It appears that Pat Buchanan may indeed become the nominee of the Reform Party, making him a truly viable candidate for the presidency. He is asking the press and the public to stop the name-calling and start judging his policies. That seems only appropriate. What would be the effect of Pat Buchanan's policies on America? Today I'd like to focus on his trade policy.
Pat Buchanan believes that the American people would be better off if government prevented them from buying so many foreign goods. He believes such policies would create jobs and put America first. But would it?
Bruce Bartlett (National Center for Policy Analysis) argues that import restrictions or high tariffs would be harmful. Critics say that it would harm consumers by raising prices on foreign goods and limiting consumer choice. But Bartlett argues that it would also be harmful for American businesses.
Last year Americans imported $917 billion in goods, much from U.S.-owned companies in foreign countries. Of this, $270 billion was for capital goods (machinery and equipment) used by businesses to produce other goods. Only $217 billion was classified as consumer goods.
The effect of Pat Buchanan's protectionist policy would be counterproductive because it would raise the cost for U.S. businesses. Since most of these businesses are engaged in international trade, this would make them less competitive.
Bartlett points out that many Latin American countries used to practice what was called "import substitution." This was exactly what Pat Buchanan is prescribing. The policies raised the cost of doing business, made the companies less competitive, and reduced foreign investment in their countries. Soon they dropped their policies.
Bruce Bartlett raises some important questions about Pat Buchanan's trade policies. If Pat has answers, he needs to put them out soon or propose a new policy.
I'm Kerby Anderson of Probe Ministries, and that's my opinion.