It's often said that America's an uncompetitive economy--unable to produce stuff that satisfies global demand. Hence, a yawning current account deficit.
I'd say the reality's harsher. America's caught in a toxic, self-destructive relationship with the globe's second most significant economy. In short, it's making the worst trade in the world.
The worst trade in the world is this: America doesn't export the stuff you might think a bellwether of the 21st century would--cutting edge assets, that power the global growth of emerging markets. Mostly, it exports industrial age raw materials and machines: literally plain old commodities. China finishes them up and "processes" them--and exports "consumer goods" right back to America. They're the trinkets and toys that are piled high on the bleak exurban shelves in super sizes--and America's pawned it's future for them.
Consider America's top exports to China. Leaving aside aircraft and soybeans (neither a sustainable basis for national advantage), America's sole export of note is semiconductors. The rest? Plastics, steel, pulp, chemicals, copper, aluminum, engines, cotton--literally commodities. It's hypercommoditized raw materials, of the lowest of value--literally just stuff, far from higher value goods or services. It's not the picture of an economy humming with innovation, meaning, purpose--it's the picture of a junkyard.
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