Purportedly the US is going to decouple from the global economy, led by exports. I believe otherwise, which got me to thinking about pledges president Obama made in January 2010.
On January 27, 2010 Obama pledged to double exports by 2015.
Miracles and Mysteries Investigated
The humorous comment at the time, as noted by the New York Times a day later, (see above link), was made by Leslie H. Gelb, president emeritus of the Council on Foreign Relations, who asked “How will he perform this miracle? It really is a mystery.”
With that backdrop, inquiring minds may be wondering what has actually happened. Not to fear, I have a set of charts that will unravel the mystery.
ISM Manufacturing: New Export Orders Index
Manufacturing New Export Orders – per cent Change From Year Ago
Let’s hone in since the promise was made.
Bear in mind those are manufacturing numbers, not total numbers, and not actual dollar numbers at all.
Even though they provide serious clues as to what is happening, we need to dig further.
Let’s take a look at “Real Net” Export Orders. “Real” means inflation adjusted. “Net” subtracts imports.
Real Net Export Orders
Please note the left scale. It is negative.
There is no point in honing in further, you can easily see the grim results as they are. Still, those are “real” (inflation adjusted) “net” export orders. US trade deficit subtracts from those results.
To give president Obama further benefit of the doubt, let’s look at exports only, ignoring the trade deficit, but still adjusted for inflation.
Real Exports of Goods and Services
Real Exports since 2010
Once again, please look closely at the numbers on the left scale. You would have to be freaking nuts to think exports will double by 2015 at this pace (or for that matter at any conceivable pace).
Simply put, President Obama is light-years away from his pledge to double exports. In terms of “net” exports, there has been no progress at all.
The mystery has been solved. The pledge to double exports was pure bullsheet.
Mike “Mish” Shedlock
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