Heard Off the Street: Obama set to come up short on pledge

Share with others:


Print Email Read Later

For those inclined to compare the promises of President Barack Obama with his performance, his much-maligned health insurance initiative has been Job 1. Precious little attention has been made to a pledge Mr. Obama made in his 2010 State of the Union address.

"We will double our exports over the next five years, an increase that will support 2 million jobs in America," the president stated.

Recent encouraging reports on the health of the manufacturing sector and recent improvements in trade notwithstanding, it looks like Mr. Obama will come up short of his worthy objective.

"That's looking like a little bit of a stretch," said Cliff Waldman, senior economist for the Manufacturers Alliance/MAPI, a public policy and research group.

"He's fighting a global economy that has been going through one adjustment after another," said Mr. Waldman, adding that Mr. Obama would have had a better chance of hitting the target if he made the pledge today rather than four years ago, when the economy was just beginning to crawl out of a recession.

U.S. exports totaled $1.9 trillion in the first 10 months of this year, up 2.6 percent over the same period a year ago. The totals for both 10-month periods easily top the $1.6 trillion in exports for all of 2009, when the economy spent half of its time in recession and half in recovery.

However, exports only tell half of the story. Imports in the first 10 months of this year totaled $2.3 trillion, flat with the same period last year but 16.8 percent higher than they were for all of 2009.

Consequently, the U.S. trade deficit, which stood at $383.7 billion for all of 2009, has grown to $402.1 billion in the first 10 months of this year.

With only five more quarters to go on Mr. Obama's five-year time export frame, one of his inveterate critics gives the president "a deep F."

"Net exports are down since the recovery began. Net exports are down because the trade deficit is up," said Alan Tonelson of the U.S. Business and Industry Council.

Some of the progress would have occurred regardless of Mr. Obama's pledge, which came about six months after economists say the recession officially ended. Exports grew about 12 percent in 2010.

"Double-digit growth coming out of a downturn, particularly a significant downturn, is somewhat the norm," Mr. Waldman said.

But the global economy slowed again, crimping demand for U.S. exports in 2012. The picture has brightened recently, thanks in part to increasing U.S. energy independence, with exports hitting an all-time high in October.

Mr. Obama expected much of the export increase would come from U.S. manufacturers, who account for about half of all U.S. exports. Even though manufacturing grew twice as fast as the overall U.S. economy early in the recovery, progress over the longer haul has been harder to come by.

Consider the following:

* Monthly trade deficits in manufactured and high-tech goods hit all-time highs, according to Mr. Tonelson. Through the first 10 months of this year, the manufacturing trade deficit -- the difference between imports minus exports -- was $540 billion, up from $536.8 billion in the same period a year ago, Mr. Tonelson said.

During the same 10-month period in 2009, the manufacturing trade deficit was $355.4 billion, he added.

* The U.S. monthly merchandise trade deficit with China hit a record $30.5 billion in September before falling to $28.9 billion in October. It remains 2 percent ahead of last-year's all-time high, according to Mr. Tonelson.

"Limiting our trade deficit with China seems to have fallen off of everyone's radar, including the administration's," said Scott Paul, president of Alliance for American Manufacturing, whose members includes leading U.S. manufacturers and the United Steelworkers union.

* 12 million Americans held manufacturing jobs in November, the first time that figure has been at that level since April 2009. However, when Mr. Obama made his export pledge in January 2010, there were 11.5 million manufacturing jobs.

"That's a small down payment on what we lost in the recession," Mr. Waldman said.

* During his 2012 campaign, Mr. Obama said he wanted to create 1 million new manufacturing jobs during his second term. He's only got 937,000 more -- or 25,324 monthly for the rest of his term -- to go, according to Mr. Paul. November, when 27,000 manufacturing jobs were added, was a good start.

Mr. Obama is not the first president to make promises that are not within his power to keep. Nor is he the only one who can do something about boosting exports and reinvigorating manufacturing. Plenty of stakeholders, including educators responsible for preparing students for careers in manufacturing and global manufacturers making decisions on where to locate plants, theoretically can take action on their own initiative.

If nothing else, Mr. Obama's pledge has sparked a more lively debate on the issue, a first step toward developing a consensus about what to do about it. If, over the next three years, that consensus can be achieved and the first steps can be taken toward implementing it, perhaps Mr. Obama can be cut some slack for making a promise he could not keep.


Len Boselovic: lboselovic@post-gazette.com or 412-263-1941.

Join the conversation:

Commenting policy | How to report abuse
To report inappropriate comments, abuse and/or repeat offenders, please send an email to socialmedia@post-gazette.com and include a link to the article and a copy of the comment. Your report will be reviewed in a timely manner. Thank you.
Commenting policy | How to report abuse

Advertisement
Advertisement
Advertisement

You have 2 remaining free articles this month

Try unlimited digital access

If you are an existing subscriber,
link your account for free access. Start here

You’ve reached the limit of free articles this month.

To continue unlimited reading

If you are an existing subscriber,
link your account for free access. Start here