Morici: Obama Appeasement of China, Japan Wrecking Recovery
Household spending has recovered but too many of those dollars still go to pay for imported oil and consumer goods from China and cars from Japan. While consumer spending is up 16%, the trade gap has jumped more than 35%.
Consequently, businesses remain pessimistic about demand in the U.S. market and are reluctant to invest. With the majority of U.S. businesses subject to higher personal, as opposed to corporate rates, more onerous and costly regulations and paying more for employee health care, they remain reluctant to hire and continue to offshore jobs.
Sequestration only subtracted about $42 billion from actual government spending this fiscal year, and its impact pales by comparison to the $240 billion increase in the annual trade deficit and the $150 billion January tax jolt.
Fracking in the Lower 48 has not delivered enough new oil, and a full push on U.S. potential in the Gulf, off the Atlantic and Pacific Coasts and in Alaska could cut import dependence in half. Shifting federal subsidies from electric cars, wind and solar to more fuel efficient internal combustion engines, plug-in hybrid vehicles and liquefied natural gas in rail and trucking could slice imports by another 25%.
Lower natural gas prices substantially improve the international competitiveness of industries like petrochemicals, fertilizers, plastics, and primary metals. However, the Department of Energy's push to boost liquefied gas exports will handicap growth and create millions fewer jobs than keeping the gas at home for manufacturing and alternatives to diesel in transportation.
China systematically undervalues its currency against the dollar to keep its goods cheap in the United States. China steals technology, subsidizes exports and imposes high tariffs on imports, while effectively distracting the Obama Administration from these commercial issues with persistent intransience on cyber-security and passive resistance on nuclear issues with North Korea.