It's the Economy, Stupid

After yesterday's dramatic stock decline, President Bush's economic team pointed to the strength of the global economy, the improvement in US exports and the strength of the eunderlying economy. Although Dylan Ratigan of CNBC did a fine job, I found myself wishing he had asked a few more questions. For one, specifically what products are the US exporting more of? To quote from Al Gore's recent book, Assault on Reason:

"When I visit port cities like Seattle, New Orleans, or Baltimore, I find the same sad story. Many massive ships running low in the water, heavily burdened with foreign cargo or foreign oil arrive by the thousands. These same cargo ships and tankers depart riding high with only ballast water to keep them from rollling over. Instead of goods, we send money, electronically, in the appropriate direction."


Is it cars we export more of? Computers? Televisions? Cameras? The answer to all of these is no. We do, however, export cigarettes. See the following from MSN moneycentral:

"Altria Group, Inc. announced plans by its tobacco subsidiaries to optimize worldwide cigarette production by moving U.S.-based cigarette production for non-U.S. markets to PMI facilities in Europe" Due to declining U.S. cigarette volume, as well as PMI's decision to re-source its production, PM USA will close its Cabarrus, NC manufacturing facility and consolidate manufacturing for the U.S. market at its Richmond, VA Manufacturing Center." http://news.moneycentral.msn.com/ticker/sigdev.asp?Symbol=MO

The Bush economic team, of course, mentioned controlling spending and keeping taxes low. I can't imagine a more costly expenditure than the Iraq war and I can't imagine that average Americans can benefit from the taxcuts proposed for those who earn over $250,000 per year.

John Edwards spoke on CNBC recently and presented a sensible economic policy for all Americans. Let's hope it won't be too late by the time a Democrat gets into the executive.