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Good Grief

Here’s a letter to the Wall Street Journal:


Your headline reads “U.S. Trade Gap in Goods Widened 10% in 2018” (Feb. 28).

I understand that the Commerce Department regularly reports on U.S. trade in goods. I understand also that many people, including President Trump, attach great significance to the ups and downs of U.S. trade in goods.

But I continue to hope that the Wall Street Journal, as the world’s leading financial daily, will one day stop reporting on U.S. trade in goods. Such trade is utterly without economic meaning, and to report on it as if it is meaningful only reinforces widespread misunderstanding.

Nearly 80 percent of the U.S. economy is in services, not in goods. Therefore, to report on trade in goods is to ignore trade in those many outputs for which Americans have a comparative advantage.

To report on U.S. trade in goods makes no more sense than to report on, say, U.S. trade in commodities colored yellow or in products whose names start with the letter G.

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030