Both parties are dead wrong about the costs and benefits of global trade – Orange County Register

Leaders from both parties agree: we must reduce globalization.

“China is tearing us apart 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 isn’t ripping us off. »

He is right.

Our video demystifies common misunderstandings about trading.

Myth #1: America is “losing.”

People often say this because America has a trade deficit.

But trade does not need to be balanced. 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.

It’s a victory for me And the food producer, 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 in life and not prepare my own food or clothes. I can use these savings and buy other things that improve my situation.

As long as trade remains voluntary, it is a win for both parties. It must ; neither side would agree to it unless they thought they would get something out of the deal.

Myth #2: Imports cost Americans jobs.

Globalization “has taken so many jobs and so much wealth out of our country,” Trump says. “Workers saw the jobs they loved shipped thousands and thousands of miles away. »

I said to Lincicome: “Some people are losing their jobs. »

“It’s true,” he replies, “we’re losing about 5 million jobs every month. »

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. It’s productivity.

Productivity increases are good.

Improvements in trade and productivity are why the number of Americans who have jobs has increased. resurrected.

“We are at a historically high level of job openings in manufacturing,” Lincicome says. “Manufacturers in the United States 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’re not producing anything anymore!” »

President Joe Biden agrees: “America’s manufacturing sector, 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 produce more than Japan, Germany, India and South Korea combined.

Fortunately, real life ignores the ignorance of politicians.

Myth #4: Trade and open markets create a “race to the bottom.”

This is how Jon Stewart denounces globalization in his show: “Globalization has allowed companies to travel the planet in search of the cheapest labor and the most flexible regulations! »

It’s true; companies do that. But Lincicome responds: “This ‘levelling down’ is a myth. We Americans are spoiled. We look at jobs in developing countries, at jobs in factories, and say, “Oh, how terrible that these people work for such low wages.” » But the reality is that their alternatives are much, much worse…subsistence farming…sex work.

Trade is what allows people in poor countries escape subsistence farming and sex work.

And child labor too.

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