<sigh> No. NO!!! It is "so good to have this kind of trade deficit" ONLY up to the moment that world affairs create a situation where some goods (or services, but it is usually goods) are absolutely essential to have; your country doesn't make those goods in any appreciable amounts; and the countries that have "comparative advantages" to manufacture those goods (whether or not they have any "absolute advantages" for any of them) will not sell you those goods - because... y'know... wars and stuff. Then, it's: "Can you gear up before the whole damn war is over, and you lost?"
It is utterly disingenuous, at an occasion of defining terms (most of this article), to then wave one's arms in magical ways that imply that simply defining the terms leads inexorably to POLICY CONCLUSIONS like "good to have!" (end of this article), thus OBSCURING the actual PROBLEM . <bigger sigh>
An inability to manufacture certain goods domestically may be bad, but it's not remotely the same thing as a trade deficit. Like those are just two different issues.
First, I did not say "inability". I said "...country doesn't make..." those goods - not country CAN'T make those goods. Whether we are talking computer chips, or steel, or refined specialty rare earth metals, or many, many other things, the US does not have an INABILITY to manufacture things. We largely do not make enough of certain things to survive sudden international conflict(s) because we PRESUME a world in which globalization of all things economic is a good idea... which is only true if one accepts the assumption that major war between major powers is "off the table". That was once a pretty good assumption, in the Cold War era - especially if one bought in, totally, to the nuclear weapons deterrence concept of "mutually assured destruction". But, as mankind is all too prone to doing, we have figured out how to wage war in ways that do not - at least immediately - suggest the inevitability of the use of nukes. Russia into Ukraine is a practical, lived-experience, example, and another is that, unless one has one's head in the sand, a China invasion of Taiwan is no longer unthinkable.
Where I agree with you, here, is that trade deficits and industrial policy are, indeed, two distinct things. Which is why I objected to your stating that a trade deficit (as you and, yes, many orthodox economists, define it) is "so good to have". In a world in which the underlying assumptions of globalization (especially, the "no wars that rise to a level of nuclear wars or World Wars") hold, a trade deficit, as you've correctly defined it, would be "so good to have". In the real world that we actually inhabit, though, a trade deficit with another major power and/or its allies is not "so good to have" - particularly if the trade deficit with any given rival country is based on trade in goods that would be essential to any war effort.
Your definition is not wrong. Your jumping FROM that definition itself to a judgment of "so good to have", without considering other factors of geopolitical economics, is the fatal flaw in your article.
<sigh> No. NO!!! It is "so good to have this kind of trade deficit" ONLY up to the moment that world affairs create a situation where some goods (or services, but it is usually goods) are absolutely essential to have; your country doesn't make those goods in any appreciable amounts; and the countries that have "comparative advantages" to manufacture those goods (whether or not they have any "absolute advantages" for any of them) will not sell you those goods - because... y'know... wars and stuff. Then, it's: "Can you gear up before the whole damn war is over, and you lost?"
It is utterly disingenuous, at an occasion of defining terms (most of this article), to then wave one's arms in magical ways that imply that simply defining the terms leads inexorably to POLICY CONCLUSIONS like "good to have!" (end of this article), thus OBSCURING the actual PROBLEM . <bigger sigh>
An inability to manufacture certain goods domestically may be bad, but it's not remotely the same thing as a trade deficit. Like those are just two different issues.
First, I did not say "inability". I said "...country doesn't make..." those goods - not country CAN'T make those goods. Whether we are talking computer chips, or steel, or refined specialty rare earth metals, or many, many other things, the US does not have an INABILITY to manufacture things. We largely do not make enough of certain things to survive sudden international conflict(s) because we PRESUME a world in which globalization of all things economic is a good idea... which is only true if one accepts the assumption that major war between major powers is "off the table". That was once a pretty good assumption, in the Cold War era - especially if one bought in, totally, to the nuclear weapons deterrence concept of "mutually assured destruction". But, as mankind is all too prone to doing, we have figured out how to wage war in ways that do not - at least immediately - suggest the inevitability of the use of nukes. Russia into Ukraine is a practical, lived-experience, example, and another is that, unless one has one's head in the sand, a China invasion of Taiwan is no longer unthinkable.
Where I agree with you, here, is that trade deficits and industrial policy are, indeed, two distinct things. Which is why I objected to your stating that a trade deficit (as you and, yes, many orthodox economists, define it) is "so good to have". In a world in which the underlying assumptions of globalization (especially, the "no wars that rise to a level of nuclear wars or World Wars") hold, a trade deficit, as you've correctly defined it, would be "so good to have". In the real world that we actually inhabit, though, a trade deficit with another major power and/or its allies is not "so good to have" - particularly if the trade deficit with any given rival country is based on trade in goods that would be essential to any war effort.
Your definition is not wrong. Your jumping FROM that definition itself to a judgment of "so good to have", without considering other factors of geopolitical economics, is the fatal flaw in your article.