U.S. Secretary of Commerce John Bryson had a bad weekend. After what appears to have been two hit and run accidents he was eventually found asleep or unconscious over the steering wheel of his car. He has now taken a "medical leave of absence."
That was obviously bad for Bryson, bad for the people he hit, and embarrassing, at least politically, for the Obama administration. But the incident didn't seem to have any real far reaching significance. There was, however, a further detail. The car the secretary was driving was a Lexus.
"So what," you say. A lot of people drive Lexuses. What's the big deal about that? Well, the thing is that Lexuses in the United States are totally imported from Japan. The Secretary of Commerce -- the official most responsible for carrying out President Obama's export doubling campaign -- is driving an import. Top Japanese officials don't drive imports. Top German officials don't drive imports. Top South Korean officials don't drive imports. All of their countries have trade surpluses.
How is the United States supposed to double exports, reduce its trade deficit and thereby create jobs domestically when its top official in charge of the export-doubling doesn't even drive a U.S.-made car? Couldn't he at least drive a Honda or a Toyota Camry or a Mercedes or BMW? All of these are foreign brands, but at least they are also made in America. He doesn't have to be xenophobic, just conscious of creating American jobs.
The coincidence of Bryson's troubles with the release by the Federal Reserve of a report showing that the median net worth of Americans fell by 39 percent between 2007-10 couldn't have been more apt.
The Fed report concluded that the Great Recession has wiped out about two decades of American wealth accumulation. This means the average family is back to where it was in 1992 in terms of its net worth. The fact that that is two decades ago suggests an interesting if discouraging comparison with Japan. How many times have you heard of Japan's "lost decades" over the past several years? Well, it seems the real lost decades have been in the United States.
Over the past twenty years, Japan along with South Korea, Taiwan, China, Germany and other countries have been producing and exporting to the U.S. market and running trade surpluses while accumulating vast reserves that they have invested to help fund their long term health care, pension and other needs. During this time, the United States ran continuous trade deficits and transferred much of its productive capacity offshore. But the country achieved what appeared to be high growth and steadily rising net worth by blowing bubbles. First was the dot.com bubble of the latter half of the 1990s. This collapsed in 2001, but was quickly followed by the real estate bubble of that finally burst in 2007-08 and led to the Great Recession from which we are still struggling to recover.
The truth is that we never really had the wealth, the net worth, we thought we had. It was a mirage, a fake. We weren't actually producing wealth like other countries. We were only blowing bubbles and importing their Lexuses.
SAJJAD HUSSAIN/AFP/Getty Images
Clyde Prestowitz is the president of the Economic Strategy Institute and writes on the global economy for FP.