International Expert on Capitalism and Free Market Trade

Good News

Any way you measure, we work less, have more, live longer, better lives If economics is the dismal science, then you must consider W. Michael Cox a contrarian. Cox is senior vice president and chief economist at the Federal Reserve Bank of Dallas. He’s also, for lack of a better phrase, a cockeyed optimist — the most unpessimistic and undismal of economists. Which is what makes Cox one of our favorite economists. Using facts — numbers, figures and the long-term historical record — he has dispelled many popular myths about the economy. His data convincingly show that Americans, whether we believe it or not, are much better off than we think — indeed, we are the wealthiest people in the history of the world. Cox is the author of the bank’s popular annual reports on rising U.S. living standards and the new economy. His book, the “Myths of Rich and Poor: Why We’re Better Off Than We Think,” is widely quoted. We spoke with him about changes in the U.S. economy. IBD: You’ve said Americans are better off now than … Continue reading

First, heads nod. Then the fingers point. That’s a pretty good description of where we are on free trade. Most of us nod in agreement on the blessings of free trade, including the global competition that gives consumers a greater variety of goods and services at lower prices. The consensus crumbles as principle collides with practice. Rather than looking out for their consumers, nations jab at each other for sins against their products, making accusations about the unfair trade practices. So it went last week, when the latest talks on liberalizing world trade collapsed with a walkout of poorer countries miffed at the rich nations’ agricultural subsidies. Delegates left Cancun, Mexico, empty-handed, forfeiting the opportunity for progress on prying open markets. If nothing else, the episode shows how we continue to look at trade backward. We hear that exports are good because they support our industries, but imports are bad because they steal business from domestic producers. Actually, imports are the gain from trade because the goal of economic activity is consumption. Exports represent resources we don’t consume at home. … Continue reading

America’s productivity is soaring. Output per hour has been rising at a 4.6% annual rate since the fall of 2001, eclipsing the performance of every major business cycle in the past 50 years. The usual sources of efficiency can’t fully explain our off-the-charts productivity. Plant and equipment spending hasn’t been booming. Workers aren’t suddenly all that much better at their jobs. Technology keeps marching forward, but recent years haven’t seen advances of the magnitude of the computer or Internet. What else could explain the great productivity numbers? Trade. The simple act of exchange carries the added virtue of increasing productivity. It does so by spurring reorganization that makes the overall economy more efficient. It does so by lowering prices, so an American’s hour of work will buy a bigger bundle of goods and services. The productivity statistics don’t isolate the impact of trade, but a simple example will illustrate how it promotes efficiency. Comparative Advantage Start with a world of two countries and two goods — the U.S. and China, producing soybeans and shoes. In an hour, a Chinese worker … Continue reading

Trusted By: