Both candidates indulge the superstition that while exports are good, imports and outsourcing are bad. In reality, it makes no sense to make something at home if we can buy it cheaper from elsewhere. The point of producing is to allow consumption. Raising the cost of consumer goods by shutting out imports makes us poorer, not richer.
Outsourcing is a competitive necessity in a global economy. If a U.S. firm can't compete with companies producing in Mexico or China, it's wiser to relocate its factories abroad than to go on losing money here.
The assumption promoted by Obama and Romney is that unless we act against the Chinese, our manufacturers will be unable to compete. In fact, the value of American manufactured goods, adjusted for inflation, has risen by 10 percent over the past decade.
That's easy to forget because the number of jobs has shrunk -- a consequence of rising productivity, which allows companies to do more with less. Another reason it's easy to forget is that Chinese output has grown. But as of 2010, the World Bank says, the U.S. remains the world's biggest manufacturer. And we are far better off with China exporting manufactures than exporting virtually nothing, as was the case a generation ago.
If there is any good news about the candidates, it's that their policies will most likely be better than their rhetoric. Aside from tires, Obama has generally avoided protectionism, while signing free-trade deals with South Korea, Panama and Colombia.
Romney will hear from plenty of Republican CEOs who favor freer trade. Few experts believe he will keep his pledge to label China a currency manipulator, setting off a trade war. Obama, after all, slammed President George W. Bush for failing to do so -- but followed suit.
Usually, we yearn to believe that presidential candidates are telling the truth. When it comes to trade, we can hope they're lying.
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