1. 1 Religion, Biology, Politics, and Economics: The Struggle of Reason with Emotion copies of this presentation can be found at www.business.duq.edu/faculty/davies

2. 2 Trade and Per-Capita Income Conventional wisdom Trade leads to a shift in wealth from workers and consumers to multinational corporations, and from developing nations to developed nations.

3. 3 Source:International Financial Statistics, International Monetary Fund, December 2001 Greater per-capita trade is associated with greater per-capita income.

4. 4 Distribution of Income Conventional wisdom Trade results in a concentration of income so that the few benefit dispro- portionately to the many.

5. 5 Source:International Financial Statistics, International Monetary Fund, December 2001, and Measuring Income Inequality: A New Database, Deininger, Klaus, and Lyn Squire, World Bank, 2002 Greater per-capita trade is associated with more equitable income distributions.

6. 6 Gender Equality and Child Labor Conventional wisdom Trade results in the exploitation of women and children.

7. 7 Source:International Financial Statistics, International Monetary Fund, December 2001, and Human Development Report, United Nations Development Programme, 2002 GDI measures quality of life (longevity, education, literacy, income) for women relative to men. Greater per-capita trade is associated with greater gender equality.

8. 8 Source: International Financial Statistics, International Monetary Fund, December 2001, and World Development Indicators, World Bank, 2002 Even among middle-lower and lower income countries, greater per- capita trade is associated with reduced child labor.

9. 9 Trade and Unemployment in the U.S. Conventional wisdom Trade destroys American jobs.

10. 10 Source: Bureau of Labor Statistics, and Bureau of Economic Analysis Greater trade is associated with reduced unemployment.

11. 11 Trade and Unemployment in the U.S. Conventional wisdom Trade erodes Americans incomes.

12. 12 Source: Bureau of Labor Statistics, and Bureau of Economic Analysis Greater trade is associated with increased real wages.

13. 13 Global Warming Conventional wisdom Global temperatures are rising at an alarming rate.

14. 14 Source: NASA Goddard Institute for Space Studies Over the period 1880-2003, global temperatures have risen, on average, by 1.1 degrees Celsius.

15. 15 Source: CDIAC, Oak Ridge National Laboratory Compared to the past 400,000 years, the current rise in global temperatures is neither extreme nor unexpected.

16. 16 CO2 Levels Cause Global Warming Conventional wisdom Global warming is due to man-made CO 2 levels.

17. 17 Source: www.johnstonsarchive.net/environment/co2table.html

18. 18 Income Inequality Conventional wisdom The rich are getting richer while the poor get poorer.

19. 19 Source: Statistical Abstract of the United States, U.S. Bureau of the Census, 2006, Table 673. Income Distribution for 1980 (in 2003$)

20. 20 Source: Statistical Abstract of the United States, U.S. Bureau of the Census, 2006, Table 673. Income Distribution for 2003 (in 2003$)

21. 21 U.S. Manufacturing Conventional wisdom The U.S. manufacturing sector is in decline.

22. 22 Source: Bureau of Labor Statistics (via www.economy.com) Since 1948, employment in Services industries has grown by 50% while employment in Manufacturing industries has declined by 50%.

23. 23 Source: Bureau of Labor Statistics (via www.economy.com) While the number of American jobs in manufacturing has been declining, American production of industrial goods has been rising. This implies that American manufacturing is becoming more efficient as it produces ever more output using less labor.

24. 24 Minimum Wage Conventional wisdom Increases in the minimum wage help the poor.

25. 25 Source: Statistical Abstract of the United States, and Bureau of Labor Statistics Increases in the minimum wage are associated with increases in unemployment among the lesser educated.

26. 26 Source: Statistical Abstract of the United States, and Bureau of Labor Statistics Increases in the minimum wage are not associated with increases in unemployment among the better educated.

27. 27 Price of Gasoline Conventional wisdom The price of gas is rising.

28. 28 Source: Statistical Abstract of the United States, 2003 (Table 725), 1996 (Table 759) 1995 (Table 775). The price of gas rose more than seven- fold from 1967 through 2005.

29. 29 Source: Bureau of Labor Statistics (via www.economy.com). Per-capita disposable income has risen more than ten-fold from 1967 through 2005.

30. 30 Source: Bureau of Labor Statistics (via www.economy.com). For gas today to be as expensive as it was in 1967, gas would have to cost more than $3.25 per gallon. For gas today to be as expensive as it was in 1981, gas would have to cost $4.00 per gallon.

31. 31 Social Security Conventional wisdom People need Social Security to insure they can survive retirement.

32. 32 Compiled from data published in 2003 Statistical Abstract of the United States, U.S. Bureau of the Census, and provided by the Social Security Administration Expected annual Social Security tax payments Expected annual Social Security benefits Expected tax payments and benefits reflect the likelihoods of employment and mortality.

33. 33 Compiled from data published in 2003 Statistical Abstract of the United States, U.S. Bureau of the Census, and provided by the Social Security Administration Expected annual Social Security tax payments Expected annual benefits from privatized account This chart assumes that 100% of the worker’s current Social Security taxes are diverted to a private investment account.

34. 34 Religion, Biology, Politics, and Economics: The Struggle of Reason with Emotion copies of this presentation can be found at www.business.duq.edu/faculty/davies