Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

Heritage Foundation's Terry Miller claims Obama is a mercantilist
Howard Richman, 3/8/2010

Terry Miller, writing on the Heritage Foundation's website (Obama's Mercantilist Approach to Trade) claims that Obama is a mercantilist since he talks about balancing trade. Miller is making two fundamental mistakes: (1) he mistakes talk for action, and (2) he equates self-defense against mercantilism with mercantilism.

Here is the passage in which he mistakes talk for action:

We first heard Obama’s mercantilist approach in the State of the Union address. He called for greater exports, a “doubling” over five years. He proposed a National Export Initiative “to help farmers and small businesses increase their exports.” That’s policy code for export subsidies. He called for greater enforcement of trade agreements. That’s policy code for protectionism....

Here's the passage in which he equates self-defense against mercantilism with mercantilism:

[Obama's] 2010 Trade Agenda is a recipe for economic failure and stagnation. Much of the focus is on enforcing rules to restrict other countries’ access to the U.S. market. It’s a begger-thy-neighbor approach in which we would sell more to other countries while restricting their ability to sell to us. Such a model is unsustainable internationally: not every country can run a trade surplus....

The Heritage Foundation needs to look up some economic statistics. The United States had a huge trade deficit in 2009 (about 3% of our GDP) not a trade surplus! And that deficit was growing in the last months of 2009. We are the victim of beggar-thy-neighbor economic attacks, not the perpetuators.

The Heritage Foundation would never advocate unilateral disarmament in the military arena. But they do advocate unilateral disarmament when dealing with foreign mercantilism.

President Bush presided over a decline in American median incomes from 2001-2008 because he was unwilling to combat Asian mercantilism. Throughout his Presidency, Asian mercantilists stole market share from American producers resulting in the loss of 4.5 million high-paying manufacturing jobs, leaving America much weaker and poorer as a result.

The Heritage Foundation will likely have influence with the next Republican President as well. If Bush fails, then Obama fails, then the next Republican President fails, all because of a failure to combat mercantilism, where will that leave the United States?