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How China helps America's poor: University of Chicago economist Christian Broda argues that U.S. trade with the Asian giant has served to reduce prices and mitigate inequality.

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In an election year, there's never a shortage of economic bogeymen. With the 2008 campaign in full swing--and with the U.S. economy reeling from sky-high oil prices, the housing crisis, and the credit crunch--politicians are busy railing against a number of convenient villains, including China, Wal-Mart, and "globalization." Meanwhile, candidates of all stripes profess concern over rising income inequality.

Christian Broda believes that much of this rhetoric is deeply misguided. "I'm an empirical guy," says the 32-year-old economist. In his latest paper, co-authored with his University of Chicago colleague John Romalis, Broda argues that the effects of globalization have been misunderstood--and that rising inequality has been overstated.

"The U.S. presidential campaign has sometimes sounded like a contest to prove who despises trade the most," Broda wrote recently in the Financial Times. "Media reports of job losses to China and the destructive effect of Wal-Mart on local businesses are ubiquitous.... This public debate has taken for granted that inequality ... has risen as a result of globalization."

Not so, Broda argues. When it comes to statistics on poverty, trade, inflation, and inequality, "interpretations of data, even official ones, can be really messed up once you look at the underlying structure of things," he says. "Most of the time, our conventional wisdom is based on data that require some structure--and many times, the assumptions and interpretations made...