In January, 2010, President Obama set a goal of doubling U.S. exports in the next 10 years. He referred to that goal during the debate with Romney, as though it was a goal that was being met. (Nobody called him on it.) The objective was to emulate Germany, an economy that thrives on manufacturing for export, and thus whittle away our huge trade deficit. I said then that any plan that focuses on exports was doomed to failure from the outset, since the U.S. has absolutely no control over exports, which are driven by foreign demand. (The only thing we can effectively control, if we ever tried, is imports.)
This morning the Bureau of Economic Analysis released its report of international trade for the month of August. (See above link.) Both overall exports and manufactured exports declined for the 2nd month in a row. Overall exports are at their lowest level since March, and manufactured exports are at their lowest level since September of 2011. Overall exports lagged the president’s goal for the 13th consecutive month by over $24 billion – a new record. Manufactured exports lagged the president’s goal for the 11th consecutive month by more than $15 billion – a new record.
This economic strategy – the bedrock of Obama’s plan to boost the manufacturing sector and the overall economy – is an abysmal failure. It’s a failure because it never had any chance of succeeding. Aside from begging our trade partners to boost their imports of American goods – a tactic that has been a proven failure for decades – no other action was taken by the administration to actually work toward the goal because there’s nothing it can do.
Will there ever come an American president with the backbone to say “enough is enough” and turn his focus on imports? Will there ever come a time when we bid farewell to the World Trade Organization and its avowed goal of running a rigged trading scheme that favors undeveloped and developing nations? Not in the next four years. Obama has proven that he’ll do nothing about it. Romney has vowed to make matters worse by pursuing even more destructive free trade deals.
When Obama took office, I predicted that, if he didn’t address the trade deficit, he’d be a one-term president. In a month, that prediction will come true. And my prediction regarding President Romney will be the same.