Where Tom Reed gets his facts

Pinochio FraudJust speaking truth to power doesn’t work. You need to frame the truths effectively from your perspective.–G. Lakoff

Where does Tom Reed get his facts? Let’s see. Tom writes:

The House Manufacturing Caucus co-chaired by Congressman Tom Reed held its first meeting of the new congress Wednesday. The caucus heard the benefits of trade; according to recent estimates, trade supports nearly 40 million American jobs. US trade agreements save the average American family more than $10,000 a year.

Median family income is around $50k, yet Tom Reed claims trade deals save an average family $10k. That’s astonishing if true. Where did Tom get this information? An undated Business Roundtable article is the likely source of it:

Trade and investment liberalization policies save the average American family of four more than $10,000 per year.

Business Roundtable cites a Peterson Institute article: “The Payoff to America from Global Integration.” Here one reads:

The payoff of $5000 per person represents 20% of the total per capita GDP gains over the period (1950-2003). It represents an additional $1.45 trillion of GDP, or a $12,900 increase in annual GDP per household.

The Peterson Institute authors claim that the GDP grew by an additional $1.45 trillion from 1950 to 2003 due to increased trade. This represents additional GDP growth of $12,900 per household. This in no way justifies the statement: US trade agreements save the average American family more than $10,000 a year.

  • Trade agreements aren’t the sole reason for the increase in trade.
  • GDP growth isn’t necessarily reflected in family income.
  • The average family is not the same as an average per family.

Wealthy families get the lion’s share of additional income from GDP growth.

As for reflecting recent information, the undated Peterson Institute article appears to have been written in 2004 as that is the latest data cited by its authors.

Tom Reed’s press release pulls a one-liner from a hundred page technical article, mangles and misinterprets it, and presents it out of context as a fact. Tom Reed deserves a giant Pinocchio for this press release.

© William Hungerford – March 2015

http://reed.house.gov/press-release/reed’s-caucus-spotlights-how-trade-preserves-jobs-and-saves-money

http://businessroundtable.org/sites/default/files/legacy/uploads/general/BRT_State_Studies_-_US_Total.pdf

http://www.piie.com/publications/papers/2iie3802.pdf

 

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About whungerford

* Contributor at NewNY23rd.com where we discuss the politics, economics, and events of the New New York 23rd Congressional District (Allegany, Cattaraugus, Chautauqua, Chemung, (Eastern) Ontario, Schuyler, Seneca, Steuben,Tioga, Tompkins, and Yates Counties) Please visit and comment on whatever strikes your fancy.
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6 Responses to Where Tom Reed gets his facts

  1. pystew says:

    Good investigating! You are giving Reed too much credit–I would have to think it was a staff member who dug through the technical journals, but it is his press release so he the credit(blame).

    I like the term “a giant Pinocchio”. He ‘misrepresents’ the facts often–the last one I remember was on Social Security. (According to Reed’s pie chart he is tying Social Security to the deficit and the federal debt. By law, it is prohibited to be counted as part of the federal budget. Therefore, Social Security and its Disability Insurance Trust Fund do not contribute a single cent towards the federal debt.–from–“Portland townhall meeting Feb. 21, 2015″) and Be Aware: Rep. Reed creates his own Social Security Facts.

    • whungerford says:

      The claim that “US trade agreements save the average American family more than $10,000 a year” is so outrageous that I was interested in the source of it; I didn’t intend to imply that Tom or his staff knew or cared where they got it–it is a compelling one-liner that matches the mainstream GOP party line.

      The claim in the Peterson Institute article that increased trade accounts for 20% of GNP growth from 1950 to 2003 is plausible, but it is a giant leap of faith to go from that to Reed’s dubious assertion.

      On the other side of the argument, Ross Perot’s claim that trade agreements presage a giant sucking sound of jobs going overseas is a compelling story whether true or not. If we wish to frame the debate over TPP to advantage, how to do that? There is little point to dueling over facts. Paul Krugman wrote that any advantage from TPP might be outweighed by the potential for infringing US law; that might be a useful tack to take.

  2. BOB McGILL says:

    did you consider that without US exports millions wouldn’t even have a job 🙂

    • whungerford says:

      Bob, I think most people favor international trade as I do. One may well favor trade and yet oppose a specific trade agreement which one might think unnecessary, unfair, or unwise.

      • BOB McGILL says:

        but you have to realize that an agreement takes two or more parties, you can’t just force your own terms on another country. (A portion of this comment has been deleted. RS)

  3. Pingback: Positive and negative concepts | New NY 23rd

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