. mtnmike says:

    Our President is returning to his childhood home of Indonesia where it is reported by his staff that, “On his trip, (Obama) plans to launch a comprehensive partnership with Indonesia.”

    That should work out well for us.

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  9. mtnmike says:

    “Because it’s never been as important an opportunity for America,” he said. “Ninety-five percent of the world’s customers and the world’s fastest-growing markets are outside our borders.”

    And, not coincidentally, 95% of the abject poverty in the world resides outside of our borders.

    Degree from Harvard or not, our president must certainly be the most misinformed man in America or otherwise, he represents the greatest threat to Middle America that has ever existed!

    • Pete Murphy says:

      Mike, let’s not forget that both parties have pursued the same trade policy for decades. Obama is no more misinformed than his Republican counterparts who would already have eagerly enacted the free trade deal with South Korea. The problem is not these politicians on the left or right. The problem is the economics that guides both parties, the economics that puts unwavering faith in 18th century trade theories and in the use of population growth as an engine for macroeconomic growth.

  10. mtnmike says:

    Pete,

    You know that I don’t spare either side of the aisle. But unlike his predecessors, Obama promised change. I suppose going from Middle America to abject poverty could be considered change.

    • Pete Murphy says:

      That’s the big problem I have with Obama, too – the fact that he promised action on trade and we’ve yet to see any.

      Yup, the downward spiral of our economy is “change,” although the spiral’s been going on for a while now. Corporate American tells us we should embrace change. We’re being embraced so hard that it’s squeezing the life out of us.

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