Pat Buchanan makes an interesting point in this article about how bailouts of banks who have foolishly lent to foreign governments has affected U.S. manufacturing.  He says that the countries which have borrowed money and could not repay were encouraged to lower their exchange rates in order to make their exports more attractive, which has made American made products less attractive.

This seems plausible, but does not seem powerful enough to warrant all the hand wringing we so often hear in the media.  Usually, the loss of American manufacturing jobs is blamed on greedy corporations who move their factories overseas in search of cheap labor.  The question of why overseas labor is so much cheaper is rarely addressed other than the fact that there exist teeming masses of exploitable human fodder.

This article shows that U.S. manufacturing has in fact not gone down, but has stayed at around 21% of world output.  What has decreased is U.S. manufacturing employment.  This is indeed due to higher labor costs, but those higher labor costs come from government regulation.  This causes manufacturers to invest in labor saving technology to increase productivity per worker, which is simply the efficient use of available factors.  In countries with cheaper labor relative to technology, more workers are used.  So what should be decried is not a nonexistent decline in manufacturing, but the government/labor union-engineered decline in manufacturing employment.