“Cleaning Those Foreigners’ Clocks”

While a lame argument is disappointing for the opportunity cost of having read it, a lame argument put forth as rebuttal to one’s own assertions can be affirming.  But, to paraphrase a colleague, there’s nothing better than being challenged with lame arguments by adversaries who have wide media circulation.  For that, I thank you, Pat Buchanan.

Buchanan takes exception to the arguments I make in this piece, which appeared in the Washington Times last week.  The theme of my op-ed was that Congress should curtail its instinct to blame trade for everything that’s wrong with America.  I even go as far as to suggest that, with strong economic growth, strong job creation, and a low rate of unemployment, things might not be all that bad in America.  And at the very least, Congress should take the time to honestly assess the meaning of the trade deficit.  What Congress would find is that the deficit is highly pro-cyclical (meaning that is shrinks when the economy contracts, it grows when the economy expands, and grows faster when the economy grows faster – see some of Dan Griswold’s work on this topic).  I also suggested that the trade account has very little to do with trade policy, and much more to do with demand in the United States and abroad, as well as differences in habits of savings and consumption.

For those empirically sound (and verifiable) assertions, Buchanan lampoons libertarians for possessing some religious-like devotion to their beliefs regardless of the facts before taking two of my points out of context to serve as springboards into his xenophobic, isolationist, nationalistic rage.

When we win at trade, it doesn’t mean they lose (“cleaning those foreigners’ clocks”).  We are all winning at trade as the economic pie grows larger and larger—so much so that the large U.S. economy can grow at a moderate-to-strong pace every year with the exception of two for the past quarter century, while the small-to-medium-sized Chinese economy simultaneously can grow by double digits every year during the same period.  

But rather than reinvent the wheel under which arguments like Buchanan’s have been reliably squashed throughout the years, I invite you to peruse this collection of timeless commentaries from Cato scholars and others about Buchanan-like views on trade and globalization.