I think ‘we’ are Slowly waking up. ( I Do think many in the US still don’t realize something Really serious is ‘up’.
We see ‘my’ job is gone, ‘my’ city is ‘gone’.
Try this;
What was the first country to land men on the moon?
No.
China.
In 200 years, when the textbooks are written in China, the US landing on the moon will be like Leif Erickson’s (and American Indian’s) ‘discovery’ of America – forgotten.
America is going to have the Russians launch our astronauts??
We need not just honest money, honest jobs, but access to them.
I think this is a BIG event.
What is it ‘we’ are producing? I can’t believe it is good jobs, research.

The blue line going down is our 17% + unemployment. The other line showing steady productivity is partially true because a lot of the parts I use in my manufacturing busiess comes from China. We could eventually end up at 35% unemployment and still have a steady rate of productivity.Wake up, what good is productivity if you are the one without a job?

Hey johnjay, back in the 50’s nd 60’s my town was a powerhouse too. Schenectady, New York was the home of GE and American Locomotive. Nobody could move when the shifts changed. Now it’s just a Project.

For what it is worth, I grew up in Bridgeport, Connecticut in the 1950’s and 60’s.
That city was a manufacturing powerhouse, with factories churning out quality products and employing thousands of honest hardworking Americans. It is now Detroit in miniature.
Below is a list of the factories that shut down or moved away. Free Trade in action!
Bridgeport is now broke because it no longer serves any useful purpose.
Here is the list for Bridgeport/Stratford of vanished manufacturing capacity.

Acme Shear
American Chain and Cable
Avco Lycoming
Bassick Caster
Bead Chain Company
Bridgeport Brass
Bridgeport Machine
Bryant Electric
Bullards
Carpenter Steel
Casco
Columbia Records
Contract Plating
Dictaphone
Dupont
General Electric
Handy and Harmon
Harvey Hubbell
Jenkin’s Valves
Locke
Manning, Maxwell, and Moore
Metropolitan Body
McKesson and Robbins
Producto Machines
Raybestos Brakes
Remington Arms
Remington Electric Shaver
Singer Sewing Machines
Sprague Meters
Tek Bearings
Tilo Roofing

I believe that the federal government has re-defined manufacturing in recent years to include fast food preparation (ala burger king) as manufacturing. If this is so, many of our families are still involved in manufacturing. If so, perhaps we could export those nice warm whoppers to pay for our imports?

The only thing that America is good at manufacturing is “money”. They have printed more money in the past 2 years than 300 years of accumulated federal debt. I want to invest in the company that is supply ink and paper to those printing machines!

Dusty

THE TOP DOGS GET THE BENEFITS
WHILE WORKERS GET LAID OFF DUE TO EXEC S GREED AND MISTAKES
WHO GETS THE BIG YR BONUS ES WHO GETS SHAFTED
TRY A WALK IN THE HOES OF THE UNEMPLOYED
BELIEVE ME
I HAVE BEEN THEE
ITS NOT A VERY PRETTY PICTURE
SAY GOODBYE TO AMERICA AS WE KNEW IT

THE JOBS ARE GONE.
THE AMERICAN COMPANIES HAVE OUTSOURCED ALL BUT YOUR JOB!

Anyone can see that “manufacturing” in the US has declined over the years. Even to the point that the Gov’t has had to reclassify cooking food as manufacturing. It would also be interesting to see how much manufacturing activity during the past 8 years is military equipment used for our unending wars and how that has boosted the stats in the graph.

A news release today says more than some questionable gov’t stat.

“The US manufacturing sector has taken a dive in December to a 28-year low amid a deepening recession now embracing the once superpower.

Figures released by the Institute for Supply Management (ISM) suggest that the United States manufacturing output has now contracted for five months in a row, with activity declining to 32.4 percent in December from 36.2 percent in October.”

I’m surprised more people other than photradarscam haven’t brought up a very basic comment/question. What constitutes “manufacturing? Remember when some administratin tried to reclassify fast food burgers as Manufacturing? Afterall, I’m sure the reasoning went, hamburgers are being “made”. It’s necessary in this discussion to start with an accurate breakdown of honest
manufacturing figures. Furthermore. as others have noted, what percentage of a product is actually made here and not overseas? Sorry, but it seems like BS to me.

Why is John Williams listened to if we don’t believe in governmnet numbers?

“These are all reactive economies but US will always be in forefront for finite number of years in creating a proactive atmosphere about new products and making people experiment their life style with innovation.”

Yes indeed, the caveat emptor (‘for finite number of years’)…

And what do you think might prompt those ‘finite number of years’?

Gee, do you think it might be an over-intrusive GOVERNMENT…?

Nahhhh…

And what loyalty to the tenets of Washington, Madison, Adams and Locke do the Brain-trusts from India and China, that fuel much of our ‘innovative’ domestic manufacturing, have here that would keep them from going back to ‘innovate’ in their home countries who are now experiencing a transformation to a more modern economy?

Would it be the tenets of our Founding Fathers, our would it be the scratch of higher-valued Rupees or Yuan?

Yeah, I know it sounds all Ron Paul-ish and jingoistic. But it just happens to be true.

Watch it play out.

The future of manufacturing both low and high ASP (average selling price) products in volume is no longer applicable to the US. From 1979 to 2002, I worked in Colorado with Hewlett Packard, Storage Technology, Seagate, Maxtor, Digital Equipment, both in manufacturing, engineering and purchasing. Luckily we didnt have a union workforce that commanded more $$ for less work, higher overheads, etc.. but manufacturing and engineering costs are too high to be competitive in the world market place. Let’s face it we are now best able to service the economy by creating paper, destroying most manufacturing jobs and supporting a parasitic government job creation.

Measuring labor productivity in the US reminds me of college football. I do believe we are packing more punch per hour worked, just like I believe that Urban Meyer did, indeed, pack 30 years of coaching success into 9 years of coaching. But at what cost? He’s a forty year old man who just about died of a heart attack, and has the health issues of someone twice his age, unfortunately. Similarly, if we’re prepared to treat workers as interchangeable parts, perhaps we can keep it up. Just keep replacing the dead guys with fresh troops. But its not clear to me this type of labor “productivity” is sustainable in the long run. If it is, then you still want to be an owner of capital, relaxing on ur boat while capturing the gains of someone else’s life-killing labor. Cruel reality inside seemingly benign numbers.

Richard Russell has quoted different figures for many years: in the late 1960s 55% of the profits on the NYSE were derived from manufacturing companies while today that percentage has dropped to 9%. That coincides with my own observations that most heavy manufacturing has moved offshore, first to Japan, then to Korea/Taiwan and most recently to China. I saw a Wall Street Journal article which claimed that 87% of manufacturing remaining within the US was defense related. This is corroborated by my own trips to Walmart where virtually no manufactured goods are for sale that are produced in the US. Elsewhere I saw a new Caterpillar machine, with the manufacturer’s information affixed to it: Made in China.

My daughter in high school statistics class knows that a statistician can create a graph or chart to make whatever point is currently in vogue. From life experience, I see that my REAL wages buy much less than they did in 1970.

My REAL share of GDP has gone down since 1970. So, whose REAL share of GDP has gone up since 1970?

It doesn’t matter how much manufacturing the US has if the upper management is the only class that benefits, in REAL wealth terms, from the increased productivity of the workers.

When a class removes more wealth than it returns, society has a problem, an increasingly serious problem. Is this what is happening in the US since 1970?

If our country is to return to solid footing economically, then the workers need to take back what is theirs, the fruits of their labor. In the last 30 years, the upper management in ALL sectors, in concert with our corrupt government, has become entrenched in their philosophy of robbing from the masses in more and more diabolical ways. They won’t willingly change. History has proven that!

Will decreased outsourcing and less offshoring bring back the good life? Ha ha!
Will increased exports bring back the good life? Ha ha! Will Americans technical innovation and creativity bring back the good life? Ha ha! Will addressing trade imbalances bring back the good life? Ha ha!

Will American workers REAL wages going up bring back the good life? YES! YES! YES!

How can we raise REAL wages? By pleading with our leaders to stop plundering the masses? Ha ha!

Many Americans have the Spirit of ’76!

Sorry Brad but all BLS statistics are suspect these days. They must include the manufacture of red tape.
The present administration will continue to introduce red tape so that small manufacturers will fold and new ones will choose the government handouts instead of taking entrepreneurial risk. So the USA will look like Europe, then China, if the 2010 elections don’t change the composition of Congress and the Senate. After all, over 50% (I hear 70%) of those members are lawyers. They manufacture red tape and if that’s not in your stats, they’ll fall off a cliff.

As manufacturing jobs chase the cheapest locations around the globe to perform such, this will remain. Eventually everyplace has a minimum price that one will perform such a job, the question is how close are we to that point. As standards of living rise throughout the world, this scenario (of running out of cheap places) gets closer.

Below is Peter Ducker’s take on the future of manufacturing from “A survey of the near-future – The Next Society”, economist.com, November 1, 2001, that may be of interest. The information Age proper will begin after the next Great Depression just as the Manufacturing Age proper began after the Great Depression of the 19th C.

The manufacturing paradox

How to get far more output with far fewer workers?

In the closing years of the 20th century, the world price of the steel industry’s biggest single product——hot rolled coil, the steel for car bodies——plunged from $460 to $260 a ton. Yet these were boom years in America and prosperous times in most of continental Europe, with automobile production setting records. The steel industry’s experience is typical of manufacturing as a whole. Between 1960 and 1999, both manufacturing’s share in America’s GDP and its share of total employment roughly halved, to around the 15% mark. Yet in the same 40 years manufacturing’s physical output doubled or tripled. In 1960, manufacturing was the centre of the American economy, and of the economies of all other developed countries. By 2000, as a contributor to GDP it was easily outranked by the financial sector .

The relative purchasing power of manufactured goods (what economists call the terms of trade) has fallen by three-quarters in the past 40 years. Whereas manufacturing prices, adjusted for inflation, are down by 40%, the prices of the two main knowledge products, health care and education, have risen about three times as fast as inflation. In 2000, therefore, it took five times as many units of manufactured goods to buy the main knowledge products as it had done 40 years earlier.

The purchasing power of workers in manufacturing has also gone down, although by much less than that of their products. Their productivity has risen so sharply that most of their real income has been preserved. Forty years ago, labour costs in manufacturing typically accounted for around 30% of total manufacturing costs; now they are generally down to 12-15%. Even in the car industry, still the most labour-intensive of the engineering branches, labour costs in the most advanced plants are no higher than 20%. Manufacturing workers, especially in America, have ceased to be the backbone of the consumer market. At the height of the crisis in America’s “rust belt”, when employment in the big manufacturing centres was ruthlessly slashed, national sales of consumer goods barely budged.

What has changed manufacturing, and sharply pushed up productivity, are new concepts. Information and automation are less important than new theories of manufacturing, which are an advance comparable to the arrival of mass production 80 years ago. Indeed, some of these theories, such as Toyota’s “lean manufacturing”, do away with robots, computers and automation. One highly publicised example involved replacing one of Toyota’s automated and computerised paint-drying lines by half a dozen hairdryers bought in a supermarket.

Manufacturing is following exactly the same path that farming trod earlier. Beginning in 1920, and accelerating after the second world war, farm production shot up in all developed countries. Before the first world war, many Western European countries had to import farm products. Now there is only one net farm importer left: Japan. Every single European country now has large and increasingly unsaleable farm surpluses. In quantitative terms, farm production in most developed countries today is probably at least four times what it was in 1920 and three times what it was in 1950 (except in Japan). But whereas at the beginning of the 20th century farmers made up the largest single group in the working population in most developed countries, now they account for no more than 3% in any developed country. And whereas at the beginning of the 20th century agriculture was the largest single contributor to national income in most developed countries, in 2000 in America it contributed less than 2% to GDP.

Manufacturing is unlikely to expand its output in volume terms as much as agriculture did, or to shrink as much as a producer of wealth and of jobs. But the most believable forecast for 2020 suggests that manufacturing output in the developed countries will at least double, while manufacturing employment will shrink to 10-12% of the total workforce.

In America, the transition has largely been accomplished already, and with a minimum of dislocation. The only hard-hit group have been African Americans, to whom the growth in manufacturing jobs after the second world war offered quick economic advancement, and whose jobs have now largely gone. But by and large, even in places that relied heavily on a few large manufacturing plants, unemployment remained high only for a short time. Even the political impact in America has been minimal.

But will other industrial countries have an equally easy passage? In Britain, manufacturing employment has already fallen quite sharply without causing any unrest, although it seems to have produced social and psychological problems. But what will happen in countries such as Germany or France, where labour markets remain rigid and where, until very recently, there has been little upward mobility through education? These countries already have substantial and seemingly intractable unemployment, eg, in Germany’s Ruhr and in France’s old industrial area around Lille. They may face a painful transition period with severe social upheavals.

The biggest question mark is over Japan. To be sure, it has no working-class culture, and it has long appreciated the value of education as an instrument of upward mobility. But Japan’s social stability is based on employment security, especially for blue-collar workers in big manufacturing industry, and that is eroding fast. Yet before employment security was introduced for blue-collar workers in the 1950s, Japan had been a country of extreme labour turbulence. Manufacturing’s share of total employment is still higher than in almost any other developed country—around a quarter of the total—and Japan has practically no labour market and little labour mobility.

Psychologically, too, the country is least prepared for the decline in manufacturing. After all, it owed its rise to great-economic-power status in the second half of the 20th century to becoming the world’s manufacturing virtuoso. One should never underrate the Japanese. Throughout their history they have shown unparalleled ability to face up to reality and to change practically overnight. But the decline in manufacturing as the key to economic success confronts Japan with one of the biggest challenges ever.

The decline of manufacturing as a producer of wealth and jobs changes the world’s economic, social and political landscape. It makes “economic miracles” increasingly difficult for developing countries to achieve. The economic miracles of the second half of the 20th century – Japan, South Korea, Taiwan, Hong Kong, Singapore – were based on exports to the world’s rich countries of manufactured goods that were produced with developed-country technology and productivity but with emerging-country labour costs. This will no longer work. One way to generate economic development may be to integrate the economy of an emerging country into a developed region – which is what Vicente Fox, the new Mexican president, envisages with his proposal for total integration of “North America”, ie, the United States, Canada and Mexico. Economically this makes a lot of sense, but politically it is almost unthinkable. The alternative – which is being pursued by China – is to try to achieve economic growth by building up a developing country’s domestic market. India, Brazil and Mexico also have large enough populations to make home-market-based economic development feasible, at least in theory. But will smaller countries, such as Paraguay or Thailand, be allowed to export to the large markets of emerging countries such as Brazil?

The decline in manufacturing as a creator of wealth and jobs will inevitably bring about a new protectionism, once again echoing what happened earlier in agriculture. For every 1% by which agricultural prices and employment have fallen in the 20th century, agricultural subsidies and protection in every single developed country, including America, have gone up by at least 1%, often more. And the fewer farm voters there are, the more important the “farm vote” has become. As numbers have shrunk, farmers have become a unified special-interest group that carries disproportionate clout in all rich countries.

Protectionism in manufacturing is already in evidence, although it tends to take the form of subsidies instead of traditional tariffs. The new regional economic blocks, such as the European Union, NAFTA or Mercosur, do create large regional markets with lower internal barriers, but they protect them with higher barriers against producers outside the region. And non-tariff barriers of all kinds are steadily growing. In the same week in which the 40% decline in sheet-steel prices was announced in the American press, the American government banned sheet-steel imports as “dumping”. And no matter how laudable their aims, the developed countries’ insistence on fair labour laws and adequate environmental rules for manufacturers in the developing world acts as a mighty barrier to imports from these countries.

Smaller numbers, bigger clout

Politically, too, manufacturing is becoming more influential the fewer manufacturing workers there are, especially in America. In last year’s presidential election the labour vote was more important than it had been 40 or 50 years earlier, precisely because the number of trade-union members has become so much smaller as a percentage of the voting population. Feeling endangered, they have closed ranks. A few decades ago, a substantial minority of American union members voted Republican, but in last year’s election more than 90% of union members are thought to have voted Democrat (though their candidate still lost).

For over 100 years, America’s trade unions have been strong supporters of free trade, at least in their rhetoric, but in the past few years they have become staunchly protectionist and declared enemies of “globalisation”. No matter that the real threat to manufacturing jobs is not competition from abroad, but the rapid decline of manufacturing as a creator of work: it is simply incomprehensible that manufacturing production can go up while manufacturing jobs go down, and not only to trade unionists but also to politicians, journalists, economists and the public at large. Most people continue to believe that when manufacturing jobs decline, the country’s manufacturing base is threatened and has to be protected. They have great difficulty in accepting that, for the first time in history, society and economy are no longer dominated by manual work, and a country can feed, house and clothe itself with only a small minority of its population engaged in such work.

The new protectionism is driven as much by nostalgia and deep-seated emotion as by economic self-interest and political power. Yet it will achieve nothing, because “protecting” ageing industries does not work. That is the clear lesson of 70 years of farm subsidies. The old crops—corn (maize), wheat, cotton—into which America has pumped countless billions since the 1930s—have all done poorly, whereas unprotected and unsubsidised new crops—such as soya beans—have flourished. The lesson is clear: policies that pay old industries to hold on to redundant people can only do harm. Whatever money is being spent should instead go on subsidising older laid-off workers, and retraining and redeploying younger ones.

If the U.S. doesn’t become a net exporter of goods in the future then what future do we have? The trade imbalances can’t go on forever. It’s only natural that the U.S. must increase it’s output. I don’t see the chart as a rosy picture at all for two reasons. First, if manufacturing has become more efficient then workers should be earning a higher real wage which isn’t the case. Second, I’d like to see the chart next to one that shows the output of the rest of the world. It would be sad and would only show the U.S. having no real growth. If the U.S. is flat and the rest of the world is increasing production then why is that supposed to be hailed as such a good thing?

We worried about the Japanese economic miracle in 1989 before they lost two decades by going down the same neoKeynesian road as the USA and refusing to let failed businesses go. Similar may happen to China. Central command economies do not work long. The USA still leads the world in energy and tech. Three examples might be PCX, TEG and ASEI on pullbacks, targeting 22, 90 and 100…

*****

QID might be an interesting trade from 18 to 30…