Sunday, February 12, 2012

$48B Trade Deficit

The 245,000 jobs created did not result in universal enthusiasm and joy, as it turns out that the general public is still concerned about jobs, and the consumer confidence index dropped in January. Rather understandable, since the people who are crowing about what unbounded good news that is all have jobs, while tens of millions of the public at large still do not. If you have been unemployed for eighteen months and have no real prospects of employment it’s hard to be enthusiastic about news that some 245,000 jobs have been created and left you out.

Meanwhile, our balance of trade went farther into the red to the tune of $48.8 billion last month, the highest deficit it has seen since before the recession. The media should be screaming bloody murder about this, on the front page above the fold, but they barely mention it, on page twelve.

The problem with the trade deficit is twofold. One is that it creates more debt in this nation, the other is that it is the result of our overvalued currency which makes us less competitive worldwide and reduces our exports. Do I need to add that restoring our ability to export goods would add jobs? “Taxing the rich” will not come close to offsetting the $48 billion per month we are losing due to trade and monetary policies. This is another example of tinkering with trivia instead of tackling the real issues that face this nation’s economy.

There is a little gem hidden in there that blows the whistle on gasoline prices, too, but no one is picking up on that either. CBS News ran a segment the other day asking why gas prices are so high at this time of year, when lower usage normally causes them to drop. One reason given was that “several refineries are closed for maintenance,” causing lower supplies and keeping prices up. Noted in the trade data, however, is that exports “grew slightly in December, with records set for petroleum, services and advance technology goods.” If gasoline is expensive due to the short supply caused by closed refineries, why are we setting export records in that commodity?

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