Here’s a letter to the New York Times:
Paul Krugman writes about “the middle years of the last decade” that “Manufacturing, once America’s greatest strength, seemed to be in terminal decline” (“Making Things in America,” May 20).
The host of a reality-tv show can be forgiven for this misperception about manufacturing, but a Princeton economist cannot. The real value of annual U.S. manufacturing output increased steadily and significantly for several decades up to 2007 when it reached an all-time high before the start of the current recession. Nor was there any slowing of this increase in the years leading up to “the middle of the last decade.” Indeed, starting in the mid-1990s and continuing (save for the recession year of 2000) through 2007, there was a slight increase in the rate of growth of real annual U.S. manufacturing output.
So how can Mr. Krugman nevertheless write that U.S. manufacturing was “in terminal decline” by the middle of the last decade? Answer: because he – without offering any justification – measures the health of the manufacturing sector by the number of workers it employs. That number has indeed fallen over the years, chiefly because of relentless improvements in technology that raise workers’ productivity.
So it’s fair to ask: does Mr. Krugman mourn the reality of technological advance and higher worker productivity? And does he believe that America’s agricultural sector (also “once America’s greatest strength”) is now in especially lamentable shambles – despite its vast and growing output – simply because agriculture today employs a mere 2 percent of the U.S. work force even though it once employed 90 percent of working Americans?
Donald J. Boudreaux
The number of flaws in today’s Krugman column are far larger than the one I highlight in the above letter.
Dr. Paul Krugman – who wrote splendid economic essays in the 1980s and 90s – would, were he still with us, scold Mr. Paul Krugman for the latter’s column in today’s edition of the NYT.