Exporting Deflation

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Three topics were dominating the news this morning: the Gates divorce, inflation, and the trade deficit.

I’ve got nothing to say about the Gates divorce, except that it’s shocking and saddening. I had always assumed their being a couple was eternal, but who knows what happened behind the scenes. I’ve got no chart for it.

As for the data news stories, I looked at our Economic Database for some charts. When I was growing up, inflation is all people thought about. Over the past thirty years, it had faded from the national conversation. Let’s just say I think it’s coming back in style and will be here for a long time to come.

The import/export situation is equally interesting. If one were to look at the long-term chart of United States exports, one might conclude that, yes, there have been a couple of nasty dips (the financial crisis and Covid), but on the whole, things with U.S. exports are just hunky-dory and perpetually strengthening.

Factor in the imports, however, and you can see that things have never been worse, as the net trade balance chart shows. The notion that America is going to bring back manufacturing is ridiculous, I think. The answer always seems to to be “job training.” Unless “training” means “convincing someone to build an iPhone for $3 per day”, no, it isn’t going to happen.