Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Pat Buchanan's history lesson about the trade deficits
Pat Buchanan's Labor Day commentary (How Capital Crushed Labor) gives a history of the U.S. trade deficits. At first we built our industries behind tariff walls, running continuous trade surpluses that benefited our economy:
Then we went globalist:
Buchanan has an important part of the story, but not the whole story. The rest of the story was that U.S. came to stand for Uncle Sucker. We let our trading partners practice mercantilism to steal our industries. It began with Germany and Japan. They were soon joined by almost every country in Asia. Now almost every developing country in the world uses mercantilism to steal our industries. Even Mexico, with whom we have a "free trade agreement", puts tariffs upon our products while manipulating the dollar-peso exhange rate in order to perpetuate trade surpluses with us. They all use currency manipulations, tariffs, and a host of other trade manipulations to steal our industries. And we let them.
We don't have to turn our backs on trade, and we don't have to let our trading partners run trade surpluses with us. There is a third alternative which lets global trade benefit all, so that countries grow along with their trading partners. It's called balanced trade and it can be achieved through the WTO-legal scaled tariff.
Buchanan concludes that America is in a state of terminal industrial decline:
The only ray of hope that I see is that Sarah Palin is a potential candidate for President, and she advocates balanced trade. She has demonstrated in Alaska and elsewhere that she is not afraid to take on the corporate interests and the Republican Party establishment. Perhaps she will win the presidency and change this narrative.
Journal of Economic Literature:
Atlantic Economic Journal: