For a nation whose consumers spend twice as much on services than on goods, and where 90% of the workforce is employed outside the manufacturing sector, the obsession with manufacturing is misplaced.
This romanticized notion about manufacturing’s value to the U.S. economy often fosters policies with pernicious long-term economic effects: tax breaks, subsidies, trade barriers and other coddling market distortions.
Even Christina Romer, an architect of President Obama’s “stimulus” plan and one who is obviously not averse to government tinkering with the economy, concludes: “American consumers value health care and haircuts as much as washing machines and hair dryers. And our earnings from exporting architectural plans for a building in Shanghai are as real as those from exporting cars to Canada… A persuasive case for a manufacturing policy remains to be made.”
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