Why Do Protectionists Like High Oil Prices?
Derek Scissors /
America’s trade deficit rose in January. Many times an expanding trade deficit indicates an expanding economy and more American jobs. In January, this may not have been true. The single biggest factor in pushing the trade deficit higher in January was higher oil prices. Unfortunately, these may also push the trade deficit higher in February, March, and perhaps beyond.
Protectionists who don’t want to let Americans freely make their own choices are already vocal in denouncing the higher trade deficit. This is actually a bit strange, since the January deficit looks like the sort that could be created by protectionist policies. Here’s how. (more…)