I Would Be Richer If I Owned Your Assets

One of the most curious – and most mistaken – arguments that Ian Fletcher made during our debates on trade earlier this week at Hillsdale College occurred repeatedly during discussions of the trade deficit. One of the facts that I pointed out is that a U.S. trade deficit is good for the U.S. insofar as such a deficit means that capital is flowing into the U.S. and creates new businesses (or bolsters existing businesses). Think, for example, of BMW's factory in Greer, South Carolina, or of any of the many Ikea stores across the United States.