U.S. industrial production chart: America makes nothing but weapons

Jon Taplin reproduces this jaw-dropping chart: Floyd Norris's scary graph of Durable Goods Production, adding, "We have so hollowed out our industrial plant that the only thing we are now producing is weapons of war." He goes on to quote Toynbee on Rome: "The economy of the Empire was basically a Raubwirtschaft or plunder economy based on looting existing resources rather than producing anything new. The Empire relied on booty from conquered territories... With the cessation of tribute from conquered territories, the full cost of their military machine had to be borne by the citizenry."

<snip>

http://www.boingboing.net/2009/08/01/america-makes-nothin.html

and all we got was a bunch of Bad Credit Fault Swaps

Shouldn't the government be ones in charge of making their own weapons?

That has been clear for a long time, as Smedley Butler observed in 1935 in "War is a Racket".

http://en.wikipedia.org/wiki/War_Is_a_Racket

at some point the bill comes due.

It just seems to show percentage change since 2000 rather than total production. So what percentage of the GDP are military and non-military durable goods?

Edit, answer here from the original article:
http://www.nytimes.com/2009/08/01/business/economy/01charts.html?_r=1
"The United States remains primarily a civilian economy. The military now takes about 8 percent of all durable goods, up from 3 percent in 2000."

Now that is an alarming increase, but I think it is misleading to claim we make nothing but weapons.

A big gain from tiny to small.

"The United States remains primarily a civilian economy. The military now takes about 8 percent of all durable goods, up from 3 percent in 2000."

"Over all, shipments for nonmilitary purposes were down by 20 percent, while orders fell by 27 percent. The declines in some areas were much larger, with orders for primary metal products, like iron and steel, plunging by 44 percent. The government cannot track orders for semiconductors because Intel will not provide figures, but shipments in that category were down by a third.

Shipments of commercial aircraft and parts fell by just 7 percent, largely because there are long lead times for such orders, and that helped to keep the shipment decline lower than it would otherwise have been. But orders fell 65 percent."

http://www.nytimes.com/2009/08/01/business/economy/01charts.html

Also note that the bar graph at right indicates the difference between this year and last year, rather than the longer-term trend - a drop in production is just what you'd expect in a recession and from an economic point of view is the right thing to do, rather than accumulating inventories which can't be sold (which would depress prices and prolong the recession). If we come back in a year and compare 1st half '10 with the same period for this year, most, if not all, manufacturing sectors will likely be in positive territory.

The OP makes a good point, but without the context of the original article one could draw a very misleading conclusion about the relative size of different sectors in the economy.

From the article:

The government cannot track orders for semiconductors because Intel will not provide figures, but shipments in that category were down by a third.

Why won't they provide figures?

reactor vessels (we sell those to china), safety gear (scuba, etc), Like the UK or France we dont make sweaters, socks, or other stuff where outsourcing labor is an option, happens. We make beer too, because it costs more to ship it from china than to make it here..

If making things like nuclear submarines was easy china would do it, if they ever get in that business they will be on par with USSR 1980's.

The US is still a major manufacturer and exporter of non-military goods. I'm tempted to link bomb, but anybody can Google it on their own. This chart is also very misleading by just focusing on percent change of military goods shipped based on 2000 averages. Besides Bushco just reflexively ramping up Military spending when they came to office, we started a couple of wars in there too. Of course Military related durable goods jumped up as a percentage of manufacturing.

We should be concerned with increasing and supporting US manufacturing, but we are a long long way from just being arms producers. More of a problem, is we import too much of everything

Just for the hell of it, overall 2008 Exports in USD
http://www.manufacturing.net/News-WTO-Names-World-Largest-Importers-Exporters-032309.aspx

Exporters

1. Germany, $1.47 trillion worth of merchandise.

2. China, $1.43 trillion.

3. United States, $1.30 trillion.

4. Japan, $782 billion.

5. Netherlands, $634 billion.

6. France, $609 billion.

7. Italy, $540 billion.

8. Belgium, $477 billion.

9. Russia, $472 billion.

10. Britain, $458 billion

Importers

1. United States, $2.17 trillion.

2. Germany, $1.21 trillion.

3. China, $1.13 trillion.

4. Japan, $762 billion.

5. France, $708 billion.

6. Britain, $632 billion.

7. Netherlands, $574 billion.

8. Italy, $556 billion.

9. Belgium, $470 billion.

10. South Korea, $435 billion.

We have here your basic trending chart. It shows increase or decrease in percentage, not in hard dollar figures.

One would kinda expect military spending to increase over ten years--after all, we ARE in two wars. And one would also expect nonmilitary hard goods production to decline because we're in a recession and no one's lending money.

Let's plug a couple numbers into this, and for this I'll reach deep into my ass and pull some out.

In 2000, we'll say production of durable goods for the military was $333 billion, and for civilian use it was $4 trillion. In 2009 we'll say military production was $666 billion and civilian production was $3.5 trillion. On a chart like this one, things would look pretty damn dire--you'd see that military production had doubled over the decade, and civilian production fell by 12.5 percent. Plot the two and it will look like we've become merchants of death.

Then plot the actual dollar figures...in 2000 the civilian economy was 12 times the military one, and in 2009 it was 5.25 times. That still looks pretty damn dire, but it doesn't mean we've quit making anything except guns...it means the gun makers are doing lots of business because the civilian economy, even though it took a $500 billion/year dump over the decade, is still pretty good.

Let's play with this just a bit more and then I'm going to go do something else. We'll say that Al Gore was inaugurated in 2001 instead of George Warmonger Bush, and military spending remained at $333 billion per year over the last decade--and just for S&G we'll say the bankers managed to destroy the economy as badly under Gore as they did under Bush. In this case the civil economy would be 10.5 times as large as the military one.

Y'know, liberals are supposed to be numerate.