As reported by the Bureau of Economic Analysis (see above link), the overall trade deficit contracted by $3.25 billion in November, due entirely to a drop in oil imports.
That was the good news. The bad news is that the deficit in manufactured goods rose by $1.2 billion, thanks entirely to a $2.8 billion decline in exports. After hitting a record in October, manufactured exports fell to their lowest level in five months. In fact, since June of 2013, manufactured exports have risen by only $1.8 billion.
In January, 2010, President Obama set a goal of doubling exports within five years. In November, exports lagged that goal by $54.7 billion per month – a record. There are now only two months to go until the data for January, 2015 is released. So far, instead of rising by 100%, exports have grown in five years by only 32%, all of which can be explained by inflation and by the rebound in the global economy – a rebound now faltering. Absolutely none of the increase is due to any improvement in America’s trade position relative to other countries. Here’s an update of the charts:
Obama set this goal because he naively believed that there was no reason that the U.S. couldn’t become a net exporter like Germany. There is, of course, one very big reason – the inverse relationship between population density and per capita consumption. Germany is five times as densely populated as the U.S., making its per capita consumption a fraction of ours. Like the citizens of so many other badly overpopulated nations (Japan, China, Korea and much of Europe, just to name a few) they can’t even absorb their own productive capacity, so why would they buy products from us? (Well, they do, but not nearly as much as they export.)
Obama ran in 2008 on a platform that included tackling our trade deficit. He took the coward’s way out, choosing to ignore the import problem, which everyone knows is where the real problem lies, focusing instead on exports in order to avoid unpleasant confrontations around the punch bowl at G8 meetings. Aside from making the promise to double exports, he never lifted a finger to do anything to make it happen. He’s done nothing to address the imbalances of globalization which nearly collapsed the global economy in 2008, and it’s going to come back to bite us.