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The Cafe’s own Russ Roberts hits a home run in today’s Wall Street Journal, with an op-ed entitled "Protectionists Never Learn [2]." Here are the final few paragraphs of Russ’s op-ed:
Yes, China holds a lot of our bonds. But Japan holds
more. Yes, we run a big trade deficit with China. But that lets us buy
lots of inexpensive stuff instead of having to make it for ourselves.
Yes, there are more than a billion Chinese. I guess that means they can
take all of our jobs four times! But our economy keeps growing. We have
more jobs than ever before. And contrary to popular belief, the
American standard of living and the American middle class are thriving.
We were told that at a minimum China (and India with
its own billion-strong population) would take all our high-tech jobs.
But the high-tech sector bounced back from its downturn (a downturn
that had nothing to do with outsourcing) and is growing again, partly
because we can get some of the simplest database and programming tasks
done so cheaply by Indians and Chinese.
So why can politicians still make China scary? Why
didn’t Americans learn from the previous sky-is-falling episodes? The
simple answer is that if you don’t understand economics, you might be
convinced by a politician who says that trade with China is bad for
America.
The next time you find yourself losing sleep over
China, remember that you were worried about Japan and Mexico and
everything turned out OK. Then ask yourself if America would be a
richer country if China cut itself off from the rest of the world.