My previous post reported on America’s rapidly expanding surplus of trade in manufactured goods with Brazil, a nation with a population density of 61 people per square mile (in comparison to the U.S. population density of 85 people per square mile). And Brazil isn’t unique. Among its South American neighbors of Argentina, Bolivia and Chile, the U.S. experienced a record surplus of trade in manufactured products with each one of them in 2010. And each is less densely populated than the U.S.
In stark contrast is our trade in manufactured goods with China, a nation with a population density of 360 people per square mile – more than four times the density of the U.S. Our trade deficit in manufactured goods with China soared to a new record in 2010 – nearly $295 billion. Here’s the chart:
That deficit alone accounts for six million manufacturing jobs lost in the U.S.!
Nice job, Obama and Geithner. The Chinese have really taken to heart your demands that they cut their dependence on exports, haven’t they?
And kudos to Congress, too. Another year has gone by without labeling China a currency manipulator, opening the door to tariffs – the only measure with any chance of reversing this trend.
Not that currency exchange rates really have anything to do with it. Since June of 2005, the dollar has plunged from 8.26 to 6.57 Chinese yuan, a drop of over 20%. Anybody see any effect on slowing the trade deficit with China? Economists will tell you that a falling dollar improves our balance of trade. Bull. Currency exchange rates have absolutely nothing to do with the balance of trade. Trade imbalances are driven almost totally by disparities in population density.
So far, in my updating of this country-by-country trade data, which I’m doing alphabetically, I’ve only made it through most of the “C” countries. But already it just makes me want to scream. In nearly every case I’ve examined so far – a total of 32 coutries – our balance of trade with less densely populated nations improved while the balance of trade with more densely populated nations worsened. How much more obvious can this relationship between population density and balance of trade be? Is there not a single economist on the planet with the intestinal fortitude to brave the “Malthusian” labels and consider the ramifications of overpopulation? Is the field of economics so devoid of intellectual curiosity? Or is it integrity that they find in short supply? Whatever, it just makes me want to take a metaphorical two-by-four to the head of this collective field of academic B.S. (it’s not worthy of being dignified by the label of “science”). If there are any economists out there reading this who take offense to this characterization, bring it on!