Stop worrying about the trade deficit
Why does anybody bother to report on the trade deficit anymore? I am not an economist and couldn't balance my check book without a computer accounting program, but I am here to say without a U.S. trade deficit the world would be in a mess. If Americans weren't buying more Japanese stuff than Japanese buy American stuff their economy would stink likeweek old Tamaki. Why let the Japanese economy crash when we can help them out by buying camcorders at low, low prices? The best thing the America government can dofor the Japanese economy is get them to knock a few thousand dollars off the price of a Honda. And since most of those Hondas are made here in America it's a win, win, win situation, with America taking the best of three series.
There was some hue and cry the other day because our trade deficit with Mexico is ballooning. Good! Have you ever been to Mexico? Mexico needs us to buy every velvet painting, VCR, refrigerator and bottle of Tequila they ever made. I was just in Mexico and it seems half the population is trying to sell Chiclets or hammocks to American tourists. I don't know what gave our neighbors to the south the idea Americans can't do without Chiclets but there's a whole lot of the Mexican work force in the retail small-piece-of-gum-in-a-box business. How many Chiclets do they have to sell before they could afford to pay for imported American-made products? If Americans buy foreign stuff because it's cheaper, guess how difficult it is to afford American- made stuff when it's imported?
So of course there's a trade deficit and it's time we quit worrying about it. Other countries make stuff cheaper than we do. And when they do, we should buy it. In fact, importing foreign goods and reselling them at a huge markup is a classic case of buy low, sell high and thanks to lower costs of manufacturing abroad we're on the right side of that equation.
I know buying cheaper foreign products results in lost manufacturing jobs here in America but this economy keeps providing new opportunities for displaced workers willing to take a chance. Who would have thought you could get people to pay $3 for a gallon of spring water when a gallon of gas only costs $1.15? Somebody who lost their job to a foreign worker probably came up with fancy drinking water. Unlike gasoline, water falls nearly everywhere in America for free and then collects itself in large quantities, at little or no cost to the manufacturer. Gas has to be refined in big factories from oil that was deep underneath someplace far from here and then distilled and distributed and carefully stored. Unlike oil, if you spill water, whatever you spilled it on is not polluted... it's just wet. Other than employees who occasionally drown nobody files workman's comp. claims because they got damp on the job. Fancy water is the archetypal future business of America.
The fact of the matter is, a lot of American companies just can't afford to make their products here anymore but as long as we produce and sell products like software programs to inventory stuff other people make and the marketing strategies to move it off the shelves, we'll be O.K. I guess the bottom line is there's more money in retail. In Los Angeles, I'm Tim Bedore for Marketplace.