The danger of mercantilism
Russell Roberts, a former St. Louisan who now teaches economics at George Washington University, is worried about a resurgence of mercantilism. He writes in an article on Foreign Policy magazine’s Web site:
But when you hear U.S. presidential candidates start to mouth off about free trade, watch your wallet: A discredited 14th-century theory of economics is enjoying a dangerous renaissance in the 2008 campaign.
In case you’re not familiar with the concept of mercantilism, Roberts explains it:
Politicians are always talking about the necessity of other countries’ opening their markets to American products. They never mention the virtues of opening U.S. markets to foreign products.
This perspective on imports and exports is called mercantilism. It goes back to the 14th century and has about as much intellectual rigor as alchemy, another landmark of the pre-Enlightenment era.
Roberts goes on to skewer the popular notion that trade destroys jobs:
In a recent Republican presidential debate, one of the moderators said that since 1989, the United States has lost 5 million jobs to foreign trade. He wanted to know what the candidates were going to do about it.
I have no idea how you measure that number, but the implication was that 5 million lost jobs over 18 years is a big number. Five million is a large number if we’re talking about the number of pennies I have to carry in my pockets. It’s a big number if we’re talking about the number of people coming to my kid’s birthday party. But it’s a very small number when you’re talking about job destruction and the job creation that follows in a dynamic economy.
Labor Department figures, he says, show that in the fourth quarter of 2006, 7.2 million jobs were destroyed and 7.7 million were created. The amount of churn in the economy is large for all sorts of reasons, including new technologies and changing tastes. Trade is only part of that picture. Over the past 30 years, Roberts notes, the U.S. has had a net gain of 50 million jobs.
Somehow, that fact never gets mentioned in the political debates.
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David Nicklaus has covered St. Louis business for more than 25 years. His column appears three days a week on the Post-Dispatch business page. 
Jobs lost as the result of foreign trade are usually a lot more visible than jobs created as the result of foreign trade.
One result of the dollar being devalued, and large amounts of U.S. debt being accumulated by foreigners, is that it will increase the demand for jobs in U.S. exporting industries. The economic challenge in the future will not so much be one of unemployment, but rather one of inflation as the result, and even tight monetary policy won’t entirely prevent it.