John Stossel: Myths We Live By

“I’m so upset,” said Senate Majority Leader Harry Reid. “Take all the uniforms, put them in a big pile, and burn them. … We have people in the textile industry who are desperate for jobs.”

Harry Reid - The Scream

Harry Reid – The Scream

Harry Reid must be a troglodyte—one who lives in a cave and consequently has no understanding of how the world works. But John Stossel comes to the rescue although it’s unlikely Reid will read it:

Here, Reid demonstrates economic cluelessness. It seems logical that Americans lose if clothing is made overseas. But that’s nonsense. First, it’s no surprise the uniforms were made in China. Most clothing is. That’s fine. It saves money. We invest the in other things, like the machines that Chinese factories buy and the trucks that ship the Olympic uniforms.

It’s about the efficiency of markets and the that Reid fails to understand. In a one does what he does best, and trades with others to get what he wants. Art Carden is an economist from Sanford University (not Stanford!) who explains the macroeconomic picture:

One could argue that the uniforms were not manufactured in China, but grown in the soybean field in Iowa. We export soybeans to China. Because we’re incredibly productive in the soybean market, we get more uniforms at lower prices (and) the Chinese get more soybeans at lower prices. … Everybody wins.

Daniel Ikenson from Cato is more direct:

We design clothing here. We brand clothing here. We market and retail clothing…

Chinese athletes arrived in London by U.S.-made aircraft, trained on U.S.-designed and -engineered equipment, wear U.S.-designed and -engineered footwear, having perfected their skills using U.S.-created technology.

So there, Mr. Reid. Read it and weep over your ignorance. If you can just find those candles in your cave…they’re around here somewhere!

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