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