In 1950, real goods production accounted for 37.3 percent of real GDP, according to the Department of Commerce; last year it accounted for 39.8 percent.Indeed, manufacturing hit its lowest share of real GDP in the early 1960s -- the "good old days" for many people -- and has risen almost continuously since.
I am curious about Gordon R. Richards, NAM, testifying before the Subcommittee on the Census Committee on Government Reform U.S. House of Representatives On The quality of GDP data. Mr. Richards said,
"The redefinition of computer output was a crucial factor in driving the manufacturing revival of the late 1990s. . . Without the quality imputations to the real value of computers, this increase in the manufacturing share [of GDP] would not have been measured."
http://www.bea.doc.gov/bea/about/test-grr.pdf
I am not an expert but I wonder if these changes affected the historic comparisons.
I know that Limbaugh and fill-in host Sullivan both have pointed to manufacturing share of GDP to ask, jobs lost? What jobs lost? This followed an article by Alan Reynolds claiming that manufacturing has remained constant as a share of GDP. None of the gentlemen addressed Mr. Richards' testimony. My e-mail to Sullivan's local show was rejected.
At least your reference to Bruce Bartlett's article acknowledges that jobs have been lost but manufacturing share of GDP has not fallen. One reason may be productivity. To wit,
"When output rises while employment falls, the result is an increase in productivity. And according to the Labor Department, U.S. manufacturing productivity is now higher than in any other major country."
Morgan-Stanley's Stephen S. Roach wonders how much "imported productivity" from overseas cheap labor affects productivity gains here. That's another issue and as I stated I am not an expert and do not want to mis-state Mr. Roach's comments.