How Much Does Trade Matter?

Good post by Matt on why the trade issue is overblown.  As a psychological point, though, trade's political resonance comes from its logic.  Even the bottom of the pyramid can understand why those at the top want to flip their jobs to India and have them done for 1/50th as much.  Thus, while conventional layoffs may be more widespread, they can be rationalized away as the type of thing that happens to bad workers, not a top employee like me.  Outsourcing, however, seems like a smart idea, and no matter how good any of us are, we're not as good as the ten or twenty Indians who could be hired for our wage.  That lends it an air unpredictability -- it's not about your performance, it's about the economic decisions and, in some ways, altruism of your employer.

There are a number of issues that Americans believe to be Big Problems, but really aren't.  Social Security, welfare, foreign aid (yes, really), violence in video games, same-sex marriage, Medicare fraud, tort reform, and so forth.  As policy, they're just not as economically salient as Americans think them to be.  As cultural forces, they're just not as powerful as folks believe them to be (gay marriage doesn't hurt conventional marriage and video games don't make kids more violent).  Nevertheless, they all, for one reason or another, have a special resonance in the American psyche, and so they need to be taken seriously.  It's something of a shame that our leaders don't have philosopher-king freedom to explain to the country that their priorities need to be reordered -- Thomas Frank, in particular, would like this power -- but they don't, and so these issues, and outsourcing, will need to be addressed as if they are grave problems, if only so Americans will believe they're solved ones.