Top of the News: Commerce Secretary Gary Locke promised more money for export promotion in a speech last week before the National Press Club, all part of a new National Export Initiative.
“Even amid the last decade’s speculative mania, exports have remained an integral part of our economy,” he said. “Last year, they accounted for 11 percent of our GDP, which is almost three times as much as just 50 years ago. Exports support nearly 10 million jobs in America and almost seven million jobs in manufacturing–and manufacturing jobs pay on average 15 percent more than the average wage. And for every $1 billion in exports, 6,250 manufacturing jobs are created or supported.”
The former Washington governor added: “But while the U.S. is a major exporter, we are underperforming.”
The details of the administration’s plan to help correct this are worth reading. Notably absent is how American exports can be improved in China, with its currency manipulation and increasing stealth protectionism. Without addressing this key issue, the destabilizing imbalances between the two most important economies in the world will continue.
The Midweek Briefing: Fed Chairman Ben Bernanke previews his exit strategy with an announcement that the central bank will raise the discount rate “before long.” The Fed engaged in massive easing of credit and expansion of the monetary base to prevent deflation from the worst of the recession. Now traders are wondering how to sustain a rally without the cheap-dollar carry trade. Here are Bernanke’s prepared remarks.
— Another peak oil warning comes from Virgin Group chief Richard Branson, who predicts the world will face a major energy crunch within five years, and it could be worse than the credit crunch. An industry report from the U.K. calls for “urgent action” to address the issue.
— As many of you know, the People’s Liberation Army isn’t just a military — it’s also a major industrial component of China’s economy. According to Reuters, some senior PLA officers are calling on the country’s leadership to punch back against the U.S. economically for selling arms to Taiwan. May you live in interesting times.
— A vote of confidence for Microsoft’s Bing comes from All Things Digital’s John Paczkowski. The search engine is not Google, but it might catch Yahoo in a year or two.
— Today’s must-read: The Atlantic’s story on “How a New Jobless Era Will Transform America.” “Ultimately, it is likely to warp our politics, our culture, and the character of our society for years to come.”
Today’s Econ Haiku:
Stocks check out the Fed
But an exit strategy
From the snow? Not yet