Like the Japanese purchase of Rockefeller Center in the late 1980s, the announcement of a Chinese offer to purchase Unocal, the big oil company, has created a kerfuffle in the globaloney community. The mere prospect of a Chinese takeover – a competing bid exists from Chevron – is said to be more evidence that America’s wanton trade deficits, fueled by wanton tax cuts, risk handing powerful leverage over the country’s economy to foreign interests.

Never mind that the Japanese who invested in Rockefeller Center, Pebble Beach Golf Club, and other trophy real estate wound up taking a bath. The Chinese, Princeton economist Paul Krugman informed us in a recent New York Times column, are less likely to “squander” their money – as if anybody thought the Japanese were doing so.

“The more important difference from Japan’s investment,” Mr. Krugman hastened to add, “is that China, unlike Japan, really does seem to be emerging as America’s strategic rival and a competitor for scarce resources – which makes last week’s other big Chinese offer [China also made a bid for Maytag] more than just a business proposition.”

But that’s the sort of badly dated analysis you might have heard more than a century ago, when Germany, England, and France were racing to lock up colonial possessions on the theory that victory would go to the empire with the most “scarce resources.” As an economic historian like Mr. Krugman ought to know, the race doesn’t go to the country with the most resources. If it did, Russia, endowed with huge quantities of almost every conceivable natural resource, would now be no. 1.

The race goes to the country with the best system for unlocking the unlimited resource of its citizens’ ingenuity – i.e., the country with a political and economic system that poses the fewest barriers to innovation, competition, investment, and productive work. And that’s still, by all accounts, the United States.

But aren’t U.S. trade deficits a cause for concern in themselves, a sign of growing financial weakness and vulnerability? Well, they certainly might be – if the U.S. economy weren’t growing at a solid pace and unemployment weren’t down nearly everywhere except Michigan. The trade deficit mainly exists because most of the rest of the world finds safety in the dollar. They ship us goods; we ship them scraps of paper called dollars. Who’s the loser here?

The fact that country A has a so-called trade deficit with country B is irrelevant information in a global economy. Indeed, one likely reason China is showing an interest in direct investment in American companies is that the interest rates on U.S. bonds are at historically low levels – again, a potentially good sign, not necessarily a bad sign. If America’s trade deficit were really a sign of weakness, U.S. bonds would be selling at a much deeper discount.

But isn’t China keeping the value of its own currency unfairly low in order to stimulate exports? Perhaps, but to the extent that’s true, the ultimate victim is only likely to be China Inc., in the form of ruinous inflation. Besides, paying a huge premium for an oil company (most of Unocal’s reserves are in Asia) at a time when petroleum prices are nearing their historical high may not be the smartest bet – any more than buying Rockefeller Center was for Japan Inc.

Playing on public fears about trade deficits may be useful to ideologues like Mr. Krugman, corporate executives seeking an excuse for underperforming industries (ahem, fellow Detroiters), and politicians of both the left and right. But it isn’t very helpful in illuminating the real economic options.

Mr. Bray is a Detroit News columnist.