Look! You fools, you’re in danger! Can’t you see? The free-traders are after you!
They’re after all of you! Our wives, our children, everyone!
They’re here already, and posting at FR! You’re next!
Posted on 11/12/2004 6:39:20 AM PST by 1rudeboy
By Christopher Swann in Washington
Published: November 10 2004 13:51 | Last updated: November 10 2004 13:51
The US trade deficit narrowed unexpectedly in September, reflecting a fall in energy imports and a pick up in exports, according to data released on Wednesday.
The trade shortfall fell by $1.9bn to $51.6bn, compared with forecasts of a deficit of about $53.5bn.
The figures pointed to a stronger performance by US exporters. Exports of goods climbed by $900m to $68.9bn, offsetting a $100m fall in service exports to $28.5bn. Sales of semiconductors, computers and food were particularly strong.
HSBC said the improvement in the trade position could lead to an upward revision to economic growth in the third quarter from 3.7 per cent to 4 per cent.
In addition to the rise in exports, the deficit was reduced by a fall in energy imports. Despite a 3.5 per cent rise in the price of energy per unit, the total import bill fell by $500m to $124.5bn due to a 10 per cent decline in volumes. Imports of pharmaceuticals, semi-conductors and computers also fell.
Economists said the figures were encouraging but many expect the deficit to widen again, since US growth continues to outpace the expansion in Japan or the eurozone.
Goldman Sachs dismissed suggestions that the improvement in September was due to the hurricanes in the south-east of the US, pointing out that most ports were unaffected. But in a research note published on Tuesday it said the report was unlikely to signal a turning point in the trade deficit.
The figures did little to help the dollar, which has been edging to new lows against the euro. On Wednesday, the euro hit a record high against the dollar at $1.305 before falling back to around $1.29.
Analysts have become increasingly pessimistic over the outlook for the dollar after the currency failed to rally in response to there-election of President George W. Bush and a dramatic improvement in the employment figures. The strong jobs figures at the end of last week were seen as a mixed blessing for the dollar, increasing confidence in robust growth and higher investment returns but also underlining that the deficit may expand further if US growth accelerates.
Many economists say the dollar will increasingly be dragged down by the bloated US current account deficit, despite interest rate rises by the Federal Reserve.
Import prices for October were also released yesterday showing a 1.5 per cent rise in October. This largely reflected an 11.7 per cent rise in petroleum prices.
The most desirable market is the American market. It has the most disposable income by far. But Europe and Asia will have much more difficulty in accessing it. American companies will therefore see a return to having control over pricing their products in the U.S. market. This is all good news for the investor.
rudeboy, I thought a trade deficit was a sign of a booming economy!? When are you free traders going to get your story straight?
Sorry LCJ but this is a lie. According to the household survey there are over 2 million more Americans working now than when President Bush first entered office. The problem you have is you are relying only on the jobs survey which covers mostly big business.
Our economy is changing. Most new jobs are people going into business for themselves or working for small companies. These are not included in the jobs survey and are always ignored by the enemies of America (Old media)
We have more people working now than we ever did. They are making (on average) more money than they ever did. and it only looks to improve as we destroy more of islam and recover more from 911
Yes very true.
Remember Yankee go home in Germany? Oooops- 30,000 jobs went by by too. Nearly 20 Billion dollars a year dried up. Yes, that's with a "B".
They live in an ideological world where even if all facts refute their view they will just find some whacko who tells them what the want to hear. Why do you think Michael Moore is so popular in large parts of Europe? Even though factually wrong, spun and with situations taken out of context, they like to hear that because he tells "what" they want to hear.
So as an “expert” 2 years ago said “The Americans just can’t spend themselves out of this recession” (He was from the Deutsche Bank), and we cut taxes and did just that. They increased their VAT tax to 16% from 14% (A tax like a sales tax) and their economy is dying. They managed to increase a whole plethora of taxes and the consumer can hardly make ends meat. But they do believe that the war in Iraq was a diversion from the horrid economic conditions in the US. They will be forced into a humiliating economic crises eventually which will force them to adopt change. In the mean time they will push on with blinders, telling themselves the merits of their “Social” economy, the great Kyoto protocol and other crap fed to them by their current demagogues in the SPD and Greens that are leading their country and media.
Ironically the media which is in Germany even partially owned by people closely associated with the political party in power also has to a large degree state ownership of much of the media as well. They point their finger at the US and say “FOX is bad and propaganda” as they watch their state official, on the state run TV channel tell them how great everything is in their “Sozialstaat”.
Being of German/Austrian decent (I'm more German than most Germans), I take the liberty to say that the masses in both of these nations are subjects. People who see “group think” as a good thing that needs practice. People who have replaced religion with a form of government that shall provide from cradle to grave. People who went from UNmoral to Amoral after WW2. Not all are bad, but they are on a downward glide path and can’t even see why; nor do they really want to.
Red6
LOL!!!
Conversely, I thought a trade deficit means we are DOOMED!? When are you protectionists going to get your story straight?
Yes, that remains the long term prognosis as our productive industries continue to migrate offshore.
Nevertheless, it IS hilariously entertaining to watch you hypocritically change your spin and hype with every little statistical anomoly and media sound byte along the way.
LOL! What a phony pile of BS!!!
Thanks.
I always aim for the bullseye.
But I gotta admit, it's almost too easy with such a slow moving target.
Excellent post. Thank you.
The improvement in exports is certainly welcome news, and is probably due to several factors. Your analysis of the currency exchange rates is likely the most important. Other effects should be the higher productivity of the US, particulary compared to China and Europe. The socialism of Europe is finally beginning to destroy their economy to the point that even their excellence in engineering cannot accomodate.
Of course, the major issue is the relative labor costs.
The popular refrain is that Chineese or Indian labor cost about 1/20 that of American. That sounds bad, but it isn't as bad as it seems. The reason is that China in particular has emphasized LOW productivity. That's right, low productivity. Following the inestimable lead of American unions, the Chineese attempt to reduce unemployment by keeping productivity low, so that they can employ as many as possible. The idea is that their wages are so low that they can still produce a cheap product with inefficient workers (not the workers fault, though).
The NET difference, if you include only direct wages, is only a factor of 2 on average, particularly when you include other costs, such as transportation and such. 1/2 is a lot better than 1/20.
The bigger problem is that government regulation and federal law impose additional costs to hiring people. The US Chamber of COmmerce (sorry, I don't have the link) estimates that the actual cost of hiring an employe is a factor of 2-3 above his wage level. You pay the employee $10; it costs the company $20 - $30. Most of this is federal employment law which is the basis for employee lawsuits for discrimination and such. Interestingly enough, over 90% of discrimination lawsuits are brought by present employees, rather than applicants that were not hired (as the law was putatively designed to address).
Tort lawyers to the rescue again!!
The cost of tort lawsuits for employment law cost companies directly in lawsuit settlements, but indirectly in additional inefficiencies in operating a business. When you include these effects, the difference between net, effective wage rates becomes 1/6. That is too high.
The solution?
1. Allow the currencies to float to appropriate levels (dollar weaker, China currency stronger).
2. Tort reform and simplification and reduction of employment law.
This approach won't save all manufacturing jobs and output, but remember that we are operating on a distribution; this is not a binary effect. Every bit we become more efficient and economical means more manufacturing that will move here.
Ooooops, you can't take credit for THIS one, WG.
sixmil is the one who nailed that bird.
Don't get carried away...
Gotta give credit where credit is due!
I look forward to anyone demonstrating that my views are false seeing that Willie cannot.
You of all people calling others hypocrites. You've wailed about our deficits and at the same time a falling dollar. You've tried to come across as the champion of the American people but yet you want to hose them by asking them to pony up more for the goods that they want to consume. The majority of the time you truly believe there are free lunches. You claim to be conservative but yet post (and agree with) the garbage you find on union, Leftist, and various collectivist thinking websites...and then you call us capitalists the Marxists.
You have marginalized yourself as a one trick, doom & gloom pony, who rarely gets it right. I can tell that you've been learning things as time goes by because you'll incorporate new - new for you - terminology into you pathetic arguments. But yet you continue with the same tired arguments. As your learning process continues, I do hope that you'll finally acquire the wisdom to see that the paradigm that you've been clinging to has been rooted in emotion and not logic.
Good luck to you, Mr. Green.
Why are we not surprised?
Come on Todd, it's the "structural ramifications" that are involved! Many pay up for the sake of the few; you know, redistribution. But yet we're the Marxists, go figure.
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