We Are Being Killed On Trade – Rapidly Declining Exports Signal A Death Blow For The U.S. Economy
Exports fell precipitously during the last two recessions, and now it is happening again. So how in the world can anyone make the claim that the U.S. economy is in good shape? On my website I have been repeatedly pointing out the parallels between the last two major economic downturns and the current crisis, and I am going to discuss another one today. Since peaking in late 2014, U.S. exports have been steadily declining, and this is something that we never see outside of a major recession. On the chart that I have shared below, the shaded gray bars represent the last two recessions, and you can see that exports of goods and services plunged dramatically in both instances…
And this chart does not even show the latest numbers that we have. During the month of January, U.S. exports fell to a five and a half year low…
The U.S. trade deficit widened more than expected in January as a strong dollar and weak global demand helped to push exports to a more than 5-1/2-year low, suggesting trade will continue to weigh on economic growth in the first quarter.
The Commerce Department said on Friday the trade gap increased 2.2 percent to $45.7 billion. December’s trade deficit was revised up to $44.7 billion from the previously reported $43.4 billion. Exports have declined for four straight months.
Because our exports are falling faster than our imports, our trade deficit is blowing out once again. Every year we buy hundreds of billions of dollars more from the rest of the world than they buy from us, and this is systematically wrecking our economy. Over the past several decades, we have lost tens of thousands of manufacturing facilities, millions of good paying manufacturing jobs, and major exporting nations such as China have become exceedingly wealthy at our expense.
We are being absolutely killed on trade, and yet very few of our politicians ever want to talk about this.
A brand new study that was recently discussed in the New York Times is bringing some renewed attention to these problems. It turns out that the promised “benefits” of merging the U.S. economy into the global economic system simply have not materialized…
In a recent study, three economists — David Autor at the Massachusetts Institute of Technology, David Dorn at the University of Zurich and Gordon Hanson at the University of California, San Diego — raised a profound challenge to all of us brought up to believe that economies quickly recover from trade shocks. In theory, a developed industrial country like the United States adjusts to import competition by moving workers into more advanced industries that can successfully compete in global markets.
They examined the experience of American workers after China erupted onto world markets some two decades ago. The presumed adjustment, they concluded, never happened. Or at least hasn’t happened yet. Wages remain low and unemployment high in the most affected local job markets. Nationally, there is no …read more
Source: We Are Being Killed On Trade – Rapidly Declining Exports Signal A Death Blow For The U.S. Economy
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