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 Richmans' Trade and Taxes Blog

Newt Gingrich on Trade
Howard Richman,

Ian Fletcher, author of Free Trade Doesn't Work: What Should Replace It and Why, had a piece in Friday's World Net Daily (Newt Gingrich: Free Trade Kool-Aid Drinker), in which he discussed Newt Gingrich's positions over the years on trade.

Gingrich, for example, supported President Clinton's decision to give China "Most Favored Nation" status and let China into the WTO without requiring any balance in America's trade relationship with China. He quotes the following Spring 2001 interview that Gingrich had with PBS:

INTERVIEWER: Was it a good thing to allow China to become an open trading partner?

NEWT GINGRICH: Absolutely … Trade increases the likelihood that you and they will engage in win-win activities. The difference between politics and trade is that in politics I may take something from you to give to somebody else, even though you don't want to lose it, so I raise your taxes. I charge you a fee. I confiscate your farm. In a free market you only do the things that make you happy in order for me to get the things that make me happy, and if we're not both happy the trade doesn't occur. So free markets dramatically lower the friction of human relationships and increase the relative pleasure and the relative success of human relationships. The more the Chinese and Americans [sit] down together to create more wealth, the happier they'll be with each other, the less likely we'll have conflict.

Gingrich did not understand Chinese mercantilism when he gave this interview in 2001. The goal of mercantilism is to delay consumption in the present in order to get increased consumption and power in the future. They give their trading partners increased consumption in the present followed by reduced consumption and power in the future. (For more on this topic, see our article The Scaled Tariff: A Mechanism for Combating Mercantilism and Producing Balanced Trade, just published by the peer-reviewed Journal of International Law and Trade Policy.)

Unfortunately, Gingrich still doesn't understand mercantilism. Fletcher points out:

Gingrich doesn't seem to have wised up since, either. If one consults his current campaign website's section on jobs and the economy, there is no mention of trade issues. I guess they're just not that important, despite a $500 billion-a-year trade deficit. The closest he comes to trade issues is to suggest some policies to "strengthen the dollar." While I'm sure the use of the word "strengthen" may make some conservative hearts beat faster, a strong dollar is actually something that has been inflicted on us by Chinese currency manipulation, it is a bad thing, and we need to go in the other direction if we ever expect to balance our trade.  

Fletcher has more hope for some of the other Republican candidates for president. He writes:

At least one Republican presidential candidate (Roemer) is actually good on trade issues. At least one (Romney) may be at least OK if he really means what he says. At least one (Cain) is an odd mix of very good and very bad. And at least one (Perry) seems to be just naïve and corrupt on the subject.

Gingrich could still study up on this issue. If not, then his presidency would fail for the very same reason that the presidencies of GW Bush and Barack Obama failed: because of a failure to require balanced trade. Hopefully Republicans will nominate a candidate whose presidency could actually succeed.

Comment by ChasVoice, 11/28/2011:

The Newt and Romney are Consigliares in the CFR

The Irrelevance of the Republican Partyhttp://chasvoice.blogspot.com/2011/11/irrelevance-of-republican-party.html

The Real Newt Gingrich Part 1
http://chasvoice.blogspot.com/2011/11/real-newt-gingrich-part-1.html

Comment by M, 11/29/2011:

It's hard to know exactly what Mr. Gingrich is thinking (ever). He's a one man idea machine, who never (ever) shuts up. One of his earlier brilliant ideas, (and his idea are all brilliant- just ask him) was to eliminate adolesence in the USA. (I was tuned into public radio and listened to him bloviate on this nonsense a few years ago.)

Newt Gingrich is like a political psychic... he makes a lot of non-senseical statements, but the media rarely (ever) calls him out on his B.S.  

Comment by HumorSeeker, 12/7/2011:

Great participation here, and some very funny comments.