Trade Deficit Hits Record High

from: Deficit Hits New Record By Dean Baker
t r u t h o u t Perspective
Wednesday 13 September 2006

The record trade deficit is a bi-partisan policy. It had its origins in the high-dollar policy that Robert Rubin put in place as President Clinton's treasury secretary in 1996. The over-valued dollar, which has been advocated, or at least tolerated, by both Clinton and Bush, is the main cause of the trade deficit.

Another reason that the trade deficit draws less attention than the budget deficit is that there is a strong class bias to the short-term gains and pain. In the short-term, the main beneficiaries are the people who work in occupations that are largely protected from international competition, like doctors, lawyers, accountants, and economists. The people who are hurt by the high dollar policy are the people whom US trade policy has subjected to international competition, most importantly manufacturing workers.

Because the short-term winners have much more political power, and own the newspapers and write the news stories, we don't hear much about the trade deficit. So, until we get a better press corps, if you want the news that will really impact your life, you will have to hunt for it.