What If?! The U.S. Had Balanced Trade With China??
When I was growing up, one of my favorite comic books was Marvel Comics' "What If?!" series. The basic premise of the series was to explore what would have happened had certain comic books heroes died sooner (or lived longer) than they did in the comics' normal running narratives. "What If?!" also occasionally delved into non-comics history, exploring alternative histories if World War II had turned out differently, and the like. In short, it was a pretty fun (and pretty heady) Saturday night plan for a nerdy 10 year old.
Our friends over at the Economic Policy Institute have a long-running series of trade policy papers that are very much in the best of the "What If?!" vein, except they have the advantage of being not about guys running around in spandex but about REAL STUFF.
In his latest paper on U.S.-China trade, EPI's Rob Scott looks at how many more U.S. manufacturing jobs could have been supported had the U.S. had balanced trade with China over the 1997-2006 period, rather than the over $237 billion trade deficit we have currently. He puts the number at a whopping 2,166,000 jobs - the bulk of that for the years since Congress granted "permanent normal trade relations" to China at the end of the Clinton administration. California, Texas, New York, Illinois and Pennsylvania missed out on the most job opportunities, while New Hampshire, North Carolina, California, Massachusetts and Rhode Island lost out on the most job opportunities as a share of its total employment. Check out the paper to see how your state stacks up.
Rob's "What If?!" work is very valuable, because balanced trade should be the norm to which we compare the current economic nightmare. In the words of my old prof Ajit Singh,
an efficient manufacturing sector is one that “not only satisfies the demands of consumers at home at least cost, but is also able to sell enough of its products abroad to pay for nation’s import requirements.” He adds the qualification that these objectives should be met at “socially acceptable levels of output, employment and the exchange rate.” See Ajit Singh, “Manufacturing and deindustrialization,” in John Eatwell, et. al., The New Palgrave: A Dictionary of Economics, Volume 3, (London: Macmillan, 1987.)
Knowing that over 2 million more good U.S. manufacturing jobs could have been created in a world of balanced China trade, how could anyone say that our current trade policies are "socially acceptable"?? To say so would sound like some comic book bunk.