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...
[5]
So how do we fix this uncomfortable truthiness to fit with talking points that everyone can understand is unquestionably bullish...
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...