John Tamny eloquently exposes Mike Pence’s hypocrisy on trade. A slice:
On the subject of “economic power,” “China” has nothing of the sort. Businesses establish economic power, not countries, which raises the question why Pence would assume “China” could assert power of the economic kind in the U.S. Really? How? Does central planning work when the Chinese practice it? Back to reality, economic power is achieved most often in ephemeral fashion through painstaking work in the private sector. Starbucks doesn’t have 3,400 stores in China thanks to the actions of people like Pence as much as the global coffee chain built a remarkable brand that China’s U.S.-fascinated citizens can’t get enough of. The same goes for McDonald’s: China is now its 2nd largest market. That Nike’s #2 market is China speaks yet again to how much the Chinese people love all things American. Crucial here is that “America” didn’t create market share for U.S. companies, but the capitalist profit motive did. Applied to China, that its businesses increasingly have “economic power” in the United States is the surest sign that “China” the state doesn’t much factor in the doings of the businesses that populate it.
Scott Sumner’s EconLog post titled “Trade realism” offers a really excellent demonstration of the fact that those people who oppose a policy of free trade as they describe themselves as “trade realists” are, in fact, out of touch with reality. (Be sure also to see the comments.)
None of the politicians/commentators, together with their business/labor allies, who peddle this economic nonsense about exports and imports behaves in their personal lives as they suggest the nation posture itself with respect to the rest of the world. Indeed, their income earning activities (their exports) enable them to buy things produced by others (their imports). Hopefully, lots of imports. The more the better, in fact. Their exports—that is—their incomes, are what enable them to do this. The bottom line is that people in their private lives export in order to import.
If actions speak louder than words, we should look at what our politicians/commentators and their business/labor cohorts do when managing their own affairs, not the affairs of the nation. It demonstrates Adam Smith’s insight in his 1776 classic, The Wealth of Nations: “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.”
Mark Perry asks: “Why cripple the US economy with tariffs when it’s hitting full stride?”
