Why is America richer than almost all other developed economies? In one recent post I have pointed out several factors, including regulatory differences. Industries such as fracking are less heavily regulated in the US than in many other developed countries. This also explains why human blood has become one of the most important in America export industries:
Last year, U.S. exports of blood products accounted for 1.8% of the country’s total merchandise exports, up from just 0.5% a decade ago – and were worth $37 billion. That makes blood the country’s ninth largest commodity export, ahead of coal and gold. All told, America now supplies about 70% of the plasma used to make drugs.
The French government has taken a principled stand against the European blood industry:
In June, the European Parliament approved new regulations that allow compensation for donations, but ban this in advertising and limit payments to an amount proportional to the value of time spent on donations. While Americans can donate 104 times a year, many Europeans are limited to fewer than 30 times. . . . France lobbied against recent changes to European Union regulations, arguing that they risked turning the human body into a commodity, as “is already a reality in the United States.”
Instead, they prefer to fund America’s blood industry:
At the same time, the French government is the sole shareholder of a company that owns six plasma centers in America, which pay donors, with the liquid collected available for use in France.
If more blood were available, many lives could be saved. The same goes for the kidneys, where even the US bans donor compensation. A study of John Dooley and Emily A. Gallagher shows that the blood industry benefits low-income Americans. Here’s the summary:
In the United States, households donate plasma as compensation at a higher rate than they use payday, auto-title, rent-to-own or pawn loans. Our article is the first to examine the financial implications of plasma donation for households. Plasma donors tend to be younger and less educated, with lower incomes and credit scores; they are also more dependent on non-bank credit. We use the dramatic growth of plasma centers between 2014 and 2021 to study the causal effect of the ability to donate plasma on non-bank credit. We find that access to a plasma donation center reduces demand(s) for payday and installment loans by 6.5% and 8.1%, respectively, with larger effects (13.1% and 15.7%, respectively) on younger borrowers. In addition, foot traffic at essential and non-essential goods establishments increases by 7-10% when a new plasma center opens nearby. Our findings suggest that plasma donation helps households facilitate consumption without relying on high debt.
No matter how much you think you know about the economy, it is bigger and more complex than you can imagine. I suspect that if Americans were asked to name our top ten exports, very few would have included human blood on the list.
The home building industry is much larger than the blood industry, but far too small even to have a noticeable effect on the overall economy. For example, between January 2006 and September 2007, housing construction almost halved, with the number of homes falling from 2.273 million to 1.183 million. You might have expected that this would lead to higher unemployment. That didn’t happen. The unemployment rate was 4.7% in January 2006 and remained at 4.7% twenty months later. Even homes are too small to significantly impact the overall economy.
There has been a lot of discussion lately about some large computer chip factories that are currently under construction. These may or may not be important to the chip industry, but they are almost certainly not important to the overall U.S. economy. Our economy is far too large and diverse for a single sector to have a major impact.
P.S. If instead of housing starts you were using completed housing, the decline would be slightly less steep, but still quite large. The best measure of ongoing construction is probably an average of the two series, which fell from 2.155 million to 1.270 million in that twenty-month period.