How To Create A Manufacturing Renaissance - Change The Definition

Tyler Durden's picture


With US manufacturing jobs down almost 40% from their 1980s peak, proclaiming the last few years marginal increase a "manufacturing renaissance" is more statistical noise, smoke, and mirrors than fact. That is a problem for an administration (and entire genre of Keynesian dreamers) that rely on this sector to prove how effective they have been with stimulus (and not just pulling demand so colossally forward that the future is bleak). How to fix this apparent dilemma between policy talking points and factual data? Easy - as WSJ reports, change the definition of "manufacturing."


Behold the Renaissance...


So how do we fix this uncomfortable truthiness to fit with talking points that everyone can understand is unquestionably bullish...

Via Wall Street Journal,

U.S. Agencies Consider Redefining Manufacturing

Should a company be called a manufacturer if it doesn't make what it sells? The answer isn't as obvious as it seems.


Some refer to companies like these as "factoryless goods producers"—firms that handle every part of making their products except the actual fabrication. As industries have gone global, this model has proliferated from furniture making to electronics: Think of Apple Inc. and its iPhones. Now, there is a move afoot among U.S. government agencies to count these companies as manufacturers, which is a surprisingly fraught issue.

The upshot would be an overnight increase in the apparent size of the U.S. industrial sector without adding a single assembly line. It would also change its geography, as places like Silicon Valley would suddenly look much more like a manufacturing hot spot. Backers of the change say this would give a truer picture of the nation's productive capability, because these firms still do most other functions of manufacturing, from designing goods to overseeing their production and distribution.


But critics like Miles Free, director of industry research and technology at the Precision Machined Products Association, a trade group for small U.S. producers, say the change in wording would gloss over the erosion of domestic manufacturing. "We think it would be bad for policy makers to say, 'Look at these numbers, we have great manufacturing,' " he said, when the production in many cases is actually taking place on the other side of the world.


"I'm not sure if this is a good idea or not," says Andrew Bernard, one of the authors, "but if we don't understand what's going on, we might implement bad policy."

Bad policy indeed... but who cares about that as long as the ruling elite have a talking point to sell to the people to show that more of the same will solve the world's problems...

Of course, this "change" already has precedent with the unbelievable addition of goodwill and R&D into the GDP figures to boost their appearance...

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Sun, 03/16/2014 - 16:58 | 4556010 TruthInSunshine
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"Two all donkey patties, 'special' sauce, GMO Lettuce, artificial cheese, GMO derived pickles, GMO onions on a chemical-laden, sesame seed bun."

- Even these "manufacturing" (McFacturing?) jobs, the type that comprised an overwhelming % of "jobs created" during the last 5 years, may be in decline soon based on trending McDonald's sales.

(In the meantime, most brands of motor vehicles, whether slapped together here or elsewhere, continue to pile up high & deep on Dealer MegaLots across the nation, as Americans' debt levels explode, gas nears $4 Yellens a gallon again, and 54% of Americans are rated as "subprime" credit risks - NINjA Clearance Sale those rides!)


Sun, 03/16/2014 - 17:04 | 4556079 smlbizman
smlbizman's picture

im not a baker...but i seem to manufacture 2 loaves a day...add one more to this count

Sun, 03/16/2014 - 17:44 | 4556241 macholatte
macholatte's picture


I didn't make the mouse or the computer or the software or the monitor but I put it all together and plugged it into the wall and flipped the power switch and now click on the mouse to see pictures of naked girls ...... am I now a manufacturer?



Sun, 03/16/2014 - 18:44 | 4556449 Anusocracy
Anusocracy's picture

Just call the Fed a manufacturer.

Mon, 03/17/2014 - 07:08 | 4557710 Ying-Yang
Ying-Yang's picture

Check out

$6800 2 person car, entirely made in USA and 84 MPG.


Mon, 03/17/2014 - 09:54 | 4558142 mrdenis
mrdenis's picture

Christie will never let it be sold in NJ ....................

Sun, 03/16/2014 - 17:10 | 4556102 W74
W74's picture

Link on the subprime credit risk plz.

Sun, 03/16/2014 - 17:30 | 4556186 TruthInSunshine
TruthInSunshine's picture

My bad, it's 56% according to linked Time Magazine article (I will try to find the original source cited):

"56 percent of all Americans now have "subprime credit" at this point."

Sun, 03/16/2014 - 17:52 | 4556270 W74
W74's picture

Something I didn't know.

700 seems a bit high to be the threshold though.

It is a scale of 350-800 right?

Sun, 03/16/2014 - 18:08 | 4556321 Osmium
Osmium's picture

Only half live paycheck to paycheck?  Would have thought that number would be higher.

Sun, 03/16/2014 - 18:24 | 4556378 TruthInSunshine
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I'm confident that their definition of "paycheck to paycheck" is extremely broad, and includes those who have to borrow massive sums relative to their incomes in order to survive (e.g. wear their credit cards out, etc.).

Sun, 03/16/2014 - 19:01 | 4556501 ILLILLILLI
ILLILLILLI's picture

They're working on it...

Mon, 03/17/2014 - 03:48 | 4557556 Villageidiot777
Villageidiot777's picture

It's the percentage of working people who can afford to live paycheck to paycheck. Others are borrowing more money to eat between paychecks.

Sun, 03/16/2014 - 21:29 | 4556999 mumbo_jumbo
mumbo_jumbo's picture

and i'll bet that most of those don't earn enough income to pay taxes.

Sun, 03/16/2014 - 17:36 | 4556212 Sean7k
Sun, 03/16/2014 - 17:50 | 4556261 W74
W74's picture


Sun, 03/16/2014 - 18:02 | 4556304 TruthInSunshine
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Thanks, Sean.

Mon, 03/17/2014 - 08:32 | 4557885 Sean7k
Sean7k's picture

Your welcome.

Sun, 03/16/2014 - 17:24 | 4556154 BlindMonkey
BlindMonkey's picture

4 Yellens per gallon you say? +1 my friend.

Sun, 03/16/2014 - 20:59 | 4556883 TrustbutVerify
TrustbutVerify's picture

So...McDomald's employees "manufacture" hamburgers?  


"USA! USA! USA!"  

Sun, 03/16/2014 - 16:46 | 4556021 Richard Chesler
Richard Chesler's picture

Automation. bitchez.


Sun, 03/16/2014 - 16:48 | 4556027 AGuy
AGuy's picture

Tyler, you got this all wrong:

The US is clearly a leader in manufactured Lies, data, and news! This has to be a Renaissance! \sarc



Sun, 03/16/2014 - 16:52 | 4556037 I am Jobe
I am Jobe's picture

Outsourcing bitchezz.

Soon Hookera and pims will be considered in the manufacturing numbers.

Ah the future of the greatest nation 



Sun, 03/16/2014 - 16:55 | 4556040 ZerOhead
ZerOhead's picture

At some point in the not to distant future politicians and economists will wake up to the fact that a nation cannot merely consume it's way to prosperity forever.

It won't be the current crew of fucktards however... I'll guarantee you that much...


Sun, 03/16/2014 - 16:55 | 4556044 I am Jobe
I am Jobe's picture
Global Capitalism Has Written Off The Human Race

Sun, 03/16/2014 - 17:04 | 4556081 ZerOhead
ZerOhead's picture

Indeed it has.

It didn't have to end this way. I know this sounds quaint but decades and decades ago investment banks used to direct Americans savings into new productive job creating businesses.

Then with Neolibealism it directed those same Americans savings into new offshore businesses where labor and taxes were cheaper and more profitable. This soon killed off the American jobs tha provided the sour

Sun, 03/16/2014 - 17:08 | 4556095 I am Jobe
I am Jobe's picture

No but looking around it seems that way. Rude awakeing for many is still lurking. I would it give it another year or two. Stay tuned , gonna be ugly. 


Sun, 03/16/2014 - 17:11 | 4556103 ZerOhead
ZerOhead's picture

Very ugly.

Keyboard acting funny and locking up today...

Sun, 03/16/2014 - 18:27 | 4556386 NoDebt
NoDebt's picture

"It won't be the current crew of fucktards however... I'll guarantee you that much..."

True.  By definition, the guys who get you into mess can not be the same ones who get you out of it.

We're still working with the same fucktards who got us into the mess.

Sun, 03/16/2014 - 17:02 | 4556075 ebworthen
ebworthen's picture

A Big Mac has enough layers to be considered "manufacturing" I'm sure.

Sun, 03/16/2014 - 17:07 | 4556089 TruthInSunshine
TruthInSunshine's picture

The Shrub Administration tried to get fast food assembly classified as "manufacturing" employment category about 9 years ago, IIRC.

Red Team, Blue Team, zerObama or Bush, it makes no difference, bitchez.

Sun, 03/16/2014 - 17:10 | 4556099 I am Jobe
I am Jobe's picture

Outsouring is considered job creators. 

Productivity, GDP, jobs and outsourcing

Sun, 03/16/2014 - 19:20 | 4556568 1fortheroad
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The States do see a Big Mac as a manufactored food and tax according but the Restaurant doest get the tax breaks of a manufacturer from the state.

Its a catch 22 for restaurants, dammed because they are and dammed again because they arent.

Sun, 03/16/2014 - 17:21 | 4556087 tickhound
tickhound's picture

This is the chatter. Re-define labor, wage... Pretty much 'work' in general.

The model no longer functions so may as well change parameters. Do whatever it takes to preserve PONZI.

Sun, 03/16/2014 - 17:23 | 4556142 LetThemEatRand
LetThemEatRand's picture

More proof that the gutting of the middle class is intentional.   One of the primary functions of MSM is to convince the sheep that the economy is doing well and it's their own fault if they are having tough times, and of course that one of the two Teams will make it easier for them personally to share in the wealth that everyone on TV seems to be enjoying.    MSM already repeats the idea every day that the unemployment rate is in the single digits (because they changed those metrics a long time ago), so why not start calling designing, marketing and even selling an iPhone at a retailer as a manufacturing job too?  "See loyal viewer, there are tons of manufacturing jobs out there.  You just need to look harder.  It's your own fault that you cannot take care of your family."

Sun, 03/16/2014 - 17:51 | 4556260 LetThemEatRand
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Great post.  I remember when there was still some semblance of truth left in MSM and there would be an occasional story about how bad things were getting, and it would be met with a chorus of politicians and pundits complaining that stories like that were the reason the economy wasn't better.  They came right out and said that truth was dangerous because people would not buy shit if they knew the truth, so the media's job was to tell a different story in order to make it the truth.  Orwell sure did nail it.

Sun, 03/16/2014 - 18:11 | 4556328 TruthInSunshine
TruthInSunshine's picture

You and I agree 100% in this topic, and for all the correct, truthful & MORAL reasons.

I once had a decent person (I call them decent because I know them well enough to believe that about them) debate me in this point, wherein he said that (and I'll paraphrase) that it was essentially POSSIBLY the lesser of two evils for the government & the lackey MSM to purposefully mislead their constituents and readers/followers regarding the true state of the economy, and paint it as better than it truly is, because of the harm that would result if a higher % of the American Population knew the reality (e.g. They would hunker down & conserve finances rather than spend; a good thing, IMO, if they are rational actors).

I disagree with this premise entirely for the reasons I state in that link (this "strategy" leads people to misinvest & waste precious resources).

Sun, 03/16/2014 - 19:03 | 4556499 LetThemEatRand
LetThemEatRand's picture

I do actually get the argument (that the consumer may hold back if MSM is all doom and gloom), but the problem with the thesis as you point out is that it is NOT a good thing to mislead people into spending money they don't have when there is no hope for an organic improvement in the economy.  The public is being propagandized to further indebt themselves to buy shit made in other countries by slave labor, so that when the house of cards crumbles the vast majority of Americans will be slaves themselves with no means left to rebuild.  And so the oligarchs can squeeze the last bit of blood from the dying husk of the middle class.

Sun, 03/16/2014 - 19:35 | 4556626 Oldwood
Oldwood's picture

When you believe that the economy only exists because of your policies, that it is ultimately all artificial and must be "maintained", it makes more sense. The fact that those perpetrating this fraud are the ones getting rich from it makes perfect sense to them as well. I mean after all, they built it, right? They will have us cleaning the ovens and sweeping the gas chambers, as we all know cleanliness is next to godliness.

Sun, 03/16/2014 - 22:29 | 4557152 Omen IV
Omen IV's picture

we have phony unemployment statistics why not phony manufacturing data

why not call pig shit chemical production


Sun, 03/16/2014 - 22:33 | 4557166 TruthInSunshine
TruthInSunshine's picture

If the people & entities that are misleading others about the true state of the economy and employment situation, portraying things as much better than they are in reality, would only offer a 100% money back guarantee on present purchases, investments, dis-savings (spending down savings) and the taking on of debt, it would be much more equitable, and somewhat mitigate the hazards they are encouraging people to'assume via their lies.

Sun, 03/16/2014 - 17:45 | 4556242 HulkHogan
HulkHogan's picture

I read this WSJ article the other day and thought the same thing as you. Last year the Fed changed its' accounting definitions and records, so it is only right that they change this too. 1984 reprogramming at its finest. 

Sun, 03/16/2014 - 17:50 | 4556263 LetThemEatRand
LetThemEatRand's picture

You beat me to the Orwell reference!

Sun, 03/16/2014 - 19:10 | 4556520 ILLILLILLI
ILLILLILLI's picture

Best version ever of the Orwell classic 1984. This was a live broadcast on the BBC in 1954...very cutting edge for its day. Stars Peter Cushing as Winston Smith and Donald Pleasance as Syme, among others.




Sun, 03/16/2014 - 17:30 | 4556160 kchrisc
kchrisc's picture

Manufacturing is where the manufacturing capital is. If you don't own the capital being used to manufacture, then the benefits of manufacturing do not flow to you and therefore you are not a manufacturer.


Or put another way: Am I in construction, making houses let say, if I am an architect that designs houses?! I think not.


"Winston Smith says..."

Sun, 03/16/2014 - 19:40 | 4556642 pitz
pitz's picture

One irony that struck me during the housing bubble was the mortgage brokers, financiers, and even Realtors, were dramatically out-earning even the engineers and architects that actually designed and facilitated the construction of the housing stock. 

Sun, 03/16/2014 - 17:33 | 4556198 kchrisc
kchrisc's picture

"Bad policy indeed..."

There is no such thing as policy. Only lies. Lies to legitimize their theft and murder. Lies to get more from you.


"Hi, I'm with the government and I'm here to...take more of your wealth, Liberty and gun toting children."

Sun, 03/16/2014 - 17:46 | 4556247 moneybots
moneybots's picture

  "The upshot would be an overnight increase in the apparent size of the U.S. industrial sector without adding a single assembly line."


The upshot is just another statistical fraud.  If they don't count the unemployed as unemployed, unemployment is 100%, even if no one is working.

What could they get GDP up to, if they would just add in people sitting at home watching TV, as part of GDP?

Sun, 03/16/2014 - 19:38 | 4556639 Oldwood
Oldwood's picture

Statistical fraud is now our number one product. If it only created wealth rather than redistribution and theft.

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