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Here’s a letter that I sent yesterday to NPR reporter Tom Gjelten:
Reporting Monday on trade between the U.S. and China [2], you interviewed University of Maryland economist Peter Morici. Mr. Morici is concerned that trade between these two countries is "imbalanced." His concern is utterly inappropriate.
Trade between the University of Maryland and Mr. Morici is also imbalanced: the University imports more from the Morici household (namely, Mr. Morici’s services as a faculty member) than the Morici household imports from the University. Yet I doubt seriously that Mr. Morici would claim that the University is getting a raw deal.
I challenge Mr. Morici to search throughout economic theory for any doctrine that suggests that even the most ideally functioning markets will result in any two economic entities – including any two countries – having "balanced" trade with each other. He’ll search in vain.
Sincerely,
Donald J. Boudreaux