And Now For Some Really Bad News

I promised Twitter listener @harmony77 a rasher of good news, but I'm afraid I can't quite come through yet. Here's what I have instead, y'all:

"U.S. Trade Deficit Surges: Boosts Likelihood of Recession, More Losses; Job Losses Mount"

This comes to us courtesy of Dr. Peter Morici, former chief economist at the U.S. Trade Commission and a professor at the University of Maryland School of Business. After the jump, a few key quotes from his latest roundup.

 

From Dr. Peter Morici:

Today, the Commerce Department reported the July deficit on trade in goods and services was $ 68.2 billion, up from the $58.8 billion deficit in June.

The trade deficit remains high because of high prices for imported crude oil and refined products, subsidized imports from China, and the continuing woes of the Detroit automakers. At about 5.2 percent of GDP, the trade deficit is a significant drag economic growth and destroys millions of high paying U.S. jobs.

Simply, money spent on Middle East oil, Chinese televisions and coffee markers, Japanese and Korean cars can't be spent on U.S. made goods and services, unless offset by a comparable amount of exports. Since U.S. imports exceed exports by more than five percent of GDP, the trade deficit creates an enormous drag on demand for U.S.-made goods and services. Along with the credit crisis and resulting slowdown in new housing and commercial construction, the trade deficit is driving up unemployment.

And this:

Presidential candidate John McCain appears aligned with President Bush on trade with China. Senator Barack Obama's positions are in line with those of leading Congressional Democrats, who express angst but take no action.

Meanwhile, workers across Middle America suffer, and U.S. automakers abandon their communities for the Middle Kingdom. Wall Street bankers open new branches in China and lavish campaign contributions on both political parties for their compliance in America's policy of appeasement.

Here come the retail jobs:

High and rising trade deficits tax economic growth. Each dollar spent on imports, not matched by a dollar of exports, shifts workers into activities in non-trade competing industries like department stores and restaurants.

Manufacturers are particularly hard hit by this subsidized competition. Through recession and recovery, the manufacturing sector has lost 3.8 million jobs since 2000. Following the pattern of past business cycles, the manufacturing sector should have regained more than 2 million of those jobs, especially given the very strong productivity growth accomplished in technology-intensive durable goods industries.