|SOARING IMPORTS SPUR RECORD
TRADE DEFICIT INCREASE
By William J. Gill,
"Americans’ appetite for imported cars, clothes and
toys sent the U.S. trade deficit up by a record amount in March," the
Associated Press reported in late May. The deficit jumped by $4.3
Billion or 16.1% from the previous month to $31.2 Billion for goods and
services. Add nearly $9 Billion to that and you get the goods only
shortfall—a more accurate reading of the true deficit, though it still
does not include billions more for illegal drugs and other contraband
The overall economy remained depressed despite the
stock market’s surrealistic comeback in early May. It rose almost solely
on the flimsy strength of yet another Federal Reserve interest cut. Most
economic indicators, especially manufacturing, continued downward. But,
as we have pointed out before, the markets simply defy the law of
gravity. And, one might add, common sense. But who believes in that any
Business Week, in its revealing May 14 issue,
disclosed, "Companies use every trick to pump earnings and fool
investors." Among the many tricks are "creative" accounting practices
that turn real losses into phony profits. Also hidden are huge foreign
investments that have gone sour. Like the $1.7 Billion owed Motorola by
Turkey’s wireless carrier Telesim. But many, if not most, of the big
multinational corporations indulge in similarly questionable, and
seemingly fraudulent, practices.
Meanwhile, job losses keep going up. Non-farm jobs
dropped sharply in April, down by some 223,000 for the month and nudging
the unemployment rate up to 4.5%, a fictitious figure not even half
right since it completely ignores the 300,000 people dropped monthly
from statistical roles.
The Bush administration is banking on the $1.35
Trillion tax cut, passed by Congress just before Memorial Day, to rescue
the faltering economy. But with the growing energy crisis lifting
inflation, the benefits from lower taxes will be swamped by higher power
bills and other rising prices.
The changing of the guard from Republican to Democrat
leadership in the Senate threatens even higher government spending. For
everything that is, except the military. Missile defense is again
endangered by the upheaval in the Senate. But the GOP wasn’t pushing it
too hard of late anyway. And Secretary of Defense Donald Rumsfeld’s
eternal studies of defense needs and strategies were already cutting the
ground out from under President Bush’s campaign promises to restore
ACCT warned months ago Rumsfeld & Co. were doing an
imitation of Robert Strange McNamara’s Pentagon pirouettes of the
Vietnam Was era that permitted Russia to surge ahead of the U.S. in
strategic weaponry. Now the word is that McMamara’s new aged "whiz kids"
are set to jettison the two ocean war strategy that carried us to
victory in World War II and kept WWIII from exploding ever since.
Rumsfeld’s team wants to focus on China, which it should do, and forget
about Russia, which it should not.
On the trade front, ACCT and other opponents of Bush’s
Fast Track campaign to forge the Free Trade Area of the Americas and
additional surrender of U.S. sovereignty to the World Trade Organization
may get unexpected help from the AFL-CIO. Member unions may have stopped
John Sweeney’s tilt toward Fast Track. In fact, the AFL-CIO appears to
be embracing ACCT’s strategy of educating more Republicans in Congress
on the dangers of Fast Track and free trade in general.
Our Americans for Trade Defense project to educate
Congress and the public on Fast Track, which gave us NAFTA and the WTO
last time around, is all set to go—just as soon as we receive sufficient
funds to fully orbit it. Contributions should still be made out to ACCT.
We need to hear from you soon if the merger with Latin American is to be