Myths Lead to Bad Policy

What we think we know for sure may not be right at all. If this is the case, we will make policy based on the wrong facts and data. You might think this doesn’t mean you, but let me throw a few commonly held beliefs that aren’t true. These are ones in no particular order that irritated me this past week. Truth is especially crucial in an election year.

The Middle Class is shrinking. This is true, but not for the reason most people think. The implication is people are falling out of the middle class and ending up in the lower levels. The truth is both the lower and middle classes have shrunk. Where did the people go? To the upper-middle class. According to a study published by the Bookings Institute, since 1967, the upper Middle Class grew from 6% to 33%. in 2016. Instead of the dark world of falling or stagnant incomes, we keep hearing about, the truth is quite good. Those who think African Americans have been left out, their participation rose from 1% to 14% in the same period. Like the TV show, “the Jeffersons” many are moving up to the East Side. They finally got a piece of the pie. In any case, this should’ve been evident by observing more people buying better cars and bigger houses.

Automation Cost the U.S. more jobs than Globalization. We are manufacturing just as much as always. We’re just doing with more robots and fewer people. Elites have given this excuse for a dismal China Policy on both sides of the aisle. They claimed the Clinton Administration’s welcoming China into the World Trade Organization didn’t really do much harm to U.S.manufacturing workers. This argument has always seemed questionable. People across the rust belt said they were feeling the pain. Former Senator Rick Santorum even wrote a book, “Blue Collar Conservatives,” about what was happening in states like Pennsylvania. Few read it. Elites claimed the data said otherwise. One who did read the book was Donald J. Trump. He saw how these people suffering real harm. He fit into his Mercantilist economic view. He hammered Globalization in the ’16 election and won. The Rust Belt went for him. 

Elites claimed Trump conned the people with a lie. It turns out Santorum by listening to his constituents was right. A study by Susan N. Houseman, Director of Research at the W. E. Upjohn Institute for Employment Research. Points out the data so many relied on was faulty. Instead of manufacturing remaining steady in the face of Globalization, she showed the data recorded healthy growth only by how one industry was handled. Computers led to distortion. Houseman provides us with two charts that tell the story. 

The automation argument was always dubious. How could we be so automated when we badly trail Korea, Singapore, Japan, and Germany in the number of robots in use? 

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