As we enter the new year are going back in time? The New York Times has an interesting metric feature about our country’s trade deficit. The interactive feature lists port cities’ exports and imports. Seattle, being a port city of some note itself, is listed. Only three ports have a trade surplus. They are Detroit, Miami and Pembina, North Dakota.* All the rest of the ports import more than they export. Of course, Seattle area exports and imports aren’t confined to our ports. We export lots of software but for U.S. government statistical purposes software is considered a service and so doesn’t show up in the trade statistics you ordinarily see.
But getting back to our nation’s trade deficit, one of the results of the financial crisis was a reduction in the trade deficit. The New York Times metric points out that in May of 2006, the monthly trade deficit was $62 billion. After the financial crisis, when U.S. imports fell like a ton of bricks and exports merely like a single one, the monthly trade deficit in May 2009 was only $26 billion. But, as our economy starts to recover, the trade deficit has started to expand again as the New York Times metric shows.
For the last 20 years or so the world has been engaged in a giant game of currency chicken as everyone tried to export more to America. The financial crisis brought all this to a temporary half. Lots of folks, including your humble correspondent, assumed the financial crisis would bring about a great rebalancing.
But there are many signs we are trying to re-create the world of 18 months ago. There’s an old Talking Heads song called “Once in a Lifetime,” which is how many think of this financial crisis. But I’m reminded of a line in the song, “Same as it ever was” which in the video the lead singer, David Byrne, repeats as he continues to slap himself in the forehead. I’m worried in the years ahead we may be slapping ourselves silly.
*Pembina is near the Canadian border and is a major port of entry into Canada. Pembina’s population? 642 according to the latest census. What’s that? Aunt Judith died? Okay, 641.