Economist Robert Reich says the U.S. cannot rely on foreign consumers to rescue American jobs.
"Trade can’t possibly be a source of new American jobs," the Clinton Labor Secretary writes in his blog. "To the contrary, it reduces overall demand in the United States."
"The widening trade deficit remains a drag on the nation’s economic growth."
Indeed, the latest Commerce Department report shows that America’s trade deficit with the rest of the world continues to widen: American businesses sold $152.3 billion of goods and services overseas in May (an increase of just over 2 percent from April) but the U.S. imported $194.5 billion (a jump of 2.9 percent).
“Our monthly trade deficit with China alone jumped $3 billion, to $22 billion,” Reich notes.
“As a practical matter, the widening trade imbalance means no more trade agreements because Americans, worried about their jobs, don’t want to risk losing more of them to foreign workers.”
The Caterpillar company offers an excellent case study in both the havoc wreaked on the U.S. job market by the Great Recession and the potential for world markets to turn that devastation around, CNN Money reports.
Though last year the company downsized by 20,000 workers, Caterpillar may rehire as many as 9,000 this year, and most of that job growth is linked to a rise in exports. Some Caterpillar factories in the United States send as much as 70 percent of their heavy equipment overseas.
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