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> Yeah, that was super short sighted. It boggles the mind that anyone could have believed that replacing many of the core productive bits of the economy with fl

by rualca 6y ago

> Yeah, that was super short sighted. It boggles the mind that anyone could have believed that replacing many of the core productive bits of the economy with fluff like management (and ownership), finance, and hospitality would lead to anything but weakness. I would add that the US's apogee was due to it's role on WW2, whose success was due to the US's preexisting industrial infrastructure, not only manufacturing capability but technical and scientific infrastructure that supported it. Since then the US not only gave up on its main strategic asset but also handed it over on a silver platter to the next world power.

DelightOne 6y ago
Was it even avoidable with global competition putting pressure on price and cost? Americans just don't want to work for the same wages some in China may accept.
- lumost 6y ago
  The US chooses to allow unlimited competition from China. China allows limited competition from US companies with their nascent industries. Switzerland is a fascinating example of a country which almost entirely bans foreign competition in anything they can reasonably produce domestically. Costs are high, but wages are higher.
  - polskibus 6y ago
    Do you have some references on how the bans work in Switzerland? I live in EU and have never heard about Swiss having some parasitic relationship with EU (meaning export to EU is ok, but import is not).
  - xiphias2 6y ago
    This was probably working while the Swiss people were working and buying their products, but in Zurich Swiss people do banking and non-Swiss people engineering (and the number of non-Swiss people grow exponentially, now maybe 1% of people in Zurich is a Googler). They usually go to the German border for weekend shopping instead of buying the expensive Swiss products.
- voodootrucker 6y ago
  This article was on HN recently, and it does a pretty good job of explaining how we did this to ourselves by making the dollar the global reserve currency: https://www.lynalden.com/fraying-petrodollar-system/ https://www.lynalden.com/fraying-petrodollar-system/
- puranjay 6y ago
  To be fair, American wages, outside of the bottom percentile jobs, are much higher than their counterparts in the developed world.
Accujack 6y ago
Yes, but not entirely as a policy of the government. The industrial complex that was built up during world war II was unprecedented, and the post war boom enabled it to grow further, allowing for things like secondary supply chains, "related" niche industries, and creating many very large companies which went beyond manufacturing products into finance, among other things. The thing is, after the first generation of management of those companies aged out, the second generation didn't have any idea about the unique circumstances that allowed that industrial base to be created. They chose to believe it was because of American superiority, American know how, etc. So when they couldn't sustain the levels of growth and profit their predecessors created, the industries started eating themselves, with mergers, acquisitions, corporate raiding (Private Equity) and regulatory capture to allow it all to happen. Achieving short term gains by shipping jobs offshore was just a necessary thing to "get theirs". Boeing was once one of many, and now it's one of the last. The US will be unable to rebuild that industrial base for the foreseeable future, because the unique combination of the post war boom, the government sponsored head start in the war, and the emergence of new technologies just don't exist any more. Jobs going overseas aren't the problem, really, so them coming back makes little difference. The problem is that our huge head start after World War II is gone because it's eaten itself, and now we need to start over.

by rualca 6y ago

DelightOne 6y ago

Was it even avoidable with global competition putting pressure on price and cost? Americans just don't want to work for the same wages some in China may accept.

lumost 6y ago
The US chooses to allow unlimited competition from China. China allows limited competition from US companies with their nascent industries. Switzerland is a fascinating example of a country which almost entirely bans foreign competition in anything they can reasonably produce domestically. Costs are high, but wages are higher.
- polskibus 6y ago
  Do you have some references on how the bans work in Switzerland? I live in EU and have never heard about Swiss having some parasitic relationship with EU (meaning export to EU is ok, but import is not).
- xiphias2 6y ago
  This was probably working while the Swiss people were working and buying their products, but in Zurich Swiss people do banking and non-Swiss people engineering (and the number of non-Swiss people grow exponentially, now maybe 1% of people in Zurich is a Googler). They usually go to the German border for weekend shopping instead of buying the expensive Swiss products.
voodootrucker 6y ago
This article was on HN recently, and it does a pretty good job of explaining how we did this to ourselves by making the dollar the global reserve currency: https://www.lynalden.com/fraying-petrodollar-system/ https://www.lynalden.com/fraying-petrodollar-system/
puranjay 6y ago
To be fair, American wages, outside of the bottom percentile jobs, are much higher than their counterparts in the developed world.

Accujack 6y ago

Yes, but not entirely as a policy of the government. The industrial complex that was built up during world war II was unprecedented, and the post war boom enabled it to grow further, allowing for things like secondary supply chains, "related" niche industries, and creating many very large companies which went beyond manufacturing products into finance, among other things. The thing is, after the first generation of management of those companies aged out, the second generation didn't have any idea about the unique circumstances that allowed that industrial base to be created. They chose to believe it was because of American superiority, American know how, etc. So when they couldn't sustain the levels of growth and profit their predecessors created, the industries started eating themselves, with mergers, acquisitions, corporate raiding (Private Equity) and regulatory capture to allow it all to happen. Achieving short term gains by shipping jobs offshore was just a necessary thing to "get theirs". Boeing was once one of many, and now it's one of the last. The US will be unable to rebuild that industrial base for the foreseeable future, because the unique combination of the post war boom, the government sponsored head start in the war, and the emergence of new technologies just don't exist any more. Jobs going overseas aren't the problem, really, so them coming back makes little difference. The problem is that our huge head start after World War II is gone because it's eaten itself, and now we need to start over.