Have you ever wondered why foreigners are willing to invest far more money in Texas and California than they are willing to invest in Argentina and Venezuela? Do you think it’s because they like North Americans better than they like South Americans? No. We’ve always had an attractive investment climate, and we’ve had current account deficits and capital account surpluses throughout most of our nation’s history (http://tinyurl.com/jczqrhu).
As long as foreigners find it profitable to invest here, they’ll continue selling stuff to us — stuff that improves our standard of living. This reality means Trump’s obsession with increasing exports relative to imports is misguided. The imports are a means to achieve what Mark Perry of The American Enterprise Institute calls “job-generating foreign investment surpluses for a better America.”
Shikha Dalmia makes clear that Trump’s economic nationalism – which punishes us whether we’re coming or going – is an obnoxious manifestation of big government of the sort that progressive Democrats typically applaud. Here’s her correct conclusion:
In the last few decades, Republicans have led the charge against immigrants (and Democrats have followed). But Democrats have led the charge against emigrants (and Republicans have followed).
Trump, in a grand synthesis, is simultaneously whipping up hysteria against both. This shouldn’t be surprising. Why shouldn’t a government that is ruthlessly stopping immigrants from coming to America in the name of protecting American jobs also not ruthlessly stop Americans from leaving for the same reason? The inner logic is frightening, but at least this president is applying it consistently.
GMU Econ alum Mark Perry corrects yet another of the countless Trumpian myths about trade.
My Mercatus Center colleague Adam Thierer writes about evasive entrepreneurialism.
