Sunday, February 28, 2010

"A New Goal"

In his State of the Union address in January, President Obama said:

...we need to export more of our goods. Because the more products we make and sell to other countries, the more jobs we support right here in America. So tonight, we set a new goal. We will double our exports over the next five years, an increase that will support tow million jobs in America. To help meet this goal, we're launching a National Export Initiative that will help farmers and small businesses increase their exports, and reform export controls consistence with national security.

When I heard this I thought that it's a nice thought but how you get people to other countries to buy our goods and services if they are not already doing it? You cannot increase demand for products that is just not there.

I decided to do a little more research into how the administration is expecting to accomplish this task. The articles I read where not clear on how they expect to do this. One article said the plan is to have "tougher enforcement of trade pacts, strong government advocacy to US Exporters and increased export financing." It sounds more like a plan to come up with a plan.

Both articles stated that the administration is going to create an export promotion cabinet. Because we all know that bureaucrats are the most effective and efficient way to get nothing done. In fact an article from the New York Times quoted Sidley Austin, a lawyer, who commented about this new cabinet. Austin said "rearranging chairs around a table, or changing the name of the table, seldom charges results."

I still think it is theoretically possible but unlikely for the US to double exports in the next five years given what I have read about the Obama administration's plan.

http://www.nytimes.com/2010/02/05/business/05trade.html
http://www.reuters.com/article/idUSTRE6131YM20100204

1 comment:

Amber Egbert said...

Another interesting side effect of increasing our exports might end up being reducing produciton in other economies of the goods or services we are exporting. Unless something is done to change income levels, wouldn't an increase in exports on our part create an increase in imports and "bad" side effects in other markets?