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Free Traders Should Be More Careful When Defending Trade Deficits

Summary:
In a recent WSJ piece, Robert Barro pushed back against Trump’s mercantilism by arguing: “Imports are things we want, whether consumer goods, raw materials or intermediate goods. Exports are the price we have to pay to get the imports. It would be great, in fact, if we could get more imports without having to pay for them through added exports.” Now this is a typical argument in the free-trade camp; I’ve used variants of it myself. But lately, something has been bugging me about it. When I saw the way Barro’s argument misled the WSJ editor who (?) wrote the title and subtitle, I put my finger on it. So, here is the title along with the offending (I claim) subtitle: Trump and China Share a Bad Idea on TradeImports are things we want, and we pay for them with

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In a recent WSJ piece, Robert Barro pushed back against Trump’s mercantilism by arguing: “Imports are things we want, whether consumer goods, raw materials or intermediate goods. Exports are the price we have to pay to get the imports. It would be great, in fact, if we could get more imports without having to pay for them through added exports.”

Now this is a typical argument in the free-trade camp; I’ve used variants of it myself. But lately, something has been bugging me about it. When I saw the way Barro’s argument misled the WSJ editor who (?) wrote the title and subtitle, I put my finger on it.

So, here is the title along with the offending (I claim) subtitle:

Trump and China Share a Bad Idea on Trade
Imports are things we want, and we pay for them with exports. Isn’t getting more for less a good thing?

If you want to see what’s the problem with that, go read my latest blog post at the Independent Institute.

Robert Murphy
Christian, Austrian economist, and libertarian theorist. Research Prof at Texas Tech and author of *Choice*. Paul Krugman's worst nightmare.

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