So now that the dollar is falling, US firms are supposed to be able to take the price reduction and turn it around and sell in the European market.

And let's take the example of something like small engine production.  Engines are heavy, and expensive to ship.  

There used to be an entire industrial sector that dealt with the production of these types of products.

But now any firm wishing to take advantage of currency arbitrage is hampered, because the minor advantage of labor and other inputs being less expensive is overcome by the fact that you have to call into existence a whole slew of industrial capacity that was wiped out of existence when all the factories where shipped overseas.

Industrial productivity that took decades to develop was destroyed in a little more than a decade.

And an American firm wanting to build a new engine factory to replace imports from the European Union faces high capital costs in the form of not only making the factory itself, but the added cost of importing the machine tools needed to produce the machines that make engines.  It's difficult to just go out on the street and find someone with the experience needed to do this kind of work.

Economists (of the American pundit variety) are often under the impression that there is little in the way of human capital found in the modern American factory.

They really think that you can take a guy off the street, and put them to work making precision machinery.  American companies have tried to do this in Mexico.  I have relatives who are auto engineers, and when the company decided to outsource a portion of US production to Mexico, the went from  1/100 defect rate, to a 1 in 5 defect rate.  The literally had vehicles come off the line that simply wouldn't run, and were forced to have engineers go through and figure out where the problem was before they could sell the vehicle.

There is a high degree of skill involved in labor in the manufacturing sector, and arguably the advantages of skilled labor overcome the low cost of cheap labor.

Much of that has been destroyed.

I would not be the least bit surprised if a closer examination of the manufacturing figures for the US showed that if you take final assembly out of the picture that what you see is a lot worse.

Its one thing for a billion dollars of economic activity to represent the ability to make the engine, the transmission, and all the other inputs that go into a car, and then assemble them.  Then for that same number to represent a much larger number of final assembled vehicles, but only being able to occur with imports of the various inputs.  In the first case its much easier to retool to meet rapid changes in the market.  In the second, not so much.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg