Hey Billy, How does this impact your perspective on our need for an industrial policy?
http://www.fivethirtyeight.com/2010/02/us-manufacturing-is-not-dead.html > There is a common theme across the internet: US manufacturing is dead and > it's never coming back. Well, there's a big problem with that analysis: it's > not true. In fact, as the chart above indicates, it's actually false. Note > that since 1960, the index of industrial production has risen from a little > below 30 to its current level of about 100. And note the increase is > continual -- meaning the number didn't just hover around 30 for most of that > time only to spike up in one big move. The index has continually risen over > that entire period. > ... > Instead, what people are commenting on is the drop in manufacturing > employment.... Non-durable goods manufacturing is even worse. From the > mid-1960s to the early 200s, total employment in this area hovered around a > 6.8 million. However, starting in 2000, the number fell off a cliff, losing > almost 2 million people. This is the lowest the number has been in over 60 > years. Depressing, but resist blaming China: > US Manufacturing is alive and well. The real issue is manufacturing > employment, which is dropping like a stone. And the reason for the drop is an > increase in productivity. > > Many people have a knee-jerk reaction to the decline in manufacturing jobs > and immediately blame outsourcing/imports for this decline. The following > graph demonstrates that the linkage between increased imports and a decline > in manufacturing jobs is virtually nonexistent. Controversial, but they back it up with a ton of data (nicely illustrated with graphs). That said, the author is actually in favor of *proactive* industrial policy to create new jobs > Secondly, there have been calls for a US industrial policy -- that is, for > Washington to essentially "pick winners and losers" by promoting some > industries that they feel have a high probability of success. Asian countries > have been doing this for years with remarkable success and it is a policy > which we clearly need to copy. I'm a big promoter of nano-technology, > alternative energy and stem cell research, but those are just my choices. > There are plenty others out there that would also make sense. -- rather than a reactive one focused on saving old jobs: > the data appear to show that the real factor in goods job creation (or loss) > is the relationship between productivity and production, which unfortunately > leaves little room for protectionism (even sans the trade war implications > that would create), as unless productivity falls precipitously we would see > no net job creation from any such endeavor. Would be interested in hearing your take. -- Ernie P. _______________________________________________ Centroids mailing list: [email protected] http://radicalcentrism.com/mailman/listinfo/centroids_radicalcentrism.com Archives at http://radicalcentrism.org/pipermail/centroids_radicalcentrism.com/
