Friday, July 9, 2010
Friday, July 09, 2010 3 comments
President Obama has been bragging that his National Export Initiative was a rousing success in the first quarter of this year and exports were up 17% from a year ago. There is no question that increased exports abroad generate jobs at home. The Senate didn’t pass the badly needed jobs bills, consumer confidence is plunging faster than home sales, we have declining factory orders, continuing layoffs at the state and local level and the weak June jobs numbers so any success is to be touted. At a time when jobs are in short supply," Obama said Wednesday, "building exports is an imperative."
There is a big problem with these export numbers, they are only up compared to early last year when nobody was buying anything. And here is the real rub, imports have increased even faster than exports so the trade deficit is going right through the roof. Businesses continue to sit on over a trillion in retained profits and so have no reason to hire Americans as imports can be had with no investment and they fully expect business to decline. (They are driving it, so they are sure it will happen.)
The only thing that is working in our favor is that China is resisting the rush of trans-national companies to set up shop there. They have decided to build domestic consumption and in that vein they are tolerating strikes by workers against the trans-nationals for higher pay. This doesn’t mean these parasites won’t look for some other country where they can exploit workers but many of these countries are becoming wary of getting into bed with these neo-con companies. The last down turn found many of the labor providing countries with billions of USD in their treasuries and no place to buy rice. (hungry people tend to revolt) This is motivating them to consider the Chinese way of doing things and move away from the neo-cons’s flat earth model.
This is not to say things have turned around for us even though some companies are returning jobs to the US.
wham-o-moves-to-america It not even clear if Obama is really doing this or is just lucky. His crack down on product dumping by the Chinese a year ago seems to have precipitated this chain of events but it’s hard to know what Obama’s real policy is. You also need to keep in mind that Obama has only a tenuous grasp on power. The admistration is still full of Republican royalists, for every McChrystal that is forced out there are a thousand more embedded in every aspect of government. (We probably should store some rice.)