I have argued time and again that America’s growing aversion to trade during the past few years is the product of myth perpetuation by campaigning politicians, captured policymakers, TV media charlatans, and woefully ill-informed newspaper columnists. Harold Meyerson always comes to mind as emblematic of this last category, so his fallacy-laden diatribe about the decline of U.S. manufacturing in yesterday’s Washington Post is par for the course.
Meyerson makes some claims that cannot be allowed to stand, such as.
“”We don’t [make things] any more – at least, not like we used to. Since 1987, manufacturing as a share of our gross domestic product has declined 30 percent.”
First of all, please note that Meyerson’s second sentence does nothing to support his first. A decline in the manufacturing sector’s share of the total economy speaks to the rapid growth of other sectors of the economy, but says nothing about the change in U.S. manufacturing output or value-added.
According to data from the 2009 Economic Report of the President, as gathered and reported yesterday by George Mason University Economics Professor Don Boudreaux, since 1987 real U.S. manufacturing output has increased by 81 percent – hardly a sign of manufacturing decline.
The facts – as reported by the Bureau of Economic Analysis – demonstrate that real manufacturing value-added reached a record high level in 2007 (the last year for which final data are available). Notwithstanding the recent recession that has affected all sectors of the economy, U.S. manufacturing has been thriving in recent years.
Second, if the United States doesn’t “make things anymore,” then nobody does. According to data from the United Nations Industrial Development Organization, U.S. factories are the world’s most prolific, accounting for 25 percent of global manufacturing value-added. By comparison, Chinese factories account for 10.6 percent.
That may be hard to fathom, given that everyone’s favorite story about shopping in retail establishments these days is that it’s impossible to find anything labeled “Made in the USA.” But that’s because, increasingly, U.S. manufacturing produces sophisticated components, such as airplane parts, not consumer goods.
American manufacturing is by no means in decline. What should be is Meyerson’s myopic way of seeing things.