Morici: Fixing China trade key to a sustainable recovery
Why is no one talking about this? How can we fix the economy without jobs and real wages going up?
EC-This week, the Obama Administration filed a WTO complaint against Chinese export practices that disadvantage US manufacturers. This is welcome news, because more balanced trade with China is essential for achieving a sustainable economic recovery.
In 2001, the recent US economic expansion began, and China was granted WTO membership and assured access into the US market. By 2008, Chinese exports to the United States more than tripled to $338 billion, exceeding US exports to China almost five to one.
Meanwhile, rapid growth in China and throughout Asia helped push up prices for oil, and the US oil import deficit quadrupled.
The US trade deficit increased from $93 billion in 2001 to about $700 billion a year from 2005 to 2008. That’s more than five percent of GDP, and China and oil now account for nearly the entire total.
Dollars spent abroad cannot be spent on US goods and services. When imports exceed exports by 5 percent of GDP, Americans must spend 105 percent of what they earn, or the demand for US goods and services is less than the supply, inventories of new homes, cars and other goods mount, layoffs result, and the economy slips into recession.
“real wages going up” . . . have you looked at the data lately, or do you just dismiss it as unsupportive of your preconceived notions?
We need to decrease imports of goods AND labor, legal and illegal.
I did not see anything in that article about wages going up. Or anywhere else for that matter.
Still no comment on data?
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See, when CPI falls — deflation, as we call it — nominal wages would have to fall even faster for there to be a REAL fall in wages.
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Hasn’t happened, but don’t let that stop a good rant.
Ah, well. I never do get a response when I pull out the data card.
DOR
Nice spin go ask the average family here what is going on!