President Trump’s preoccupation with the trade deficit is maddening to professional economists, who understand, as he apparently doesn’t, that it measures nothing useful. But there might not be a trade deficit today—that is, the government wouldn’t be tracking it—had an earlier generation’s economists had the courage of their convictions.
America faced a dollar-flow deficit in the early 1970s—more greenbacks were flowing out of the country along trade and investment channels than in. The causes were multiple, from a surge...