Thursday, October 09, 2003

More Dumb Slate

Between Krugman and Sureweiki (sp), Slate used to have a great econ and business section, but they both left, one went to seed and the other to the New Yorker. Since then Slates financial columns have been pitiful, with this latest one from being particularly poor. Without going into the central economic insight which explains why falling prices in one sector frees up money and cash in all others (and therefore creates jobs there), it's good to have one killer econ fact that undermines the usual dumb arguments you get over this stuff. The article asserts "There's no question... that Chinese imports are pummeling American manufacturers." Oh really?

The truth is that American manufacturing has increased output by 50% over the past ten years -- which is pretty amazing when you think about it. It is also doing it with far fewer people as the economy as a whole continues to move from manufacturing to service, just as it moved from agriculture to manufacturing. But the image of a flood of Chinese imports crowding out domestically made products is just wrong -- and hard to maintain when you point out that America is manufacturing more today than it ever has in the past.

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