I've been enjoying Daniel Griswold's new book, Mad About Trade. It's the best of all the popular books on trade that I've read in the last few years. It's heavy with facts, many of which I "kind of" knew. But the magnitude of some of the numbers I thought I knew surprised even me. As I read it to draw material for my economics class that I posted on last week, I'll share some of the most striking ones with you. Here are a few:
. The value of U.S. exports going outside of North America via air has jumped from 12 percent of total exports in 1965 to 53 percent by 2004. Almost a third of the value of U.S. imports from outside North America now arrives by air. (p. 6)
. "We should think of trade as the market's trust buster." (p. 11) Not a new idea; just a nice formulation. (Reminds me of the old complementary line from over 100 years ago: "The tariff is the mother of the trust.")
. At a Democratic primary debate in Chicago, moderator Keith Olbermann asked, "If buying American costs more, and in many cases it does, how do you convince a working family that's struggling to get by on a tight budget and in part makes ends meet using $10 T-shirts for their kids, that buying American is still best for them no matter what the price is?"
Not a surprising question--actually a good question. Just surprising that Olbermann, who almost never asks tough questions of those he likes, asked it. (p. 13) Read Obama's answer and see how impressed you are or aren't.
. Christian Broda and David Weinstein, in an NBER study, found that simply the increased variety brought about by imports (call it the "Krugman effect" because it was Paul Krugman's Ph.D. dissertation that first addressed this) raises U.S. real incomes by about 3%. This translates to about $1,300 per person.
. The aforementioned Broda and John Romalis found that trade with China narrows income inequality in the United States. (p. 21) The reason: increased trade with China has brought down the prices of the goods low-income people buy more than the prices of goods that high-income people buy. Broda claims the China effect and the Wal-Mart effect are so strong that there has been NO change in inequality, but Griswold makes a weaker claim.
. Along the same lines as the above bullet, MIT economist Jerry Hausman and USDA's Ephraim Leibtag found that buying groceries at supercenters allows upper-income families to save 20% on their food expenditures, but allows low-income families to save almost 30%. (p. 23)