New York Times economics columnist Jeff Madrick argued that American foreign policy hurts the domestic economy. In his role as the New School’s president, former U.S. Senator Bob Kerry was the master of ceremonies for this lecture, which is the first of a series of NASDAQ Economic Policy seminars.
Madrick sounded like a West Village liberal complaining about the Bush Administration. He complained about U.S. unilateralism dealing with the Iraq conflict, the ABM Treaty, Kyoto environmental protocol and differences from Clinton’s policies. Madrick said negative opinions about America will hurt international trade. While this argument is plausible, are consumers really making buying decisions based on these feelings?
A more believable hypothesis is that foreign policy has increased international instability and increased worldwide defense spending. More danger and risk means higher trading costs and decreased investment. Madrick also stated that increased defense spending means governments allocate less money for everything else.
Unfortunately, Madrick did not go into the numbers. The presentation was heavy on rhetoric and light hard facts.