Vice President JD Vance recently drew criticism for questioning the benefits of the dollar’s reserve currency status. In a 2023 interview, he argued that it encourages Americans to consume too much, describing it as a “resource curse.”
If you’ve followed Vance during his time in Congress, these comments are not particularly surprising. He has been one of the biggest proponents of rebalancing America’s relationship with the global economy through targeted industrial policy, much to the chagrin of the GOP establishment.
Naturally, the response from Vance’s free-trade critics was immediate and severe. They argued that cheap imports increase consumers’ purchasing power, while an economy organized around offering high-value services is not necessarily a sign of economic weakness. In their eyes, what Vance proposed amounts to a command-and-control economy, snuffing out economic opportunity and raising prices at a time when families can least afford it.
Contrary to his critics, Vance had the right general diagnosis, even if his prescription risks creating problems of its own.
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