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Why Autos are Important

Posted by: Michael Mandel on December 27

The failures in the domestic auto industry really are a big cause of our trade problems. Take a look at this graph, which shows the cumulative merchandise trade deficit of the U.S. since 2000.


Astoundingly, the auto trade deficit is only slightly smaller than the china trade deficit (there’s about $30 or so of auto-related trade in the China number, which I will ignore). If we could juice up our domestic auto production with green cars, it would go a long way to improving our trade record.

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Reader Comments

Joe Cushing

December 28, 2008 01:00 AM

Today, "America's" greenest cars are not made here. They are made in mexico and other countries. Why would new green cars be any different? How do even define what is an American car.


December 28, 2008 09:46 PM

You had too much eggnog for Christmas. Keep this picture because I want a comparison at the end of 2009 I think the global economic meltdown will show just how we in america have regulated all our industry out of this country and the trade defecit will get ugly beyond belief.


December 28, 2008 11:12 PM

But Honda Accord, Honda Civic, etc. are manufactured in the US. So they are not part of the trade deficit.

Separately, we should not bail out the auto industry. Rip the bandaid off quick, and let them fail.

If IBM could be outcompeted my Microsoft, why can't GM be outcompeted by Tesla and Aptera?

justin newman

December 30, 2008 09:29 PM

because microsoft did not manufacture anything other than intellectual property and to do so did not employ all that many people at the beginning in no way can you compare the production and competition models of software firms to that of companies that produce hard physical goods as their sole source of income

Thank you for your interest. This blog is no longer active.



Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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