Los Angeles port traffic is up 46.6%. Traffic is up 44.7% in Long Beach, the biggest monthly gain since 2013.
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
“but he was too anxious to attack Trump.”
But didn’t he also attack Hillary and Bernie right after?
No because no one takes their trade discussions seriously
Everything is “extend and pretend”, “blue smoke and mirrors” and “let’s boil the general populace in oil so slowly that they won’t notice it”. Modern high tech economies have been creating more costs and so more minimal prices than individual incomes for probably at least a century and that inherently cost inflationary scarcity ratio is only going to get worse with AI. And no matter how strongly you BELIEVE in General Equilibrium, Austrian Deflationary dogmas or the silly @$$ed puritanical righteousness of “the curse of Adam” such theories will never pan out without integrating costless monetary Gifting into the debt based money system. We can in fact have Austrian deflation with a price deflationary retail discount. I’ve shown you the way. You just have to open your mind to it is all.
So, let me guess, this Winkler fellow didn’t write that what must have been a huge November decrease in shipping through L.A. meant that the economy is collapsing because that would have been ignoring the context of the situation.
But now that dropping the context give a falsely positive reading . . .
Do we call it “free trade” because we can buy a trillion more goods than we sell year after year and seemingly never pay the deficit?
Again I will ask….how can we run a permanent and huge trade deficit and LOSE in a trade war?
Yes, a large portion of our deficit is due to oil, but have we not proven that we can supply most of it from domestic sources (if they don’t all go bankrupt)?
And is not food one of our biggest exports?
I would think people can do with less oil easier than with less food.
Are we going to allow ALL of our manufacturing to die while funding its loss with debt before we actually find a way to stop it?
A larger question is do we think that China will fund our entitlement payments? I know China is communist, but will they REALLY embrace wealth redistribution to America?
What is free trade? We have thousands of governmental intrusions in all aspects of trade.
We have the highest corporate taxes (35%), no tariffs on imports while others have them on our goods, so our companies are moving their headquarters where the production has gone.
I was a self-employed graphic designer/illustrator for over forty years. A one person business. Every project was open to competition, no government support, no company benefits and 150% Self-Employment Tax (Social Security) payments. REAL FREE TRADE.
The internet and offshoring changed all that as lowest price became the only criteria. Now everyone’s job is open to global competitors—directly or indirectly.
We are now at the point where the American consumer has no choice other than to buy cheap crap at Walmart. He also has no place to work but Walmart and that is losing to internet sales.
This is why Trump is popular…
Only he and Bernie talk about our forgotten, former middle class. The elitist party stalwarts continue to ignore the demise of those who for generations made our country unique. We will soon be the 1%… and the rest of us.
Free trade within a nation is beneficial in the long run.
Free trade between nations is not beneficial in any long run scenario.
This is simply due to a disregard for people, and the reality of people. This means religion, culture, race, and nation. Diversity + proximity = War.
You can cuck all you want about it, but like the stock market, debt, and housing bubbles it’s not different this time. Humans are not different.
Either you build your nation at the expense of other nations, or maintain an equivalent balance, or your nation is expended.
You had better choose, and choose soon.
hopsing sendin everything that ain’t nailed to Walmart and home depot for pennies on the dollar in a desperate attempt to keep the factory lights on. china reaching an unprecented level of dumpin all their cheap crap on the american consumer and their credit card and fat gov’t paychecks
The export numbers include empty containers. Remove those from totals and look at difference in growth between exports and imports. We are getting killed with strong dollar.
Lets just keep in mind that the “strong dollar” is relative. There is no real strength in any of it. If the dollar was strong it wouldn’t represent an economy that would collapse if not be dependent on subprime credit to stay afloat (and non-GAAP accounting).
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What is free trade? We have thousands of governmental intrusions in all aspects of trade.
We have the highest corporate taxes (35%), no tariffs on imports while others have them on our goods, so our companies are moving their headquarters where the production has gone.
I was a self-employed graphic designer/illustrator for over forty years. A one person business. Every project was open to competition, no government support, no company benefits and 150% Self-Employment Tax (Social Security) payments. REAL FREE TRADE.
The internet and offshoring changed all that as lowest price became the only criteria. Now everyone’s job is open to global competitors—directly or indirectly.
We are now at the point where the American consumer has no choice other than to buy cheap crap at Walmart. He also has no place to work but Walmart and that is losing to internet sales.
This is why Trump is popular…
Only he and Bernie talk about our forgotten, former middle class. The elitist party stalwarts continue to ignore the demise of those who for generations made our country unique. We will soon be the 1%… and the rest of us.
The ports were shut down for a while as many forget to point out. The big issue is many work in LA but cannot afford to live in LA. So they commute. Some commute 2 to 3 hours one way to go to work. My sister is one of these folks.
Just left Venice Beach where my father lived. Went out to visit and pay my respects to my father who passed at the old age of 94. Some perspective on real estate there. His old home built in the 1940’s was 1200 square feet and on a tiny lot just sold for 1.8 million dollars. I was absolutely floored as we would have paid at the most 30k in Arkansas for this run down, needing to be torn down, home. I do not care that it is three miles from the beach. Crazy prices.
I was born and raised in Venice and Redondo beach and left in the 70’s. A foreign couple from the Middle East bought the place.
I ask my sister why she commuted so far and why not just rent closer to LA. Her reply was, “it would cost her 2500.00 a month for a 400 Sq. Ft. apartment and the crime was rampant in LA. I spoke with my older sister and she told me the same thing. All of their friends commute. I am glad I left it takes me on a bad day 10 minutes.
Both sisters complained about the living standards and I asked them why stay, they both said the beach and weather. Although neither have been to the beach lately as they have pollution alerts for swimming. LOL gotta love California.
I loved CA when I lived there but now it seems like a third world country. Made me sad really. Traffic you can have the rat race.
Thanks for sharing that. What a shame.
I moved to an Orange County gated senior community from the Palos Verdes area (next door) because of that mentioned above and I too couldn’t leave the weather.
In this article……………………
http://www.nytimes.com/2016/03/20/business/economy/carrier-workers-see-costs-not-benefits-of-global-trade.html?_r=0
The workers will make $19 A DAY in Mexico ??? What American products will they be able to afford ?? Do companies like Carrier LOWER their prices ?? Saw a tape of Cramer (CNBC) admitting Trump was right that we are getting screwed on the trade deals and then he whitewashed it by saying like a bleeding heart actor that many Mexicans make $5 an hour and get free government sponsored health care — they are lucky — ???
It’s all long and convoluted but my preference is fair free trade and support Trump over the other bought and paid for trade agents because they will do what they are told to do by the architects of the trade agreements just like Obama.
Frat I can remember when Palos Verdes was like living in the country, with the exception of Marineland. Now closed of course. I also lived in Torrance before all of the malls. We used to bicycle up there all the time. Later we scuba dived in Palos Verdes for abalone when the seals were not around. When the seals were in no one dived unless they had a death wish as the Great Whites were there hunting seals. An old timer abalone hunter did not heed this and well got killed by a great white. this was the early 60’s.
You can have the weather and the traffic. I was a diver, surfer, spearfished the coast, two months ago took a dive in Redondo and the places we used to hunt are gone it is a desert underwater. Did not see even one fish. My sister told me I was crazy to snorkel there it was polluted.
Winkler should have looked at retail sales during the same time frame.
Also, consider that the North Slope of Alaska oil fields are shedding jobs, laying down rigs, and contractors are shipping their construction equipment back to the Lower 48, through California. And, when affected families leave the state their belongings are shipped, not trucked, via LA, or Long Beach. This is the tip of the iceberg if oil prices don’t rise.
You are saying that a slowdown in Jan and Feb 2015 caused a rebound in FEBRUARY 2016????
I think that you were too quick to criticize.
The way it reads, it sounds to me that the percentage increases are a y/y comparison. I may be misinterpreting that, but that’s what it seems like.
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