Robert Reich: The Vanishing American Consumer and the Coming Trade War

[marmar]

from HuffPost:



President Obama has vowed to double U.S. exports within the next five years. That's because exports are critical for rebooting the American economy. It's clear American consumers can't get the economy going on their own. They can't restart the jobs machine. They've run out of money and credit.

It's not just that one out of four Americans is unemployed or underemployed (working part-time, overqualified, or at a lower wage than before). More significantly, the Great Recession burst the housing bubble that had let American consumers turn their homes into ATMs. Now the cash machines are closed.

So the administration figures foreign consumers will have to fill the gap.

Problem is, most other economies also relied on American consumers. Remember the trade gap? Americans used to be the world's biggest and most reliable customers -- sucking in high-tech gadgets assembled in China, car parts from Japan, shirts and shoes from Southeast Asia, and precision instruments from Germany.

With American consumers pulling back, these other economies have also been slowing down. Their unemployment is rising. ......(more)

The complete piece is at: http://www.huffingtonpost.com/robert-reich/the-vanishing-american-co_b_640836.html

[endless october]

1. we should probably think about making some things here in the states

unless everyone is happy with where the economy is right now. you can't have a thriving economy with no disposable income no matter how cheap you make the imports.

[Bandit]

4. Ever heard of Walmart

Every Mom and Pop business in America is destroyed when Walmart moves in. You want to make clothing, sorry, Walmart will put you our of business. What would you make that Walmart can't import and sell at half your assembly costs, let alone your selling price? We are a Service based economy now. We have carpenters and mechanics and TV repairmen but we do not make anything because we can not compete with countries that have no OSHA or Environmental Laws or any protections of any sort. How can we compete with countries that use women and children working twelve hour days at six cents an hour. Also every business in America faces the Health Care dilemma which no other foreign business we deal with faces. Health Care is a business killer.

[xchrom]

2. Glad the hear some one address this.

Global economies are cooling or have cooled - including
the Chinese.

Japan is a mess - again.

Where are these consumers?

We need to make and consume at home.

And that means people need to be paid well for the jobs they do.

[BR_Parkway]

6. Maybe it's time to figure out a system that doesn't require endlessly

increasing consumption. And no, I have no idea what that would be - it just seems pretty obvious that we can't have unlimited growth forever, so we're going to keep bumping up against this until an actual change is made.

[Bonobo]

3. But to get the rest of the world to buy our stuff...

We will have to drive the dollar down even lower and deflate our (already low) wages further. Essentially, we will have to make our economy into something like Mexico.

Grab your socks everyone. And learn how to sew and garden. I think it is going to be a rough ride.

[fishwax]

5. kick

:kick:

[SoCalDem]

7. A slight problem with this.

If an "American" company "exports" goods made in China by one of their factories, how does that help with American joblessness?

Exports only work FOR us, if American workers are paid to make the products here...products that WE buy for our own consumption, and then export a surplus to beef up the companies.

Workers have to be paid well enough to be able to buy local..

and of course we need to have buyers abroad who want our stuff..

For decades, we have been exporting the technology and expertise to MAKE the stuff, so why would other countries clamor to buy stuff from us, that they can more easily make on-site for themselves?