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State of the Union Takeaway: We Need to Export More Goods. But How?

This, from Black Swan Capital:

There exists the potential that this tighter-money posturing, maneuvering, squirming or strategizing by the Fed will ultimately support the US dollar’s value. Well it can’t hurt, considering the overwhelming sentiment that the Fed will opt to inflate away the US dollar.

And that brings me to something President Obama mentioned last night in his little talk.

Littered with awkward contradictions, strong rhetoric pushing partisan ideals, and plenty of trademark off-the-cuff (and off-the-teleprompter) jokes … he mentioned something that jumped out at me.

The US needs to export more of its goods.

Yes, in an environment of deleveraging and belt-tightening and a perhaps permanent shift in consumer attitudes, we need to find something to compensate for that lost growth driver. And we should find something that can be considered positive, helpful economic activity. Emphasis on industry and exports is a good place to start.

No kidding.  But how?

Having been involved in a small business that routinely exported a third of its output, I think I can say something intelligent about this.

One of the big changes in international commerce that has eluded most Republicans is that most countries do things to help those who export.  Whether it be tax breaks or subsidies or what, in countries other than the U.S. (especially those that face us across both Atlantic and Pacific) government support for exports is a way of life.  Competing against this isn’t fun.  Our governments (the states are in this act too) have done some things to be helpful.  Part of that help is facilitating small businesses export, because small businesses find many routine business activities (such as getting paid) daunting overseas.  International commerce, especially for those too small to lobby for trade representatives to carve them out foreign markets, isn’t as level of a playing field as one would like it to be.

This should be right up the Obama Administration’s alley.  But it isn’t, for several reasons.  Most of these relate to the nature of the American left, and by now it should be obvious that our President is solidly in that idea.

  1. Barack Obama needs to basically break the back of small business to insure a permanent Democrat majority.  That’s because most small business people are Republicans; to pull the rug of funding out from under them would go a long way to ending effective opposition to his party.  It’s an interesting choice between the prosperity of the country and the perpetuation of your political power but, hey, look around and see how other places have made that choice.
  2. Doing (1) would centralise what economic activity is left with the government and large corporations.  That too would suit the current administration’s concept.  But how innovative of a system would we have?
  3. The American Left has a running aversion to industrial activity of any kind.  After all, industrial activity creates suburbs and bourgeois life and all that.  (I can hear the barf bags breaking out already…)  It’s been that way since the 1960’s, and the dream won’t die until they do.
  4. There’s also the issue of “maintaining traditional society and culture,” which I discussed during the campaign in my piece Message to Barack Obama: Why My Family Business Left Chicago. Obama gets this from his mother; it’s ironic that she campaigned for small enterprises to help preserve such societies, although my guess is that her idea is closer to Mao Zedong’s iron furnace in every yard (which he tried during the Great Leap Forward) than what we have here in the U.S..

I just don’t see an American leftist pursuing favourable industrial policies that would ameliorate this situation, even though their European counterparts have shown the way.


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