Every day as I make my rounds in the blogosphere I run into the rankest economic illiteracy. Most of it comes from commenters rather than posters but, based on what I read in the newspapers and hear on TV, U. S. senators are absolutely no better off. In the interests of my venting and in the hope that somebody who reads this might actually choose to research it for him or herself I’d like to present a handful of responses to some of the idiocy I’ve read recently.
- Bank-created, i.e. financial wealth, dwarfs the wealth created in this country by manufacturing, farming, and mining. This is Econ 101. Don’t take my word for it. You can find the explanation and support for this in any introductory economics textbook. Without bank-created wealth our standard of living would be that of a developing country. If that.
- U. S. manufacturing output and revenue, adjusted for inflation, are at all-time highs. (Source: U. S. Census Bureau)
- The U. S. manufacturing sector is several times the size of China’s and accounts for more of the world’s total manufacturing. (Source: U.N. Industrial Development Org.)
- Total compensation per employed person in manufacturing is the highest it’s ever been. (Source: National Association of Manufacturers)
- The number of people employed in the U. S. manufacturing sector has declined from its high of about 30% of those employed in 1950 to about 11% now. (Source: Council of Economic Advisors)
- We’re producing much more with significantly fewer people as a result of capital investment, cf. bank-created wealth above.
- As a consequence were the size of the manufacturing sector to increase sharply as a result of increased costs of transportation or other reasons the likelihood of large numbers of highly compensated jobs being created is extremely low.