Image: A worker uses an oxy-acetylene torch at a steel plant in Chicago © Mister Joe Lekas, Flickr, Getty Images

Clearly, something's still wrong with the economy. By the metrics that matter to most people, the Great Recession has not ended. Employment, retail sales, industrial production, home prices, most of the stock market and real incomes are all below their 2007 peaks. Food stamp usage is at a record high and rising.

But something's going right, too. And I want to focus on that this week.

American competitiveness is back, albeit largely because of the pain we've endured. Our dollars are worth less, and real wages are lower. Corporations are responding, with new factories springing up and manufacturing jobs blooming like flowers welcoming the spring. Overall, the U.S. has added nearly 500,000 manufacturing jobs since the beginning of 2010 -- the first period of significant growth since the late 1990s.

Meanwhile, the costs of producing goods overseas, and getting them here, are rising. Workers in places like China are demanding more, and oil prices make shipping costlier.

Experts say these trends are likely to continue.

Bank of America Merrill Lynch researcher John Inch wrote in a recent note to clients that the "U.S. economy is in the early stages of a long-term manufacturing renaissance." Analysts at the Boston Consulting Group add that rising wages and other forces have steadily eroded China's "once-overwhelming cost advantage as an export platform for North America."

Image: Anthony Mirhaydari

Anthony Mirhaydari

Thanks to higher U.S. worker productivity, as well as supply chain, cheap energy (natural gas) and logistical advantages, the BCG team says that by around 2015 "it may start to be more economical to manufacture many goods in the U.S."

In short, we could be on the cusp of revival of "Made in America," with workers paid good wages for building things again. And for the millions in the army of the unemployed, it can't come soon enough.

Silver lining to storm clouds?

Don't get me wrong. Our problems still run deep, and I'm not saying happy days are here again; I'm merely pointing out one of the few silver linings to be found.

We've long been too reliant on credit to supplement stagnant wages -- and that's left the West with an $8 trillion debt hole, according to Credit Suisse calculations. This fueled two bubbles and a financial crisis, and it resulted in the pitiful "recovery" we're in now.

And so far, if the economy is reviving, most workers aren't sharing in it. Real, inflation-adjusted wages have fallen in three of the past four months. This has never happened outside recession before. So it's very possible we're following Europe into the depths of a new downturn.

Last September, I argued that "the real recession never ended" and that, in reality, it started a decade or more ago as labor participation peaked in the late 1990s. We've been sliding lower ever since, trying to compensate for a lack of high-quality jobs and stagnant pay, with voodoo stimulus efforts out of Washington and an extreme, inflation-igniting easy-money policy from the Federal Reserve.

The core problem has been a hollowing-out of America's manufacturing base because of increased globalization, the manipulative trade policies of China and others, and rapid technological change.

Washington, of course, hasn't done anything about trade or jobs (except talk, of course). But the U.S. economy may find a way out of the hole anyway.

The depth of the problem

Before moving on, it's worth remembering that something similar has happened before.

In many respects, the current situation resembles the Gilded Age of the late 1800s and the Long Depression, a global downturn that lasted from the 1870s through the 1890s. Replace the robber barons with hedge-fund managers and multinational CEOs, and the agitation over the Free Silver Movement with the Tea Party and the debate over the Federal Reserve's stimulus efforts, and the similarities are striking.

The downturn was preceded by a period of global economic integration as steam power, the telegraph and railroads made the world smaller. Workers lost jobs to technology and foreign competition. The banking system was rocked by the panics of 1873, 1884 and 1893, driven by real-estate bubbles and stock speculation.

Our current role was played by the United Kingdom, an aging sovereign struggling to maintain its role as the world's superpower. The role of the upstart United States is now played by vigorous up-and-comers like China and India. Check out this excerpt from A.E. Musson's "The Great Depression in Britain, 1873-1896: A Reappraisal":

"Britain was losing her technological lead; she was failing to modernize her plant, to develop new processes, or to modify her industrial structure with the same rapidity as Germany and the United States -- owing to conservatism, the heavy cost of replacing old plant, and deficiencies in technical education."

In other words, the British got lazy, making them vulnerable. We have the same problem now, and I outlined in "Are American workers getting lazy?"