The Economic Ignorance

…of Pat Buchanan. Some thoughts:

True, the United States imports a lot of stuff, particularly stuff made by low-wage, low-skilled workers. Everybody’s got a comparative advantage, and sweatshops aren’t ours. I can live with that. But here’s a shocker: The majority of the stuff we import is not consumer goods. The majority of what we import is stuff we use for manufacturing. As Daniel Ikenson reports, as recently as 2006, 55 percent of our imports were industrial components, i.e. stuff that goes into our factories as inputs and comes out as products. Ikenson: “Meanwhile, U.S. factories remain the world’s most prolific, accounting for more than 20 percent of the world’s added manufacturing value. By comparison, Chinese plants account for about 8 percent. And manufacturing is thriving in large measure because of international trade. Manufacturing exports and imports hit records in 2006.”

These kinds of arguments aren’t academic. When implemented as policy, protectionism can destroy, or prevent the creation of, trillions of dollars worth of wealth. It was one of the few areas of policy that Bill Clinton got right.

6 thoughts on “The Economic Ignorance”

  1. I hope the manufacturing using Chinese parts consists of more than adding a “Made in USA” sticker. If by “added manufacturing value” they mean they can sell it for more money after the label, that does not mean much to me either.

    If I think really, really hard about US made components in my computer, I can think of one, and it is a pretty major one: the CPU. So there are indeed some industries left, plus a lot of design work is still done in the USA. Economic isolationism also usually is a precursor to war. While I am in favor of free trade to a large degree, countries still need to be able to export something to pay off the things they import.

  2. It’s a matter of pure productivity improvement. The U.S. percent of workers employed in primary agriculture has fallen from 80+% in the mid-19th century to less than 2% now. Manufacturing has gone the same way. The American “Arsenal of Democracy” in WW2 was equipped mainly with manually operated machine tools. Modern Computer Numerically Controlled (CNC) tools run rings around all those manual South Bend lathes and Bridgeport mills that cranked out Shermans and Liberators in the 40’s. We make a shitload more stuff with a lot fewer people than we used to need. That ain’t gonna change. The reason people like Pat Buchanan think we don’t manufacture anything anymore is because he doesn’t know anybody who works in a factory anymore. Not surprising. There are a lot fewer of them to know than there used to be.

  3. Patrick Buchanan is one of the most valuable columnists in America. When you find yourself agreeing with him, you know you need to do a rethink.

  4. Nonsense. What this country needs is for the government to subsidize millions of overall-wearing workers making steam locomotives with hand tools. Who cares about supply, demand and profits? Smart pundits and pols know that the most efficient economy is the one that resembles a factory from an old movie.

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