Ezra Klein finds the distinction between domestic and foreign policy “ridiculous”:
In a world where a bank can simply uproot its headquarters and head to London or Hong Kong or Singapore, regulators need to worry about driving banks in unregulated havens where they’ll be even more dangerous, and so they need to work with their counterparts in other countries to achieve some minimum standards of regulations. Dealing with the international spillovers of the financial system would be an excellent topic for the foreign-policy debate to cover. But financial regulation is “domestic policy.”
You can go down the list. Gas prices are set on a global market. Flu pandemics with the possibility to kill thousands or even millions of Americans begin on farms in Asia. Food safety is no longer a domestic question when you’re importing your grapes from Chile. The climate heats whether your greenhouse gases are coming from Minnesota or Malaysia. Interest rates are driven by foreign demand for U.S. debt. “Talking about economic policy and stopping at the borders doesn’t make a lot of sense,” says Simon Johnson, an MIT economist who previously served as chief economist at the World Bank.