Matthew Winkler, Bloomberg Editor-in-Chief Emeritus, says “This means that the economy is healthy and poised to get better, benefiting from trade that is expanding big and small businesses alike while creating more and higher-paying jobs.”
Mish says “What a bunch of nonsense.”
Before I provide the reason, let’s tune into As U.S. Ports Go, So Goes the U.S. Economy by Matthew Winkler.
You’ve heard it from Donald Trump. You’ve heard it from Bernie Sanders. Hillary Clinton chimed in. Some famous economists, too. It’s the idea that trade liberalization has sapped U.S. economic strength, and that it’s time to make it stop.
Flourishing U.S. ports tell a different story. Business is booming, and the unprecedented quantity and quality of port commerce announces their role as a leading indicator of America’s strengthening job market and her robust consumers.
Los Angeles and Long Beach, the continent’s two biggest gateways, reported the best February traffic in their histories going back more than a century. Total imports to the U.S. last month increased 27.4 percent from 2015, the most since 2010. Everything from furniture and electronics to apparel and machinery unloaded and distributed via Los Angeles surged 46.6 percent in February, the largest increase since February 2002. Long Beach traffic was up 44.7 percent in the same period, its biggest monthly gain since 2013.
This means that the economy is healthy and poised to get better, benefiting from trade that is expanding big and small businesses alike while creating more and higher-paying jobs.
I am a huge free trade advocate. I side with Winkler on that side of his story. The rest of what Winkler says is total rubbish.
Flashback February 21, 2015: Bloomberg: West Coast Ports Shutdown Averted With Five-Year Labor Deal.
West Coast dockworkers and their employers ended their nine-month standoff with a five-year contract deal, averting a shutdown of 29 ports that could have cost the U.S. economy $2 billion a day.
The labor standoff had reduced productivity at West Coast ports by as much as half since November. California citrus fruit bound for Asia spoiled on the docks, while Mardi Gras beads destined for New Orleans instead languished on cargo ships off the Southern California coast. Carmakers flew in vital components at more than 10 times the cost of shipping them, while Japanese McDonald’s restaurants rationed french fries because of a shortage of Idaho potatoes.
The Port of Los Angeles, the nation’s busiest, handled 29 percent less cargo in January 2015 compared with January 2014, and volumes were down 19 percent in neighboring Long Beach, the second-busiest port, according to statements from both ports.
The contract agreement won’t end cargo bottlenecks right away, even after port operations return to normal by Saturday night, Perez said.
The West Coast ports, responsible for 43.5 percent of U.S. trade, have been operating at reduced capacity since late October as dockworkers slowed cargo movement and port employers cut shifts.
All increases in port traffic stats from January and February are related to the port slowdown ending. Winkler should have investigated that unusual jump, but he was too anxious to attack Trump.
Mike “Mish” Shedlock