I think what is meant is that the US is not a manufacturing world leader and is not as high as it should/could be.

It's true that we were the world leader once upon a time. From the 20's to the early 40's, we had a major competitive advantage: our factories didn't explode much, whereas European and Japanese factories did. In the late 30's and early 40's, there were also trade barriers (http://en.wikipedia.org/wiki/U-boat, http://www.navy.mil) preventing the US from receiving Japanese and European exports.

However, in 1945, Europe and Japan figured out how to build non-exploding factories. The trade barriers were also removed. We retained our competitive advantage for some time after that, since it took them time to build up an industrial base.

But it is silly to expect us to be world leaders to the extent we were back then. That epidemic of factory explosions was a one time occurrence.

From the executive summary at the link I provided: "And despite all the stories about the erosion of U.S. manufacturing primacy, the United States remains the world's most prolific manufacturer--producing two and a half times more output than those vaunted Chinese factories in 2006."

Too bad no one wants it: http://en.wikipedia.org/wiki/List_of_countries_by_current_ac...

Hardly: the US exports more than $1 trillion USD of goods per year. The fact that it imports more than that doesn't mean that "no one wants US exports", or that the US "has essentially lost its production capability". Your argument would be more persuasive if you cut out the hyperbole.

Ok, I'm being dramatic. But that export number includes, for example, when Ford produces a car in Mexico, with Mexican labor, and sells it in Mexico.

We've been outsourcing not just blue-collar work, but more and more white-collar work as well. While this is essentially inevitable, it will, in the end, demote America to a second-world country, divided into starkly wealthy areas and dirt poor areas.

It's not that they don't want what we produce. It's that they are stupid enough to trade us stuff for our fiat pieces of paper that we send in exchange that they hold in reserve.

Huh? An opinion piece from the Cato Institute?

Do you dispute the figures?

Yes, because they are clearly not talking in constant dollars and therefore it's meaningless.