Feb 25 2013

Let’s Talk about the Trade Deficit

Feature Stories | Published 25 Feb 2013, 1:18 pm | Comments Off on Let’s Talk about the Trade Deficit -

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Listen to Thom Hartmann discuss trade deficits with Ohio Senator Sherrod Brown.

HARTMANN: You’ve got this plan for a national network for manufacturing, innovation, jobs and this sort of thing. Please tell us about this.

BROWN: Well, first of all, we know a number of things. We know that in order to create wealth you grow it, you make it or you pull it out of the ground. We don’t do as well making things as we used to as a nation. We are a very productive manufacturing work force but not nearly as many people work in it now and we don’t make nearly as much in this country as we used to. We lost five million manufacturing jobs between 2000 and 2010 but since the auto rescue we’ve grown back about 500,000 of those jobs. To do the kind of advanced manufacturing we need to do, (and it doesn’t mean we turn our backs on traditional manufacturing), we need a bit more of a partnership between the federal government and the local governments and business and labor and universities.

Youngstown, Ohio is the first place in the country to have something like this called the National Additive Manufacturing Innovation Institute. It’s working with Carnegie Mellon in Pittsburgh and Case Western in Cleveland and Youngstown State in Youngstown and local businesses and community colleges. It’s sort of a teaching hospital model where there’s a specialty that grows out of it and entrepreneurs grow out of that and create the kind of jobs that give people a shot at the middle class.

HARTMANN: It sounds like a great thing. Steve Keene is a professor of economics in Australia at Western Australia University and he’s sort of a regular on this program and earlier in the week we were talking about basically these three things that have to be in balance in a macro-economy.

One is the public government sector whether it’s in debt or whether it’s in surplus. The second is the private sector whether it’s in debt or in surplus and how it’s doing. And, the third, is the balance of payments sector, which is basically the trade debt plus or minus any deals we may have with other countries, investments we have abroad, things like that that bring money in or cause money to go out. And, he made the point that the reason why Japan is relatively unaffected by a debt to GDP ratio of over 200 percent and China is flirting with numbers at or around that, maybe vastly more than that. It’s because these three numbers have to be in balance. When you have a national debt of 16 trillion that literally means that there’s 16 trillion dollars in the private sector that’s in savings invested in that debt. It’s like double entry bookkeeping. But the plus or minus part is the trade deficit or surplus.

And since the Reagan Administration we’ve had about a 9 trillion dollar trade deficit in the United States since we really seriously started flirting with global free trade. And, those countries that have a surplus, like Japan and China are able to run huge deficits without it affecting them, in fact arguably to their benefit rather than their detriment. They have all kinds of elbow room for government to do things that can further enhance that. How come we never hear a conversation about our trade debt and deficit?

Listen to the rest of the interview with Senator Sherrod Brown.

Thom’s Guest: Sherrod Brown, Ohio State Senator

Visit Senator Brown’s website.

Learn more about the Additive Manufacturing Institute.


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