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Tuesday, the Commerce Department is expected to report the April deficit on international trade in goods and services was $41.2 billion,Beats By Dre Studio Camouflage Brown Headphone, up from $24.9 billion when the economic recovery began. The Obama administration’s ill-conceived energy policies and appeasement of China and Japan are responsible for this jump in the trade gap and the slow pace of economic recovery.

Sequestration only subtracts about $42 billion from actual government spending this fiscal year, and its impact pales by comparison to the $225 billion increase in the trade deficit and the $150 billion January tax jolt.

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 measured intransience on cyber-security and nuclear issues in North Korea.

Other Asia governments, most recently Japan, have adopted similar currency strategies to boost exports. For example, the jump in the value of the dollar against the yen gives Toyota at least a $2000 advantage pricing of the Camry against the Ford Fusion. That may not show up in the list price but it gives Toyota’s importing arm in the United States the latitude to pack cars with better features and more aggressively discount.  

It's no surprise the trade gap with Japan is up about 350 percent since the economic recovery began, and the full brunt of the cheap yen policy is yet to be seen.

Economists across the ideological and political spectrum have offered strategies to combat predatory currency policy and force China and others to abandon mercantilism. However, China,Beats By Dre Studio High-Definition Headphones Blue, Japan and others, offering only token gestures and deflecting rhetoric, exploit President Obama’s weakness on economic issues—the Obama policy of appeasement is wrecking the U.S. recovery.

Cutting the trade deficit by $300 billion, through domestic energy development and conservation, and forcing China and others’ hands on protectionism would increase GDP by about $500 billion a year and create well more than 4 million jobs.

Cutting the trade deficit in half would raise long-term U.S. economic growth by one to two percentage points a year. But for the trade deficits of the Bush and Obama years, U.S. GDP would be 10 to 20 percent greater than today, and unemployment and budget deficits not much of a problem.

Fracking in the Lower 48 has not delivered enough new oil,dr dre beats, 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 percent.

Household spending has recovered but too many consumer dollars pay for imported oil and consumer goods and cars from China and Japan. Whereas consumer spending is up 16 percent, the trade gap has jumped 36 percent.

Businesses, consequently, remain pessimistic about demand in the U.S. market and 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.


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