A couple of posts ago, I included a link to a TIME Magazine article that warned of our trade deficit. Now Forbes, a financial magazine, has jumped on the bandwagon! The tide of opinion is turning against globalization and our trade deficit. I generally agree with Mr. Morici’s article, but do not agree with his method for reducing the deficit – cutting fuel consumption and somehow just buying less stuff from China. He essentially blames Americans for consuming too much. This seems to be a popular conclusion about the trade deficit these days. But it’s wrong. We’re not consuming any more on a per capita basis than we used to. The problem is that the manufacture of virtually everything – even American passports – has been outsourced to foreign suppliers.
The only way to address the trade deficit is with the remedy proposed in Five Short Blasts: a tariff structure on manufactured goods that is indexed to the population density of our trading partners. And there are no remedies to our dependence on foreign oil that don’t begin with stabilizing and ultimately reducing our population. Conservation measures, while fine and also necessary, if taken alone will only make room for more people and ultimately exacerbate the problem.