Port Data Gives Clues On The Economy
from the ship-it! dept
Measuring the activity at US trading ports is a good way to get a picture of global trading activity. For example, take a look at the statistics from the Port of Los Angeles, where you can see that the percentage of ships that arrive empty is dwarfed by the number of ships that leave empty, indicative of the fact that the US imports way more than it exports, at least when it comes to physical goods. While imports have been on a tear, there is some evidence that imports from overseas are starting to slow. There are a number of possible reasons for this, although the most worrisome possibility is that the economy is weakening. On the other hand, higher commodity costs and increased concerns over the quality of items being shipped from China, could also be weighing down the numbers. Either way, this statistic will be an important one to watch, as it could portend a significant economic shift.
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go america
But seriously, the trade deficit will continue to grow until it is no longer profitable for businesses to import their goods. This will only happen when our biggest sources of imports raise their standard of living and thus the cost of living and producing goods. This is already happening in India where it is not-as-cheap as it was to outsource IT five years ago (but it still cheaper).
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Rising middle class
The good aspects of the trade deficit is that it somewhat fuels the growth of a middle class in the foreign countries. I believe that nothing is more important to world peace than a solid, influential middle class. They have enough money (as a group) that the rich can't ignore them, not not enough (as individuals) to insulate themselves from political instability. Unlike the poor, they have something to lose when war or insurrection breaks out.
Of course, it won't help at all if the trade deficit destroys the middle class in the USA.
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Minor nitpicks
2. The port handles container ships from countries other than China.
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Re: Minor nitpicks
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Re: Rising middle class
Oh, and while economics can have an impact on conflict, the poor have vastly more to lose than the middle and upper classes in times of war. Their lives. Those who can afford to leave flee, leaving behind those who can't to die.
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Middle Class is good
Over time as they develop a middle class they will not be able to supply all the goods their citizens want and will increase their imports. This will benefit the US in the long term due to our high productivity in relation to the rest of the world. As prices stabilize worldwide, manufacturing will grow in the US again as we will be able to compete again on price and still maintain our high standards of living.
Unfortunately, it's going to be another 20 years before we see real results in the US economy. It's all a cycle.
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It's going to take much more than a bunch of Americans buying cheap DVD players to improve the lot of humanity. If we want to maintain anything close to our economic standard for the next 100 or 200 years, it's going to take real investment in the second and third worlds, often at the expense of some of the U.S. workforce (i.e. "middle class". This "outsourcing" everyone gets all riled up about is part of it. I think someone made the comment about how it's getting more expensive now to do business in India-- that's because the dividends of the investment are being realized by Indian workers. If we want someone to buy our goods, we have to encourage these markets.
The U.S. middle class is not a bad thing, but it can't let individual and short-term greed blind it to the long-term, global picture. We have to strike a balance between our own needs for material wealth now, and the wisdom to sacrifice some of that for our (and the world's) future security.
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I don't think it was the slave trade that gave the US our middle class. It was the fact that after WW2 most of the industrial world was in ashes wile the US wasn't touched. That was our huge head start.
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nothing to see here, move along
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