The NYT has an interesting piece this AM on the recent increase in US exports, their contribution to growth, and the progress made on the Obama administration’s goal, announced in Jan of 2010, of doubling exports in five years.
I’ve got a beef, however. The piece doesn’t mention imports. What matters for growth is NET exports—i.e., exports-imports, and while obviously our net exports do better when we export more, all else equal, analysis like this always reads to me a bit like, “hey, the Wizards scored 92 points last night! Hooray!…(btw, the Bulls scored 110…).
In fact, since President announced the initiative, net exports have subtracted an annual avg of 0.3 ppts from real GDP growth (2010q1-2011q3—see figure). Sure, that would be worse without the higher exports of course, but to evaluate what’s going on here re growth and jobs, people need to know the net.
The piece makes another point worth amplifying. The US is producing more oil and gas, and as Lowrey notes, exports of petroleum products, ex crude oil (so stuff like gas, diesel, heating oil, jet fuel) are up. In fact, as the figure below shows, we’re now exporting more of these petroleum products than we’re importing, for the first time in decades (the figure shows net imports, so when it turns negative in 2011, that means positive net exports; detailed analysis here). Of course, we’re still importing 50% of the oil we consume, but in the mid-2000s, that figure was 60%.
Source: Energy Information Agency
Don’t get me wrong. I’m no fossil fuel freak and strongly advocate taxing carbon-based products (a perfectly sound neo-classical economic principle—internalize the externality of environmental damage). But the idea, promoted incessantly by prominent figures like my good friend but frequent opponent Larry Kudlow, that the Obama administration is hostile to fossil fuel extraction is patently false.