One of the major points of his post is how our economy has shifted to a service base, which is largely non-exportable (at least to smaller, more locally oriented businesses). This also means we’re not manufacturing as much as we used to, and therefore don’t have the export power we’ve had in the past. In other words, as the dollar has fallen against the Euro and other currencies, we’ve not seen an increase in exported manufactured goods as you’d expect.

This is an extremely important point to take in. If the current administration can’t see that the single most important thing we need to do in order to help the economy is to save/rejuvenate manufacturing jobs (read as: jobs that create exportable products and services) in the US, then we’re really sunk.

I tend to think, however, that the market will correct for this. We’ve already heard of some manufacturers moving operations to the US from the EU as a means to cut manufacturing costs. This is a trend that will probably continue, but only if businesses wake up to the fact that the current downturn in the economy isn’t a short term anomaly. Rather, it’s a long term (think several years) condition.

Link