You raise a lot of very good points, but I'm not so sure that our "manufacturing base" is really smaller today than it was 50 years ago. I think manufacturing has changed dramatically in that time, and that has resulted in a lot of displacement of industries even within our own borders (see my previous example of the auto manufacturing industry).
I'm not so sure that our "manufacturing base" is really smaller today than it was 50 years ago.So where are the manufacturing or service jobs? If our population has doubled in the past 50 years, so then, the output of industry should have also at least doubled.
It hasn't.
The cause of this, in one word: Outsourcing...
the Far East, Mexico, and other countries manufacturing is BOOMING, along with their exports TO the US...