Why Obama's export push won't save jobs
http://money.cnn.com/2010/01/29/news/state_of_the_union_obama.fortune/index.htmPresident Obama said "We will double our exports over the next five years, an increase that will support two million jobs in America." in the State of the Union address. This article explains why it is not likely for the president or the businesses to control the growth of export.
The article mentioned 2 ways for US export to grow: 1). China and other Asian countries increase the exchange rate; 2). encourage smaller companies to expand their businesses overseas. However, both practices are hard to come true and will face a lot of difficulties.
Furthermore, as Griswold points out, the health of the U.S. job market is determined mostly by domestic demand, so even the export does doubles, it probably won't help the job market much.
I think this article brings up a lot of good points about the difficulties associated with growing the US GDP. Obviously, in order to grow, President Obama is banking on many variables going in a positive way. However, I feel the President's speech was more geared to rallying the public than anything. He may not be able to raise exports to the level that he stated but some growth is possible.
ReplyDeleteUnlike China whose job market depends heavily on exports, the job market in the US is mostly determined by domestic demands. SO the solution of creating jobs by growing exports won't help that much. Business don't want to risk to borrow money and invest during recession. So if Americans aren't spending, there will be fewer jobs, regardless of what's happening abroad.
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