Trade Deficit

This morning I read that the trade deficit has begun to narrow.

U.S. Trade Deficit Narrows Slightly

This is a good piece of information but of course the dreaded asterisk is added to the story. We still have the third highest deficit on record. Doesn't that stand to reason based on a theory called inflation?

There is another part of this article that really makes me question people's understanding of the economy. The article states: "The soaring trade deficits are being used by Democrats as evidence that President Bush's policies of striking free trade agreements around the world have failed to protect American workers from unfair competition from low-wage countries such as China. They blame the loss of 3 million U.S. manufacturing jobs since mid-2000 on trade liberalization policies that have allowed U.S. companies to move factories overseas." This statement makes no sense to me. Our unemployment rate still sits at very low levels compared to historical averages. Our economy has been creating jobs for the last two years. Lastly, the Democrats strongly support the union policies that make our workers unable to compete with foreign labor.

Just seems to me that the Democrats are playing on the fact that many don't understand economic numbers. What are your thoughts?