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December 2, 2014

Jonathan Tobin: Defending the Right to a Jewish State

Heather Hale: Compliment your kids without giving them big heads

Megan Shauri: 10 ways you are ruining your own happiness

Carolyn Bigda: 8 Best Dividend Stocks for 2015

Kiplinger's Personal Finance editors: 7 Things You Didn't Know About Paying Off Student Loans

Samantha Olson: The Crucial Mistake 55% Of Parents Are Making At Their Baby's Bedtime

Densie Well, Ph.D., R.D. Open your eyes to yellow vegetables

The Kosher Gourmet by Megan Gordon With its colorful cache of purples and oranges and reds, COLLARD GREEN SLAW is a marvelous mood booster --- not to mention just downright delish
April 18, 2014

Rabbi Yonason Goldson: Clarifying one of the greatest philosophical conundrums in theology

Caroline B. Glick: The disappearance of US will

Megan Wallgren: 10 things I've learned from my teenagers

Lizette Borreli: Green Tea Boosts Brain Power, May Help Treat Dementia

John Ericson: Trying hard to be 'positive' but never succeeding? Blame Your Brain

The Kosher Gourmet by Julie Rothman Almondy, flourless torta del re (Italian king's cake), has royal roots, is simple to make, . . . but devour it because it's simply delicious

April 14, 2014

Rabbi Dr Naftali Brawer: Passover frees us from the tyranny of time

Greg Crosby: Passing Over Religion

Eric Schulzke: First degree: How America really recovered from a murder epidemic

Georgia Lee: When love is not enough: Teaching your kids about the realities of adult relationships

Cameron Huddleston: Freebies for Your Lawn and Garden

Gordon Pape: How you can tell if your financial adviser is setting you up for potential ruin

Dana Dovey: Up to 500,000 people die each year from hepatitis C-related liver disease. New Treatment Has Over 90% Success Rate

Justin Caba: Eating Watermelon Can Help Control High Blood Pressure

The Kosher Gourmet by Joshua E. London and Lou Marmon Don't dare pass over these Pesach picks for Manischewitz!

April 11, 2014

Rabbi Hillel Goldberg: Silence is much more than golden

Caroline B. Glick: Forgetting freedom at Passover

Susan Swann: How to value a child for who he is, not just what he does

Cameron Huddleston: 7 Financial Tasks You Should Tackle Right Now

Sandra Block and Lisa Gerstner: How to Profit From Your Passion

Susan Scutti: A Simple Blood Test Might Soon Diagnose Cancer

Chris Weller: Have A Slow Metabolism? Let Science Speed It Up For You

The Kosher Gourmet by Diane Rossen Worthington Whitefish Terrine: A French take on gefilte fish

April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review May 4, 2011 30 Nisan, 5771

The Obama administration's odd claims on export growth

By Glenn Kessler




http://www.JewishWorldReview.com | “We are working to meet President Obama’s National Export Initiative goal of doubling exports by the end of 2014. I’m pleased to report our efforts are getting results. Exports were up 17 percent last year. Increased exports have contributed to 13 straight months of overall private-sector job growth, which has added a total of 1.8 million overall private-sector jobs.”

— U.S. Trade Representative Ron Kirk, April 28

With great fanfare in his 2010 State of the Union speech, President Obama announced that he was starting a new initiative to double the nation’s exports within five years.

But on the very day that U.S. Trade Representative Ron Kirk declared progress on the president’s pledge, in a speech to the Washington International Trade Association, the Commerce Department reported disappointing growth in the overall U.S. economy, in part because net export growth was essentially flat.

So what’s going on here? (Warning: Lots of numbers ahead.)

The Facts

Economics is not an exact science. But certain principles hold true over the years. We headed to the basement to pull off the shelf an economics text from graduate school, “Understanding International Economics: Theory and Practice,” by J. David Richardson (1980). There, on page 243, was the following statement:

“Somewhat crudely, exports generate employment and upward pressure on prices; imports take away employment but hold down prices.”

Now, to be fair, some experts might argue that both exports and imports — i.e., all international trade — boost U.S. job growth. But generally, most economists would say that exports create jobs at home and imports create jobs abroad. If exports and imports move in tandem in response to demand, then the net effect on jobs is likely to be minimal. This is especially the case today, when globalization has resulted in a worldwide division of labor, with different countries producing parts and building products depending on which can do the job most effectively and at the lowest cost.

This basic rule of economics was demonstrated on Thursday with the release of the first-quarter report on gross domestic product. The GDP is the broadest measure of the U.S. economy. Dig into the report — which showed the economy growing at a rate of 1.8 percent, compared with a rate of 3.1 percent in the fourth quarter — and here’s what you will find: “Real exports of goods and services increased 4.9 percent in the first quarter, compared with an increase of 8.6 percent in the fourth. Real imports of goods and services increased 4.4 percent, in contrast to a decrease of 12.6 percent.”

As even a high school student might know, the basic formula for measuring the GDP is C + I + G + (X –M), meaning consumption plus investment plus government spending plus (eXports minus iMports). Imports had fallen in the fourth quarter, boosting the GDP, but in the first quarter they had caught up to exports.

In other words, a major contributing factor to the tepid rate of growth was that net export growth was essentially flat. The Commerce Department, in fact, put this shift first on the list of reasons for disappointing GDP result: “Imports turned up strongly, and exports slowed.”

Obama’s export initiative, while laudable on its face, ignores these fundamentals of economics. By some estimates, every $1 billion in U.S. exports leads to at least 6,000 new jobs. But although it is all well and good to brag about a 17 percent growth in exports, as Kirk does, that’s only half the picture. It’s a lot like claiming your income went up 17 percent without mentioning that your expenses (food, housing expenses, taxes) also went up as well. You have more money only if the increase in income exceeds the increase in expenses.

It is also worth noting that much of what the United States exports are parts for the assembly of products that are then shipped to this country, such as engines to Mexico that are assembled into cars. Some of the exports also include inputs that were produced in other countries. So these are examples of “exports” that don’t necessarily add many U.S. jobs.

Moreover, the 17 percent growth in exports Kirk touted is mostly making up lost ground from the recession. (Obama conveniently began his export initiative after exports had fallen 15 percent.) Export growth is actually negative if you measure it from 2008, although the net difference between exports and imports has narrowed somewhat.

Throwing in a reference to 1.8 million new private-sector jobs, as Kirk does, also gilds the lily. By the administration’s own math, exports support just 6.9 percent of all jobs. Exports, however, did increase faster in 2010 than the GDP, so it is possible that the percentage of jobs created by exports was slightly higher last year.

Carol Guthrie, a spokeswoman for Kirk, said that nothing in his statement was inaccurate.

“Ambassador Kirk’s emphasis on the president’s export program and on the continued ability of that program to meet its targets — something that we have been clear about and repeated often — does not become misleading because GDP was reported on the same day that we reiterated another long-standing metric,” Guthrie said. She noted that the GDP release was preliminary and could be revised with updated trade data.

Guthrie added: “We have always been clear that we were talking about the increase in both exports and export jobs from 2009, our base year. We have said from the beginning of this effort that we know exports (and export-supported jobs) tend to rebound following a recession, and so we are aware that we are recovering ground and that has been part of our intention. It’s hardly fair to discount this growth in export-supported jobs as ‘merely’ recovering ground; each job is an added job that certainly counts to the American now employed in it.”

Guthrie also argued that the relationship between imports and U.S. jobs is more complex than the relationship between exports and jobs. “Imports are often either inputs, commodities or things we don’t typically make here,” she said. “So while some imports displace jobs, some have no effect on jobs and some are even used by our domestic economy to create or support U.S. jobs. . . . It’s just not one for one as in a GDP accounting sense.”

The Pinocchio Test

We gave Guthrie a fair amount of space to make her case because economics is an inexact science with many points of view. (This is why every presidential candidate has been able to line up Nobel Prize-winning economists to support his economic plan.) But we stand by our general description of the economic rules involving exports and imports.

By that measure, Kirk’s statement claiming the administration is “getting results” is incomplete. The real measure of success is net export growth, preferably from 2008, not raw figures off an artificially low base generated by the recession. It was especially strange to brag about success on the very day the latest GDP report showed that export growth had slowed.

One Pinocchio


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An award-winning journalism career spanning nearly three decades, Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street. He was The Washington Post's chief State Department reporter for nine years, traveling around the world with three different Secretaries of State. Before that, he covered tax and budget policy for The Washington Post and also served as the newspaper's national business editor. Kessler has long specialized in digging beyond the conventional wisdom, such as when he earned a "laurel" from the Columbia Journalism Review



Previously:

04/28/11: How effective are sanctions in ‘changing behavior’?

04/14/11: ‘Biggest cuts in U.S. history’? Well, no.

04/08/11: Nancy Pelosi's absurd math on senior citizens losing their meals

04/06/11: Hillary Clinton's uncredible statement on Syria

03/25/11: Libya, Obama and the tragedy in Darfur

03/22/11: Gifts of bogus statistics for the health-care law's birthday

03/21/11: Mitch McConnell's not-so-happy birthday greetings for the health care law

03/10/11: A job-loss statistic produced out of thin air

03/10/17: A budget analogy that earns a Geppetto checkmark

03/10/11: Four pinocchios for the American public on the budget

03/09/11: Obama and the White House's ‘halfway’ fixation with the budget

03/08/11: Foreign policy braggadocio on Libya and AIDS

03/07/11: Democrats keep misleading on claimed budget ‘cuts’

03/01/11: Mike Huckabee is on to something here, but jumped the gun

02/25/11: Harry Reid's illusory $41 billion in budget cuts


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