Angrybear readers might have already picked up on the fact that I am generally a free trade advocate. One might then suspect I’d be praising the latest from Lawrence Kudlow. But then Lawrence has to write:
But you can blame U.S. textile makers. These businesses have been protected for nearly 30 years but they still can’t seem to compete. Why should consumers be denied choice simply because a handful of companies can’t cut the mustard? … Free trade helped all political parties and all world nations. It was not zero sum. It was – and is – win-win.
I generally agree with Mr. Kudlow that free trade is not the cause of our current account deficits (never mind the fact that Kudlow supports the Bush fiscal trainwreck that is one contributor) and I’m hoping against all hope that this Administration does not impose duties on garment imports. But the notion that everyone gains from free trade is not a credible argument – especially in parts of South Carolina.
Memo to the National Review: leave the international trade issues to Bruce Bartlett and Bill Buckley.
Update: Kudlow’s colleague John Tamny just told Paul Volcker (and hence me as well) that Bush’s fiscal trainwreck is not a cause of the current account deficits. You see – we are saving more according to this statistic:
In it David Malpass (NRO financial writer and Bear Stearns chief economist) shows per capita assets in the U.S. of $89,800 that make us the top saving country in the world. (Japan is second at $76,900 per head.)
This represents the level of assets whereas savings represents the increase in assets over time. Real per capita wealth at the end of 2004 was lower than it was the end of 1999 for the U.S. But neither Malpass nor Tamny get the point that their own measure shows we have had negative savings.