As a recent post by Stephen Ezell referenced, a recent op-ed by Christina Romer has touched off a back and forth on the blogshere on whether manufacturing matters.  The fact that the question is even asked illustrates the lack of understanding of the issue and of the structure of our economy. Back in December Susan Hockfield, the President of MIT, made the case for manufacturing in her own op-ed "Manufacturing a Recovery". Central to her argument is a description of some advanced manufacturing...

On February 4, Christina Romer, former head of the Council of Economic Advisors (CEA) under the Obama Administration, wrote an op-ed asking “Do Manufacturers Need Special Treatment?,” and argued that they don’t. For Romer, as for most neoclassical economists, manufacturing and manufacturing jobs matter no more than any other industry or jobs in the economy. But Romer’s op-ed gets at least four critical points flat wrong. First, it conflates having a coherent set of policies and strategies to support...

I should just get a macro for my computer so that when I type "Control T" it writes "Tom Friedman is wrong because" since he so often is, as I pointed out here. But in Today's New York Times Op-Ed he does it again, only maybe even worse; blaming technology for joblessness.  When will he and others realize this is not the case. He writes that information technology "is more rapidly replacing labor with machines." Well, if this were true, how does he explain the fact that productivity growth rates...

A lawsuit by the Air Transport Association of America (ATA) against the U.S. Export-Import Bank (Ex-Im Bank) has raised broader questions about U.S. policies to help U.S. companies remain competitive, specifically the critical role of the Ex-Im Bank. Last fall, the ATA filed a lawsuit in the U.S. District Court of the District of Columbia to block the Ex-Im Bank from providing $3.4 billion in loan guarantees for aircraft financing to Air India. Air India has placed orders for a total of 68 Boeing...

A great deal of economic thinking in the U.S. has become based on fads and popular delusions and the current one that says manufacturing is back and leading the recovery is a prime example. Don’t worry about the United States losing a greater share of its manufacturing jobs in the last decade than we did in the Great Depression, this thinking goes, manufacturing is coming back! The New York Times journalist Floyd Norris’s recent article is emblematic of such thinking. Norris’s piece looks at...

As a recent Economist article notes, there is a quiet but potentially revolutionary transformation taking place in how things are manufactured.  The "maker" movement, with meetups and online SIGs of one sort or another, combines crowdsourcing, open-source or otherwise open hardware platforms, 3d printing, and a "Mechanical Turk"-style world organization of small handicrafters and manufacturers to create a new manufacturing system (dare we call it a paradigm) which will turn the idea of "economies...