Many people base their judgements purely on anecdotal evidence, images from TV, and soundbites.
For example, most business people or journalists who come to China only visit Shanghai, and so they come away thinking that China is the wealthiest, most industrially advanced country in the world. Yes, it looks that way from the back of a taxi or limousine as you are riding through the city, but even in Shanghai there are large pockets of poverty and squalor that one would never see in the US, Japan, or Western countries. And if you travel extensively in the heartland of China, on the same buses and trains that most Chinese people use, it looks like a completely different country than Shanghai. And, in many ways it is. Statistically, the vast majority of Chinese people live well below the official poverty line of the US, even after their incomes are adjusted for Purchasing Power Parity. Nevertheless, many Americans refuse to believe this, even when confronted by statistics.
The problem is that these kinds of misconceptions tend to skew the political debate. Instead of having a realistic assessment of the world around us, we tend to focus on what seems to be true on the surface and overlook the real challenges that we face.
Here are some other misconceptions that many Americans have, along with the true facts, as shared by Morgan Housel (read the article for more detail):
Misconception: Most of what Americans spend their money on is made in China.
Fact: Just 2.7% of personal consumption expenditures go to Chinese-made goods and services. 88.5% of U.S. consumer spending is on American-made goods and services … The figure comes from a Federal Reserve report. You can read it here.
A common rebuttal I got was, “How can it only be 2.7% when almost everything in Wal-Mart (NYSE: WMT) is made in China?” Because Wal-Mart’s $260 billion in U.S. revenue isn’t exactly reflective of America’s $14.5 trillion economy. Wal-Mart might sell a broad range of knickknacks, many of which are made in China, but the vast majority of what Americans spend their money on is not knickknacks …
Misconception: We owe most of our debt to China.
Fact: China owns 7.8% of U.S. government debt outstanding.
As of August, China owned $1.14 trillion of Treasuries. Government debt stood at $14.6 trillion that month. That’s 7.8%.
Who owns the rest? The largest holder of U.S. debt is the federal government itself …
Misconception: We get most of our oil from the Middle East.
Fact: Just 9.2% of oil consumed in the U.S. comes from the Middle East.
According the U.S. Energy Information Administration, the U.S. consumes 19.2 million barrels of petroleum products per day. Of that amount, a net 49% is produced domestically. The rest is imported.
Where is it imported from? Only a small fraction comes from the Middle East, and that fraction has been declining in recent years …
Again, you should read the whole thing. And if his article challenges your assumptions, ask yourself why your assumptions are being challenged instead of just reacting in incredulity.