The Global Economy: Love It or It'll Leave You

Robert Samuelson gets it right again in today's edition of the Washington Post where his column defends free trade and encourages its promotion. Despite being whipped by protectionists as a device to benefit the wealthy at the expense of everyone else, trade is a two-way street.

While American consumers have absolutely benefited the rest of the world, the rest of the world has also helped the US create jobs as overseas markets become available. In fact global economic growth is now out-pacing America's, meaning that the rest of the world is helping the US get through a housing slump. The International Monetary Fund expects global economic growth to more than double the US in 2008.

But if we embrace a protectionist stance, such as what Congress has done by thus far refusing to approve free trace pacts with Peru, Panama, Columbia and South Korea?

All the ritualistic denunciations of globalization are not harmless. Psychology matters. If global investors fear that the United States might make its economy less open to foreign trade and investment, the result might be the very dollar panic that everyone fears. The dollar's status as the world's central international currency depends on its usefulness in buying and selling. The more we restrict, the less useful it becomes. Globalization's casual bashers should remember that. They think they're playing only to a domestic audience, but the world is listening, and it may not like what it hears.