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Kai Ryssdal: While it’s tempting to believe the markets have been rallying on all this talk of some kind of deal on the debt, fact is, traders are a bit more base than that. Strong corporate profits from the likes of Apple, IBM and Coca-Cola are really what’s going on.
That’s one economic bright spot. Commentator David Frum says there’s another one.
David Frum: Here’s some good news amid the economic gloom: U.S. exports continue to surge. April set a record, $175 billion. May fell a little short, but the United States is well launched to increase exports in 2011 by 25 percent over 2009 — and to double exports by 2014.
An economy as big as the U.S. cannot export its way out of recession. But the export surge does contain promising signals of the U.S. economy of tomorrow.
The U.S. is increasing its exports to China faster than to any other country — despite China’s manipulated currency. Computer technology and foodstuffs head the list of sales.
U.S. grain exports have surged to their second best year since 1982, as the droughts in Russia and Ukraine impelled those governments to halt international sales.
Some U.S. industries faced weaker competition as Japan absorbed the shock of the tsunami and nuclear disaster.
Above all, exports are driven by the drop in the cost of the U.S. dollar relative to other currencies.
If to make up an example, a Martian dollar used to buy $1 of U.S. products and now can buy $1.50 worth of U.S. products, odds are that the Martians will increase their U.S. purchases.
A cheaper dollar cuts the pay of U.S. workers relative to the rest of the world — without depressing their ability to buy non-traded goods like housing or to service their debts.
A cheaper dollar is not pain-free: imported goods cost more, starting with the oil that moves American cars and trucks. Everybody who holds U.S. dollars loses a little wealth. Those who hold the most, lose the most — one reason that Wall Street squawks when the dollar declines.
Through the pain, though, the cheaper dollar shows the way forward to servicing U.S. debt more easily — and spurring global competitiveness. Growth resumes. Recovery accelerates. It’s a start.
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