Heavy Lifting - thoughts and web finds by an economist
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Tuesday, March 06, 2007
Claims that the U.S. manufacturing base is in severd decline seem to focus on the number of jobs, which is a strange "labor theory of value" approach, rather than the amount produced.
However, the rest of the world wants our stuff and, evidently, we are completely capable of producing stuff. The U.S. exported $1 trillion in merchandise in 2006 (and imported $1.8 trillion in merchandise); the tenth largest economy in the world is Brazil at $1.12 trillion and the eigth largest economy is Italy at $1.79 trillion (more here).
One problem with focusing on jobs rather than production is that it masks the tremendous productivity gains that the United States is able to capture. Here are the growth rates of merchandise exports and imports since the 2000 recession:
Some might carp about trade deficits, which are not per se bad, but the deficits completely hide the fact that exports of merchandise goods has recovered tremendously after the short recession of 2000.
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