Americans who want to stop the world fear that the nation either already is or is destined to become a victim of globalization. Such pessimism seems downright un-American. It is also fundamentally illogical. After all, much of globalization amounts to Americanization — as numerous foreign critics have ruefully observed. The United States has long been the biggest, most open, most market-oriented and most competitive economy on earth. Globalization is now spreading these practices to the rest of the world, creating a huge, open, competitive global marketplace. But Americans are past masters of this game. How can we lose if the rest of the world decides to play on our field?
Yes, this is the same Alan Blinder who sometimes is cited as being one of the economists who is willing to break with the conventional wisdom on trade. Rumors of his apostasy have been greatly exaggerated.
One further point that I would make is that our non-oil trade balance is slowly improving, and if it were not for that. Putting on my Keynesian hat, I would say that without the trade sector, the recession that everyone is worried about would already have started and the outlook for 2008 would be even dicier. So we should pray that nothing happens this year to cause international trade to seize up.