And the trade deficit is beginning to come down, lower in the last 2 months, it takes a little while for the weakening of currency to show up in the decline of the trade deficit. Not that the "trade deficit" concerns me much.
Very true. A weak dollar hurts wine-sniffing liberals who enjoy swanning about in French bistros. It helps Joe Six-pack working on an assembly line, by making his products cheaper for the rest of the world to buy, and fighting outsourcing.
Another thing he fails to note is that productivity continues to grow by leaps and bounds. American workers are exporting more valuable stuff than ever, but export-related job numbers remain stable because of productivity gains.
Some Americans make big bucks selling jet aircraft, machine tools, pharmaceuticals and sophisticated financial services to the world. They then spend the money they earn on other goods and services in the domestic economy, and eventually it winds up back at Wal-Mart where it is traded for cheap Chinese crap, or at the gas station where it is traded for oil from Mexico and Venezuela. If the price rises because of the weak dollar, people buy less of it, and the trade deficit will fall. That hasn't happened because China has chosen to subsidize their own exporters to maintain full employment, and it takes time for things like oil sands and oil shales to come on line to replace imported oil.
In effect, the Chinese are giving the American consumer manufactured goods in exchange for pieces of paper, the value of which is falling. If anyone has a beef, it's the Chinese consumers and taxpayers, who ought to be angry at their government for pegging the yuan to the dollar.
Moreover, the American public, through their government, has chosen to pay higher prices for energy in order to restrict domestic sources of like Alaskan oil and nuclear power. This is a deliberate tradeoff in exchange for perceived environmental benefits.
Trade deficits are self-correcting. The only thing the government need do is allow free-floating exchange rates.
-ccm