Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Trade Deficit Saps 2nd Quarter Growth
Howard Richman, 7/30/2010
Today's economic story is very simple. The Obama administration and Congress have been trying to pump up the economic tire, without first patching the trade deficit leak. The faster they pump, with stimulus after stimulus, the faster the trade deficits grow.
As shown in the chart below, taken from data released this morning by the BEA, increased purchases by consumers contributed 1.1% to 2nd quarter economic growth, increased fixed investment purchases by businesses contributed 2.2% to growth, increased purchases by government contributed 0.8% to growth, and inventory build-ups contributed 1.0%. But net exports sapped 2.7% from GDP growth as imports increased without a corresponding increase in exports. If you add it all up, GDP grew by 2.4%.
But inventory build-ups are not sustainable. Businesses produced more goods than they sold, something they will not keep doing. If you subtract inventory build-ups, economic growth was a paltry 1.4% annual rate during the second quarter. With such slow growth, the U.S. economy could remain depressed below 2007 levels for quite some time.
There is a simple way that Congress could get the economy going: PATCH THE LEAK, such as by enacting the scaled tariff.
Archive Feb 2012
- Economists still failing to understand the effects of mercantilism
- Trade Deficit Saps 2nd Quarter Growth
- Pres. Obama's $787 Billion Recovery Act Has Produced Few Sustainable Jobs
- Geithner's job is to finance federal government expansion
- Some criticisms of our Scaled Tariff proposal
- Congress busts the budget to create 90,000 manufacturing jobs
- Prof. Blinder Believes He and Obama are Keynesians But Keynes Would Disown Them
- The Scaled Tariff would Resuscitate the U.S. Economy
- Real Policies for a Sustained Economic Recovery
- Fed: Possibly 5 or 6 years before sustainable growth
- Michael Pettis: U.S. is "likely to be swamped by a tsunami of foreign capital"
- Trade deficit rises again in May
- Outsourcing Production Is Committing National Suicide, Says Andy Grove, Former Intel CEO
- Geithner's Three Currency Manipulation Reports
- Obama Touts his Failing Trade Policy
- The First Step for a Sustainable Economic Recovery -- Balanced Trade
- The Currency Reform Bill Won't Work: What Should Replace It and Why
- Emmanuel Goldstein makes the case for our Scaled Tariff in his blog
- Growing trade deficit quashing recovery -- again!
- Romney ad hits Obama for letting China counterfeit US intellectual property
- Jack Davis commentary may have given Romney the win in Iowa
- Santorum emphasizes bringing back U.S. manufacturing in his Iowa victory speech
- China raises their 25% tariff on American-made cars
- Republican presidential candidate Gov. Buddy Roemer would require balanced trade
- Newt Gingrich on Trade
- China to devote $1700 billion to new import-competition
- New Scaled Tariff Article Published
- Wishful thinking expanding, but the trade data are flat
- Germany, the Euro and the Gold Standard
- Romney's position against China's intellectual property theft resonates at Microsoft
- Romney Won! He would tackle trade, repeal Obamacare, stop throwing money away on green jobs, reduce bank regulation, and continue strong defense spending.
- Senator Webb Introduces Bill to Combat Chinese Intellectual Property Grabs
- American Production of the iPod? Setting the Record Straight
- "What Would Keynes Do?" The Diagnosis is Right. The Solution?
- Will Obama Answer This Question
- Net U.S. manufacturing investment was 0.08% of GDP in 2010
- GM caves to demand that it give China its electric car technology
- Clyde Prestowitz: "We live in a world that is ... half free trade and half mercantilist"
- Obama correctly identifies one of the reasons for his economic failure!
- Pat Buchanan's history lesson about the trade deficits
- Why Obama's job speech failed
- Romney on Trade
- QE2 could have worked had Bernanke bought foreign currencies instead of Treasury bonds
- June trade data showed a worldwide slowing of business investment
- Gordon Chang: "The Chinese have a right to maintain mercantilist practices. Yet we have every right to counter them."
- Is Dark Horse McCotter the best Republican Candidate on Trade?
- Candidate Positions on Trade in the Fox News Debate 8/11/2011
- Asian central banks step up currency manipulations
- Will Asia Pull Back from the Dollar?
- U.S. Net Exports to China set record 12-month low in May
- Prof. Gomory On Our Need to Balance Our Trade With China
- Government procurement is a one-way street between U.S. & China
- Congress should reject the Free Trade Agreements unless a Balanced Trade Clause is added
- Economist Peter Navarro Accuses China of Unfair Trade Practices
- There Is a Trade Multiplier. There Is No Keynesian Multiplier
- Mark Steyn's explanation of our politically correct military policy also explains our trade policy
- Jed Babbin correctly identifies power as one of the goals of Chinese mercantilism
- Morici: Create jobs by ending Bush & Obama's "appeasement" trade policy
- Palin calls for balanced trade
- It Wasn't About Medicare: Jack Davis' Message for the Republican Party -- we're published in Enter Stage Right this morning
- U.S. Trade Deficit grows to $571 billion, driving GDP growth down to 1.8% in 1st Quarter
- Navarro's new book "Death by China"
- Obama gives China a free pass to continue currency manipulations
- Roubini: China is slowing the recovery in the U.S. & U.K.
- Trump rising rapidly in GOP polls
- The Korea Free Trade Agreement would Enable Korean Mercantilism
- Where's the Beef?
- Geithner thinks our trade problems with China are solving themselves
- Are China's coming reductions in import barriers a short-term or a long-term change?
- Rush Limbaugh apparently agrees with Donald Trump on China trade in March 1 interview
- Rising ChinaTrade Deficit Cost One-Half Million U.S. Jobs in 2010
- Donald Trump closing on leaders in Republican race
- G20 ministers again let China veto meaningful measures to address trade imbalances
- Did Geithner lean on U.S. regulators on behalf of the Chinese government in June 2009?
- France pushing G-20 deal to adress global imbalances
- Is the 2010 Trade Report the Prelude to a Dollar Collapse?
- Donald Trump at CPAC
- Morici: Events in Tunisia and Egypt were caused by Chinese mercantilism
- Evans-Pritchard on China
- Obama-Hu Summit Ignores our Imports from China
- How to Balance Our Trade with China and Put Americans Back to Work
- Hu Knows?
- The Give-Away Summit
- U.S. Trade Deficit with China edges up in November
- U.S. free trade policy promotes worldwide authoritarianism
- China rounds up the usual suspects
- Donald Trump calls for a 25% tariff on Chinese products
- AEA features Dismal Forcasts of America's Economic Future
- What do Obama's new top appointments have in common?
- Requiem to Roger Milliken and red-lentil stew
- The North American Unilateral Free Trade Agreement
- Proposed 'Scaled Tariff for Balanced Trade Act'
- Richard Duncan: World Economy on the Brink of Disaster (in 5 to 10 years)
- Hubbard and Navarro advocate VAT and end to currency manipulation in new book
- EPA regulation of carbon dioxide to begin January 2
- Will improved trade deficit of October be temporary?
- Bernanke to China: Stop Hurting Us or You'll Hurt Us -- We're published in today's American Thinker
- China's competitor to Boeing and Airbus
- Heartland Poll: Continued Public Support for Action on Trade
- Bernanke starting to catch up to Evans-Pritchard
- American Economic Leaders keep giving Advice to China
- Bernanke has learned what Richard Duncan explained in 2005
- D.J. McGuire: Obama may be "best-equipped American leader to take the CCP on"
- Obama and the House can produce Economic Growth
- Paying the Piper
- Gordon Chang: China is not making the transition to a consumer-led economy
- Geithner backtracks from his call for balanced trade
- Obama's Failing Industrial Policy
- Just-elected Republican Congressman Allen West from Florida calls for tougher stance on Chinese trade
- Speak Loudly, but carry No Stick!
- Geithner calls for balanced world trade
- Geithner undercuts Bernanke's negative-interest rate plan
- Krugman: China is a "rogue economic superpower, unwilling to play by the rules ... What are the rest of us going to do about it"
- The 'Move Your Corporate Headquarters Offshore' Act -- We're published in today's American Thinker
- Democrats Increasingly Turning to Trade Theme
- European Central Bank calls for a fixed exchange-rate system
- Gomory calls for Import Certificates to balance trade
- Let's have an Honest Trade Debate
- Michael Savage proposes 20% tariff on Chinese products
- WTO Helping China Loot Caterpillar -- We're published this morning in the American Thinker
- Trade pacifism killing Canada's Economy, not just the U.S. economy
- China's 30% Tariff snags Caterpillar's Technology
- Japan is Back
- House Committee Pulls Teeth out of China currency bill
- Dan Dimicco's Sept. 15 testimony on Chinese Currency to the House Ways and Means Committee
- Committee Hearing reveals that Currency Bill is Too Weak
- How to strengthen the currency exchange rate reform bills
- Tonelson and Kearns: House Ways and Means will consider filing a China currency complaint with WTO
- Tonelson and Kearns: Trading Away the Stimulus
- U.S. Trade Deficit Still Growing
- Morici Proposes a Scaled Tariff Variant to Confront China
- Summers was given the royal treatment in China
- Summers heads to China to rescue U.S. recovery
- Commerce Department refuses to investigate Chinese currency manipulations
- Unions Divided on China Policy
- Unions Divided on China Policy
- Scott Paul: The Onshoring Trend is Phony
- Greg Richards: "We must be much more aggressive with mercantilist countries in enforcing the rules of the road so that we protect out production and technology."
- Barr McClellan: "Malaise has returned"
- Krugman: "We're in a world in which mercantilism works"
- Obama Fiddles while Economy Falters - We're published in the American Thinker this morning
- Dan Drezner gives Obama an "F" for his trade agenda
- We are in the persistent depression predicted by Keynes
- Economists still failing to understand the effects of mercantilism
- Trade Deficit Saps 2nd Quarter Growth
- Geithner's job is to finance federal government expansion
- Some criticisms of our Scaled Tariff proposal
- Congress busts the budget to create 90,000 manufacturing jobs
- The Scaled Tariff would Resuscitate the U.S. Economy
- Fed: Possibly 5 or 6 years before sustainable growth
- Michael Pettis: U.S. is "likely to be swamped by a tsunami of foreign capital"
- Trade deficit rises again in May
- Geithner's Three Currency Manipulation Reports
- Obama Touts his Failing Trade Policy
- The Currency Reform Bill Won't Work: What Should Replace It and Why
- Steven Pearlstein calls for direct action against mercantilism
- Obama's G-20 Summit Setback -- we're published in American Thinker this morning
- Seven Options for Tackling Trade with China
- China riggles off the hook
- Why is Washington's China rhetoric growing harsher?
- Congress plans ineffective action against Chinese mercantilism
- Is the Chinese government moving against Taiwanese and Japanese corporations?
- Yves Smith: "the US example show how a naive posture towards trade may not help its citizens"
- Bruce Bartlett: We should raise taxes to lower our trade deficits
- AFL-CIO's Trumka asks Obama for stronger action on China
- The global warmers' shell fish hoax
- One or more members will have to exit the euro zone to restore competitiveness
- Trade Deficit up again in March
- China uses industrial policy is to keep out US products
- Auctioning Import Certificates is consistent with WTO rules
- Pretend Free Trade vs. Balanced Trade -- The national debate kicked off on FoxNews yesterday
- China raises its tariff on some US nylon products to 96.5%
- Why we should tax interest earned by foreigners in the United States
- Congress passes foolish tax change that will increase US trade deficits
- China's temporary trade deficit largely due to stockpiling of commodities
- Geithner will Punt on China Currency
- Boston Globe spins nuclear summit as success
- Obama bows as Chinese President Hu stiffs him
- U.S. Trade Deficit up in February
- Smoot-Hawley did not cause the Great Depression
- Charleston Post Courier editorial advocates Buffett's Import Certificates to balance trade
- NPR explains Chinese currency manipulation
- Obama punts on Chinese currency manipulation
- USTR lists China's many barriers to American products
- Lies, Damn Lies, and Chinese Statistics
- U.S. Corporations not helping China avoid Krugman's tariff
- Sidney Sherman traces start of America's decline to giving away our manufacturing to Asia
- Volcker is realistic about China
- Carbon tax: Sarcozy backs off, Sen. Kerry pushes forward.
- Peter Morici: Our current China policy is "appeasement"
- China activates its Fifth Column
- Needed, a Cross-the-Board Tariff on Imports From China
- NY Times ignores China's R&D Rules
- Why Krugman's China Argument Matters
- Relative currency values are not static
- Obama's Trade Policy Agenda -- we're published in American Thinker this morning
- Krugman on China currency
- 130 Congressman sign letter to Treasury and Commerce Deptartments asking them to address Chinse currency manipulations
- Paul Krugman calls for 25% cross-the-board tariff on Chinese goods
- What is the real reason why the Obama administration won't do anything about China?
- Washington Post: There's nothing that we can do about Chinese mercantilism
- U.S. exports down in January
- GreenJobsGate
- British exports see biggest fall in three years
- Heritage Foundation's Terry Miller claims Obama is a mercantilist
- Trading Away Productivity - Tonelson and Kearns in March 5 NY Times
- Unemployment report shows stagnant economy in February
- Commerce Dept. sets miniscule tariff on Chinese glossy paper
- Obama: 'It's very hard to ship windows from China'
- Bipartisan group of fifteen senators call upon Commerce Department to investigate China's currency manipulations
- Pfizer moving R&D from Connecticut to China
- Obama giving US R&D to China - we're published in today's American Thinker
- A Review of W. Raymond Mills "Toward Managed Trade"
- IMF Reconsiders Capital Controls Opposition
- Chin'a not selling. China's Buying
- US Companies Required to move Research Centers to China
- Nicholas Lardy: Obama "trying “trying to head off critics in Congress who think the administration is lying down in front of the Chinese"
- Peter Morici: Open Trade is Failing America
- "Playing Chicken with China" - we're published in today's American Thinker
- ABC News on Green Stimulus Jobs Going to China
- Restore American Jobs and Do It Quickly
- No growth in US goods exports to China in 2009
- Obama's China strategy
- Summers says everything is fine in our China relationship
- China is Playing Chicken with Obama
- Judith Stein: US reliving the 70s when we gave away our steel industry
- Kenneth R. Davis: Buffett Plan would make the WTO irrelevant
- Peter Morici's Currency Conversion Tax to End Mercantilism
- Ha-Joon Chang takes on Free Trade in his book The Bad Samaritans
- Ralph Gomory: The time has come to take Warren Buffett's Import Certificates plan seriously
- Google Has Its Rosa Parks Moment -- I'm published by Seeking Alpha today
- Larry Ringler: Google's courage may turn the tide in our dealings with China
- Peter Navarro writes commentary on China's industrial espionage
- Doha Round stalls over US demand that India and China open their markets
- Peter Morici: Free Trade is Failing America
- Calla Wiemer misunderstands Chinese mercantilism in Wall Street Journal
- Levy Economics Institute's analysis of Import Certificates to balance trade
- US wins WTO appeal on China's non-tariff barriers against US movies, music, and games
- Prof. Krugman and Chinese Mercantilism
- China agrees to modify export subsidies
- American Economic Alert
- American Jobs Alliance
- Angry Bear Blog
- Economy in Crisis
- Econbrowser
- Levy Economics Institute
- McKeever Institute
- Michael Pettis Blog
- Naked Capitalism
- Natural Born Conservative
- Science & Public Policy Inst.
- TradeReform.org
- What's Up With That
Wikipedia:
- [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]
Journal of Economic Literature:
- [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....
Atlantic Economic Journal:
- In Trading Away Our Future Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]
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