I ran across a Gallup poll today that found 50 percent of Americans believe China is the world’s leading economic power. Fifty percent. Only 34 percent believe the United States is the world’s most powerful economy, despite every shred of evidence available. The idea that a plurality of Americans believe we’re worse off than China helps explains a lot about the anxiety of voters.
Politicians could argue, of course, that Americans should be rooting for China (and Mexico, etc.) to build a wealthy and stable economy, considering it’s not only beneficial for the Chinese people and for the spread of liberalism, but for American consumers and workers. China is our third-largest trading partner. But imagine a “Go China!” pitch at a campaign rally of socialists or Trumpkins—or anyone else, for that matter. Democracy propels a perpetual loop of paranoia.
The idea that international trade is solely a competition rather than mutually beneficial is embedded in politics. To think otherwise makes you an unsympathetic elitist bloodsucker. And because the benefits of trade inevitably, if often temporarily, displace some of the working class, we now let that working class drive economic debate.
But if we’re going to judge the world in this way, someone might point out to voters that Credit Suisse found that American private wealth was at $85.9 trillion while Chinese private wealth at $22.8 trillion. (Although I imagine even saying the words “Credit Suisse” would make you a lily-livered GOPe globalist these days.)
When it comes to GDP per capita, the World Bank puts the United States at $54,629 and China at $7,590. (China’s income inequality gap, which seems to matter to people, is wider than the United States’s.) Although the nearly eight years of progressive economics creeping into U.S. policy has degraded economic freedom, the World Economic Forum still ranks the U.S. economy as the third most competitive in the world. China is 28th. I could dig up another 100 metrics of wealth and well-being and they would all say the same exact thing. So, yeah, they’re not “killing us” in any measurable way.
Now, I can explain this to my increasingly shrinking pool of protectionist friends—show them some nifty graphs, maybe—but they won’t care. They’ll tell me we don’t make anything anymore! even if U.S. manufacturing output has quadrupled since 1990. They’ll tell me we’re losing, even though the United States is becoming more competitive in manufacturing through automation and other efficiencies, creating advanced technology products with higher pay. The average American worker is responsible for nearly six times the output of the average Chinese worker. Why would we want to “bring back” an unproductive economy that saps jobs, I’ll ask? It’s all BS, they’ll say.
They’ll tell me the working class is shrinking, but forget that it’s getting richer. Mark Perry at AEI has done great work on dispelling the myth that the middle class is losing ground. As Thomas Sowell points out today, 51 percent of American families will be in the top 10 percent of income earners at some point during their lifetime. Our wages haven’t gone up, says every politician. Yet if we consider what Americans can buy with a dollar, inflation, and how much employers pay in benefits, this isn’t exactly true for most people. They don’t care.
All of these are complicated issue to argue—and politicians have zero incentive to challenge voter sentiments. Certainly, we have many genuine economic problems. But China’s economic supremacy is a myth. Perception is everything in politics. And we believe a lot of ridiculous things.