Actually, the title of this piece is not original to me. It comes from a report issued by the United States Business & Industry Council (or “USBIC”), an educational and lobbying organization for America’s small businesses. Here’s a brief summary of what they do and why they do it from their website:
The United States Business and Industry Council (USBIC) and its affiliated research arm, the USBIC Educational Foundation (USBICEF), champion the interests of America’s domestic family-owned and closely-held firms—our nation’s “main street” businesses—which create new products, jobs and growth here in the United States. The Council’s mission is to expand our domestic economy, with particular emphasis on our manufacturing, processing, and fabricating industries, and through the resulting growth to extend a high standard of living to all Americans.
These aren’t the people who lobby for multinational companies which outsource their production facilities to third world countries, but those who represent America’s small and midsize manufacturers, companies that still largely employ their fellow Americans, yet still depend upon both national and international sales to grow their businesses.
So what do they have to say about the recent soaring trade deficit the US is running with the rest of the world? To find out follow me after the break.
To be blunt, they aren’t very sanguine about what’s going on with our trade policies. Highlights from their analysis of the September trade deficit numbers follows (bolded text is directly from the report):
TRADE ANALYSIS: September 2005 trade figures
Alan Tonelson, Research Fellow, U.S. Business & Industry Council (USBIC)
November 10, 2005The total U.S. trade deficit in goods and services skyrocketed from $59.3 billion in August, 2005 to $66.1 billion in September, 2005. This jump of nearly 11.5% is especially alarming for three reasons. First, it smashed through the old total monthly trade deficit set this past February of $60.4 billion. Second, the rise in the non-oil goods deficit of 13.74% was more than twice as fast as the 6.78% rise in the oil deficit. Third, the U.S. deficit in advanced technology products soared by an astounding 69.3%, to $5.57 billion, the second highest monthly total on record. . . .
In other words, U.S. trade policy has become an outsourcing policy, which overwhelmingly serves the needs not of U.S.–based producers, but of multinational companies that increasingly supply the U.S. market from abroad. If bold measures are not taken soon, a balance of payments crisis will engulf not only the U.S. economy but a global economy that depends heavily on U.S. consumption for its growth. . . .
The sharp September spike in the non-oil goods deficit vs. the oil deficit represents a stunning reversal of recent trends. Although the monthly oil deficit of $22.2 billion represents a new record, the non-oil deficit represents the second highest monthly total in U.S. history, with imports rising from $41.78 to $47.52 billion, or 13.74%. The U.S. monthly oil deficit, by contrast, rose only from $20.79 billion to $22.2 billion, or 6.78%. This is the highest U.S. oil deficit on record. However, the non-oil deficit is the second highest ever. . . .
In the critical manufacturing sector, the September trade deficit of $54.19 billion represented a 3.8% increase over August’s figure of $52.2 billion. In September, manufacturing exports fell from $59.09 billion to $56.44 billion, or 4.48%, while manufactures imports dipped only from $111.29 billion to $110.63 billion, a decrease of 0.59%. Year-to-date, the $442.25 billion manufacturing deficit is running nearly 10.9% ahead of the comparable 2004 total.
U.S. trade in advanced technology goods suffered a major setback. U.S. exports of these products, which are not only critical to future productivity growth but to national defense, plummeted 7.93% in September to $17.07 billion. Meanwhile, U.S. imports of advanced technology products increased 3.71% to $22.64 billion, the second highest total on record.
You really should go read the whole article. However, the thrust of their argument is that we are headed into a world of hurt if these trends continue. The policies advanced by the Bush administration are driving up the US trade deficit for the benefit of the short term interests of large multinational companies at the expense of American consumers, American workers and American manufacturing capability.
The trade deficit is rising in part due to the spike in oil prices, but that is not the whole problem. The far more serious concern is that the US is increasingly exporting less, and importing more, high tech goods. Let me emphasize that point by quoting from the report again, this time with my added emphasis in the text:
U.S. trade in advanced technology goods suffered a major setback. U.S. exports of these products, which are not only critical to future productivity growth but to national defense, plummeted 7.93% in September to $17.07 billion. Meanwhile, U.S. imports of advanced technology products increased 3.71% to $22.64 billion, the second highest total on record.
When we think about the national security failures of the Bush administration, we tend to look at their utter failure to protect us prior to 9/11, or the hash they have made of fighting the War on Terror by diverting us into an unwarranted and destabilizing invasion and occupation of Iraq. Some point to the total breakdown in our efforts at the non-proliferation of nuclear weapons under John Bolton and friends at the State Department. These are all major policy failures that will haunt us in the years ahead
Yet, in the long term, perhaps the single most damaging thing the Bush administration has done with respect to our Nation’s national security may very well be our trade and economic policies. Without a strong American economy vis-a-vis the rest of the world, without good jobs and the growth of our manufacturing capability, particularly in the area of high technology, we are dooming our children to a world in which they will be not only poorer, but less safe and secure from external threats, whether those be from the economic might of our trading partners or from terror attacks from an increasingly radicalized Islamic populace seeking revenge for our wars of choice in the Middle East.
This is Bush’s true legacy: A diminished America, militarily, economically and diplomatically.
