Trade deficits do not matter, for example, I have a trade deficit with Trader Joes. I buy from them, they buy nothing from me. Amazon.com has a trade deficit with me, they buy far more from me than I buy from them. What matters, as I heard Paul Volcker once say, it is the health of your trading partner that matters, not the deficit. I'd be in trouble to the degree that Trader Joes or Amazon.com were economically unhealthy, for my range of goods and services traded would be in that measure in doubt.
No come the February import export report from USCensus.
So we are seeing here too changes that may take some time to play out.
As you read trade data, recall that big business makes up probably 60% of the trade, that is about 1000 companies, while the rest is handled by while small business. Although those drops are graphically alarming, not to me, for it takes big business to make changes that big that fast. it is big business being hurt, not small business. In fact, what big business is no longer buying and selling, some is because their customers are not buying, but some is for their customers' preferences have changed. Any chenge at the big business level is exponential at the small business level, bad of big is exponentially god for small.
(This is not necessarily so, for there is a natural symbiotic relationship in free markets between small and large business, but in capitalism it is a zero sum game in which one loses and one wins, and class contradictions are fomented, as the Marxists accurately critique capitalism. A pox on both their houses, gimme free markets.)
This graph shows it is getting better to get into small business international trade, competing on design. We can adapt any of the widening excess production capacity to more closely match emerging consumer demand. McD cannot do it.
Feel free to forward this by email to three of your friends.
No come the February import export report from USCensus.
The Nation’s international trade deficit in goods and services decreased to $35.4 billion in February from $42.7 billion in January (revised), as imports decreased more than exports. (April 2, 2015) |
So we are seeing here too changes that may take some time to play out.
 |
| http://www.census.gov/foreign-trade/data/index.html |
As you read trade data, recall that big business makes up probably 60% of the trade, that is about 1000 companies, while the rest is handled by while small business. Although those drops are graphically alarming, not to me, for it takes big business to make changes that big that fast. it is big business being hurt, not small business. In fact, what big business is no longer buying and selling, some is because their customers are not buying, but some is for their customers' preferences have changed. Any chenge at the big business level is exponential at the small business level, bad of big is exponentially god for small.
(This is not necessarily so, for there is a natural symbiotic relationship in free markets between small and large business, but in capitalism it is a zero sum game in which one loses and one wins, and class contradictions are fomented, as the Marxists accurately critique capitalism. A pox on both their houses, gimme free markets.)
This graph shows it is getting better to get into small business international trade, competing on design. We can adapt any of the widening excess production capacity to more closely match emerging consumer demand. McD cannot do it.
Feel free to forward this by email to three of your friends.
1 comments:
John, Don't wars get started over trade deficits, ever read about what happened to China when the British started liking Tea and the Chinese Emperor decided that they were only interested in Gold and Silver in payment ?
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