Among the most frequent claims of “common good capitalists” is the claim that American workers have been, and continue to be, denied their fair share of the fruits of economic growth in recent decades. Senator [Marco] Rubio insists they are American workersSufferingOren Cass argues that the wages of American workersInhibitorHe said. This pain and stagnation, in turn, is called – for example, by This study of the American compass – Lower incomes for middle-income families and increased economic inequality.
These and related claims have been repeatedly debunked by serious academics who, unlike most “regular good capitalists,” have a deep knowledge of the data and interpret it competently. Especially consult the work Scott Winshipof Michael Strynand the Phil Gramm, Robert Ekelund, and John First. Any assertion by “common good capitalists” about ordinary Americans being desperate and in decline is wrong, and spectacularly so. It is a far cry from ordinary Americans who have been oppressed by globalization and the entrepreneurial movement of the past few decades.Unauthorized creation“Economic opportunities for ordinary Americans have expanded and their living standards have risen.
For example, consider this fascinating fact, supported by data, described by Gramm, Ekelund, and Earley:
When inflation is fully accounted for for the extraordinary improvements in our well-being from new and improved products, over the past fifty years, all but 6.2 percent of households in 2017 had incomes that would have placed them in the top quintile in 1967.
Or consider Michael Strain’s summary of his well-documented findings:
A country as large as ours, where citizens have such diverse experiences, makes it difficult to generalize. But today’s pervasive narrative is so rigid that the task of generalization becomes too easy. The narrative is wrong. America is upwardly mobile, especially for those at the bottom of the income distribution. Incomes are not static. Workers enjoy the fruits of their labor. The argument that life hasn’t improved for the average family for decades is bound up with rationality.
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The “common good capitalists” indifference to information is combined with a ridiculous failure of basic economics. One such frequent fallacy is the assertion that US trade deficits represent, or cause, a net reduction in demand for US-made goods. As Oren Cass put it One 2019 New York Times op-ed, “More trade is good, if that trade is balanced. But large trade deficits indicate supplies [produced by] Foreign workers enter the US market from afar without a commensurate increase in foreign demand for what US workers produce.
This claim is based on the premise of fact and error.
It is actually false because most of the dollars that foreigners do not spend to buy US exports are returned to the US. They do it as an investment. And these foreign investment dollars fuel the “demand for what American workers produce” no less than the dollars used to buy American exports. As always, it can fuel this desire directly. Dutch company Ikea It will use the dollars to build a new store in the US. Or it may indirectly exacerbate this demand, as when non-Americans buy US government bonds, the proceeds of which sell to increase the spending power of the US government, which is used for military equipment or welfare programs. The key fact that Mr. Casa and other “crowd capitalists” miss is that foreigners receive dollars when they are exported, not because foreigners want to hoard pictures of dead American governments, but because foreigners want to spend them. or investing Those dollars in the US.
The flawed premise in Mr. Cass’s claim, by contrast, is that Americans are harmed if foreigners literally or figuratively stuff most or all of their dollars into mattresses. If they are foreigners They were. Refusing to spend or invest their dollars in the US is the best of all possible worlds for us Americans, business wise. We Americans get richer at the (voluntary) expense of foreigners.
The cost of printing a $100 bill is 17 cents.. Therefore if so Foreigners hoard their dollars, we spend only $1,700 on every hundred dollar receipts for every million dollars worth of goods – we Americans make a nice profit of $998,300 on every $1,000,000 you buy. In contrast, in terms of the value of imported goods and services, the rate of revenue from trade with foreign nationals is 58,724 percent! This rate of return will be even higher if we pay with lower bills (those costing less than $100 to produce).
It is beyond me that we Americans would be reduced to poverty if foreigners sold us goods and services worth only the linen and cotton cloths we produce at low cost. Alas, though, foreigners are like us: they produce and sell in exchange for dollars only because they want to spend or invest those dollars, ultimately in America. And foreign dollar spending and investment creates demand for American labor.
