Here’s a letter to White House trade alchemist Peter Navarro:
Interviewed this morning on CNBC you said that according to “some estimates” – estimates that you obviously take seriously – for every $1 billion in U.S. trade deficits, America loses 6,000 jobs. Let’s do the math, and let’s increase the plausibility of your “estimate” by looking only at the years since China joined the WTO – that is, the years from 2001 forward.
In each of these 17 years (2001-2017) the U.S. ran trade deficits in the hundreds of billions of dollars. For this entire 17-year span, the U.S. trade deficit was $9.259 trillion.* According to the “estimate” that you wish us to take seriously, therefore, the number of jobs that America “lost” as a result of these trade deficits is 55,554,000 – a number of jobs more than one-third of today’s entire U.S. labor force, and nearly nine times larger than is the number of Americans who are today unemployed!
Your “estimate” is beyond laughable. Can you tell us, then, given your proneness not only to fall for such absurd “estimates” but to perpetuate them as if they’re a sound basis on which to formulate policy, what reason have we Americans to take you seriously? Why should anyone trust your economic analysis to be sound if you swallow and publicly regurgitate “estimates” that fail even the smell test of arithmetic?
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030* Here’s my source for the size of the U.S. trade deficit in 2017.
…..
Navarro’s “estimate” of jobs lost per each $1 billion in U.S. trade deficits was only a drop in a firehose-torrent of economic fallacies that gushed this morning from his mouth.
