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Trump Gets It Right: Trade Was a Loser For All Except the Most Wealthy Americans
Robert B. Zoellick, wrote an opinion piece entitled “Trump Gets It Wrong: Trade Is a Winner for Americans” (WSJ, 8/8/2016). Mr.Zoellick is a lawyer with a J.D. degree from Harvard. From 2001to 2005, he was the United States Trade Representative under President GW Bush. Prior to that, from 1993 through 1997, he served under Pres. Bill Clinton as an Executive Vice President at Fannie Mae for two years. He served as the lead State Department official in the negotiations of the North American Free Trade Agreement and the Uruguay Round which created the World Trade Organization. He helped launch the Asia Pacific Economic Cooperation group. From 1985 to 1988, under Pres. Reagan, he served in the Department of the Treasury in various positions, including Counselor to the Secretary, Executive Secretary and Deputy Assistant Secretary for Financial Institutions Policy. He served as the Chairman of International Advisors at The Goldman Sachs Group, Inc., from June 2006 to 2007 He actively supported Romney in 2012. He was rewarded by Pres. G. W. Bush with a five year stint as the head of the World Bank at about $800,000 per year. He is clearly a guy who knows how to ingratiate himself with politicians of both parties.
He writes that “55% of registered voters think free trade is good for America because it opens up markets for U.S. goods”. Citing other polls, the writes that “Republicans would be prudent not to assume voters will join Mr. Trump’s retreat on trade.” Unfortunately, he may be right on that; we shall see. He declares that American manufacturers have benefitted from the free trade deals through lower costs and so have American consumers through lower prices, averaging savings according to one study of about $10,000 per household. U.S. multinationals make about “57 % of U.S. capital investment, and are the source of 83% of private R&D.” “Americans are not losers. But some Americans lose out because economic forces and misfortunes can overwhelm them. Whoever becomes the next President should help people adjust to change, not pretend that change can be prevented.”
Zoellick is not an economist and unfortunately does not display how much economic knowledge he lacks. If he were to look at the Gross Domestic Product data published by the U.S. Department of commerce, he would know that the U.S. trade deficits have been increasing for more than two decades and have diminished total GDP by an average of 3% a year, so that our economy could be growing at double the rate we actually experienced for two decades. Here is the data he should be aware of:
Gross Domestic Product and Net Exports (1996 – 2015)
[Billions of chained (2009) dollars]
As the foregoing table shows, GDP growth would have been more than double that actual growth rate every year if our international trade had been international trade had been in balance each year since 1996. The ills of our economy, slow growth, loss of manufacturing jobs, stagnant incomes for the lower middle class, movement of millions out of the labor force were largely caused by the trade deficits. And government officials like Mr. Zoellick and global-oriented Congressmen, Senators, and Presidents, as candidate Trump suggests, are largely responsible.
Comment by Steve Talbot, 9/29/2016:
While I agree with your conclusion, you haven't really proven your point. You simply state an unsupported conclusion. You leave readers hanging on the question, "How do you know this?" or "Why should I believe this?"
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