To follow up on that article, someone asked me to comment on it, and here is my reply:
Dear Brad,


The answers one gets always depend on the questions one asks and the measures one uses. NRO (and the Cato Institute) apparently use the following measures:
"But here’s the kicker. U.S. manufacturing is not in decline ­ not by any stretch. Manufacturing is thriving by historic standards and relative to other countries’ manufacturing sectors. In 2006, the sector achieved record output, record sales revenue, record profits, record profit rates, record return on investment, and record exports. U.S. factories continued to be the world’s most prolific in 2006, accounting for just over 20 percent of the world’s manufacturing value-added. By contrast, Chinese factories accounted for just 8 percent."

I Don't know where these numbers come from, and the article isn't helpful. Nor is it clear what a phrase like "20 percent of the world’s manufacturing value-added" actually means. But in any case, they are not the proper measures. Nations grow wealthy and secure by making enough to support their needs (real or perceived) on their farms, factories and mines, and to finance the imports the need or want. The health of every other industry depend on these. It is silly to speak of a "service economy" without presuming something to service; you can't grow rich selling each other insurance policies, or taking in each other's laundry. And if your financial inter-mediation business is all about foreign firms, then its really about handing over your capital to someone else.

So the questions to ask are whether our farms, factories, and mines earn enough to support us. Clearly they don't, or we would not be running the current account and trade deficits that we do. And we ask further questions about the security and quality of the jobs we can provide ourselves, and whether there are enough high quality jobs. And finally, we ask what is the ownership of the companies we do have. We cannot be indifferent to foreign ownership, since the capital is likely to be repatriated back to some place else, meaning that it is not available for expansion here. By all of these measures, our manufacturing is in deep trouble.

Some industries are doing very well indeed, such as the aircraft industry. But when you look under the covers, you find that more and more of the parts are made overseas, and so the "export" component of any given airliner is much smaller than it appears at first glance. Here is a brief article on this phenomenon http://tinyurl.com/2tg5jq

Thanks for the heads-up on this. I'll do some checking when I have a moment and see what it is they are talking about. In the meantime, check out the "Economy in Crises" website (http://www.economyincrisis.org/) for another view.

John C. Médaille

"A dead thing can go with the stream...
but only a living thing can go against it."
-G. K. Chesterton
The Vocation of Business: Social Justice in the Marketplace (Amazon.com)
http://distributism.blogspot.com/