US trade deficit widened sharply in August - Bye, bye jobs

[NNN0LHI]

http://thehill.com/blogs/on-the-money/801-economy/124277-us-trade-deficit-widened-sharply-in-august

Commerce Dept.: U.S. trade deficit widened sharply in August

By Vicki Needham - 10/14/10 01:51 PM ET

The trade deficit widened sharply in August as imports got a boost from businesses ramping up for a possible increase in consumer spending.

The deficit decreased 8.8 percent, to $46.3 billion, as a slight increase of 0.2 percent in exports was overtaken by a 2.1 percent jump in imports, the Commerce Department reported Thursday.

The trade deficit is running at an annual rate of $502.5 billion this year, up 34 percent from the $374.9 billion deficit for all of 2009, which had been the smallest deficit since 2003.

[TexasObserver]

1. Reality: 9 straight months of positive job growth in private sector.

We didn't get into this hole in 20 months, and we can't get out of it in 20 months.

It's a long, slow recovery, and often disappointing, but it's a recovery.

[HereSince1628]

2. Does the parsing really matter?

Yes, net job loss in September is blamed on governments cutting back, rather than the private sector, although net private job gains weren't really very strong.

The still unresolved problem is the negative feedback that all unemployment has on demand.

Unemployment destroys consumer demand it doesn't matter where the unemployed formerly worked in any particular sector. Unemployed can't spend freely, the employed cutback when they are afraid of further job loss. Employers stop hiring and cut positions when they anticipate soft demand, which actually creates soft demand and the cycle continues.

Without large government investment and intervention on trade and monetary policy are used to drive US domestic demand, we can look to be in trouble until the rest of the worlds costs and standards of living meet or exceed ours. That'll be a long, long wait.

[TexasObserver]

5. The actual trends really matter.

I have long favored a second stim package of a trillion or more, aimed at creating jobs by creating federal programs such as the old WPA, and by rebuilding collapsing infrastructure.

I want to see more done to create jobs, including protectionist legislation and cutting of tax benefits to companies which outsource.

One can look at the economic world, find any factoid they wish, and make it into a talking point. The general long term trends are the ones which matter. We are in a long, often choppy, recovery from a fall into the deepest recession in over 70 years. The president wasted opportunities and chose the wrong priorities. He naively went for the GOP "attack the deficit" sucker punch, and now instead of seeing unemployment below 8%, we're still pushing 10%.

I'm not suggesting the economy is great. It isn't. But it is improved, even if new job formation is lagging badly.

[HereSince1628]

7. I thought I was referring to basic Keynesian principle

but, my mistake was thinking I had something to say.

[lonestarnot]

3. Just richies importing more Chinese crap for richies to spend our money on. They'll have to hire

someone to unload it.

[mkultra]

4. "from businesses ramping up for a possible increase in consumer spending"

That pretty much says it all. Everyone expects it.

[Barack_America]

6. Mmm. Wouldn't it be nice if Americans wised up and refused to buy this crap?

And left it sitting in the warehouses instead?

Yeah, yeah, I know. Pipe dreams.