The reason the third presidential debate got so loud is that the only way Barack Obama and Mitt Romney could distinguish themselves from each other was by their decibel level.
Take trade: Both candidates agreed about the need for energy independence, fewer imports, and—above all—more retaliation against Chinese currency manipulation.
They are both wrong. But Romney's shrillness on China is more troubling. Obama is only pandering to his party's base, but Romney seems at odds with his party's free-trade beliefs.
Every president since Richard Nixon has promised and failed to deliver energy independence—and that's a good thing. When America imports more oil than it produces, it's usually because foreign oil is cheaper. Attempts to ramp up domestic energy production artificially—through subsidies and politically correct renewables such as wind or solar (Democratic plan) or ethanol (Romney's promise)—only makes American consumers poorer and kills American jobs by drawing resources away from their most productive uses. There is only one noble goal for any energy policy: cheaper, baby, cheaper.
Equally illiterate is the notion that the hoarding of dollars—by selling more to other countries (exports) than we buy from them (imports)—is the road to riches. Adam Smith debunked this mercantilist fallacy over 200 years ago pointing out that countries maximize their wealth when they trade what they value less for what they value more—whether money or wine.
Yet this fallacy lived on as Romney and Obama each strove to out-China-bash the other. Obama bragged that he had imposed tariffs to deter Chinese tire imports and, with his auto bailout, was selling cars to China rather than buying them from it (a claim that is both false and silly).
Romney harrumphed that Obama hadn't done enough to stop China from taking away American jobs by deliberately undervaluing the renminbi to keep its exports cheap. He promised to declare China a "currency manipulator" on day one, something candidate Obama promised in 2008 but never did.
One silver lining was that both men refrained from recycling the trope du jour of the last election, that Chinese ownership of U.S. debt meant China could decimate America's economy by dumping American bonds at will—never mind that this would also decimate the value of its own holdings. Romney even suggested—rightly—that the power in the China-U.S. relationship was on America's side. Hence, retaliation against China wouldn't trigger a trade war, because that would hurt China's trade-dependent economy far more than America's domestic-oriented one.
But just because China is in no position to retaliate in kind, does it mean that Romney's plan to declare it a currency manipulator and impose sanctions a good one? No. Tariffs on foreign goods hurt American consumers by leaving them with higher prices and inferior goods. And there are more consumers who benefit from Chinese currency manipulation than producers hurt by it. But would a higher renminbi produce more export jobs in the United States? Not necessarily.
A higher renminbi would lower the cost of China's manufacturing inputs—capital goods, oil, raw materials. This means the final prices on Chinese finished products would not change much, nor would the competitiveness of American goods increase significantly. What's more, plenty of American jobs are in import-dependent industries that are harmed by a weaker dollar. Our trade deficit with China allows China to reinvest its surplus dollars in U.S. plants, assets, and debt—all of which provide employment to Americans.
At best, anti-China sanctions are useless. At worst, they are harmful. Many Republicans are therefore uncomfortable with Romney's tirades. House Speaker John Boehner, Florida's Republican Sen. Marco Rubio, and the conservative Club for Growth have all distanced themselves from Romney's position on China, warning that anti-China sanctions would hurt growth.
Romney is the most protectionist GOP presidential candidate in living memory. Odds are he'll be more temperate in office—especially because acting on his bellicosity would require picking an immediate fight with his own party. Still, having campaigned on a protectionist message, he has neutered his ability to champion free trade if he wins. And that's a great pity.
This column originally appeared in The Washington Examiner.