Wonder why you’re worse off than four years ago? Wonder why we’re so heavily dependent on deficit spending just to keep the economy on an even keel? Look no further than the July report on international trade, released this morning by the BEA (Bureau of Economic Analysis).
The fact that the overall trade deficit held relatively steady at $42 billion is bad enough, but dig deeper and the picture gets uglier. The trade deficit in manufactured goods jumped over $3 billion to $40.1 billion, continuing an ever-worsening trend and close to the worst level of the Obama administration. Of course, the trade deficit with China gets much of the blame. It rose for the fifth consecutive month to a new record – $29.4 billion. But China isn’t the only story. The trade deficit with Germany rose to $4.9 billion, just shy of the record of $5.0 billion set in December of last year. The trade deficit with the rest of the Euro zone was $7.0 billion.
Remember when, in January of 2010, President Obama vowed to double exports in five years to boost our manufacturing sector? Overall exports actually fell in July and lagged that goal for the 12th consecutive month, and the shortfall increased to $19.9 billion. Here’s a chart of our “progress”: Obamas Goal to Double Exports.
But what really matters are exports of manufactured goods, since that’s where the jobs are. In that category the story is even worse. Manufactured exports plunged by $3.3 billion and lagged the president’s goal for the 10th consecutive month by the largest amount yet by far – $13.4 billion. Here’s the chart: Manf’d exports vs. goal.
And the deficit in manufactured goods continued its worsening trend: Manf’d Goods Balance of Trade.
Both President Obama and challenger Mitt Romney have pledged to pursue more free trade deals in an effort to open up more markets to our exports. The problem is that, with each new market that we open, ours opens even wider and for every job created by those exports, two jobs are lost to another wave of imports. When will a leader step forward with the “brass” (as Obama put it, or was it Biden? I forget.) to actually do something about trade policy that’s rooted in failed economic theory developed when trade consisted of swapping tea for beaver skins?