[E. Pluribus Unum]

Manufacturing Myths

...It helps to keep in mind a few simple points. First, manufacturing is extremely cyclical. The manufacturing component of the U.S. industrial production index fell by 5.5 percent a year in 1974-75, then rose by 6.6 percent a year for the next four years. In 1980-82, manufacturing fell by 3.1 percent annually for three years, then rose by 4.8 percent a year for six years. Manufacturing then dropped 2 percent in 1991....

...Unfortunately, it looks as though indefensible assertions about the supposed long-term disappearance of U.S. manufacturing are going to become a familiar political complaint over the coming year (as well as a promising source of special interest campaign funds). This rerun of the old "downsizing" story will again bore us with many more efforts by bumbling business writers and their slumbering editors to trump up some sort of "public agitation." If the rhetoric gets too annoying, ask the authors for a few facts. They just hate that.

[ninenot]

Interesting "facts" you present.

My "facts" from the Bureau of Economic Analysis/DOL are a bit different:

Starting in the year 1987, manufacturing as a % of GDP was 18.7%, 19.2% ('88), 18.5% ('89), 17.9% ('90), then holding around 17.-17.5 through 1995. UNDER 17% '96-99, only 15.5% 2000, and 14.1% 2001.

Certainly other sectors of GDP grew during that period. But manufacturing's DOLLAR INCOME, while growing every year from 1987-2000, finally took a dive, and a big one, in 2001, losing 6.6%--around $100billion.

That's the bad news. We don't yet have 2002 numbers from BEA--they are expected in late March.

[Paul Ross]

The measure and UNASSAILABLE evidence of U.S. manufacturing's decline is right in front of the Cato-apologists..and their noses need to be rubbed in this mess like the bad puppies they are:

The $550 Billion/year trade deficit...slated to grow to $1.5 trillion....

Yup, when the CATO-rhetoricians assertions get too tendentious...just ask them why the trade deficit has not ended. They just hate that: "Pay no attention to the man behind that curtain!!!!!!!"

This is the best compilation of policy correctives to restore U.S. competitiveness to date. Ronald Reagan would have adopted this in a heartbeat (indeed, many of these things are lifted right out of policies he implemented with both trade restrictions and R&D subsidies)...and NOT waited to do the right thing until after getting re-elected.