On February 6, 2015, a report by the Associated Press is published in the Los Angeles Times:
The U.S. trade deficit in December jumped to the highest level in more than two years as American exports fell and imports climbed to a record level.
The deficit jumped 17.1 percent to $46.6 billion in December, the biggest imbalance since November 2012, the Commerce Department reported Thursday. The widening trade gap reflected a drop in exports, which fell 0.8 percent to $194.9 billion. Imports soared 2.2 percent to $241.4 billion.
The deficit for all of 2014 increased to $505 billion, up 6 percent from the 2013 deficit of $476.4 billion. Economists expect the deficit to widen further in 2015 as strong growth in the United States boosts imports, while weak growth overseas and a rising dollar continue to depress exports.
The politically sensitive deficit with China set a record for 2014, rising 23.9 percent to $342.6 billion. The United States deficit with China surpassed the deficit with Japan in 2000 and since then, the trade gap with the world’s No. 2 economy has set a new record nearly every year.
Those deficits are creating pressure on Congress and the Obama administration to take tougher actions against what critics see as China’s unfair trade practices. U.S. manufacturers contend that China is manipulating its currency to keep it artificially low against the dollar as a way to make American products more expensive in China’s market and Chinese products cheaper in the United States.
The $505 billion deficit for the year was the largest imbalance since a $537.6 billion deficit in 2012.
The overall economy grew at a moderate 2.6 percent rate in the final three months of 2014 after turning in a sizzling 5 percent growth rate in the July-September period. Part of the slowdown reflected a swing in trade, which boosted growth by 0.8 percentage point in the third quarter but reduced growth by 1 percentage point in the fourth quarter.
For the whole year, trade was a small negative, trimming growth by 0.2 percentage point. The economy grew 2.4 percent in 2014, and many economists believe growth in 2015 will be slightly above 3 percent, giving the country the best growth in a decade
The trade deficit would have been even larger last year if it weren’t for the energy boom in the United States. Higher production at home has been lowering America’s reliance on foreign oil. For the whole year, petroleum imports fell 9.6 percent to $334.1 billion, the lowest level for imports since 2009. U.S. petroleum exports jumped 5.9 percent to a record $45.7 billion.
The widening trade deficit comes at a time when the administration is hoping to finally get Congress to approve the fast-track authority it needs to wrap up a major 12-nation trade agreement with Pacific Rim countries known as the Trans-Pacific Partnership.
The administration sees the trade deal as one of the areas where he may be able to find common ground with Republicans, who now for the first time in his presidency control both houses of Congress.
While economists believe lower oil prices will help the trade picture in 2015 as well, they are still forecasting the deficit to widen slightly. Faster growth in the United States is attracting more imports, while U.S. exporters continue to struggle with the impact of weaker growth overseas and a stronger dollar.
http://www.latimes.com/business/la-fi-trade-deficit-20150205-story.html
What is particularly remarkable about this report is the reference and applause for a “sizzling 5% growth rate” in the short July-September period. Of course, reality has subsequently set in resulting is today’s 2% to 3% tops growth rate for the U.S. economy.
Our nation’s economic growth rate is sadly anemic, and hindered by a closed system in which ONLY a tiny minority of Americans will benefit due to the fact that they OWN essentially all of the non-human productive capacity of the nation, with physical capital assets extending out globally, which the vast majority of Americans are delegated to wage slavery and welfare slavery, with a Job as there ONLY opportunity to earn income. The wealthy ownership class, of course, is getting richer through the global expansion of their ownership of wealth-creating, income-producing capital assets, which is the productive factor responsible for mass producing products and services.
Unfortunately, in most people’s minds there is ONLY one way to earn income and that is through a JOB. Thus, the focus of economists and anemia, as well as politicians is always on Job Creation, whether real or make-work (otherwise not created had not the government spent taxpayer extracted income and incurred national debt to finance job creation and other social income measures).
There is, however, another means to earning income, which is the “secret” that the richest among us understand and pursue, and is the very reason one becomes rich. That is OWNING wealth-creating, income-producing capital assets, the non-human factor of production (land, structures, tools, machines, robotics, super-automated production, computerized operations, etc. used to produce products and services), which comprise the assets of business corporations.
Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital owner “worker” input has been rapidly changing at an exponential rate of increase for over 239 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advances amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Physical capital does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, free-market forces no longer establish the “value” of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income. This is the policy approach advocated by most.
But because productive capital is increasingly the source of the world’s economic growth shouldn’t we be advocating that capital ownership become the source of added property ownership incomes for all? Think about it, if both labor and capital are independent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then shouldn’t equality of opportunity and economic justice demand that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all?
By accepting and embracing technological invention and innovation and its formation so that it is broadly owned personally by American citizens (with its ownership never allowed to be concentrated), we can achieve economic growth rates exceeding 10 percent, even 20 percent, which would enable us to build a future economy that supports general affluence for EVERY child, woman and man while over the short term generating full employment in REAL jobs necessary to the building of our affluent future, and reversing the outsourcing of jobs and capital asset investment in other countries, making America once again strong and self-reliant.
The end result is that citizens would become empowered as owners to meet their own consumption needs and government would become more dependent on economically independent citizens, thus reversing current global trends where all citizens will eventually become dependent for their economic well-being on the State and whatever elite controls the coercive powers of government.
It is hard to talk about the trade deficit without mentioning China, the US trading partner in which its deficit is greatest. China now supplies 82 percent of US toy and sporting good imports, two-thirds of its imported footwear, and even one-third of its electronics. It will be interesting to see how long this continues.