Goal to Double Exports Off to a Weak Start

http://www.bea.gov/newsreleases/international/trade/2010/pdf/trad0210.pdf

The Bureau of Economic Analysis (BEA) released February trade results this morning (link to the full report provided above).  This is the first month of trade data since President Obama announced in January his plan to double exports in five years.  Being skeptical, I promised that I would track his progress against this pledge.  It’s a fine pledge, but wasn’t backed up by any trade policy action. 

Well, we’re off to an extremely weak start.  In order to double exports in five years, they need to rise at a rate of 1.16% per month, which would be an increase of $1.66 billion over January’s exports.  However, exports in February rose by only $0.3 billion. 

And, of course, the real goal is to slowly reduce the trade deficit, reaching a balance of trade in five years.  By that measure, the news is even worse.  Imports jumped by $3.1 billion, increasing the trade deficit by $2.7 billion. 

Here’s the chart that tracks progress toward Obama’s pledge:

Obamas Goal to Double Exports

It’s a little difficult to see just one month of data on the above chart, so here’s a chart of only the first year of this five-year “plan”:

Obamas Goal to Double Exports, 1st year

It’s not my intention to bash Obama here, but to point out the folly of expecting improved trade results when no action has been taken toward that end.  No doubt, the president believes that he has taken action by playing the diplomat and securing from other nations pledges to boost their imports of American goods.  But this is nothing more than the same approach of every Democratic and Republican president who has preceded him for the past three decades.  Albert Einstein famously defined insanity as doing the same thing over and over again and expecting different results, which is exactly what Obama’s trade policy is doing. 

No improvement in the U.S. balance of trade is possible until tariffs are implemented to counteract the role of population density disparities in driving trade imbalances.  February’s trade results are just one more pebble added to the ever-growing mountain of evidence.

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6 Responses to Goal to Double Exports Off to a Weak Start

  1. Mark Hall says:

    As evidenced by the following which compares 2010 YTD trade numbers to 2009 YTD trade numbers, the ONLY thing that appears to be keeping our trade deficit from being drastically higher is a BROKEN & UNEMPLOYED MIDDLE AMERICA.

    The affluent seem to have recovered judging from the difference in the trade numbers from Japan and the E.U. when compared to East & S.E. Asia numbers.

    2010 YTD TRADE vs. 2009 YTD TRADE:

    EAST & S.E. ASIA*:

    U.S. Exports To = +54.0%
    U.S. Imports From = +9.9%

    JAPAN:

    U.S. Exports To = +15.4%
    U.S. Imports From = +16.3%

    European Union:

    U.S. Exports To = +.5%
    U.S. Imports From = +3.5%

    *Note: Includes China, India, S. Korea, Taiwan, Indonesia, Vietnam & Thailand

  2. Mark Hall says:

    Pete:

    Compared to February 2009, our February 2010 exports to Indonesia grew from $304,200,000 to $591,300,000 or 94.4% (nearly double).

    Did Obama ever actually define where exports were to double?

    Would this be defined as “Mission Accomplished”?

    • Pete Murphy says:

      I don’t think he said where the would double and, from my perspective, it doesn’t matter. Nor did he say what he was using as the baseline, so we can only assume that he was talking about doubling exports from what they were at the time that he spoke in January. Comparisons to a year ago can be deceptive because, at that time, we were in the very depths of a recession that was quickly spiraling into a depression, cutting all global trade dramatically.

  3. mtnmike says:

    Pete, Your point is well taken. The question of “compared to what,” must continually be asked.

    Otherwise we are subjected to; “Torture numbers and they will confess to anything.” — Gregg Easterbrook

  4. mtnmike says:

    Is it me, or does the subject of energy and world resource constraints seem to be a non-factor in today’s main stream reporting?

  5. Mark Hall says:

    Just remember, this is the same guy who changed “creating 2 million jobs” into “saving or creating 2 million jobs” when things started getting tough.

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