As the debate continues over trade in the US presidential campaign, again and again we are told stories of shuttered factories and lost jobs.  To make it even more personal, the "story" of a particular individual, sometimes named, sometimes not, is told in soft, sympathetic tones.  The moral of the story, of course, is that this hard working American would still have a job if it weren't for the ravages of trade deals, whereby the evil corporations were able to "ship jobs overseas" to be worked instead by lower-skilled, cheaper workers.  It all sounds so heart-wrenching.  Some politicians appeal to the national pride instinct, claiming that trade deals result in exchanging good-paying factory jobs for lower-paying jobs in the service sector; they argue that we are losing our ability to produce "stuff", as well as make an honest living.

The truth, however, conflicts with the message of these stories.  Typically, when a politician deals in anecdotes instead of broad facts, it is because the facts don't support the politician's claims; such is the case when speaking of trade and manufacturing.  While the percentage of manufacturing workers in the US has decreased, manufacturing output has increased, as shown in the following chart produced by the Federal Reserve:



So based on the facts, we are producing more goods, just requiring fewer workers to do so.  That would seem to be a good thing — we're increasing efficiency and productivity.  If we were losing jobs due to simply moving them to another country of origin, there would be a corresponding drop in manufacturing output.  Instead, we see that not only has manufacturing increased since the passage of NAFTA, it has increased at a greater rate than any other time in the past 50 years, stalled only by the min-recession of 2000 and the aftermath of 9/11.

Trade increases the size of the market into which businesses and industries can sell, as well as increases the number of choices for consumers.  Protectionist trade policies only serve to "protect" favored businesses from having to compete, from having to produce goods and services that people want at competitive prices.  Restricting trade promotes government corruption, as special interests seek to influence the government to protect a particular business or sector.  Restricting trade ultimately can promote war, as there is a financial and economic disincentive to destroy one's best customer.

Those are the facts; let's hope that pulling on the "mind strings" is a stronger endeavor than pulling at the "heart strings":  let's hope that facts win out over anecdotes.