05.20.11

Manufacturing said to be coming back — in inches

Posted in Made in China at 6:56 am by George Smith

From Krugman:

The story so far: In the 1990s, U.S. manufacturing employment was more or less steady. After 2000, however, it entered a steep decline. The 2001 recession hit industry hard, while the bubble-fueled expansion of the decade’s middle years — an expansion marked by a huge rise in the trade deficit — left manufacturing behind. By December 2007, there were 3.5 million fewer U.S. manufacturing workers than there had been in 2000; millions more jobs disappeared in the slump that followed.

Crucially, the manufacturing trade deficit seems to be coming down. At this point, it’s only about half as large as a share of G.D.P. as it was at the peak of the housing bubble, and further improvements are in the pipeline. The Boston Consulting Group, which is now predicting a U.S. “manufacturing renaissance,” points to major U.S. firms like Caterpillar that once shifted production abroad but are now moving it back. At the same time, companies from other countries, especially European firms, are moving production to America.

I don’t want to suggest that everything is wonderful about U.S. manufacturing. So far, the job gains are modest, and many new manufacturing jobs don’t offer good pay or benefits.

Um, Europe moving production to America — mostly because of worker wage compression, not having to deal with unions in the south, and lowered standard of living, among other factors.

Krugman credits this to current policy and the cheaper dollar. Which will surely drive the fiat money kooks wild.

However, it’s still not enough to offset this, not by orders of magnitude:

On the ground, almost everything the average American buys — other than automobiles — is made in China.

There is no other option.

As a side note, earlier in the week, along with millions, I was a recipient of the Obama machine’s clever idea to put his birth certificate on a T-shirt, along wiith “Made in USA” under his picture.

I haven’t been able to buy American-made T-shirts in years. For example, all the Pasadena-themed garments in, uh, Pasadena, are made in China.

And while I’m not going to buy one of these things to check, unless the operation got off a special dispensation to an American made factory, I’m betting these aren’t, either.

But verification or proof of American origin is left to the future research of others.

Comments are closed.