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Mythonomics: Ten Economic Myths that Demonstrate America's Decline

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American economic myths are first and foremost myths. Most of us believe that these myths are actually true. Most of them sound good and were pounded into our heads in college. But nonetheless they are false and are causing great harm in this country and around the world.

It is the great educational institutions of this country that perpetuate these economic myths. Many famous newspapers, liberal and conservative, including the New York Times, the Wall Street Journal, the Washington Post, the Chicago Tribune and the Los Angeles Times perpetuate these myths, because by and large, their editorial boards were well-educated at these same institutions.

One of the well-known writers who is promoting these economic myths is Thomas Friedman, of the New York Times. Friedman resides in Bethesda, Maryland, a wealthy suburb of Washington, D.C.

Mr. Friedman is the head cheerleader for a clique of naïve writers, liberals and conservatives, who uncritically and universally praise globalization. Friedman, who studied Arabic and Middle Eastern Studies, appears to have taken Econ 101 without further training in economics. Friedman is not alone in his uncritical support of more and more "free trade agreements." Howard Kurtz, a Fox News commentator and a former writer for the Washington Postsaid, "The national press was unabashedly pro-NAFTA." Kurtz added, "From George Will and Rush Limbaugh on the Right to Anthony Lewis and Michael Kinsley on the Left, most of the nation's brand-name commentators are cheerleading for NAFTA."

Washington and its nearby suburbs never manufactured products and has not suffered the job losses that have been suffered in my native Ohio. Friedman looks around and sees nearly all of his neighbors driving Lexuses (Lexi?) and Mercedes and thinks everything is just fine. I observe the same things and think that our country has gone mad, buying overpriced, imported luxury cars that so many cannot afford.

Friedman also claims that the United States is the biggest beneficiary of globalization. This too is completely false, and the opposite is more likely to be true. The United States has been the biggest loser to globalization. Look at General Motors, Ford, Chrysler, Boeing and the film industry. We are losing our two biggest exporters, aircraft and film, due to unfair competition. Airbus Industries, the recipient of billions of subsidies of Euros from European countries, has stolen market share from Boeing. Canada has stolen market share from the U.S. film industry with illegal subsidies. Ireland has taken over our pharmaceutical industry with low tax-haven rates. Our government has failed to respond because of the myth that free trade will cure all ills.

A subsidiary myth of the "free trade is good" myth is that NAFTA was a win-win-win situation, when actual studies have shown that it was not the case. The United States has lost more than two millions jobs to Canada and Mexico, while no one can show that the U.S. gained anything from NAFTA. Friedman ignores NAFTAit doesn't even rate a listing in the index to his book The Lexus and the Olive Tree. Trump's NAFTA 2.0 is no improvement on the original.

Another myth is that trade with China will bring about democracy and freedom in the Middle Kingdom. Religious freedom, and all other freedoms that we cherish in the United States will not come to China via globalization. The State Department found that "the [Chinese] Government's respect for freedom of religion and freedom of conscience remained poor, especially for many unregistered religious groups and spiritual movements such as the Falun Gong."

Is China becoming more free and democratic? Ask the Falon Gong. Ask Richard Gere. Ask the Dali Lama of Tibet. Ask any resident of Hong Kong. And ask the workers in China who are arrested when they protest layoffs, pollution or any other problem. Ask Harry Wu how China is doing. Mr. Wu was imprisoned in China for 19 long, hard years before he landed in the United States. He returned to China to report how China was selling products made by prison and slave labor on world markets and that the profits are going to the Peoples Liberation Army

The Ten Economic Myths:

Myth Number 1: "Free trade is good for every nation that enters into it."

Barrack Obama, George Bush, Sr. and Jr., Bill Clinton, the Wall Street Journal, The Washington Post and the New York Times all agree that free trade is good. A little knowledge of economics can be dangerous. The above-listed "authorities" undoubtedly took Econ 101 but few other economics courses, which explains economic theory with a quick superficial assessment of free trade. In theory, free trade may be good, but in reality it causes a lot of harm to the United States and other advanced nations.

The author of the world's leading textbook used for Econ 101 is the late Prof. Paul Samuelson, the first American to win the Nobel Prize for Economics. Samuelson found that this first myth is false. See his article in The Journal of Economic Perspectives, Spring, 2004. Samuelson believed that advanced nations, like the United States are often losers in the free trade game.

Myth Number 2: "Every developing nation, just like the United States and the United Kingdom, must go through a period when there are sweatshops."

Like a college fraternity explaining hell week, where frat pledges are made to do unthinkable acts, the seniors continue the tradition by saying that since they had to endure hell week, so do the new freshman pledges. Developing nations can skip the sweatshop period. Advanced nations can help by establishing a global minimum wage for exporting companies.

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Chairman, Made in the USA Foundation, economist and lawyer, author of ten books and hundreds of articles.
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