The Econonaut Explains: Trade This

Listen to this 'Talk of the Nation' topic

Adam Davidson, explaining stuff, probably to yours truly.

Adam Davidson, explaining stuff, probably to yours truly. Source: Brian McCabe, NPR hide caption

itoggle caption Source: Brian McCabe, NPR

Those of you who are regular listeners to NPR will recognize Adam Davidson as The One Guy On The Planet Who Can Bring Clarity To Economics (TOGOTPWCBCTE). He and Alex Blumberg collaborated on what is, possibly, the best explanation of "the credit crisis" I've heard on any media outlet, for the excellent radio program, This American Life. Now, you will recognize him (you will! you will!) as TOTN's Econonaut (that's four syllables, rhymes with Argonaut) — the man who brushes microeconomic cobwebs away from business news, and sprays clarity all over Henry Paulson's wordiness. We'll be talking to him regularly about the most abstruse economics news and terms, helping you understand what's going on as oil fluctuates madly, credit is harder to come by, and the dollar is worth less than a sixth grade love note. Think of him as your economic Valium — not boring, just anxiety soothing. Today, we're talking trade — what the hell does a narrowing trade deficit mean? — and we want to hear what you've noticed, especially if you're in a business that exports stuff. (Stuff is not a technical term. We're talkin' soybeans to airplane engines.) And one more thing! if there's something you don't understand (hedge funds! windfall tax! fungible!) let us know... we'll run it by Adam. We're here to help.

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Does outsourcing of manufacturing jobs make the trade deficit worse? If a company closes a factory in the U.S. -- while keeping its headquarters and all other operations in the U.S. -- does that overseas manufacturing get added onto our trade deficit? If it does, shouldn't the U.S. government put restrictions on outsourcing that benefits one company, but which could hurt the nation economically?

Sent by Warren Volkmann | 2:52 PM | 8-12-2008

Exports are Up - - This is GOOD news??? NOT!!!
~ ~ ~ ~ WE ARE SELLING ALL THOSE PRODUCTS AT HALF 'barking' PRICE!!!!
~ ~ ~ ~ ~ When they buy our stuff with our badly devalued currency, they win - - and then we buy our petroleum with our "half-price" dollars, WE HAVE TO PAY TWICE AS MUCH!
~ ~ ~ ~ ~ We are actually LOSING money on everything manufactured for export overseas - - but we pretend we are doing Just Great (big Happy grin, plus a little drool).
~ ~ ~ ~ ~ We are Major being FlimFlammed by the corporate/ Administration lie telling us how Good things are!
~ ~ ~ ~ ~ ~HA !!! Suckers !!!!!!!

Sent by John G. | 2:57 PM | 8-12-2008

I listened to the program. What great news! Too bad it took fifteen minutes for two people to communicate something absurdly simple as they rambled through condescending, convoluted manners of speaking. And thank God Neal Conan explained to me what a "Bull Market" was. If he didn't, I don't know what I would have done. NPR, please; the so called "economist terms" are there for a reason: they allow for articulate, clear explanation of economic phenomena. Now I'm no economics major, but I'm also not an idiot. I hope I never have to hear this watered-down, hollow radio programming again. If you're running out of things to do, please run a story on a seventeen year old who created a popular political blog. It's www.killerbuffalo.com. I look forward to your email.

Sincerely,
David Lamb

Sent by David Lamb | 3:24 PM | 8-12-2008

After spending several hours with Mr. Davidson, prodding the citizens of West Hartford on their knowledge of economic terms, I can disappointedly and admittedly come to the conclusion that my earlier post is in most places naive. While intense NPR listeners have a good familiarity with both the significance and the definition of the terms "bull market" and "trade deficit," other listeners--those who constitute the majority--may not have such familiarity. In order to maximize appreciation of any sort of financial news on a not exclusively economic program, these definitions ought to prove helpful, and thus aren't condescending. Indeed, with a greater understanding of the public's economic understanding, I would like to apologize to Mr. Conan and Mr. Davidson, and withdraw my earlier qualms, albeit with a few caveats and a bit of advice.

NPR should be consistent when it can. That's not to say it should assume the same economic literacy of all its audiences--those during Marketplace and those during Talk of the Nation--but rather it should know that it's audience may be similarly composed during all non-financial broadcasts, and the station ought to adjust accordingly; if that means defining confusing economic terms, the terms should be universally adopted, at least until audiences are familiarized with them. I would recommend that during local news roundups at the beginning of the hour, NPR stations don't spend time on definitions, just as Kai Ryssdal might not during Marketplace. I also might suggest that NPR shows clarify at what points they are being particularly careful to fully explain financial news, i.e. Mr. Conan may behave differently when Mr. Davidson is on TOTN versus when he isn't. Overall, I look forward to this new, maybe populist form of reporting. Perhaps NPR and perhaps I too had forgotten what the P once stood for. There's a term we won't soon forget.

Best of luck,
David Lamb

Sent by David Lamb | 9:53 PM | 8-16-2008

This is a question for the on-air econonaut: Now that the economy is faltering, we are once again being told that the "cure" is to reduce taxes on the wealthy so they can invest the money to create jobs. How do we know that the extra money they get from reduced tax bills will not be invested in places overseas where labor is cheap and environmental regulation weak and unenforced? How do we know more tax breaks will not accelerate the flight of jobs overseas through this sort of profit-maximizing investment? Why shouldn't taxes on the wealthy be raised so the government has more money to repair infrastructure, hire teachers, and provide medical care to Americans, all of which would really create jobs here?

Sent by Daniel A. Seeger | 3:50 PM | 8-19-2008