Yes, we're a bit pessimistic these days, but let's not get fatalistic. The most troubling aspect of the survey isn't the glumness; it's how willingly we accept myths that threaten our economic future.
Incredibly, only 1 in 5 Americans believes that the U.S. economy is the world's strongest today -- with nearly half of those polled picking China as the strongest power. Only 34 percent of Americans believe that the U.S. will have the world's strongest economy in two decades, and 37 percent believe it will be China.
You don't have to have blind faith in American exceptionalism to know that the U.S. economy, even with the tribulations of the recent years, is still the richest and most productive and innovative power in the world. The private sector isn't collapsing (though we've certainly hit a bump); others just happen to be gaining on us.
We tend to idealize past successes and too easily turn to base isolationist instincts. According to the poll, rather than embrace the immense opportunities of emerging markets, we fear globalization. Guess what? There is no bailout that is going to stop China and India from continued growth, just as there is no tariff that can stop irritating overachievers in Singapore preschools from acing calculus exams.
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Other than "college whites," the survey sees most Americans viewing international trade as a bad deal for the United States. Not surprising. We can't go a day without hearing some experts talking about "outsourced" or the equally chilling "You know, we don't make anything anymore."
Economist and columnist Walter Williams provides the best historical rejoinder to this myth. In 1790, he explains, farmers made up 90 percent of the U.S. labor force, yet by 1900, they made up only 41 percent. By 2008, fewer than 3 percent of Americans worked in agriculture. Yet today we have more food than ever -- at cheaper prices.
William Strauss at the Federal Reserve Bank of Chicago recently explained that the number of Americans working in the manufacturing sector -- about 14 million -- is about the same as it was in 1950. Yet there has been a 600 percent increase in output. That's good news.
It makes no sense for government to prop up nonproductive manufacturing jobs any more than it makes economic sense to artificially prop up farmers. (Oh, I know, we try.) We need far fewer people to work those jobs, but it doesn't mean we don't make anything. But as Williams succinctly points out, "if the U.S. manufacturing sector were a separate economy, with its own GDP, it would be tied with Germany as the world's fourth-richest economy."
Eighty percent of Americans told the National Journal that manufacturing is "extremely or very important to U.S. economic growth over the next five to 10 years." (What do they mean? Manufacturing what?) Sixty-two percent believe it is important for government to help advanced manufacturing industries with "tax incentives and funding."
How many price-fixing fiascos does government have to engage in for us to understand that Washington shouldn't be picking winners in the marketplace? How many wasted dollars will we need to pump into subsidies to understand that the market doesn't care what we think, that it cares what we buy?
Instead of blaming reality and resisting change -- as the new isolationists continue to do -- we have to start owning both.
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