WHERE'S THE JOBS?
This NYT article on the state of manufacturing jobs made me rather nostalgic. No, not for "boxgate" and the theatrics of China trade political economy, but for 1980s Wendy's ads:
The administration's desparation on the issue of jobs and manufacturing is not even funny anymore. It's pathetic. Earlier this week, the Council of Economic Advisors' Greg Mankiw waxed philosophic on the nature of manufacturing, echoing earlier pronouncements in the ERP:
"When a fast-food restaurant sells a hamburger, is it providing a service or combining inputs to manufacture a product?"
Would a hamburger by any other name taste but as sweet?
The statistical classification for manufacturing activities is admittedly not-so-lucidly defined as enterprises "engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products."
Um, yeah. When they start trying to pass off minimum wage earning burger flippers as phantom manufacturing jobs, you know they are in deep (political) trouble, and we are all in deep trouble.
Check this pretty little picture:
The solid line represents the US manufacturing trade balance (the amount we export less the amount we export), which has been in deficit pretty steadily since the early 1980s. The dashed line represents the US current account deficit, which is edging up over 5% these days, a threshold where many economic studies show is the breaking point for a major financial crisis. As this picture shows, the current account deficit is driven almost entirely by the deficit in manufacturing (looking at the rest of trade, our trade surplus in services--which has been shrinking, too, in recent years--and our surplus in agricultural exports--aided by our dismal agricultural policy that is impoverishing much of the world--roughly pay the bill for American oil imports).
Those manufactured goods--and I don't mean the hamburgers--that we no longer make, but instead import from China, are driving our country to financial ruin. It's no wonder the Bush administration wants to hide the fact.
Unconventional wisdom on global political economy.
Friday, February 20, 2004
WHERE'S THE JOBS?