自产自销的美国贸易赤字

Apr 25, 2016 Stephen S. Roach

发自纽黑文——在美国总统选战的大肆煽动之下，针对贸易问题的辩论及其对美国工人的影响在政治光谱的两端都被扭曲了。左派对跨太平洋伙伴关系（TPP）协定极为不满，而右派则不断抨击中国，两党的政治家们都将对外贸易曲解为美国最大的经济威胁。

在2015年，美国对101个国家拥有贸易赤字——即经济学术语中的所谓多边贸易赤字。但切不可像这帮政客们那样总是归咎于一两个“坏家伙”。虽然中国——大家最喜欢找的替罪羊——确实占了这种不平衡状况的大头，但其他100个国家加起来的综合赤字其实更为庞大。

但那些候选人不会向美国民众说明的是，贸易赤字及其对举步维艰的中产阶级工人所带来的压力其实是由美国国内的问题所导致的。事实上，美国拥有如此庞大多边贸易赤字的真正原因是美国人不愿意储蓄。

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0 Comments on this paragraph, 38 Comments on this article

Alexandros Aslanidis Jun 26, 2016

Such a load of crap.

America's trade deficits stem from the fact that it is the issuer of the global reserve currency. The dis-saving is a result of that.

Trump's proposal (controlled trade flows) is going to deal with the trade-deficit but will come at the cost of diminishing the dollar's role as the global reserve currency. I would argue that this is in favor of America's interests, and not against, as the author argues.
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Barry Rosenfeld May 3, 2016

It's such a comfort to know that China's beggar thy neighbour policies are not the issue. Globalized capital doesn't care where is the origin of its income, but that does not hold for labour.
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Ben Leet May 1, 2016

In 2008 private household net worth was $57 trillion, today it is over $86.8 trillion. A 55% increase in total net worth indicates sufficient savings in 8 years. See FRB Flow of Funds report, page 2. Correcting the current account deficit is a complex issue, I'm reading Michael Pettis' book The Great Rebalancing. Verdict is still out, but his analysis is intriguing. Roach is incorrect about "Government budget deficits have long accounted for the largest share of America’s seemingly chronic saving shortfall." Financial corporate debt tripled in ten years, 1996 - 2006, household debt expanded but not that much, and government debt was the least expansionary. It was a "financial" crisis, a breakdown of banks and bad loans. Almost 9 million jobs were permanently lost in 2 years, as a ripple effect.
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Peter Burgess May 1, 2016

Trade deficits and balance of payments are a very important part of national accounts. I would argue that the US corporate sector has been responsible for the unsustainable US trade deficit as they have done everything in their power to maximize profit and return on investors' investments. US corporate behavior has been all about profit and nothing about the bigger social good for at least the last 50 years ... and one of this failure has anything to do with government and the significant deficits that have become necessary at the government level. I am not impressed with most of the economic analysis I see published! ... Peter Burgess ... truevaluemetrics.org
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Gene Coyle May 1, 2016

Has my much admired Stephen S. Roach fallen for the pre-keynesian dogma that savings precedes investment? Is there no one left, among economists that I can rely on? This essay seems right out of the 1920s. Please, Mr. Roach, delete this one.
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markets aurelius May 1, 2016

Savings = Income - consumption (ignoring taxes for a while).

If an economy opens itself to more and more trade, it reduces incomes of those who where, prior to the opening in trade, producing the goods and services that provided the income that allowed labor in the importing countries to save after attending to consumption.

With incomes falling and consumption constant, savings fall. To increase saving consumption has to fall, or the prices of goods and services have to fall in order to maintain savings. If the prices of imported goods and services are falling, eventually the indigenous labor supply's wages have to fall if indigenous production is to remain competitive. Otherwise, imports will displace increasing amounts of indigenous production. When this happens the demand for labor indigenous to the importing country falls.

Incomes in exporting countries rise as exports rise. Because consumption responds with a lag to higher income, savings also rise. This allows investment to rise. If the initial conditions are such that the cost of labor in the exporting country is far below the cost of labor in the final market where exports are directed, there is a labor-cost arbitrage the exporting country can exploit to increase incomes at a faster rate than consumption, resulting in savings growth. This accelerates investment, which compounds the labor-cost advantage.

Because incomes and savings are falling in the importing market as the demand for indigenous labor falls, the exporters eventually develop overcapacity in the industries exporting to final markets, resulting in disinflation. If the overcapacity is not taken off line, deflation ensues.

It's a killer loop that ultimately equilibrates labor rates between the exporting states with higher savings and importing states with lower savings. It super-charges savings and investment in the exporting country and hollows out the importing country. As we see now, particularly vis-a-vis China.

Return on capital, however, remains robust. Investing in production in exporting countries with a labor-cost advantage -- particularly in higher-technology production -- super-charges capex flows to the exporting countries, which further reduces productivity in importing countries. At the same time, the return on capital expands.

Party on.
- Joseph Ravitsky May 19, 2016
  
  Yes Markets Aurelius! This makes the most sense and is lost in Professor Roach's argument, so what's the solution?
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Jeremiah Hartnett May 1, 2016

There are many interesting articles in PS this week. After a thorough perusal it becomes readily apparent that there are many small tweaks that could be implemented in the global economy that would have beneficial impact. Collectively these tweaks would add up to substantial stimulus. What the heck is everyone waiting for?
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E Walker May 1, 2016

I really don't care what the Masters of the Universe think. This guy is responsible for the destruction of the economy, and now he wants to tell us how to cure it? He should be in jail.

And then he blames the victims. Shameful and ignortant.
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Cary Fraser May 1, 2016

Given the long-standing recklessness of Wall Street and the US focus on supporting a sector that has shown itself to be unrelentingly parasitic, is it any wonder that there have been the imbalances in industrial production, trade, and wages that have limited American savings capacity.
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Avraam Dectis May 1, 2016

.
I was under the impression that the banks have a great deal of money to lend at very low rates, so any company that needs money to invest can easily and cheaply borrow it.

Is this inaccurate? Is this not relevant?

I was under the impression that inadequate demand was the cause of low investment. Should we not try to boost demand?

Yes, people should save. Governments, maybe not so much!
.
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d clark May 1, 2016

Yes. And what would Stephen Roach do to increase America's saving?
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Garry Gentry May 1, 2016

Right now we have about 50% of the American people with 40 hour a week jobs making $26,000 a year or less. Of course those people are not saving money as they are trying to survive today. We also do not teach financial literacy in schools to any great degree because even in a low wage economy if we could teach kids to save even a little it would add up over time yet I am sympathetic to the low wage worker who is simply trying to make ends meet.
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Mr Econotarian Apr 28, 2016

BTW, US Social Security tax revenue is now about 10% of GDP. Who needs savings for retirement, when you can get retirement funds from everyone who is still working?
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Gerry Hofman Apr 28, 2016

Americans are not saving because were inducted in the culture of credit. Saving is something the pre- 1950 generation did but modern people use their credit to the max and rely on inflation to reduce their debt relative to income. To change this would involve a major shift in culture as the purpose in life is still to obtain the largest number of luxury goods one can afford.
The situation involving the shift of industrial output eastwards was carefully designed following Bretton Woods to allow for the rapid industrialisation of Germany and Japan post WWII and later, China. This allowed for the rise in power and profits of multinational companies, spreading influence around the world, the removal of the worst of repetitive labor in western society and the finally the dramatic rise of the financial sector as the developing countries re-invested their earnings in Wall Street.
It's only post '08 this arrangement has become a liability and the obvious solution to blame the population for the misfits they have become. Deep down people sense they have been lead down a blind alley resulting in today's widespread anger and frustration as the great American dream is exposed as a piece of corporate manipulative deceit. It would be too late to return to the values of our grandparents since the elites have managed to move the largest share of the countries' wealth to their tax-free accounts and leave the rest of us squabbling over the crumbs. And now they want us to start saving? What a joke. I think the outcome will be something very, very different.
- Mike Holly Apr 28, 2016
  
  America's problems began long before World War II and are far deeper than the multinationals. The US government has monopolized major industries from the outset. It has been tough to save in a monopolized economy when income is stagnant and prices keep rising. Like before the Great Depression, the US has lowered interest rates because the wealth disparity has created a need to stimulate the monopolized economy through spending based on easy credit. The post-war boom was simply a blip caused by a perfect storm of dismantling wartime regulations and global rebuilding.
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Huiyi Chen Apr 27, 2016

Americans do not save enough because they can. Given the US productivity and USD pegged to oil.
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Huiyi Chen Apr 27, 2016

Prima facie, the trade deficit is there because of China's relative high savings and America's higher productivity. Tracing to the root of the 'problem', it is high land/population ratio and the US constitution. There is more resources in the US per capita and effective protection for people's intellectual achievement which have attracted the most innovative and skilled human capital. The US is more innovative than other countries which means it is higher up on the value-adding chain of manufacturing. Apple's chips can be made in S Korea or Taiwan and the parts can be assembled in mainland China but Apple designs and owns the product. Apple brings home the bacon.Why is there trade deficit then? Weak Yuan and low labour cost in China make lower end of value-adding manufacturing in the US less competitive, but that is about to change. Given shale gas and automation, the future production cost for the US could only be lower. The US would be able to automate its production at a much high rate than China, not to mention the Henry Hub gas price is somewhere around $2 but China signed a contract with Russia purchasing gas at around $10. Passing the Lewis point, China cannot rely on cheap labour and currency for long, unless China can innovate fast enough to compete with the US, trade deficit would narrow over time. Ultimately China would be a consumption led economy with a vast consumer market that foreign companies compete for with domestic companies; Chinese savings would be invested not in productivity of America (bonds in essence is lending which in essence is investing in US credibility) but in financial products. We can never count on politicians to leave economic imbalance to time, hence we have Trump's 45% tax which is in essence taking money from the US middle class to give jobs to the US labour class. Living standard for middle class would drop marginally as gone are the cheap good in WalMart, whilst the working class would have some manufacturing jobs back. That is not the way to go, investing in infrastructure to reduce future production cost and creating jobs meanwhile, investing in innovation by public sector, revamp the tax system to extract more from corporate's management level, equipping youth with skills to work, etc, there is a list of policies that could make America more productive rather than the short-term fix of levying tax on Chinese goods. Methink working class votes not public welfare was the main objective...
- Mike Holly Apr 27, 2016
  
  The trade deficit has also been caused by China's weak and unsustainable environmental regulations. But the US gas price is also unsustainable: the market is depressed below cost, need to drill deeper, environmental problems, etc. Since public investment is often misdirected, the answer is to abolish all regulations favoring monopolies.
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Desiree Dogood Apr 26, 2016

I find the discussion about free trade, trade deficits and savings somewhat complicated, though I don't disagree with Mr. Roach.

Nevertheless, any student of history should know that we've already tried increasing tariffs via the Smoot Hawley Tariff Act in 1930. Within 3 years, US GDP fell by nearly half, and the act was repealed. en.wikipedia.org/wiki/Smoot-Hawley_Tariff_Act Free trade is good for US citizens, because it means they aren't taxed when trading with foreigners. I see it as a simple extension of the benefits of specialization of labor.

It's also obvious as to why the Oreo plant moved to Mexico: high corporate taxes in the US, and high sugar tariffs in the US - making producing Oreos here a lot more expensive, and far more profitable (for mostly US owners) to produce in Mexico. Seems to me that jobs, investment and production move out of the US due to the greedy US government, and voters who keep asking the government to steal from Paul for their own purse. You can't have freedom and the prosperity that comes from it, without first being willing to give it to others. That means not using government to fatten your own wallet.
- Mike Holly Apr 27, 2016
  
  The primary causes for the loss of US manufacturing is higher labor costs (including health care benefits) and tougher environmental regulations. Taxes are a factor, but more for small business, since there are more ways for big companies to evade taxes.
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Jim Nail Apr 26, 2016

Since your whole argument is based on the accounting identity of savings and investment, your conclusion, that Americans don't save enough, can just as easily be stated the other way 'round, that they don't invest enough. This leads to opposite policy conclusions though - not that Americans should tighten their belts even further but that measures to stimulate investment should be undertaken. For instance, spending on infrastructure renewal, incentives for alternative energy development, etc. Of course private investment will only really resume when there is a market to sell to; and this may mean import controls. But all that aside, my point for now is not policy - I'm just trying to point out that it's a little silly to build a whole policy agenda on the accounting identity.
- Mr Econotarian Apr 28, 2016
  
  The important point is that there is nothing "wrong" with a trade deficit, it is just a number. High trade deficits are fully compatible with low unemployment and high growth. If you look at OECD countries, the US now has some of the lowest unemployment and highest growth.
  
  The real issue is that hundreds of millions of people in Asia have been unshackled from extreme communism and came onto the unskilled labor market. We should be celebrating this. But it did certainly displaced many US low-skilled workers in tradable sectors, while providing large reductions of prices of those tradable goods for all americans.
  
  Whether Americans (or Chinese) are saving too much or too little is an interesting question. In the presence of reliable credit, savings is less required, so the differential of savings between the US and China may have more to do with availability of reliable credit and mature financial markets in the US. Also the reliability of US Social Security retirement benefits appears to be very solid, while other developing countries have fewer years of experience with government retirement pensions.
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john phelps Apr 26, 2016

econ 101: large gov deficits (dissaving) cause large inflows in capital account (positive ) , therefore the current account must be negative by an equal amount. good article.

Two things are left out. Much trade with china is intra-company (US) increasing trade deficit and thus increasing capital account inflow. China ships received dollars back to US to keep their currency from rising vs. the dollar. Entry is thru capital account.

These government deficits began with Reagan tax decreases for rich. Thus the problem was political, i.e. redistribution. The resulting increases in debt must have some limit, especially if interest rates go back to 5 %. good luck.
- Mike Holly Apr 27, 2016
  
  The national debt has been caused by health care costs. The US increased demand with Medicare and Medicaid while limiting the supply of doctors and hospitals, and more recently drugs and insurance.
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Mike Holly Apr 26, 2016

I totally agree America’s problems are made at home and politicians are wrong to blame foreigners, including trade and immigration. But thinking America can solve its problems by increasing the savings rate is also lame. America’s problems are caused by politicians serving special interests that monopolize major industries, and made worse by monetary manipulation.
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Steve Hurst Apr 26, 2016

There are two demographic bulges in the US; the boomers who as retirees do not save, they have already done their saving; and the millennials who have income issues. Its inevitable saving dip. Of the remainder they arent saving as they have bills to pay, called trying to preserve their lifestyle. Strange how a citizen spending their own money comes into criticism
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P. Foofootos Apr 26, 2016

Government budget deficits increase the saving rate, not the opposite. Essentially what Sanders proposes is a solution to the very problem described in this article.
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Derrick Baragwanath Apr 26, 2016

Yes, it is true Americans lack savings. But blaming the American people is not the problem. The reasons for a lack of savings are as follows: Firstly, the majority of Americans who are struggling simply to pay the bills cannot afford to save. Secondly, the wealthier sections that make up a small minority of US citizens have no incentive to save because zero interest rates means that their investment dollars have been going into the global property and share markets, which have provided better returns. Finally, successive governments have no incentive to encourage domestic savings because funding has been available to them and US corporations from both printing extra money which is loaned to US banks which is then loaned to government agencies and US corporations, or from obtaining funds externally. The volume of borrowing from the Federal Reserve is unique to America because the US dollar is the global currency. Other economies cannot print the same volume of surplus money because such an action will quickly translate into inflation and currency depreciation.
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Petey Bee Apr 25, 2016

"politicians of both parties have mischaracterized foreign trade as America’s greatest economic threat"

A brief look at the candidates' statements shows the premise of this article contains just as big a mis-characterization as it accuses the presidential candidates of.

Sanders has income and wealth inequality as the foremost issue. Oh his list of issues, trade appears 23rd from the top, and "fair" trade and raising the minimum wage in developing countries is advocated.
https://berniesanders.com/issues/

Clinton of course supports author's positions.

Cruz, on his official issues listing, does not mention trade at all, except to "remove federal impediments" to trade, in the context of energy resource policy.

Trump, who I am not a fan of, is the only one putting trade issues front and center. He vocally criticizes China, for policies which violate rules advocated by free trade proponents. He criticizes Pres. Clinton as well, for incorrectly forecasting the practical benefits of the free trade programs passed in his time. https://www.donaldjtrump.com/positions/us-china-trade-reform
- Desiree Dogood Apr 26, 2016
  
  My reading of Sander's and Clinton's positions on free trade, is that they believe it hurts Americans:
  http://ontheissues.org/2016/Bernie_Sanders_Free_Trade.htm
  http://www.ontheissues.org/Celeb/Hillary_Clinton_Free_Trade.htm
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Tomas Kurian Apr 25, 2016

Myth of saving as necessary tool for prosperity
http://www.genomofcapitalism.com/index.php/16-3-myth-of-saving-as-necessary-tool-for-prosperity

Saving has nothing to do with it !
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Florian Strahberger Apr 25, 2016

America’s Trade Deficit Begins at Home?
Sure.
They are a symptom of a deeper problem?
Yes, of course.
The problem is the serious shortcomings in competitiveness on a per capita basis.
And with the next big step of globalization things will become much much worse.
After money, goods and services it's now on WORK to become a global comparable production factor.
Agile enterprises, made of virtual project organizations, with virtual teams and global staffing are the next "big thing".
Porters "competitive advantage of nations" has to be rewritten - we can build-up clusters with locally distributed team-mates today, and even more in the future.
With the ICT-based communication is now superior to face-to-face if you are using the right technology (no more reading between the lines, clarity instead of misinterpretations, reusability of communication-content & big-data capabilities) this movement cannot be stopped any more.
We will see how long the privilege of nation-wide deficit-spending the countries with the big financial industries have today can be retained: selling financial-products against real-products is nothing else but a legalized Ponzi scheme & the backbone of permanent trade-deficits.
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stephan Edwards Apr 25, 2016

So it is the hourly workers who CANNOT afford to saves fault not our "beloved Elite" corporation and the .1% parking their money offshore has nothing to do with it. Nor the profit stripping or licensing fees paid to companies in Ireland or Bermuda with no office no employees just a PO box. You must really think people who are paid by the hour are stupid! We aren't benefiting from globalization so try peddling it's all are fault on Wallstreet not Main Street!!!!
- lt lee Apr 25, 2016
  
  You are absolutely right. Tax havens and secret jurisdictions controlled/captured by multilateral corporations and bankers are the missing links. If all MNCs repatriate their money back to the US, a large percentage of this would be invested to boost US export and reduce trae deficit. If US banks are not currently easy money through offshore banking, they would be more eager to lend money to local entrepreneurs which would create more jobs. And of course, if MNC pay their fair share of taxes, there would be smaller budget deficit.
  Stephen Roach is right concerning the link between trade deficit and low US saving rate. But he missed the critical link.
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M M Apr 25, 2016

Trade is not the issue, competiveness and sustainability are. When you have a large number of the population on “zero hour contracts” and having to borrow at exorbitant rates, it would be illogical to ask them to save. When you have most corporations and governments running large deficits in their pension pots which constitute time ticking bombs, how can anyone save? When you have governments in the West putting taxation up, pushing the retirement age higher and maintaining austerity measures on the population, how is it possible to generate any saving? It is a big mess that no one wants to touch. Most politicians care about their own image and photo opportunities and could not care less about the population. There is a good article today on Bloomberg titled: what brings together Clinton and Trump? The Delaware address that is shared with another 285,000 addresses.
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Walter Gingery Apr 25, 2016

1) Agreed: Consumption + savings = production

BUT: we're talking about a world-wide economy where savings in one country can easily be used to fund investment or consumption in another.

2) Agreed: to import foreign savings, Americans must run a trade deficit.

BUT: It's not at all clear which way causation runs. According to the author, Americans' low savings rate CAUSES the trade deficit.

It is just as likely, however, that causation runs the other way: that it is foreigners' HIGH savings that cause the deficit.

So stop blaming government deficits; they are not the problem.

Investment in public works, research, education, can pay off.

More broadly, it's the richest countries that have expanded government the most -- for government has the unique capacity not only to correct market failures, but also to help markets better serve human needs.
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