(1) Many if not most economists are empirical. Recent John Bates Clark medals---a good reflection of what academic economists think is the best work being done right now---have gone to economists doing empirical work. Recent examples include what works for development (evaluated with large randomized controlled trials), what are the causes of growing income inequality, how should we structure auctions etc. http://en.wikipedia.org/wiki/John_Bates_Clark_Medal . To say that most economists have no contact or interest in empiricism is incorrect.
(2) The point about simple models is not that economists fully believe them---it's that they force everyone to be explicit about assumptions. They also try to identify what are the key features of admittedly very complex phenomena. This is what models do in most scientific endeavor. That the models often perform poorly is a sign of an immature science---not fraud or dishonesty. You'd get eternal fame and become fantastically rich if you came up with a financial model with great predictive powers---do economists not create such models because they are stupid and corrupt? That seems unlikely.
(3) The transistor example completely misses the key distinction that every presentation of the simple supply and demand model always makes - i.e., there is a difference between the short term and long term. If demand doubled for transistors tomorrow, the price wouldn't rise?
(4) You confuse absolute and comparative advantage.
(5) "In the 1950s the US had a great economy. Except for some points of information, biomedical, and materials technology, it's not clear that our standard of living is as high now."
This is where I stopped reading - this is so obviously wrong http://www.wolframalpha.com/input/?i=GDP/capita+real+US that it's hard to take seriously any conclusions on the relative merits of different industrial policies the follow from this "fact."