By John Tamny of RealClearMarkets
Peter Morici is a renowned economist and University of Maryland professor of economic means who believes that the “trade deficit” was the “principal cause of the Great Recession”. He also believes that the deficit’s existence “threatens to stifle recovery and push unemployment above 10 percent through 2011.”
The irony in all this is that Professor Morici doubtless runs numerous trade “deficits” himself. Presumably he runs a deficit with the builder who put a roof over his head, with the automaker who built the car he drives, and with the grocery store whose items stock his refrigerator.
But do Morici’s deficits impoverish him? Far from it. In order to run those alleged deficits, he achieves surpluses with others. In his case, Professor Morici has a trade surplus with the University of Maryland, not to mention the likelihood that he has a trade surplus with a book publisher eager to publish his views on why the very trade “deficits” that allow him to pursue his comparative advantage (economic research) are bad for others.
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