Enormous, Humongous $42.6 Billion October Trade Deficit Is Unbalanced
December 7th, 2016 | Dave Johnson
The U.S. Census Bureau reported Friday that the October trade deficit rose to $42.6 billion from a enormous and humongous 36.2 billion in September. That’s a 17.8 percent increase.
October exports were down $3.4 billion and imports were up $3.0 billion. The goods deficit with China also increased, hitting $28.9 billion in October.
Scott Paul, President of the Alliance for American Manufacturing (AAM),
“The trade deficit is a drag on growth and jobs in the goods-producing sector. It is one signal of weakness that speaks to our challenges in global competition.
“It will take more than a Carrier deal to save jobs here and bring some home. For that, we need aggressive economic policies, including a rebalance on trade policy, a tax code friendly to manufacturing and patient capital, and investments in our infrastructure, research, and workers.”
Trade Deficit Damage Led To Trump
A trade deficit drains jobs, communities, tax revenues, and entire industrial ecosystems. A trade deficit is a deficit in people’s jobs and livelihoods. Forty straight years of trade deficits was also forty straight years of a system that treated working people like “economic units” to be used up and discarded instead of treating people like people. So the people finally reacted.
Forty straight years of trade deficits is a big part of what led to Trump.
Mike Konczal, in Learning From Trump in Retrospect, explains:
… [T]he divide among economists on trade is driven by the fact that labor economists study the real effects of unemployment on real people, where trade and macroeconomists treat people as just another commodity. …
I’d phrase it this way: are people just like a barrel of oil? In the abstract models of trade economists, commodities like oil will always get sold at some price, they will get to where they need to get to do so, and they’re largely indifferent on the process. Even when commodity markets are off, oil can sit in tankers floating in the ocean waiting out price moves, and it makes no difference to the oil.
Oil doesn’t experience unemployment as the most traumatic thing that can happen to it. Oil moves magically to new opportunities, unlike people who don’t often move at all. A barrel of oil doesn’t beat their kids, abuse drugs, commit suicide, or experiencing declining life expectancy from being battered around in the global marketplace. But people do, and they have, the consequences persist and last, and now they’ve made their voices heard. It’s the the dark side of Polanyi’s warning against viewing human being as commodities.
Balanced Trade Resolution In Congress
The resolution states, in part:
Whereas the United States has run 40 consecutive years of trade deficits;
Whereas the trade deficit of the United States has substantially increased in the last 25 years;
Whereas the overall trade deficit of the United States in 2015 was $532 billion, including a deficit of $758 billion in trade in goods;
Whereas the manufacturing sector of the United States has suffered a disproportionate impact from such trade deficits, resulting in substantial losses of jobs and industries;
… Whereas trade imbalances are unhealthy for the global economy and stagnate economic growth in deficit countries such as the United States and especially in the manufacturing sectors of such countries;
… Whereas persistent trade deficits hinder the ability of the United States to reach full employment and increase underemployment and reliance on low-wage and often part-time service sector jobs;
… That it is the sense of Congress that Congress and the President should prioritize the reduction and elimination, over a reasonable period of time, of the overall trade deficit of the United States.
There’s nothing wrong with that.
The Coalition for a Prosperous America (CPA) is “a nonprofit organization representing the interests of 2.7 million households through our agricultural, manufacturing and labor members.” CPA focuses on trade issues and promotes balancing trade.
CPA is sending out the word to Click here to tell your Representative to sign on to the Lipinski/Brooks balanced trade resolution.
This post originally appeared on ourfuture.org on December 6, 2016. Reprinted with Permission.
Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.