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Jewish World Review Sept. 23, 1999 /13 Tishrei, 5760

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Econophone

The Pat Buchanan dilemma

http://www.jewishworldreview.com -- IT IS HARD to imagine that Pat Buchanan wants to help elect a liberal Democrat to the White House next year by splitting the conservative vote. That would allow another liberal president to appoint three or more liberals to the Supreme Court, to spend decades of the next millennium turning criminals loose to commit more muggings, rapes and murders.

That is surely not what Pat Buchanan wants. Nor is he likely to relish what a resurgence of liberalism in Washington would mean to our military security, our failing schools and the continuing degeneration of American culture.

Buchanan has referred to the possibility of building up the Reform Party as a long-run challenger to the Democrats and Republicans. But you have to get through the short run to get to the long run -- and the lasting damage done in the short run may be irreparable, even if Buchanan's long run scenario works out.

Pat Buchanan refers to himself as a "nationalist." But nationalists have usually been of two sorts -- those trying to create a nation by gaining independence from an imperial power and those trying to impose their nation's will on other nations. Nehru was a nationalist in the first sense and Hitler in the second.

Buchanan is like neither of these. He wants to preserve the United States as a sovereign nation and to restore a sense of its special achievements as a free country and a decent and humane society. He believes that the American government exists to serve the American people, not to engage in global adventures or promote world government. Buchanan is a patriot, not a nationalist.

Unfortunately, patriots are not immune to being very wrong on particular issues, as Buchanan is painfully wrong on international trade. It is one thing to be against the global adventurism implied in the phrase "new world order" -- a phrase left over from the Nazis -- and it is something else to be confused about the economics of international trade.

Contrary to what Pat Buchanan, Ross Perot, and other opponents of free trade said before the North American Free Trade Agreement was passed, there has been no "giant sucking sound" as American jobs left for Mexico and other countries with lower wages. We have had more jobs created since NAFTA was passed and lower unemployment rates than we have seen in years.

None of this should be surprising to anyone familiar with either economics or history. International trade is not a zero-sum game, where one nation loses what the other gains. Like other trade, international trade takes place only when both parties benefit. There is no fixed number of jobs to fight over.

When one country becomes more prosperous, it creates more jobs producing the things it can buy with its greater affluence. When two countries become more prosperous by trading with each other, they both create more jobs.

Nor does it do any good to scare people with bogey-man words like "trade deficit" or "debtor nation." The benefits of international trade do not depend on whether you have more imports or exports. Countries have prospered with either an import surplus or an export surplus -- or have failed to prosper with either one.

As for being a debtor nation, this is an accounting technicality that is completely misleading when applied to international transactions, as if it was like an individual going into hock. The United States has been a debtor nation for most of its history -- and it has had the highest standard of living in the world for most of its history.

Every time someone in another country sends his money to the United States, we are automatically in debt to that person, since it is still his money.

The more prosperous and safe the American economy is, the more people in other countries want to put their money in American banks and buy stocks in American corporations.

Foreigners invested $12 billion dollars in U.S. businesses in 1980 and more than $200 billion by 1998. This growing "debt" created more American wealth and more American jobs. This too was not a zero-sum game, since both the American economy and the foreign investors gained, because there was a bigger pie to slice.

While Pat Buchanan is out of step with the prevailing views of the Republican Party, neither would he be in the mainstream of the Reform Party. He is a man of words and ideas -- some of them ideas much needed to counter dangerous trends in American society. It is hard to see what he can accomplish as a politician that is more important than what he can accomplish as a man of ideas.


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©1999, Creators Syndicate