China fear overblown

Below is a letter to the editorial-page of the Washington Times by Prof. Boudreaux

In your uncritical review of Pat Buchanan’s new book – which expresses his hysterical fear that the American economy will be shattered if nothing more is done to block Americans’ access to inexpensive goods from abroad (and especially from China) – you assert that “It doesn’t matter what you want; almost every consumer product on U.S. store shelves is made overseas, especially in China. It doesn’t matter how much you want to find it; almost nothing you need is made in the USA” (“Buchanan: Take the China Test,” Oct. 30).

Wrong. According to an August 2011 report by the San Francisco Fed, the percent of Americans’ personal consumption expenditures used to buy Chinese-made goods and services in 2010 was 2.7 percent. And if we exclude expenditures on food and energy, the percent of our 2010 personal consumption expenditures spent on goods and services from China rises to only 3.1 percent.

In contrast, the percent of Americans’ personal consumption expenditures spent on goods and services made in America in 2010 was 88.5 (and 88.0 percent if we look at personal consumption expenditures excluding those on food and energy).*

Surveying the “Made in” labels on goods sold at Wal-Mart and Costco, while perhaps a cheap source of anecdotal fodder for fear-mongering protectionists, is not rigorous economic research.

SOURCE

Posted by John J. Ray (M.A.; Ph.D.).