Exports are only half the story
Rob Scott at the Economic Policy Institute (EPI) has published an excellent analysis of President Obama's 'State of the Union' address:
President Obama talked about doubling exports in the State of the Union Address last night as a strategy to create jobs. It's a great sound bite, but woefully incomplete economics. While exports support American jobs, imports displace them; when imports grow faster than exports, our trade deficit expands and American jobs are lost. Between 2001 and 2007 (both business cycle peaks), we lost 3.4 million U.S. manufacturing jobs, and the fact that the trade deficit as a share of GDP rose by roughly one-third is a key reason why. Lately, when the president has talked about jobs and trade, he mentions the jobs associated with exports but ignores those lost due to growing imports. It's like watching baseball, but only counting runs scored by the home team—lots of fun, but it won't tell you anything about who is ahead.
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