Enough Magical Thinking on Trade

In his Financial Times column Adam Posen gets out the old trade magic story, throwing away conventional economic to make bizarre arguments about trade's wondrous impact on the U.S. economy. Among other things, he tells readers:

"Econometric studies have established that when US companies invest abroad, the net result is increased employment, stronger demand and more investment at home. This makes sense, since it should on average be the more competitive businesses that have the resources and...