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Frank Bernheisel: The View From Here
Frank Bernheisel
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Frank Bernheisel
Posted 01.03.17
Just Outside Washington

FRANK BERNHEISEL

Thinking Huuugely in America

Our President Elect, Donald Trump, has said that he is going to bring American manufacturing jobs back from overseas. I have argued that, while some jobs have gone overseas, the real problem is that jobs have disappeared due to new technology. The chart below, needless to say, supports my position.

The data from Moody's, as analyzed by the Brookings Institution, highlights three major points:

    1. The U.S. manufacturing output in inflation adjusted dollars (blue line) has risen pretty steadily since 1980. The Great Recession dip in 2008 is clearly visible.

    2. U.S. manufacturing employment (red line) has dropped to about 75 percent of the 1980 level.

    3. The number of jobs to produce $1 million worth of manufacturing output has dropped from 24.9 in 1980 to 6.4 in 2015, a decline of 74 percent.

chart

Donald Trump says he will "bring back" a HUUUGE amount of manufacturing in his Presidency; that is either 4 or 8 years depending on how you count. To bring the number of manufacturing jobs to the 1997 level would essentially double the manufacturing output at current productively level.

This raises the question; who would buy all this stuff?

In addition, the Federal Reserve indicates that in 2015, the U.S. manufacturing ran at about 75 of capacity, indicating that output could be raised by 25 percent with no new investment.

The investment to double manufacturing output in four years would indeed be HUUUGE.

GOOD LUCK, DONALD!

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