Home Economics American Manufacturing Doesn't Need Revitalising

American Manufacturing Doesn’t Need Revitalising

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The American Prospect tells us that Joe Biden will be real good for American manufacturing. Because, apparently, spending money on more expensive supplies of whatever is a good thing. The base problem here though is more fundamental:

This is a revolutionary challenge, not just to Trump—but to decades of bipartisan trade policy that sold out American industry. If put into practice, Biden’s plan just might make American manufacturing great again.

American manufacturing is great, it’s never stopped being great either. Thus it doesn’t need reviving either.

We can see this from output:

It’s at, or at least very near, all time highs. We can’t even say that manufacturing is more stable than services because that variance in output is greater than that in GDP over the business cycle.

So what is it that needs to be revitalised? Perhaps it’s employment?

Sure, there’s that Covid-19 spike to think about but we can’t be running industrial policy over short term issues like that. We had full employment before all of this. Which brings us to this:

Perhaps for some reason it’s just thought good that there should be more people employed in manufacturing? But that comes with a problem. If we’re – normally, OK – at full employment then why would we want more people to be employed in manufacturing? Doing so would mean that we’ve got to take people away from producing other things that we obviously desire. Sure, maybe the country would be better with fewer haircuts and more swamp coolers but who is it that gets to decide that? Most of us would think that it should be consumers who do. Not journalists at least and involving politicians in such personal preferences would seem a bit odd.

So, to have more people in manufacturing for some purpose or other what is it that we’re going to give up by taking people away from making them? And do note that we can and do import manufactures while services are rather more difficult to put into a box and ship.

Perhaps manufacturing pays more so this would raise all American wages?

No, that doesn’t work either.

It’s mystifying therefore. It’s just generally assumed that more people bashing things is better. Not that it is but that’s the insistence.

Maybe The American Prospect just has the hots for Richard Trumka, who the hell knows?

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