Saturday, September 22, 2012

Hope and Exports

    The Obama campaign's "Forward" slogan is meant to invoke not only the positive, feel-good aura that surrounded the 2008 Hope and Change campaign, but is also specifically focused on five major areas:  exports, reducing foreign oil dependency, new jobs in natural gas, new jobs in manufacturing, and investing in America by ending the war in Afghanistan.  The question could be asked of all five, why weren't these priorities during the first four years?  However, I will only address exports at the present.

    If the Obama administration wishes to run on the idea that the Second Obama administration will lead to a doubling of exports, it's worth asking what has taken place in the last four years.  Here's a graph showing the growth (or decline) of exports during the end of the Bush administration up to the present:

    Note that the first two years under President Obama were spent simply recovering ground that was lost during the great financial crisis.  The next six months saw some moderate growth, but then look what happens: a plateau.  And the most recent month on record actually shows a decline.  The policies of the administration so far have seen a little under a fifty percent increase in three and a half years, and that includes the rebound off of the Great Recession dip.  The president is now expecting the country to believe that those same policies (because he has not acknowledged any deficiencies in those policies or any need to change them) will lead to a growth rate twice what they have achieved so far.  The claim is even more dubious since this doubling would have to take place from the virtual dead-stop where exports have been idling for the past 12 months.

   Steven Hayward of Powerline recently posted two items on the state of the economy, both global and here at home.  Neither bodes well for Obama's optimism regarding exports.  Back in July, I wrote the following about government's role in the economy:

    It is often said (usually by the party in power when the economy is faltering), "There's really not much the president can do about the economy."  In some ways, that's true.  To go with the road-analogy, if the economy is a runner, there's not much anyone can do to help him run faster.  It's not as if someone can double his speed.  But someone (think Barack Obama) can sure put obstacles in his way and even slow him down or even stop him.  The way to help then becomes removing the obstacles and protecting the runner from interference.
    If we were starting with optimal conditions, the president could not do much to improve the economy - but we're no where near optimal.  Romney should not campaign on "I will create jobs," but rather, "I will remove obstacles keeping the private sector from creating jobs."
    The same could be said of exports.  Government can do trade deals and help fight unfair trading practices in other countries to help our businesses compete globally.  But for the most part, government just needs to get out of the way.  Barack Obama has shown little inclination to do this in his first term.  There is no reason to believe a second term would be any different.  Rather than doubling exports, the United States would be likely to spend the next four years struggling just to hold its own.

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