Trump and Biden Both Get Globalization Wrong
Leaders of both parties agree: We must reduce globalization.
“China is ripping us on trade,” says Donald Trump.
Our trade deficit is “an immorality,” says Nancy Pelosi.
But it’s not.
In my new video, Scott Lincicome of the Cato Institute points out, “Selling us stuff is hardly ripping us off.”
He’s right.
Our video debunks common misunderstandings about trade.
Myth No. 1: America is “losing.”
People often say that because America runs a trade deficit.
But trade doesn’t need to balance. I have a trade deficit with my supermarket. They get more of my money every year. So, what? I don’t “lose.” I get food without having to grow it myself.
That’s a win for me and the food producer regardless of whether the food was grown locally or came from Mexico.
“Imports are great,” says Lincicome. “It means I can focus on what I want to do for a living and not go make my own food or make my own clothes. I can use those savings and buy other things that makes me better off.”
As long as trade is voluntary, trade is a win for both parties. It has to be; neither side would agree to it unless they think they get something out of the deal.
Myth No. 2: Imports take jobs from Americans.
Globalization “moved so many jobs and so much wealth out of our country,” says Trump. “Workers have seen the jobs they love shipped thousands and thousands of miles away.”
I say to Lincicome, “Some people do lose jobs.”
“True,” he replies, “We lose about 5 million jobs every month.”
But trade isn’t the main reason. “Jobs are lost due to…changing consumer tastes and from innovation. We make more stuff with fewer workers. That’s productivity.”
Productivity increases are good.
Trade and productivity improvements are reasons why the number of Americans who do have jobs has ris
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