Leaders of both parties agree: we must reduce globalization.
“China is robbing us of trade,” says Donald Trump.
Our trade deficit is “an immorality,” says Nancy Pelosi.
But it isn’t.
In my new video, Scott Lincicome of the Cato Institute points out, “Selling us stuff hardly robs us.”
He’s right.
Our video dispels the most common misconceptions about trading.
Myth no. 1: America is “losing.”
People often say this because America has a trade deficit.
But trade does not need balance. I have a trade deficit with my supermarket. They get more money every year. So? I don’t “lose”. I get my own food without having to grow it myself.
This is a win for me AND the food producer regardless of whether the food is grown locally or comes from Mexico.
“Imports are great,” says Lincicome. “It means I can focus on what I want to do for a living and not go out and make my own food or clothes. I can use those savings and buy other things that make me feel better.”
As long as trade is voluntary, trade is a win-win for both parties. It must be; neither party would accept unless they thought they would get something out of the deal.
Myth no. 2: Imports take away jobs from Americans.
Globalization “has moved so many jobs and so much wealth out of our country,” Trump says. “Workers have seen the jobs they love shipped thousands and thousands of miles away.”
I tell Lincicome: “Some people lose their jobs.”
“It’s true,” he replies, “every month we lose about 5 million jobs.”
But trade is not the main reason. “Jobs are being lost due to… changing consumer tastes and innovation. We make more things with fewer workers. That’s productivity.”
Productivity increases are positive.
Improvements in trade and productivity are the reasons the number of Americans who have jobs have done so increased.
“We are at historically high levels of job opportunities in manufacturing,” says Lincicome, “Manufacturers in the U.S. say they can’t find enough workers.”
Trade allows Americans to focus on what we do best. Sixty percent of new American jobs come from companies engaged in international trade.
But Trump says: “We don’t do anything anymore!”
President Joe Biden agrees: “American manufacturing, the backbone of our economy, has been hollowed out!”
This is myth number 3.
Manufacturing production in the United States is near its all-time high. We earn more than Japan, Germany, India and South Korea combined.
Fortunately, real life ignores politicians’ ignorance.
Myth no. 4: Trade and open markets create “a race to the bottom.”
This is how Jon Stewart denounces globalization on his show, saying: “Globalization has allowed companies to scour the planet for the cheapest labor and loosest regulations!”
This is true; companies do it. But Lincicome responds: “This ‘race to the bottom’ is a myth. We Americans are spoiled. We look at jobs in developing countries, at factory jobs, and say, ‘Oh, how terrible it is that these people work for such a low salary’. wages.’ But the reality is that they aalternatives they are much, much worse…subsistence farming…sex work.”
Trade is what enables people in poor countries leak subsistence farming and sex work.
And also child labor.
“No parent wants their children to go to a factory or farm,” Lincicome points out. “They do it because they have no choice. As we get richer, child labor disappears…Factory owners in Vietnam now complain that children nowadays…don’t want to work in the textile factory. This is not good for that factory owner, but that’s great for those workers!”
Myth no. 5: Globalization destroys the environment.
“It is undeniably true that when a nation begins its development path, it will pollute more,” admits Lincicome. “But as countries get richer, they also get better environmentally.”
Only when people become rich enough to think beyond their next meal will we start to care about the environment. This is why pollution is decreasing in America and other capitalist countries.
“The best thing we can do for the developing world is to help countries get rich,” Lincicome says. “Globalization is part of this recipe.”
Trade is a win-win. It gives us more things at lower prices.
The more we trade, the better.
COPYRIGHT 2024 BY JFS PRODUCTIONS INC.