Export Growth Propelling Fed Reserve's Seventh District
Bill Testa at the Chicago Fed Reserve has some charts the CAFTA-NAFTA nay sayers should review before they drive out every manufacturing job in the midwest.
Some of the Seventh District’s slow economic growth earlier in this decade originated with softness in U.S. exports abroad. The manufacturing sector continues to account for the lion’s share of U.S. exports, especially capital goods such as high-tech electronics and computing machinery, as well as industrial machinery and equipment. As global economic growth has recovered, so have U.S. exports abroad. In turn, parts of the manufacturing-intensive Seventh District economy are being carried along.
Nominal U.S. exports abroad experienced rates of decline of 6.3% and 5.2% for 2001 and 2002. Since then, as the economic growth of our major trading partners has generally accelerated, U.S. export growth has responded, averaging 7.7% over the past three calendar years.
As a group, the Seventh District states of Illinois, Indiana, Iowa, Michigan, and Wisconsin are on par to slightly above the nation in export intensity.
11 comments:
What really ticked me off about CAFTA and would have led me to vote against it was that it didn't get rid of the stupid stupid sugar tariff that our country has. It means that sugar cost 3X what it should and cowards bowed to sugar lobbyist donations to still maintain that horrible piece of protectionism.
Sugar tariff killed Brach's on the West Side.
I'm waiting for it to hit the Jaw Breaker factory I grew up near by along the Congress xpressway.
what a pointless post, again.
what point is there reading pointless posts, and taking to time to comment to point it out?
what's the point?
My buddy exports Illinois produced industrial gloves and markers for the steel industry... my point is I want to help him out.
Bill... there seems to be a little too much patronage going on here... Seriously though, free trade is absolutely great for the country. Protectionism lead to a depression rather than a recession in the 1930s and anyone that hates free trade obviously has no education in economics. Go NAFTA! Go CAFTA!
It's not a black and white question of 'protectionism' versus 'free trade' as both the Nafta and the Cafta are long, 100-page agreements (that's the 'a' at the end of Nafta and Cafta) that creates winners and losers. The losers in both of these agreements have been Chicago candy manufacturers, as the winners have been domestic sugar growers. The US price is double or triple the world market price (except when the world market price is very high, as it was a few months ago and may still be). Losers include low-income wage earners in the US in manufacturing, because it's much cheaper to manufacture in Latin America than it is here as people are paid much less. Trade agreements should require a stronger right to form unions, so we can raise wages, which will increase purchasing power and make life better for everyone. Agreements that weaken union laws are bad for the economy, and the Nafta and the Cafta both do that. We should be coming up with smarter trade agreements for our continent, as they have largely figured out in the European Union.
Here is the problem with unions. Most Americans are now invested in the stock market. So they want to make money. Unions can make that very difficult. You take a look at the companies in the US that are profitable, they have held the unions in check (Daimler Chrysler, Caterpillar). America can't afford unions. The only place that unions are currently strong is in the public sector. Guess why? We don't buy stock in government. The only things the unions do now is stand in the way of progress (and profit). Sorry Mom....
DJW,
Read article 4 of the Euston Manifesto,
...we support the interests of working people everywhere and their right to organize in defence of those interests. Democratic trade unions are the bedrock organizations for the defence of workers' interests and are one of the most important forces for human rights, democracy-promotion and egalitarian internationalism. Labour rights are human rights. The universal adoption of the International Labour Organization Conventions — now routinely ignored by governments across the globe — is a priority for us.
Also, it would be easier to take the left seriously in the US if they would show some support for Iraqi Trade Unions.
Here's what Will Hutton had to say which is timely given the Hu's visit with Bush,
My intellectual voyage is not via Iraq, but via China. Here, there is a parallel debate. Asian values are different from those in the West, runs the argument, just as Islamic values are supposedly different. However ...
Whether you want to build great companies or a fair society, even an Asian country needs independent courts, a free press, freedom of expression, gender equality, fair trial, separation of religion and state and a capacity to hold private and public power to account. China's capacity to continue its miracle will depend on some accommodation with these truths. The Communist Party is transfixed by an internal debate about how to respond, with some challenging whether it dare to continue reform. Democracy and its institutions are universally applicable and the West should not compromise on them either at home or abroad.
The same is true in Iraq. Because Iraqi reconstruction has been a fiasco, the liberal temptation is to side intellectually with the insurgents. But, for example, trade unions are forbidden to organise in the Iraqi public sector because of the Saddam Hussein ban still in force; the comment pages of the liberal press are hardly full of articles insisting that the Iraq government entrenches union rights. Little space is given to arguments about the wider importance of building a sustainable democracy. Rather, there is another piece on why the US and Britain must get out of Iraq now to allow, presumably, the establishment of a theocratic, authoritarian state.
NAFTA has been a mixed bag at best.
Yes of course you have job creation and retention because of an International economy and Illinois has done not too bad on exports (other states have not faired to well)
Part of the issue is personal responsibility. Part of it is technology. BUT a lot of it is that the economy is becoming a meaner place and that the job training is changing so fast and the markets are changing so fast and there is no job security and threats to retirement security a la United and Enron etc. Mexico is not the threat, but China is.
Part of the problem is telling people that there are no more good paying jobs in factories and without educations certainly not lifetime jobs with good wages, health benefits and retirement.
DJW,
It's silly to say that low wage earners are hurt. Who do you think benefits from having lower priced goods in their stores? It's lower income workers who are the beneficiaries of free trade since they can stretch their paycheck further with cheaper goods. And while people can lose jobs initially after free trade, these jobs are more than made up by the jobs created both directly by exports and by US companies being able to hire more since they spend less on the inputs as they can be bought at the world lowest price.
That being said, union rights should be included in trade agreements as unions should be protecting workers' rights, NOT governments.
It is weird people who want open borders for immigration are often the some people who want to close up trade with opposition to CAFTA.
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