Sunday, February 6, 2011

"Nothing is Made in the USA anymore!"--oh, really? Don't let evidence get in the way of a good Protectionist argument...


Carpe Diem

Is US manufacturing in decline?..."Nothing is made in America anymore!" If you look at the graph above, you will see that we have dips in manufacturing output but the historical trend suggests that manufacturing in the US is relatively healthy. SAY WHAT?  But China makes everything, right? I suggest you go on over to the source of this graph and read what Carpe Diem has to say--a short, concise explanation is provide there...I have an additional observation.

Look at the early to mid-1990's.  This is the era of the implementation of NAFTA and the rise of China as a manufacturer, otherwise known as "Doom and Gloom" to trade protectionists.  Notice what happens to the slope of the lines for BOTH the US and China. Both are increasing at an increasing rate--getting steeper.

Granted China's trend line is steeper, but they were starting from a lower base number.  The only anomaly is that in 2010 we took a dip and China did not. I have to assume when our recovery ramps up, our trend line will also head up. 

What do I see out of this?  Manufacturing does not appear to be a "zero-sum game"---their gain does not have to be our loss.  As discussed at Carpe Diem, we are not manufacuting the low tech, low skill, low wage paying stuff we see at Wal-mart but higher tech, higher skilled, knowlege-based, higher wage paying goods/services.  Isn't that what really should matter?

(The source of Prof. Perry's blog entry is this article in the Boston Globe)
View My Stats