The mythology and scare tactics of the trade deficit hawks

Would you rather sell China toys & clothes, or services in finance, law, education, engineering and technology? And would you rather you and your children be paid more like those Chinese factory workers, or professionals in the aforementioned service sectors?

If you prefer the latter, then you should not be wringing your hands over the trade deficit with China, but doing handsprings over the capital surplus the U.S. enjoys with that country:

The Commerce Department's Bureau of Economic Analysis calculates that America's service sector had a $3.7 billion trade surplus with China last year. In 2005 the surplus was $2.4 billion, up from $515 million in 1992. U.S. service exports cover a wide range of economic activities, from parcel shipping to investment banking. Education is one of America's top service exports (a $1 billion surplus). Advertising, technology, legal services, industrial engineering and other "business, professional and technical services" account for just over a third of the U.S. surplus, and financial services, for another $480 million.

China is now the ninth largest purchaser of American services. And the U.S. surplus could grow bigger if China meets all of its World Trade Organization commitments and opens its markets further. According to a study prepared late last year by Oxford Economics for the U.S.-China Business Council, America's service-trade surplus could reach $15 billion a year by 2015.

In my late teens, I worked in a dusty hot warehouse for roughly $3 per hour. I've since found that working in an office for $3 per minute is better.