The bigger deficit — job creation

The president had barely finished his remarks, though, when Republicans returned fire, dismissing the speech as a partisan attack, and calling for a delay to Obamacare. A predictable war of words as another debt ceiling fight heats up.  But investments in infrastructure, education, and industrial innovation are waning while our global competitors are investing. Meanwhile, outside the beltway, the economic “recovery” limps along.

Despite the lack of specifics from either side, the president’s rhetoric suggests he knows this isn’t a recovery: 7.3 unemployment is unacceptably high; increases in low-income retail and hospitality work aren’t growing a sturdy middle class; and, stagnant wages and widening economic inequality remain serious concerns.

But maybe he doesn’t get it. The president did say, after all, that “we sell more goods made in America to the rest of the world than ever before,” and then failed to finish the thought.

Which is: While exports are indeed up, so are imports. In fact, imports are way up.  America’s goods trade deficit stood at $540 billion dollars in 2012 while our trade deficit with China clocked a record $315 billion.

Think about that sum and what it means. Last year we could tweet instantly about Superstorm Sandy, but couldn’t source any domestically produced electrical transformers for blacked-out New York City. Our homes are wired with fantastic, imported tech gadgets, but we commute over 70,000 structurally deficient bridges. As taxpayers, we’ve financed research that has led to extraordinary devices like MP3 players and GPS navigators, but we don’t make any of them.

Congress and the president have either grown oblivious to, or unconcerned by, what seems obvious: We’ve traded production for consumption, and in doing so we’ve lost millions of high-income manufacturing jobs. Again, the speeches suggest the president understands: He spent his 2012 re-election campaign promising to help create one million new factory jobs by the end of his second term. But inaction speaks volumes. We’ve seen only 12,000 new manufacturing jobs so far, and the president makes scant mention of his pledge now.

Still, let’s give him the benefit of the doubt. If President Obama wants those jobs back, and is facing a do-nothing Congress, there’s plenty he could do on his own to encourage manufacturing’s return.

He could apply “Buy America” provisions to all federal procurement and federal infrastructure projects, so that less of our tax dollars are spent overseas. That means more wind turbines manufactured in Iowa, steel made in Pennsylvania, and automobile parts crafted in Ohio.

Instead of pledging to double exports while ignoring our import surge, the president could announce a goal of cutting the trade deficit in half by the end of his second term, and achieve it by making balance a pre-condition for any future trade or investment deals with economic rivals like China and Japan.

He could also designate those two countries as currency manipulators. Both Beijing and Tokyo exacerbate America’s massive trade deficit by undervaluing their currencies to subsidize exports, which also acts as a de facto tax on U.S. goods sent overseas.

President Obama could direct his administration to ensure that more of our domestic natural gas stays here rather than heading off to state-capitalist economies with which American businesses compete. And he could promise to veto any tax reform proposal that gives more breaks to Wall Street while raising taxes on capital-intensive manufacturing.

The President needs to take action because it's clear Congress won't: Their sole obsession is the debt debate.  But that's not what American workers need right now. And if we don’t get people back to work, our trade deficit will increase along with our national debt.

Paul is president of the Alliance for American Manufacturing (AAM).