Obama Unveils Export Strategy

http://www.cnbc.com/id/39208306

I couldn’t let this story (above link) pass without comment.  It seems that the president has finally gotten around to laying out a “strategy” for his plan to double exports in five years.  Why the hurry, Mr. President?  It’s only been eight months since setting the goal. 

And the strategy couldn’t be more laughable. 

– An “outreach campaign” to raise awareness among small and medium sized companies about export opportunities and available government assistance.

— Implementing a “government-wide export promotion strategy” for markets in Colombia, Indonesia, Saudi Arabia, South Africa, Turkey and Vietnam.

— Increasing U.S. trade missions abroad.

— Bringing more international buyers to U.S. trade shows and boosting participation of U.S. companies in international trade shows.

That’s it?  That’s the strategy?  It took eight months to come up with that? 

Yeah – trade shows – that’ll work.  At least bringing more international buyers to U.S. trade shows will help our balance of trade in services, since foreign travel to the U.S. counts as a services export.  And, regarding the 2nd point, why these countries?  The population of all of them combined accounts for only 7% of the world’s population.  In terms of market, it’s even smaller.  Why isn’t a single European country on the list?  Why not China?  Why not Japan?  Why not India?  And “increasing U.S. trade missions abroad?”  We’ve seen where that’s gotten us in the last four decades.  No thanks.

This isn’t a strategy.  It’s a show designed to create the appearance of doing something.  It’s a joke.  Is it any wonder that we’re already falling behind the president’s goal?

Finally, I can’t let this pass without comment:

“Exports are actually leading our economic recovery,” Commerce Secretary Gary Locke told reporters on a conference call ahead of the report’s release, noting exports were up roughly 18 percent over the same period last year.

Locke conveniently omits the fact that imports are up more than 22% in the same period, more than offsetting the gains in exports.  The net result is a bigger trade deficit and loss of jobs.  So exports are not “leading our economic recovery.”  The growing trade deficit is leading our back-slide into a double-dip recession.

Our trade deficit will remain the same or worsen, as will our economy, until this president and future presidents come to the realization that boosting exports is not within our control, but limiting imports is.  The problem is not that Americans consume too much but that overpopulated nations consume too little.  Since it’s impossible for them to boost their domestic consumption and imports, the only choice is to limit imports into the U.S. if we want to restore a balance of trade.

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10 Responses to Obama Unveils Export Strategy

  1. MikeF says:

    First, I think the CNBC article deserves the standard Aaron Levenstein Warning, “Statistics are like bikinis. What they reveal is suggestive, but what they conceal is vital.”

    We always come back to the same question, “Why not make the things that American’s purchase every day in America?” Why import anything at all until such time that unemployment is at 4%?

    The answer is of course our system of guerrilla globalized debt capitalism. The lowest bid on the planet wins as does the highest earning Americans. The Middle Class? Forget ’em.

  2. ClydeB says:

    Eddy, the option is clearly within the power of an executive order. Balance imports vs. exports or pay tariffs. It actually could be that simple.
    Attrition of population by way of, again of all things, “reducing imports” and eliminating subsidies and incentives for more babies in the tax code and pretty soon the numbers will fall in line. No big boom will be necessary.
    It remains to be determined who is sane.

  3. MikeF says:

    To change our policies would and will require a massive paradigm shift. When the unrest in this nation reaches critical mass; change will occur and that may be a good or a bad thing depending on how it unfolds.

    Eddy has a point in that most American Corporations have moved their operations off shore OR they are receiving materials and parts from offshore and therefore a tariff would hit those American Corps hard.

    Since government is bought and paid for by corporate America, only massive…and I mean MASSIVE…resistance from the citizenry will change our course.

    • Pete Murphy says:

      Mike, no doubt that tariffs would hit importers hard. However, they’d be a huge boon to anyone manufacturing products in the U.S. Here I’m talking about the kind of across-the-board tariffs I proposed in Five Short Blasts, not tariffs applied to certain products or segments of industry.

      For example, the tariffs enacted on steel imports by President Bush did wonders for domestic steel makers, but they were a detriment for domestic auto manufacturers (and other manufacturers), because the relatively higher price of steel made the cost of their cars less competitive. But that wouldn’t be a problem if the tariffs applied not just to steel, but to cars and everything else. Who care if importers are hurt, even if they are “American” companies? It will simply force them to return to domestic manufacturing. There is no way that tariffs could harm the economy in any way, aside from some short-term high inflation that would soon be more than made up by rising incomes.

  4. ClydeB says:

    Mike,
    I had a conversation with a fairly high placed executive in a major corporation recently and his opinion is that we will see virtually all US corporations with off-shore headquarters in the near future. The US tax climate is so onerous that they will no longer tolerate it.

  5. MikeF says:

    Pete,

    My point is not the right or wrong of the situation, but only the fact that nothing is going to change until such time that there millions of Americans toting burning torches and pitchforks while they circle the White House.

  6. ClydeB says:

    Be gentle, Pete. I are one.

  7. Pete Murphy says:

    OK, Clyde. Basically, I’m happy to see people looking beyond the two traditional parties. It’s a good first step.

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