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"Instead of drawing down our gold reserves, however, we gradually draw down our domestic manufacturing base and it gets replaced piece-by-piece in foreign count

• andy_ppp 6y ago
  I think people are starting to realise that globalisation needs to be balanced with other kinds of security especially around tech, hence TSMC being given a stack of cash to build a fab in the US. I wouldn’t say globalisation is dead more that it’s going to be more balanced going forward with local concerns.
  • flatline 6y ago
    So much of globalization up through the 2000s was exploitation of emerging markets for cheap labor and lax environmental and safety standards. This was not wholly without benefit to the people in these countries though: it has dragged a lot of the third world out of abject poverty despite some of the dystopian aspects. Hopefully the next three decades will be better on a number of fronts.
• downrightmike 6y ago
  This happened in part thanks to bain capital, those following the same business model of theivery, and the deregulation in the 80's. https://en.wikipedia.org/wiki/Bain_Capital https://en.wikipedia.org/wiki/Bain_Capital Republican lawmakers and party members have been destroying America for generations. Goes back even further to 1971 when Nixon opened talks with the CCCP and then went there in 1972 cutting the ground out from beneath American workers. And now if we even wanted to rebuild our manufacturing base, we have to deal with the same problems the few remaining factories do, finding people not on some kind of illegal substance that can work. The bodies are there, but they aren't in any shape to bring back what we had.
  • User23 6y ago
    Trump was the first president in my lifetime to even admit gutting our manufacturing base is a problem. Neither Democrats nor establishment Republicans did anything but line up for their shockingly paltry share of the loot while mouthing platitudes about efficiency.
    • hedora 6y ago
      True, but he said he said that simply because Bernie did, and it played well against Hillary in the primaries. He didn’t do anything that actually slowed the loss of our manufacturing base while president.
      • omgwtfbyobbq 6y ago
        He ended up reversing the steady gain we've had in manufacturing jobs since 2010, albeit indirectly, because he botched the response to covid. https://data.bls.gov/timeseries/CES3000000001 https://data.bls.gov/timeseries/CES3000000001
        • AnthonyMouse 6y ago
          The argument against his covid response was in not using more aggressive lockdowns. Which is the thing that increases unemployment. You seem to be arguing that more lockdowns, which increase unemployment in the short term, would have reduced unemployment in the short term (i.e. the period measured in that data).
          • cycrutchfield 6y ago
            If you have a more aggressive lockdown, you can control the disease instead of letting it rage unabated for months. Trump’s covid response has been an unmitigated disaster for businesses.
          • appleflaxen 6y ago
            uniform lockdowns that were widely enforced for 2 weeks and then followed by masks, social distancing, and hand washing would have been more effective, and harmed the economy less.
• deleted 6y ago
  [deleted]
• vinniejames 6y ago
  This is 100%, the fact the US can barely manufacturer face masks during a global pandemic is embarrassing. On the other end, how do you compete with slave labor in the Chinese factories?
  • daniellarusso 6y ago
    US prison labor?
  • liquidify 6y ago
    The consequences of that slave labor are far more on Chinese society than just the manufacturing dominance. There are a lot of things that are negative such as hatred of the CCP, that these policies are creating in China. The facade may look good, but there are cracks in China's foundation because of these decisions.
  • Thinkx220 6y ago
    By lowering taxes and deregulating the economy.
  • vsskanth 6y ago
    > how do you compete with slave labor in the Chinese factories? Trading blocs that ensure minimum working conditions. Companies which pay the worker a decent wage should get favorable tax treatment and procurement.
    • justinzollars 6y ago
      Or technological improvements
      • u801e 6y ago
        Some industries in China follow the 996[1] working hour system. [1] https://en.wikipedia.org/wiki/996_working_hour_system https://en.wikipedia.org/wiki/996_working_hour_system
    • sumedh 6y ago
• mbesto 6y ago
  > the last LCD panel manufacturer in the US closed around then and we could no longer manufacture LCD for our military vehicles And funny enough our gov't (I'll let you guess which political party) struck a deal with Foxconn to produce LCDs in Wisconsin. It has failed miserably: https://www.theverge.com/2020/4/12/21217060/foxconn-wisconsin-innovation-centers-empty-buildings https://www.theverge.com/2020/4/12/21217060/foxconn-wisconsi...
  • jtbayly 6y ago
    So an attempt was made to bring back manufacturing, and that’s so terrible? Let’s all roll our eyes at the Republicans.
    • GcVmvNhBsU 6y ago
      It’s fair to eye roll at ineffective agreements that don’t pan out. Racing to the bottom with tax incentives is not the only way to bring back manufacturing and hasn’t seemed to work when it’s tried.
      • jtbayly 6y ago
        I don’t mind eye rolling at corporate handouts and deals that are mirages. But the parent comment only seems to be mocking the idea of bringing manufacturing back and saying how dumb Republicans are for wanting to do it.
        • mbesto 6y ago
          > mocking the idea of bringing manufacturing back and saying how dumb Republicans are for wanting to do it. At what point did I ever say Republicans were dumb for wanting it? I'm mocking the idea that Republicans actively denounced corporate welfare (saying it's a Democratic thing), yet just do it themselves (and then fail at actually make the change for that matter). Take your triggered self over to Reddit.
          • 6y ago
• lettergram 6y ago
  My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them. They spent years training the Chinese side-by-side in the US. In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the tool & die makers in China. To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade. There are enough people still here to teach and expand the Industry. However, if you don’t start now. Like today. We won’t ever recover. Once enough manufacturing is gone, it’ll be impossible to come back - we are almost there. You are competing against a foreign power who uses slaves. You either let free people work for what ever wage they can achieve or we risk becoming slaves ourselves.
  • alex_anglin 6y ago
    Competing in a race to the bottom ought to beg the question about what alternatives and options are. Focusing on efficiency and quality are two examples that would probably be a better long-term bet, with fewer negative secondary effects.
    • nextweek2 6y ago
      That's the strategy of the Germans.
      • koolba 6y ago
        We all want to be like Germany, but do we have the sheer force of will?
    • southeastern 6y ago
      I don't know why more people aren't saying this. Is it really a majority opinion on this site that a race to the bottom is a good, or even tenable idea?
• ehvatum 6y ago
  Consider Elon's move from California to Texas. His energy costs are vastly reduced, expenses generally are reduced, and he can continue to hire directly in the US and draw directly on US machine shop production capacity. There should be more machining and making in the US; everyone would like to have solid US-made hardware, but success in small-business machining and manufacturing, and scaling to large scale without off-shoring, requires a discipline and commitment to self-improvement that is difficult to cultivate.
• recursivedoubts 6y ago
  There was a recent youtube of a Chinese professor discussing how china has gotten along so well with the US while the great migration of manufacturing occurred. It boiled down to wall street being fine with moving manufacturing abroad, as they don't identify with, and in fact despise, the American working class. Pretty depressing.
  • arminiusreturns 6y ago
    "When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain." - Napolean Bonaparte "I sincerely believe with you, that banking establishments are more dangerous than standing armies; & that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale" - Thomas Jefferson "I have two great enemies, the southern army in front of me and the financial institutions in the rear. Of the two, the one in the rear is the greatest enemy" - Abraham Lincoln
  • blix 6y ago
    Do you have a link to this?
  • eli_gottlieb 6y ago
    Did we not expect capitalists to despise their class enemies, the workers?
    • deleted 6y ago
      [deleted]
  • TruthHurts44 6y ago
    If they despised the working class they would've pushed for removal of the useless rules the West has - health and safety, generous pensions for hard jobs(like miners), minimum wage, etc.
• stdbrouw 6y ago
  > Even if this anecdote is untrue, the point remains valid... I mean, I guess the point remains valid in that everyone can see that a lot of manufacturing has left the US in the past, I dunno, fifty years. But if you don't even know whether the anecdote you mention is true, why bring it up? Why comment at all?
• passerby1 6y ago
  Correct me if I'm wrong, but it seems like the US does not need any factories, as it can print any amount of money and buy whatever it wants from any country has factories. Money talks. Or not? It has enough military for safely making this again and again for tens of years at least.
  • biggermike 6y ago
    What happens when the other country isn't willing to sell? Consider a war or other disaster e.g. in the months before the pandemic, China stopped the export of face masks and other PPE, resulting in shortages in hospitals around the world.
    • passerby1 6y ago
      Free market - money decide. If not - the politics is involved in selling decision making - then the US starts a sanctions war, as China example shows. It sells in the end, but after being economically punished.
    • notahacker 6y ago
      Countries are virtually never 'unwilling to sell', and there are quite a few different countries out there. PPE shortages in hospitals were because of unprecedented demand levels, not because China didn't continue to export it. A country is actually a lot more likely to have problems handling that kind of short term demand shock if it relies entirely on domestic manufacturing
    • southeastern 6y ago
      There at other manufacturing centers than China. I don't know why people keep it repeating this line. Where do you think China gets their things made? It SE Asian countries. And they're making in roads to Africa. That's what we should be doing. We have a president talking about shhole countries-- destroying international relations is gonna do a lot more damage in a war. We should be building diverse business relationships with competing economies.
• paulpauper 6y ago
  Had you shorted the US stock market in 2000 on that prediction/hunch, you would be down a lot. The economy has moved beyond manufacturing. Data, payment, and information processing and intellectual ropery have taken over manufacturing in importance.
  • seibelj 6y ago
    There is national security interest in being able to manufacture our own weapons, computers, and infrastructure components. Otherwise if a war happens we may be in trouble.
  • CoffeeDregs 6y ago
    I wouldn't have shorted the market based on that but I've not been sanguine about the US economy since then. Financial engineering, not productivity[1], has really been the driver of our economy... [1] https://voxeu.org/article/industry-anatomy-transatlantic-productivity-growth-slowdown https://voxeu.org/article/industry-anatomy-transatlantic-pro...
  • deleted 6y ago
    [deleted]
  • imtringued 6y ago
    Shorting the stock market makes no sense because central banks prop up stocks. All that newly created money goes into your pocket if you go long.
• throwanem 6y ago
  I agree, but this seems to me to be something which unfortunately requires a generational strategy to repair, and I don't see how any government that's possible in this country could achieve it. The time horizons aren't long enough and the incentives aren't aligned enough to permit even a credible start.
• hanuman 6y ago
  This monetary policy, and the consequent industrial policy ("free trade"), is, more than any other factor, the cause of the so-called "Great Stagnation." Its persistence is why the Great Stagnation is not over, despite some recent noises to the contrary. US growth will not resume until energy production does. With shale seemingly spent, nuclear too scary for most, and fusion perpetually 10 years off, growth is unlikely. The US will continue to "print" oil by printing dollars (h/t to Luke Gromen), care of Saudi Arabia, until it can't. The US will do anything and everything to ensure this continues, history is proof of that. When the US finally fails there will be a war. Not like Vietnam or Iraq or Afghanistan. A very, very bad war. And the winner will determine monetary policy for the next century or so.
• Reggi55 6y ago
  It was done for 2 reasons and planned out by Paul Volcker, and there is a speech to go with it if someone can find it. 1) USD reserves allow us to import more value than we export so it offers a better standard of life for the consumer than otherwise. 2) It allows us to have a bigger consumer market than we would otherwise have and incentive for countries to partner with us to sell their stuff to. If you've lived outside the US you know every business wants to sell their stuff here either as #1 or just after their home market. Under those purposes it seems to have worked very well. Of course theres the risks of crashes along with it too.
• jayd16 6y ago
  Tariffs just cause US buyers to pay more without much help. Tariffs have no way to make a US manufacturer competitive globally. US made goods would just be that 25% more expensive. At its best its a regressive subsidy from one set of Americans to another. Why not just a direct subsidy to US manufacturing under the usual tax code?
• stjohnswarts 6y ago
  This was actually one of the good things that I thought -might- happen with the Trump regime despite all the other negatives. Guess what, nothing happened :( . We're still losing the ability to make stuff which is very scary in a world that is becoming China vs. The USA . There is price that isn't easy to express in $ that goes with the national security lost through losing a manufacturing base.
• kopakabana 6y ago
  > To me, this is the money shot. In which sense?
• CryptoPunk 6y ago
  The uncompetitiveness in manufacturing is due to two factors: 1. Regulations. Both the OSHA and EPA had a measurable negative impact on manufacturing productivity growth. [1] I suspect the most harmful regulations are those that constrain contract freedom by requiring employers to give unions a negotiating monopoly, aka collective bargaining, over any work unit where they emerge. This would devastate any of the bright spots in American industry today, whether it's Tesla, or Amazon, or Google. The threat of unionization also discourages these firms from expanding into areas that require employing high concentrations of less-skilled workers in immobile capital intensive projects, as these are the most susceptible to unionization. 2. The massive rise in social welfare spending [2], diverting capital from productive uses to unproductive ones. [1] https://www.jstor.org/stable/1810223?seq=1 https://www.jstor.org/stable/1810223?seq=1 [2] https://fivethirtyeight.com/features/what-is-driving-growth-in-government-spending/ https://fivethirtyeight.com/features/what-is-driving-growth-...
• jaredklewis 6y ago
  I agree with some part of what you are saying, but tariffs are a miserably blunt instrument. Think of the supply chain of something immensely complex like the Boeing 787, which has, quite literally, millions of parts (including LCD screens). Many if not most of those parts are imported. If there are tariffs on imports, either: 1. Boeing will pay tariffs, increasing the cost of each plane. Great for Airbus, bad for Boeing. 2. The parts are sourced locally instead. These parts will invariably be more expensive, as if there were cheaper local options, they would have been sourced locally before. Again, Boeing planes get more expensive, great for airbus, bad for Boeing. 3. Boeing, to avoid raising prices and giving market share to airbus, decides to move manufacturing outside the US. What applies here for Boeing, is also going to apply to Tesla, Caterpillar, and hundreds of other companies. Tariffs create incentives to source locally, but they simultaneously create incentives to manufacture abroad. It is a very thin tightrope to walk and I haven't seen any evidence that Washington can. On the topic of national security: “When goods don’t cross borders, soldiers will.” I'm far less concerned about a war breaking out between two countries with healthy trade relations and cultural exchange. Do we want China to be our enemy? Why?
• 908B64B197 6y ago
  It's a bi-partisan issue. Hell, I would agree it's not even a exclusively US issue but is pretty much generalized throughout the west. Shifting manufacturing to China makes absolute sense when you look and care about the the quarterly/yearly performance. And if you decide not to do it well tough luck because your competitor is and will have better results than you. If you look at it with a 20/30 years perspective then it becomes obvious that outsourcing is completely the wrong move. You basically get rid of your local expertise, train your replacements, slim down your middle class (the folks buying the products!). Then your manufacturing partner starts vertically integrating and designing it's own competing products and you are pretty much left out of the equation. It's almost as if, thanks to support from the party, Chinese businesses can plan for 20 years ahead but western companies can't because they HAVE to maximize the quarterly results! > I argued that, even in the presence of free trade, a country should have the ability to tariff imports to the extent that that country could maintain a 25% (or something) domestic market share. Tariffs and trade wars seem completely useless to me when done between G7 countries because we're all in the same situation regarding China. To achieve any sort of paradigm shift we'd need to stop each having a 1:1 relationship with China and start negotiating as a block.