The Global Economy And You

By Maxine Mulvey

December 7, 2018 5 min read

Politics perturb people -- well, at least most of them.

According to Scott Rasmussen of Rasmussen Reports, "Just 12 percent of voters discuss politics on a daily basis." To a majority of people, world politics, and even national politics, feels far away. "Two-thirds (64 percent) of all voters discuss politics only occasionally, rarely or never," says Rasmussen.

But politics also possess profound power -- over everyone, whether we like it or not.

The political climate determines how voters, well, vote. And how voters vote determines who holds political office. And who holds political office determines the bills that are drafted, the laws that are made and -- in a hop, skip and a jump -- the budgets and standards of living for the general public. While politics may not be an appealing topic of conversation, its direct effect on you and your loved ones' day-to-day lives warrants at least some attention.

Let's take wages, for example. It's a sore spot for a lot of people, and rightly so. While some "want to believe that the American worker is hurting," according to Forbes, Americans' frustration "isn't born of starvation or lack of comforts ... it's born of how much plenty that's on offer at the moment." In fact, "there's so much plenty within the grasp of seemingly every American. That so much is within their grasp, that a new billionaire is seemingly minted every day, is a certain sign that the outlook for the typical American worker is getting better and better with each passing day." People are good for business. Business is good for billionaires. Billionaires are good for people -- or so the research goes.

Across the Pacific, international economic conflict is affecting average Americans, as well. President Donald Trump has recently been caught in a trade war with China. Are you yawning? Hang in there; this affects you. According to Trump, "Billions of Dollars are pouring into the coffers of the U.S.A. because of the Tariffs being charged to China," and these tariffs will "make our Country richer than ever before!"

Some economics research supports this: According to a November article by the Association of Equipment Manufacturing, "The Peterson Institute for International Economics estimates the United States' trade expansion and access to foreign markets has boosted our economy by $2.1 trillion over the last several decades and has resulted in an $18,000 increase in purchasing power for the average American household." Maybe. Or maybe not.

These "billions" could, realistically, never make it into the pockets of average Americans. According to Newsweek, a study commissioned by Koch Industries suggests that "the average American could face costs totaling $915 in 2019, or $2,400 for a household, due to the trade dispute. ... The cost could rise to $17,300 per household by 2030." Most people can't just shrug off that extra cost.

In the average American's pocketbook, those hundreds, even thousands, of dollars make up a significant portion of their monthly budget. Specific items at risk of price increases due to the tariffs include cars, clothing and homes, says CNBC. And according to Business Insider, American companies such as Walmart, Gap, Coca-Cola and General Motors have gone public with their expected price increases as a result of the tariffs.

Since its statement, GM has added that it will be closing five of its plants and laying off as many as 15,000 workers. The company did not cite the U.S.-China tariffs in its announcement, but some see a connection.

Politics, what government leaders negotiate, affect every American. Says Phillip Ellender, the Koch Industries president of government and public affairs, "Any trade debate should convey a clear understanding of the effect of the U.S.' and its trading partners' actions on consumers, businesses and supply chains." Burying our heads in the sand just isn't the smart thing to do.

Ignoring what goes on in Washington, D.C., is easier than listening. Politics often feel foreign -- even at home. Getting through each day may seem more difficult if you're aware of the worrisome things going on in your government. But days add up to weeks, weeks to months, months to years. And the political happenings you've chosen to ignore will be apparent in your changing workplace, your fluctuating budget, your unsteady state of mind.

It pays to pay attention. Ignorance is bliss -- but only in the short term.

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