Note to President Obama: Exports Ain’t Gonna Save Us September 8, 2013Posted by geoff in News.
Inasmuch as I understand it, the President has had a multifaceted approach to stimulating the economy:
|The Strategy||How It Works||The Payoff|
|Sign trade agreements||?????||Double Exports!!|
|Transition to green tech before it’s ready||?????||5 Million Green Jobs!!1 Million Electric Cars!!|
|?????||?????||1 Million More Manufacturing Jobs!!|
|Vilify American businesses||?????||Insourcing & More Hiring!!|
But of course none of his facets have really paid off. At all. Take his export facet, for example. Thursday’s BEA report on exports gives us the (continuing) bad news:
Back in October 2011, the President signed 3 trade agreements: one of them with Korea that was supposed to create 70,000 American jobs. In 2012 it apparently cost us 40,000 jobs. [The other two agreements? Columbia and Panama, totaling all of $26 billion of our exports in 2012. Out of $2.2 trillion. That’s about 1.2%.]
I’m not a fan of protectionism, but US tariffs are at an all-time low (0.7%, with the exception of the shoe and clothing industries, which are at 10%). Reducing them further isn’t going to have a profound affect on anybody’s economy: it’s foolish to pursue free trade agreements as though they are our economic salvation.
So, of course, responding to the complete collapse of his export strategy, the President’s latest push has been to . . . negotiate more trade agreements. I don’t think he’s in any danger of keeping his promise.
As a final aside, I’m struck by how well the administration seems to grok the relationship between lower tariffs and increased economic activity. But for some reason the same relationship between taxes and economic activity eludes them.