Busted: Bankers and The Global Economy

May 14, 2010

Big Business & Consequence of Economic Recovery

Because of the way that the United States economy is structured, every article of good news is almost always balanced by an equally troubling fact of economic life. Despite the prospects of a growing recovery in the eyes of many, we are now confronted with the latest trade deficit statistics.

As the economy improves, established business and some people are spending more money. The unhappy news is that the nation is spending more on imported goods than the rest of the world is spending on U.S. goods.

The latest statistics show that U.S. exports rose 3.2 percent during the month. Authorities equate this to a seasonally adjusted $147.9 billion. Imports increased by almost the same percentage, rising to $188.3 billion, resulting in a trade deficit of $40.4 billion for the month of March. This an increase of 2.5 percent compared to the prior month, the highest trade imbalance in dollars in 15 months.

Much of the trade imbalance is due to the cost of  addictive imported oil, which points to the need for more effective national energy policy. The recent gulf oil spill has put a bit of a monkey wrench into what government says are short-term plans.

The largest winners in this trade process are the Middle East, followed by China. While consumers ultimately decide what they will buy, the big decision makers in all this hocus-pocus is Big Business, either through Corporate America, Multinational Corporations and large retailers like Wal-Mart. Responsibility doesn’t stop there. Even small mall shops bear a burden in supporting cheap foreign goods. In fact, no business is free from supporting cheap foreign goods over American goods. That die was cast in the 1990s. Even now, corporations are constantly trying to lower their bottom line and increase profits exponentially. Most of the time, they don’t care how they do it.  As a result the nation spends more than ever on foreign goods to support the desire for cheap stuff. Unhappily, because of corporations, much of that cheap stuff isn’t really cheap. It is being marked up by Big Business, made more desirable through glitzy advertising. As a result, quality of goods is often being reduced as well.

Corporations are not being encouraged to use goods produced in the United States. In fact, there is little incentive to produce goods in the U.S. when insanely cheap manufacturing sources can be found overseas. Politics is often involved with the notion of “saving America.” Any economic sustainability for this nation must involve corporations and businesses that do business in America.

It has been posited by many that consumers must demonstrate more discipline. While consumers do vote with their dollars, they often have little choice in the matter, especially in this decade. It isn’t simply about tightening spending and buying American goods. Corporations that do business in America must comply as well for the nation to succeed in putting down a continued national trade imbalance. Any other approach is simply magical thinking.

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