The deficit is under your control. Do the right thing … whatever that is.

I just read in The New York Times that we’re once again facing a record trade deficit. The article (and the government) explain how important it is for China to fix their manipulative ways and to help slow down the loss of jobs and manufacturing from the US.

This victim mentality is odd, coming from a Government that has no trouble imposing its will on smaller countries when it suits our wishes. China’s a bit too big to invade, however.

Want to stem the job losses caused by outsourcing to China? The government can do it through tariffs and by limiting free trade. Business people can do it by simply deciding not to outsource. That would, of course, result in higher prices that consumers would have to be willing to pay for (I’d be willing to pay higher prices, if my job depended on it).

Remember that free trade is all about letting money flow to where things are cheapest, with no barriers. America has some of the highest paid workers in the world, so of course labor dollars will flow away from America. This is probably a good thing, globally, as it spreads the capital around, even though it hurts at home.

(Prices would be more sensible [read: higher] and the system would probably adjust faster if we combined free trade with political systems allowing the free movement of people. We only have cheap labor in China to begin with because the Chinese can’t freely immigrate and are stuck in a country where $5/day is a lot of money.)

So next time you shop at Wal-Mart, or go online to conveniently find the lowest prices, ponder that your decision to comparison shop is an important driver behind the loss of American jobs overseas.

P.S. The oil trade deficit comes from our energy policy. Read it and weep.

The other big source of the deficit is oil. We have only, only, only ourselves to blame on this one. Many of us have been clamoring for years for a real national energy policy. Instead, we have an energy policy written by oil companies, endorsed by a President who is either blind to long-term consequences of his policies, or who really doesn’t care about much other than accumulating wealth for himself (oil family, remember) and his friends.

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