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Here’s a letter to the Wall Street Journal:
Editor:
Attempting to excuse Pres. Trump’s economically misguided protectionism, Bobby Jindal – like a rabble-rousing populist from central casting – bellows out fallacies and slays straw men (“Trump Wins the Populist Patriots [2],” Dec. 3).
Consider this concoction of confusion: “Automation and foreign competition led to layoffs, and while some new higher-paying domestic jobs were created in value-added advanced manufacturing, they weren’t distributed evenly by geography or skill level. Cheaper products at Walmart weren’t sufficient compensation for lower wages and fewer hours.”
First, all economic change destroys some particular jobs. Automation and foreign competition are hardly unique on this front. Jobs were destroyed by the polio vaccine, the Atkins diet, Home Depot competing with locally owned hardware stores, and Aunt Edna buying a pet goldfish rather than another dog when beloved Fido died. Does Mr. Jindal wish to stop all economic change?
Second, economic change occurs only if masses of ordinary consumers voluntarily embrace the new products and sellers. Why doesn’t Mr. Jindal wave his rhetorical pitchfork menacingly at middle-class and poor Americans and accuse them of unpatriotically selling out the U.S. to their own narrow material interests?
Third, economic gains are never “distributed evenly by geography or skill level,” and nothing in economic theory suggests that they should – or even could – be so distributed.
Fourth, wages were not “lower [3].” And if there was a fall in work hours, it was almost certainly caused by workers chosing to work fewer hours – a happy outcome made possible by ordinary Americans’ increasing prosperity.
Although you’d never guess it from reading Mr. Jindal, the percentage of all American households earning annual incomes of at least $100,000 (measured in 2018 dollars) is, at 30.4, today at an all time high.* This figure is more than double what it was during the mid-1970s – that period just before America started running trade deficits, deregulating industries, cutting marginal tax rates, and falsely identified by peddlers of the middle-class-stagnation myth as marking the peak of middle-class American prosperity.
Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030* See Table H-17 here [4].