Manufacturing: It does matter

Contrary to a common misperception, manufacturing is very important for the American economy. According to the World Bank, the United States is still the world's leading manufacturing economy, generating $1.7 trillion in 2001. This nearly equals the combined size of the manufacturing sectors of Japan and Germany.

Recent data from the National Association of Manufacturers suggest that manufacturing was responsible for 16 percent of American gross domestic product growth in 2002, about the same as in 1987.

So why is there continued angst about manufacturing? The concern is not about production; it is about lost jobs. We have lost 3 million manufacturing jobs since March 1998. These job losses are not from the "de-industrialization" of America. They are a result of technological advances and rising productivity -- millions of jobs are no longer there. In recent years, off-shoring of manufacturing jobs to China, Mexico and other countries has also been a factor underlying the loss of manufacturing jobs.

One of the misunderstandings of the notion of a "postindustrial society" is that services job are substitutes for manufacturing jobs. They are actually complements. If we continue to lose leadership in manufacturing, we will not only lose well-paid manufacturing jobs but also lose high value-added (high-wage) services jobs. We do not want to become a society of just "McJobs".

Sorry, but the "hamburger flipper" lines won't work this election cycle. Americans heard all that during the Reagan era and realize that the economy moves in cycles. It's the case, in our modern economy, that the service sector is among the first to see the benefits of improving circumstances and you can, indeed, already see that in the profits from restaurants and like suited businesses of late. But, of course, that's just the beginning in the cycle which - as in the Reagan era - portends great progress ahead & newfound rewards & innovation.

I'm sure the great sighs of desparation arising from DemoncRAT circles today instead assures you're obviously feeling the need to post doom & gloom at double-pace also reminds some the news of Saddam's capture bodes well for the US financially & economically as well, removing further sources of uncertainty I'm sure will be reflected to some degree in morning markets, if at least not significant shortcoming that's got to have the bears & rats all sent running from their own scummy spider holes, themselves!

Service jobs cannot provide the foundation of economic recovery.
Their existance is largely DEPENDANT on the prosperity of the sectors of the economy where wealth is created by the production of value-added goods: farming, mining, manufacturing, construction, etc. etc.
Ever see what happens to the service jobs in a small, rural town when the local mine or factory closes? Yep, a good many of 'em board up their windows and close their doors. That's because there is NO SUCH THING as a "service-based" economy.

BTW, Saddam's capture doesn't mean squat as far as our economy is concerned. Except, perhaps, as a diversion from addressing more serious issues. IMHO, we'd be better off had they just plunked a grenade down that little spidey-hole and then dragged what was left of his lice-infested carcass through the streets. At least then we wouldn't be subjected to a long drawn-out circus reminiscent of the OJ trial.

Sadaam's capture will ease some of the pressure that the operation in Iraq has put upon the troops and leaders of the US. I cannot see any connection between the financial markets and the fundementals underlying them being affected by the capture of Sadaam, though. We need the doom and gloom scenario as well as the rose tinted everything is wonderful version to analyze the different points of each argument. Then the individual can weigh the possibilities in his own mind. Congrats to both of you for your insights.

It's the case, in our modern economy, that the service sector is among the first to see the benefits of improving circumstances...

You argue the very case for Willie Green. Conversely, when there is any such outside influence (Such as the 9-11 attacks) what are the first industries to go? Service of course. Look at the airlines, hotels and restaurants that went out of business immediately after the attack.

It's short-sightedness and short term profit taking from people such as yourself that have ruined the future of manufacturing. I know it's beyond your ability to see that a nation of "service sector" workers would be much more vulnerable to market fluctuations and outside influences. You speak of the stock market as if it is the only thing that matters in the U.S. economy.

Where is the long term investment today? There is none. Everyone wants immediate return on investments. If the economy was so strong we would see steady growth without all the profit taking on a daily basis.

Manufacturing plants provide long term economic support. Whereas, a restaurant has no tangible assets to speak of. When someone spends a million dollars on a restaurant that is not an investment. When a company spends $100 million dollars on a printing plant, say, that supports so much more collateral industry.

Comparing the long term effects of losing manufacturing in this country to restaurants is so narrow minded that it is laughable.

The service sector consumes. It's the manufacturing (and related) sector that produces. Our money will have value to buy things we consume from overseas only as long as it is able to be traded back to us for something the holders value. If our consumption continues to outpace our production, we will eventually end up with nothing. Anyone that has a job and supports himself should understand that.

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