If trade made the US rich, explain this graph
At the New York Times, Thomas L. Friedman claims that "[w]e got rich as a country through trade."
Undoubtedly all mainstream economists would agree with him. So would probably most alternative economists.
So, if what Friedman says it true, how does he – or anyone else – explain the following graph?
The more the U.S. trades, the lower its GDP growth becomes. It's a simple, yet profound and fundamental, relationship that is highly statistically significant and that holds over the entire post WWII period.
America became rich under economic nationalism. Its growth has progressively stalled and is effectively flatlining under an increasing trade regime. In the early 1960s, trade made up just 9% of U.S. GDP, and growth was rapid. As of the mid-2010s, trade constitutes 30% of GDP, and growth is nonexistent.
There is no need, nor desire, to see the vigorous hand-waving that always occurs whenever such basic questions are asked. The adherents of trade religion inevitably bring out their calls to authority (which are, of course, logical fallacies) and theoretical frameworks. And please, no econometric multiple regression snake oil trying to show that what is going backward is actually going forward via the judicious selection of variables.
If your argument is founded on logical fallacies and theories that do not match reality, perhaps the belief is wrong. It goes without saying that the situation is complex, but to some extent, that is irrelevant. The result is what matters, and for as far as reliable records go back, the result is wrong.
Too bad the United States wasted many trillions in lost economic growth on junk theories of macroeconomics over the past half-century. If the Democratic attorneys general are looking to prosecute the promotion of junk science, rather than persecuting climate skeptics, they can instead start with trade-promoting economists and their allies in the pundit class who made wild promises of untold riches that failed to come true. These economists and commentators have done more real damage to the American public and national fabric than any climate "deniers" could ever accomplish.
So much for that settled trade science.