In a service economy, anybody can be that to anybody, as wine steward, plumber, chef, masseuse, personal trainer, therapist, lawyer, tax accountant, automotive designer, financial planner. We pay each other rather well to provide these services. If forced to categorize its various internal functions by economic value, GM would be seen as more a service company than a manufacturing one. Hewers of metal, glass, oil, and naugahyde, and drawers of personal computers, sportswear, and automobiles, collect a shrinking share of economic value compared to those who design these goods and those who use them in the course of running around and servicing each other's personal tastes and needs. Believe it or not, the trade deficits that so alarmed the pundits spurred the expansion of the non-tradable sector.
Imports feed the creation of better-paying jobs that are immune to global competition.
Which brings us to today's puzzler. Nobody can quite agree on how to measure inflation, in the traditional sense of too much money being created, when the prices of so many complex goods and services, each the sum of the prices of other goods and services, are moving in different directions. To someone stuck in the low-skilled end of the universal economic pecking order, it looks a lot like the U.S. is committing deflation without having to suffer from it. Sadly the global financial system runs the way the human body does, not with foresight but in erratic pursuit of balance. It does not liquefy and liquidate enterprises with painless gradualism.