George Bush, true to form as a politician, is no deep friend of free trade. Just yesterday, his administration signed an agreement with the Chinese government that sets numerical limits on the number of textiles that American consumers will be allowed over the next few years to buy from Chinese suppliers.
In its report today on this return to quotas, the New York Times quotes Bush as saying that he finds the U.S. trade "imbalance" with China "bothersome."
One frequent response to this ridiculous belief that something is amiss if any one country runs a trade deficit or a trade surplus with another country is to ask those who find such situations troubling "Do you shop at supermarkets?" Of course, the answer is yes. Unless the person to whom the question is directed works at a supermarket, the questioner then responds "Don’t you realize that you run a persistent trade deficit with your supermarket? You buy lots of things from it and it buys nothing from you!"
Everyone immediately understands that any such "trade deficit" with a single economic entity (in this example, a supermarket) is absolutely no cause for concern.
The same truth applies for each country viz-a-viz any other country.
Nevertheless, the American president himself is "bothered" by China’s trade surplus with the United States.
So it occurred to me that perhaps Mr. Bush might feel sympathy for me if I point out to him my immense and ever-growing trade deficit with Uncle Sam. I buy lots of things from Uncle Sam — national-defense services, a stake in the Social Security system, drug-interdiction efforts, the list is practically endless. But Uncle Sam buys nothing from me. (The fact that Uncle Sam will imprison me if I refuse to buy what he sells, and that I attach negative value to almost every good or service that he chucks my way, is here of no relevance.)
So I wonder if the President will permit me to cure this bothersome trade imbalance that I have with Uncle Sam by refraining from ever again buying anything from Washington.
If Washington’s pols and pundits find the U.S. trade "imbalance" with China "bothersome," surely they’ll understand my wish to no longer be a customer of Uncle Sam.
What say you, Mr. President?