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 Richmans' Trade and Taxes Blog

Why Obama's job speech failed
Howard Richman, 9/8/2011

In his jobs speech today, President Obama ignored the growing U.S. trade deficits, even though statistics released this morning by his own Commerce Department show that U.S. net exports to China (exports minus imports) hit yet another record low in July, falling to a negative $288 billion over the most recent 12 months, compared to a negative $287 billion in the 12 months ending in June, as shown in the graph below:

Meanwhile, U.S. net exports to the world as a whole also continued to worsen. Over the 12 months ending in July, overall U.S. net exports of goods and services fell to a negative $538 billion, compared to a negative $535 billion during the 12 months ending in June, as shown in the graph below:

Under WTO rules, Obama could impose a scaled tariff on the mercantilist countries in order to balance trade. If they were required to buy as much from the United States as we buy from them, they would have to abandon the currency manipulations, tariffs, copyright violations, and other subterfuges that they use to keep out American products. As a result, Americans would gain about $540 billion of income -- about 5.4 million new jobs each producing about $100,000 of product. These Americans would, in turn, employ other Americans to provide them with services. The United States economy would boom.

President Obama's had a chance to say something real, today, something that would given American workers more than 5 million good-paying jobs. But he ignored America's trade deficits.