Latest episode of Bikini Statistics

via Russell Roberts:

Harold Meyerson in the Washington Post wants America's trade policy to help Americans. An interesting idea. And how should it do that? Harold wants to save manufacturing jobs, the key to prosperity in his view. He argues that because of foolish free trade policies such as NAFTA and other increases in trade:

...America has gone from being a nation that manufactured things to a nation that manufactures debt. Manufacturing (as Kevin Phillips points out in the forthcoming issue of the American Prospect, which I edit) accounted for 25 percent of America's gross domestic product in the 1970s but just 12 percent in 2006. Finance, which amounted to 12 percent of GDP in the '70s, amounted to 20 percent in 2006.

If you read that quickly, it does sound pretty scary. It looks like our manufacturing output has been cut in half! Actually, manufacturing output since 1970 has roughly tripled. TRIPLED. I feel like writing the word again but I'll refrain. But "TRIPLED" is a good word to remember when you keep hearing that America's manufacturing sector is being hollowed out and we don't make anything anymore and soon we're going to be sitting around doing each other's laundry.

The reason manufacturing has become a smaller proportion of GDP is because other sectors have grown even more. The reason other sectors have grown even more is because we have such high productivity in manufacturing over the last 40 years. That's freed up people and resources to make other stuff.

Previous BS installment here.

Statistics are like a bikini. What they present is suggestive, but what they conceal is vital--unnamed economist