This morning the Bureau of Economic Analysis released its monthly report of U.S. International Trade in Goods and Services for the month of September. (Link provided above.) The good news is that the trade deficit for September fell slightly to $44.0 billion from $46.7 billion in August.
And exports did rise very slightly, by about $0.5 billion. But, in order to keep pace with President Obama’s goal of doubling exports in five years, they need to be rising by about $2.0 billion per month. Here’s a chart:
As you can see, exports are beginning to lag well behind the president’s goal. This is no surprise, since no nation has any control over its exports, other than to make sure its domestic industry is efficient and competitive. Exports are totally dependent on foreign demand, over which we have zero control.
What we do have the ability to control completely is imports. The U.S. simply chooses not to. We choose not to because that wouldn’t be in keeping with the spirit of free trade, and we have blindly placed complete faith in the theory that free trade benefits all, in spite of the fact that it’s nothing more than a theory – one that was never proven and in spite of the fact that it runs contrary to the growing mountain of evidence.
Nevertheless, imports did decline in September by about $2.0 billion. That would be good news if the decline occurred for the right reason – because the manufacture of some products was returning to the U.S. But that’s not the case. No manufacturing has returned. In all likelihood, the decline in imports is due to a softening economy.
The president’s real goal is to export our way out of our huge trade deficit, increasing exports faster than imports. By this measure too, the plan is a failure. The trade deficit has widened dramatically, from $35 billion per month when he set this goal in January to about $45 billion per month now. Here’s the chart:
As I write this, the president is on a trade mission to Asia with the stated goal of “opening new markets.” The problem is that opening new markets always begins with opening ours first. Decades of “opening new markets” is what’s led to a $10 trillion cumulative trade deficit since our last surplus in 1975. Einstein once said that the definition of insanity is to keep doing the same thing while expecting different results. I wonder what he would call doing the same thing for six decades?