Rep. Alan Grayson (D-FL) is trying to get people talking about the trade deficit and the harm it is doing our wages, our jobs and our potential for mutual prosperity. He’s right to do this.
Last week Grayson spoke at a press conference with several other House Democrats and representatives from a broad coalition of organizations, expressing opposition to “Fast Track” Trade Promotion Authority. Fast Track is a weird process whereby Congress essentially approves of trade deals before even reading them. I wrote about this press conference in “House Members, Activist Leaders Form United Front Against Trade Scheme.”
Now Grayson is emailing his short talk out to his list. This is Grayson’s letter, which repeats what he said at the press conference:
Trade is a simple concept. You sell me yours, and I’ll sell you mine.
That’s not what’s happening.
What’s happening is that day after day, month after month, and year after year, Americans are buying goods and services manufactured by foreigners, and those foreigners are not buying goods and services manufactured by Americans. We are creating millions — no — tens of millions of jobs in other countries with our purchasing power, and we are losing tens of millions of jobs in our country, because foreigners are not buying our goods and services.
What are they doing? They’re buying our assets.
So we lose twice. We lose the jobs, and we are driven deeper and deeper into national debt – and, ultimately, national bankruptcy. That is the end game.
This is not free trade; it’s fake trade. We have fake trade.
That’s why before NAFTA was enacted and went into effect, this country never had a trade deficit as much as $140 billion a year, while every single year since then — for 20 years now — we have had a trade deficit of over $140 billion a year.
We have had a[n average annual] trade deficit of half a billion dollars now, for the past 14 years.
Look back all across history. Look all across Planet Earth. You will see that the 14 largest trade deficits in the history of mankind are – all [of them] — the American trade deficits for the last 14 years.
(I cannot rule out the possibility that somewhere on Alpha Centauri there might be a country that has a larger trade deficit. But here on Planet Earth, no.)
Listen, we are in a deep, deep hole, thanks to fake trade. Thanks to fake trade, right now, 1/7th of all the assets in this country — every business, every plot of land, every car – 1/7th of all the assets in the country are now owned by foreigners. And ultimately, if we keep going the way we’re going, they all will be.
That’s why we have the most unequal distribution of income [among all industrial nations] in our country, [and] the most unequal distribution of wealth in our history.
We’re in a deep, deep hole. And there’s a simple rule about holes: When you’re in a hole, stop digging. Stop digging!
So I’m calling upon our leaders. I’m calling upon the American people. Let’s stop digging.
Let’s not only have a trade policy. For once, let’s also have a trade deficit policy.
Let’s deal with the reality that has robbed the American Middle Class now for decades. Let’s address it, and let’s defeat it. That’s what I’m calling [for], right now.
Let’s stop digging deeper. Let’s raise ourselves up, let’s climb out of this hole, and rebuild the American Middle Class. Thank you very much.
Rep. Alan Grayson
Grayson’s email includes this chart showing the history of how our enormous, humongous trade deficit has grown and grown:
This is a big deal, because Grayson reaches a lot of people, and information spreads. So, maybe Grayson’s efforts will help drive awareness of the the trade deficit problem.
What Is The Trade Deficit?
The trade deficit is a direct measure of how much more our country buys from other countries than it sells to other countries. It also directly measures dollars and jobs literally drained from our economy. The trade deficit — contrasted with the budget deficit which we largely owe each other inside the country — really is like a family or business budget and we are spending more than we are taking in. In fact, we have been spending more than we are taking in for a long time.
Last month our trade deficit was $39 billion. That is $39 billion worth of business that went to non-US factories and other providers representing $39 billion worth of jobs and store purchases and the jobs and taxable revenue all of that represents. And that was in just one month.
Meanwhile China reported that their trade surplus has increased by almost 50%. “China 2014 trade surplus rockets to record high”:
China’s trade surplus soared by almost half last year to a record $382 billion, the government announced Tuesday…
Exports increased 6.1 percent to $2.34 trillion in 2014, while imports rose 0.4 percent to $1.96 trillion, the General Administration of Customs said on its website.
That translated into a trade surplus of $382.46 billion, the highest ever and a 47.2 percent increase on 2013.
That trade surplus represents a direct transfer of $382 billion of wealth into China from other countries — largely our own — while our trade deficit represents a direct transfer of wealth out of our own country, mostly to China.
Grayson’s little chart shows how long our trade deficit has been draining jobs, factories, and prosperity from our country. Nothing like this has ever occurred before in human history. If you look at the effect on the country you can trade the years of factories closings and community devastation in much of the country to the lines on this chart. You can trace the “hollowing out’ of America’s middle class by following the lines on this chart.
Budget Deficit Or Trade Deficit — Which Matters More?
You have heard a LOT about the budget deficit over the years. Conservatives and Wall Street have put a lot into making people scared about the budget deficit. This scare machine has been effective and as a result most people don’t even know that the budget deficit is way down from where Bush left it. (“By 73 percent to 21 percent, the public says the federal budget deficit has gotten bigger during the Obama presidency.”)
The reason conservatives and Wall Street are investing so much in budget-deficit propaganda is that if people are fearful about the budget deficit they demand certain policies that are, to say the least, a lot more beneficial to conservatives and Wall Street than to regular, working people. These include allowing cuts to the federal budget (and its oversight of and push-back against the giant corporations) that would be unthinkable without budget deficit fear stampeding the public. (The budget deficit was caused intentionally to force these results.)
However, if people come to understand and worry about the very real trade deficit they will demand policies that are very good for regular, working people as well as for “Main Street” businesses that make or do things in America. Policies that balance trade would increase jobs and wages, general prosperity and tax revenue.
These policies to help balance trade include outlawing currency manipulation which makes foreign-made goods less expensive relative to American-made goods, enforcing existing trade rules and finally renegotiating the trade deals that have caused our massive trade deficits (China, in particular).
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF. Sign up here for the CAF daily summary and/or for the Progress Breakfast.