Saturday, February 26, 2011

American Manufacturing Decline: Media/Politician-Driven Myth vs. Undeniable Reality

One of this blog's most prominent themes is the identification and destruction of protectionist myths that, despite being totally and utterly fallacious, remain firmly planted in the American psyche due to constant manipulation repetition by lazy media and certain opportunistic politicians.  Perhaps the biggest myth of all is the unfounded assertion that the American manufacturing sector is in tatters, due mainly to a hyper-competitive China that has eaten our collective lunch.  For anyone paying attention (or living here or in places like it), this assertion is a complete joke.  Yet the myth doesn't just endure; it thrives.

Case in point...

All next week, the braintrust at ABC will run on its evening news program a new segment called "Made in America," in which they will (a) bemoan the current state of American manufacturing; and (b) challenge Americans to devote their daily lives to buying only American-made stuff (Ford Pintos for everyone!).  They've kicked off this hackneyed festival of inanity new segment with a website where you can do all sorts of awesome stuff like surf an interactive map to find where certain items are made in America, or meet American families who make American stuff, or take an (American!) quiz to find out "what classic brands are no longer made in America."  (I also think there's a chat room where you can just type "AMERICA" over and over and over, but I couldn't find the link right now.)  ABC News also ran an introductory segment on Thursday's program lamenting the sad fact that all the kitschy, low-quality souvenirs that you buy in Washington, DC are - gasp! - made in China, Taiwan and, well, everywhere but the USA.

I forced myself - Clockwork Orange-style - to watch this segment, and to read the accompanying story, and it is just as awful and misleading as you'd expect.  If you'd like to spare yourself the misery, here's a completely unbiased and accurate summary:
The cheap American flag pins and other hideous souvenirs sold in our nation's capital are made in China/Mexico/Taiwan/etc and not in the dear ol' U.S. of A.  This is obviously disgraceful for lots of jingoistic reasons that we can't say on the air, but - wink wink - you true American patriots get the idea.  America's souvenir-making impotence is undeniably indicative of our nation's overall manufacturing demise.  If only there were something we could do to save America and its good, hardworking workers from the Great Red Souvenir-making Menace.  If only there were a second-rate evening news program that could save us all.  ABC to the rescue.  We'll be right back.
The video segment also notes that a push to Americanize DC's foreign-occupied souvenir industry has emerged from a "US Senator."  The story's print version illuminates that this "Senator" is none other than self-avowed socialist (gee, I wonder why they left that out of the TV version?) Bernie Sanders of Vermont who wrote an angry letter to the Smithsonian saying, among other things:
It appears that a museum owned by the people of the United States, celebrating the history of the United States, cannot find companies in this country employing American workers that are able to manufacture statues of our founding fathers, or our current president...  That is pretty pathetic!  I was not aware that the collapse of our manufacturing base had gone that far.
And there you have it, folks.  The media/politician manufacturing-myth exacta.  Well done, ABC.  Well done indeed.


There are so many things wrong with this news segment, and ABC's entire "Made in America" special, that I can't possibly hit on all of them here.  For one, it's never really clear to me why ABC so desperately wants America to be the world's number one maker of cheap crap (and trust me, if you've ever been in a DC souvenir shop, you know that calling that stuff "crap" is actually doing a disservice to excrement).  Second, and more broadly, the folks at ABC never stop to ponder the economic problems that would result from making everything - especially low-end consumables - in America.  (More on that here, here and here.)

But for my non-economist money, the most egregious problem with ABC's program is that they never once inform their trusting viewers of the undeniable fact that, while America might have a comparative disadvantage at flag-pin manufacturing (nooooo!), the US manufacturing sector as a whole is absolutely dominating.  This, of course, is an issue on which I and many others have blogged repeatedly, but, hey, ABC's producers and researchers are busy, so maybe they missed all of that.  Maybe they also were too busy talking with Senator SocialistSanders to read Mark Perry's excellent (and well-timed!) op-ed in yesterday's Wall Street Journal on the "The Truth About US Manufacturing":
Is American manufacturing dead? You might think so reading most of the nation's editorial pages or watching the endless laments in the news that "nothing is made in America anymore," and that our manufacturing jobs have vanished to China, Mexico and South Korea.

Yet the empirical evidence tells a different story—of a thriving and growing U.S. manufacturing sector, and a country that remains by far the world's largest manufacturer....

International data compiled by the United Nations on global output from 1970-2009 show this success story. Excluding recession-related decreases in 2001 and 2008-09, America's manufacturing output has continued to increase since 1970. In every year since 2004, manufacturing output has exceeded $2 trillion (in constant 2005 dollars), twice the output produced in America's factories in the early 1970s. Taken on its own, U.S. manufacturing would rank today as the sixth largest economy in the world, just behind France and ahead of the United Kingdom, Italy and Brazil.

The truth is that America still makes a lot of stuff, and we're making more of it than ever before. We're merely able to do it with a fraction of the workers needed in the past.

Consider the incredible, increasing productivity of America's manufacturing workers: The average U.S. factory worker is responsible today for more than $180,000 of annual manufacturing output, triple the $60,000 in 1972.

These increases are a direct result of capital investments in productivity-enhancing technology, which last year helped boost output to record levels in industries like computers and semiconductors, medical equipment and supplies, pharmaceuticals and medicine, and oil and natural-gas equipment.
Perry's blog provides some backup visuals to really hammer his op-ed points home:

And, heck, since we're sharing pretty pictures, here's one more from my blog to further destroy ABC's meme du jour:

This important graph shows that the decline in manufacturing jobs is a worldwide phenomenon that is unrelated to trade deficits or surpluses (and, just so we're clear, China's losing manufacturing jobs too).  As I said at the time of posting, "According to the CIA's World Factbook, Germany, the United States, Japan, Italy, France, the Netherlands and the UK are all among the world's top ten merchandise exporters; according to the OECD, some are net importers, and others are net exporters. Yet the long-term employment trend for each country is decidedly downward (but for a few random upticks).  So neither a country's total exports output nor its trade balance is a magical recipe for increasing - or even retaining - manufacturing jobs."

And yet, you'll never hear any of this reality-based sanity on ABC or any other TV network.  It's for this reason that, upon reading Perry's new WSJ op-ed, Cato's Dan Ikenson (who's valiantly fought the manufacturing myth for years nowblogged:
University of Michigan economist and American Enterprise Institute scholar Mark Perry has an excellent oped in today’s Wall Street Journal [$] about how U.S. manufacturing is thriving. It can’t be emphasized enough how important it is to present such illuminating, factual, compelling analyses to a public that is starved for the truth and routinely subject to lies, half-baked assertions, and irresponsibly outlandish claims about the state of American manufacturing.

The truth matters because U.S. trade and economic policies—your pocketbook—hang in the balance.
Indeed.  You see, it's ridiculous, lazy segments like ABC's that cause many unwitting Americans to support protectionism and other horrid economic policies peddled by economic snake-oil salesmen like Bernie Sanders and others.  And it's these policies that, while clearly benefiting discrete and well-connected interest groups (like American flag pin-makers!), are just awful for the rest of us because they retard the free market's natural - and immensely beneficial - evolutionary process.  As Perry noted in his op-ed:
Our world-class agriculture sector provides a great model for how to think about the evolution of U.S. manufacturing. The U.S. produces more agricultural output today—with only 2.6% of our work force involved in farming—than we did 100 years ago, when farming jobs represented almost 40% of the labor force. Likewise, we're able to produce twice as much manufacturing output today as in the 1970s, with about seven million fewer workers. That means yesterday's farmhands and plant workers can become today's computer engineers, medical doctors and financial managers.
Sanders and others seek to deny the American citizenry this obvious improvement.  They would prefer that our farmers and plant workers remain "in their place," rather than move up the economic food chain to their, and our society's, obvious benefit.  And ABC (who is certainly not alone) helps them do it with Made in America and the myriad "news" segments just like it.

ABC and other mainstream media outlets would do the nation a great service by escaping their bubbles of conventional wisdom and reporting on America's awesome market evolution, or on the truly amazing advances in American manufacturing productivity and our nation's continued industrial dominance.  But don't hold your breath waiting for that story.  Nope, ABC is far too busy lamenting our fake flag-pin-failures to notice our real, and far more important, successes.

No wonder nobody watches the "news" anymore.

No comments: