American Manufacturing: Miraculously on the Upswing

Manufacturing In The US Is Making A Historic Comeback

Read more: http://www.theatlantic.com/magazine/archive/2012/12/the-insourcing-boom/309166/#ixzz2F9DSav2I

In the spirit of blaming the President for macroeconomic trends outside of any individual's hands, it must be said---

Thank you President Obama.

 

That's a misnomer---reading the article, manufacturing did not shrink so much as manufacturing activity indexes, which are an indication of present perceptions of manufacturing based largely on comparison to the past month, and which includes a whole lot of other factors that just pure output.

In this example---

Means November readings simply gather the fact that conditions are worse than in October. Of course, Hurricane Sandy might have something to do with that.

Manufacturing itself, well, all's well that ends well---

Read more: http://www.foxbusiness.com/economy/2012/12/14/us-manufacturing-rebounds-post-sandy/#ixzz2F9aKOSEw

Part of the disconnect is probably due to the upcoming fiscal cliff, which is weighing on industry figures by pushing down external demand and in general causing a whole lot of fear. Of course the fiscal cliff aims to slash spending on a terrible level (which have much more favorable fiscal multipliers) while raising revenue. Essentially, the fiscal cliff represents some of the dangers of the Republican plan for the economy. Commodore, I think it was you who asked how "return to Clinton-era rates would cause a recession/LFPR contraction"...this is one reason why.

So, thank you Republicans!

For more information on the PMI and other related indexes---

http://www.investopedia.com/university/releases/napm.asp

Read more: http://www.investopedia.com/university/releases/napm.asp#ixzz2F9bEEs5t

 

It would appear that there are some benefits being "trickled down".

Blue collar unemployment fell off a cliff thanks to Lehman Brothers et. al, but it is recovering with a ferocity.

 

Blue collar workers were hit disproportionately hard.

Changing that has to begin somewhere. I do agree with you that it will be very hard, but when has that ever stopped America from trying?

 

A Republican reappointed by a Democrat---and who seemingly half of the Republican Party despises, or wants to see tried for treason.

 

Yes, the first peek upwards since the late 90s.

Also, a simple numbers game on this is way too simplistic.

There's a bunch of reasons why, but I'll focus on a key one---it utterly fails to capture a crucial variable; the ever-increasing labour manufacturing productivity. I'm not really on the "productivity wipes EVERYTHING" side on this one, and you can poke holes in how productivity itself is measured, but to completely ignore it is a bit troubling.

For perspective---

http://rogerpielkejr.blogspot.ca/2012/02/does-increased-productivity-decrease.html

 

There's a few reasons why manufacturing jobs are particularly economically beneficial.

I will now cite the Brookings report I partially countered in the previous post.

With that said, labour manufacturing productivity is actually constantly increasing, and may actually be holding manufacturing employment numbers down from where they should be (as explained in previous post). A stagnant wage helps explain some of the differential (and is a distorted price signal itself, given the boundless increases in labour manufacturing productivity). Price signals have been distorted once again by the wise all-knowing owners of capital who seem only now, by their own admission, to be realizing that producing in America makes a whole lot more sense.



Free market! Hooray invisible hand! No one needs unions, ever.

 

The price is flawed in the first place. For reference, check my previous post.

In any case, taking your argument head-on, it's not because things like these are Marshallian Externalities; in other words they accrue social benefits but not private ones, and are thus under-priced from a societal viewpoint.

Does it benefit the American people to have a less ridiculous current account deficit? For the sake of simplicity (though this could literally be an university class in of itself), let us say yes. As such, keeping manufacturing jobs in America does this (as America will manufacture more goods, importing less and exporting more), and benefits American society as a whole. Do private agents have an incentive to benefit American society as a whole? Not unless they are capturing that profit. But the American people are capturing that value, and thus have a very real interest in keeping manufacturing jobs that goes beyond what a private agent would value.

I'm assuming you care at least a bit about benefits accruing to the American people seeing as how you are one of them, but correct me if I'm wrong.