Carlinomics

"It's all about stuff." -- George Carlin

   What is a trade gap and why is it "bad"?
   Some folks would have us believe that a negative balance of trade is somehow evil incarnate, and a nation must avoid it at any cost or face bankruptcy and extinction.
   At root, a trade gap is when we buy more stuff from them than they buy from use, and therefore "they," whoever they are and whatever nation they occupy, are somehow defeating us and that situation must change.
   To the ultranationalists, the other way around is better. The important thing is to win, and the way to do that is for us to sell more stuff to them than they buy from us. That way, we collect all the money, and therefore we win.
   A nice thought, but if we have all the money, it follows that they have none, and therefore cannot buy any more stuff from us. Likewise, if they have all the stuff, we would have none.
   Therefore, one side goes hungry and cold.

   Consider this, from what might be called the George Carlin School of Economics: "It's all about stuff," as the comedian put it for one of his sketches.
   Or, from an economist's viewpoint, each side has stuff. But each side has more stuff than they need, so they offer to trade. I have more of this kind of stuff, but not enough of some other kind of stuff. But the other side says I don't need any more of that kind of stuff. I need this kind of stuff, but you don't have any
   It turns out, however, that a third party has an excess of this kind of stuff, but doesn't need the kind of stuff that the first party has. So the three sides get together and invent money.
   One definition of money is anything that facilitates trade, which then enables the three parties to do business, trading stuff for money, and then money for some other kind of stuff.
   Simplistic, yes, but that's the way things work in the wacky world of economics.
   Eventually, while there may be some lags in the three-way trading, all things balance.
   
   In politics, there are winners and losers. In economics, every side benefits and there are no losers.
   Political leaders, however, insist on winning. There must be a winner in everything, and for that to happen, there must be a loser.
   In the economic short term, there may indeed be winners and losers as people compete, selling some of their stuff and collecting money from others. Over time, however, all things will balance and everyone benefits.
   If one side wins all the money but has no stuff -- including foodstuff, clothing stuff and shelter stuff -- they are the worse for it. Conversely, if another side has all the stuff but no money, they will soon use up all the food, clothing and shelter stuff, and won't be able to acquire more.
   What happens then, unfortunately, is war.
   Currently, there are too many nations, including the U.S., where politics is dominated by those whose only goal is winning. There is no room for cooperation and mutual benefit  from fair trade.
   For them, international trade is useful only as a way to win.
   That way madness lies.
   Politics and economics are like love and marriage. You can't have one without the other, but unless there is mutual understanding, respect and cooperation, the relationship is doomed.