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Key points: "Thus Beijing prefers that the best talent in the country work in manufacturing sectors rather than consumer internet and finance. Personally, I th

Key points: "Thus Beijing prefers that the best talent in the country work in manufacturing sectors rather than consumer internet and finance. Personally, I think it has been a tragedy for the US that so many physics PhDs have gone to work in hedge funds and Silicon Valley." "The US focus on efficiency has revealed the brittleness of its economy, which has neither the manufacturing capability to scale up domestic production of goods nor the logistics capacity to handle greater imports. Decades of American deindustrialization as well as an aversion against idle capacity has eroded domestic manufacturing." "In the face of this challenge against a new peer competitor, the US has demonstrated a superb capacity for self-harm." "For someone in the middle class, there has never been a better year to live in China. That comes down to the entrepreneurs, who are creating businesses to please people." All, absolutely true as I've commented previously in other posts. The decline of America is primarily a story about misallocation of talent and the demise of the American middle class as a result.

paganel 5y ago
> a story about misallocation of talent I wish modern-day economists would be more aware of local maximums, which is the economic strategy the US seems to have adopted in the last 2-3 decades. Looks like China is targeting things beyond the local maximums, much like the US used to do back in the '50s and '60s, maybe also in the '70s. Not sure things like the ARPANET would have been possible in today's world when the strategy of "looking for the local maximum" is the only one made use of.
- 01100011 5y ago
  We need an enemy. The Soviets made the US better. We have identified both Global Warming and China as our current external enemies(terrorism seems to have fallen off the radar for now), but we're not fighting them like we did the Soviets. There is a lack of national purpose and a seriousness which is needed to focus our efforts on survival. Right now we're more focused on fighting each other and while some of our efforts to clean up our political and justice systems may bear fruit they may be irrelevant if we don't survive as a nation.
  - kurthr 5y ago
    There's more profit scamming middleclass Americans (and their government) than there is in competing on the global stage. The idea of the rising tide lifting all ships is no longer followed within the country (or Mexico, UK, etc) as it is in other countries.
temp8964 5y ago
Poor logic. How can U.S. PhDs work in manufacturing when factories moved to China? Beijing didn't make PhDs work in manufacturing either. It's just the manufacturing job market is there. The government has nothing to do with this. The west self-harm is contradicting itself by allowing both heavy labor-regulations in their own countries and trade with countries with basically no labor-regulations. It's just like they hate their own low skill workers so much that the politicians intentionally destroyed the factory job market.
- throwawaygh 5y ago
  > How can U.S. PhDs work in manufacturing There are tons of US PhDs working in manufacturing. Most of the interesting and high-leverage problems in manufacturing are in Chemical/Biochemical Engineering, Robotics, Controls, ... When it comes to "stuff phds do in the manufacturing sector", the US is still a leader. > The west self-harm is contradicting itself by allowing both heavy labor-regulations in their own countries and trade with countries with basically no labor-regulations. This is accurate. If you want manufacturing capacity in the US, the correct thing to do is to raise the bar globally. Want to import? Great. Meet a minimum standard of labor and environmental regulations, perhaps different than the US labor regs, and even possibly lower in some dimensions, but qualitatively similar. Of course, this is far easier said than done. > It's just like they hate their own low skill workers so much that the politicians intentionally destroyed the factory job market. WRT environmental regulations, it's much easier to turn a blind eye to something happening half-way around the world than something happening in your own town. Especially when that "something" is "Pittsburgh's skies blacker than night at noon due to cancerous smog". WRT labor regulations & cost, you seem to claiming that the workers rights movement hated workers? Again, it's easy to say "make jobs safer and pay people more". It's much harder to so "and also we're going to accept permanent double-digit inflation." I think, instead of malice, we can attribute the US's current situation to the fact that policies which make manufacturing more expensive are largely popular even among manufacturing laborers and policies which make imported goods more expensive are (a) horrendously difficult to "get right" and (b) largely unpopular.
  - billconan 5y ago
jollybean 5y ago
This may not be so true. Remember comparative value, which is a real thing. China had very cheap labour that the US could never compete with. China made outrageous amounts of stuff, and stocks Wallmart and Amazon shelves with it. In my own lifetime, I have seen a seismic shift in material consumption of Americans, mostly for the better: the quantity, variety, quality of goods and even foodstuffs in a Wallmart today - cheap and accessible to most Americans - would blow someone from 1975 away. The giant piece missing from the economic equations is 'consumer surplus' which is the 'profit' that consumers derive. When consumers get more choice, more quality and lower prices, they are making huge 'profits' that we simply don't put in the equations. Consumer Surpluses have been massive for the West. At least for low-end manufacturing, it's been a massive neoliberal win-win. Obviously, the storyline is changing, and for more advanced products it's a different issue. But for most things so far, it's 'good' trade.
- baybal2 5y ago
  > China had very cheap labour that the US could never compete with. Not a case now. Skilled assembly line workers cost more in South China than in cheaper US states. Amazons, Googles, Facebooks still keep pouring into China like there is no tomorrow. I think a little of critical thinking will point to problem not being with the cost of labour. Thought, the initial US MNCs push into China was definitely motivated by the borderline free workers.
  - jollybean 5y ago
    "Not a case now." Yes, it's the case now. Average mfg. wages in China are still short of Mexico, and US salaries include all sorts of overhead, especially healthcare. "Skilled assembly line workers cost more in South China than in cheaper US states." - for some things, not for most things. "Amazons, Googles, Facebooks still keep pouring into China like there is no tomorrow." - Yes, and? Without 'cheap labour' China would not exist, even today, the economic machine depends on it. The surpluses wrought by the American/Western consumer are massive. Walmart would have 1/2 of the goods, and they would be more expensive. Americans consume considerably more goods than they would otherwise, and that's a measure of the enormous surplus being created by comparative value trade between the two nations. The 'anti comparative value' argument made in the article is just hot air and speculation without a lot of data to pack it up. Adam Smith is as correct as Isaac Newton, you can't just say 'gravity doesn't exist anymore'.
throwDec21 5y ago
Chinese may be the world's best manufacturers but it just creates pollution and little profit. SV maybe create pointless apps but it makes loads more money.
natded 5y ago
My unironic recommendation for any nation state is to block American social media companies and then proceed to restrict or outright ban R&D work on 'ads' and other such trinkets. Exactly because of: ".. a tragedy for ... that so many physics PhDs have gone to work in hedge funds and Silicon Valley." Just looking at the sheer amount of work gone to optimize ad clicking is insane.
- georgeburdell 5y ago
  Perhaps a less heavy-handed approach would be to actually enforce existing anti-trust laws against Big Tech so that they're not able to monopolize America's best and brightest? Also, as a Physics PhD holder myself, I dislike that Physics PhDs are held up as the archetypal smart people to be allocated in society's best interest. My opinion is that most of them, myself included, were foolish to go that far in their education and would have better served themselves, and society, if they had stopped at a BS. We could unlock a large economic gain if we went back to fairly matching job responsibilities with the minimum required education.
  - deleted 5y ago
    [deleted]
- dnautics 5y ago
  > Just looking at the sheer amount of work gone to optimize ad clicking is insane. It's circular -- while I think ads are absurd and am actively trying to remove as many of them from my life as possible, it's not like technologies that have been subsidized by optimizing ad clicking haven't come back around to help science out.
  - Swenrekcah 5y ago
    Are you referring to ad tech somehow being useful or that some of FB/Google pet projects ultimately funded by ads have been useful? Just curious, especially if you mean the former.
    - 5y ago
11thEarlOfMar 5y ago
What metrics are you observing that lead you to conclude that the American middle class has met its demise?
- mdorazio 5y ago
  There have been many articles written on this topic. I think Pew paints a pretty good picture of the overall decline [1]. [1] https://www.pewresearch.org/social-trends/2015/12/09/the-american-middle-class-is-losing-ground/ https://www.pewresearch.org/social-trends/2015/12/09/the-ame...
  - 11thEarlOfMar 5y ago
    Thanks. According to Rand[0], the % of households in the middle class has shrunk, primarily because they are moving into the upper class. While technically, yes, the middle class is shrinking, it's not for a negative reason (from the perspective of the middle class themselves). Overall, American households are increasingly wealthy, class divisions notwithstanding. [0] https://www.rand.org/blog/2021/05/most-americans-consider-themselves-middle-class-but.html https://www.rand.org/blog/2021/05/most-americans-consider-th...
    - matthewdgreen 5y ago
      I don’t think that’s really a fair summary of the article and it elides many of the nuances, such as the fact that the “increase in wealth” you cherry-pick is due to demographic changes (workers getting older and thus having higher salaries) whereas the other measures in the article all point to declines. But more to the point: does this summary reflect your actual experience?
      - 11thEarlOfMar 5y ago
        The word that caught my attention was demise. It doesn’t square if you believe that the US is seeing record employment and record stock market returns, as more than 50% of US households have stock-based investments. I was asking, and still hoping to see, the metrics and data that point to demise of the US middle class.
baybal2 5y ago
> "For someone in the middle class, there has never been a better year to live in China. That comes down to the entrepreneurs, who are creating businesses to please people." Every rich Chinese I know is trying to leave China now. This includes even very well placed regime insiders. A PLA 2 star general almost forcefully sent his daughter to live in Canada at the peak of COVID travel restrictions. I knew her from my days in a Canadian college. A grandson of some revolutionary hero whom I took misfortune to acquaintance with by helping his daughter practice English, started recently asking me how immigration to Canada works, and if he can get along there without knowing English. Even most zombiefied, hardcore pinkos who were going flag waving at West Georgia have shut up for good, and got in line for Canadian passports. From the middle class you mention, factory owners I knew who were the most staunch, and stalwart when it came to hostile business environment, are now shutting down, selling at n-times discount, and pretty much running from the country. It's done for.
- deanCommie 5y ago
  I think you're making the point. North America is for the rich. There is no better place to be RICH (better than even Europe). Western Europe is probably the best place in the world to be poor. It seems that China is now the best place in the word to be middle class. (I know very little about it, just basing it on the article and the other discussion here). That the richest want to leave China for North America is not an indictment of China, it's an indictment of North America.
  - thewarrior 5y ago
    Yea you’re exactly right. The elite of every non first world country are busy trying to immigrate to the US or one of the Anglo nations. It doesn’t say much about whether a country will continue to rise or not.
  - deleted 5y ago
    [deleted]
  - ryanqian 5y ago
    North America is the country for rich of the earth.

paganel 5y ago

> a story about misallocation of talent I wish modern-day economists would be more aware of local maximums, which is the economic strategy the US seems to have adopted in the last 2-3 decades. Looks like China is targeting things beyond the local maximums, much like the US used to do back in the '50s and '60s, maybe also in the '70s. Not sure things like the ARPANET would have been possible in today's world when the strategy of "looking for the local maximum" is the only one made use of.

01100011 5y ago
We need an enemy. The Soviets made the US better. We have identified both Global Warming and China as our current external enemies(terrorism seems to have fallen off the radar for now), but we're not fighting them like we did the Soviets. There is a lack of national purpose and a seriousness which is needed to focus our efforts on survival. Right now we're more focused on fighting each other and while some of our efforts to clean up our political and justice systems may bear fruit they may be irrelevant if we don't survive as a nation.
- kurthr 5y ago
  There's more profit scamming middleclass Americans (and their government) than there is in competing on the global stage. The idea of the rising tide lifting all ships is no longer followed within the country (or Mexico, UK, etc) as it is in other countries.

temp8964 5y ago

Poor logic. How can U.S. PhDs work in manufacturing when factories moved to China? Beijing didn't make PhDs work in manufacturing either. It's just the manufacturing job market is there. The government has nothing to do with this. The west self-harm is contradicting itself by allowing both heavy labor-regulations in their own countries and trade with countries with basically no labor-regulations. It's just like they hate their own low skill workers so much that the politicians intentionally destroyed the factory job market.

throwawaygh 5y ago
> How can U.S. PhDs work in manufacturing There are tons of US PhDs working in manufacturing. Most of the interesting and high-leverage problems in manufacturing are in Chemical/Biochemical Engineering, Robotics, Controls, ... When it comes to "stuff phds do in the manufacturing sector", the US is still a leader. > The west self-harm is contradicting itself by allowing both heavy labor-regulations in their own countries and trade with countries with basically no labor-regulations. This is accurate. If you want manufacturing capacity in the US, the correct thing to do is to raise the bar globally. Want to import? Great. Meet a minimum standard of labor and environmental regulations, perhaps different than the US labor regs, and even possibly lower in some dimensions, but qualitatively similar. Of course, this is far easier said than done. > It's just like they hate their own low skill workers so much that the politicians intentionally destroyed the factory job market. WRT environmental regulations, it's much easier to turn a blind eye to something happening half-way around the world than something happening in your own town. Especially when that "something" is "Pittsburgh's skies blacker than night at noon due to cancerous smog". WRT labor regulations & cost, you seem to claiming that the workers rights movement hated workers? Again, it's easy to say "make jobs safer and pay people more". It's much harder to so "and also we're going to accept permanent double-digit inflation." I think, instead of malice, we can attribute the US's current situation to the fact that policies which make manufacturing more expensive are largely popular even among manufacturing laborers and policies which make imported goods more expensive are (a) horrendously difficult to "get right" and (b) largely unpopular.
- billconan 5y ago

jollybean 5y ago

This may not be so true. Remember comparative value, which is a real thing. China had very cheap labour that the US could never compete with. China made outrageous amounts of stuff, and stocks Wallmart and Amazon shelves with it. In my own lifetime, I have seen a seismic shift in material consumption of Americans, mostly for the better: the quantity, variety, quality of goods and even foodstuffs in a Wallmart today - cheap and accessible to most Americans - would blow someone from 1975 away. The giant piece missing from the economic equations is 'consumer surplus' which is the 'profit' that consumers derive. When consumers get more choice, more quality and lower prices, they are making huge 'profits' that we simply don't put in the equations. Consumer Surpluses have been massive for the West. At least for low-end manufacturing, it's been a massive neoliberal win-win. Obviously, the storyline is changing, and for more advanced products it's a different issue. But for most things so far, it's 'good' trade.

baybal2 5y ago
> China had very cheap labour that the US could never compete with. Not a case now. Skilled assembly line workers cost more in South China than in cheaper US states. Amazons, Googles, Facebooks still keep pouring into China like there is no tomorrow. I think a little of critical thinking will point to problem not being with the cost of labour. Thought, the initial US MNCs push into China was definitely motivated by the borderline free workers.
- jollybean 5y ago
  "Not a case now." Yes, it's the case now. Average mfg. wages in China are still short of Mexico, and US salaries include all sorts of overhead, especially healthcare. "Skilled assembly line workers cost more in South China than in cheaper US states." - for some things, not for most things. "Amazons, Googles, Facebooks still keep pouring into China like there is no tomorrow." - Yes, and? Without 'cheap labour' China would not exist, even today, the economic machine depends on it. The surpluses wrought by the American/Western consumer are massive. Walmart would have 1/2 of the goods, and they would be more expensive. Americans consume considerably more goods than they would otherwise, and that's a measure of the enormous surplus being created by comparative value trade between the two nations. The 'anti comparative value' argument made in the article is just hot air and speculation without a lot of data to pack it up. Adam Smith is as correct as Isaac Newton, you can't just say 'gravity doesn't exist anymore'.

throwDec21 5y ago

Chinese may be the world's best manufacturers but it just creates pollution and little profit. SV maybe create pointless apps but it makes loads more money.

natded 5y ago

My unironic recommendation for any nation state is to block American social media companies and then proceed to restrict or outright ban R&D work on 'ads' and other such trinkets. Exactly because of: ".. a tragedy for ... that so many physics PhDs have gone to work in hedge funds and Silicon Valley." Just looking at the sheer amount of work gone to optimize ad clicking is insane.

georgeburdell 5y ago
Perhaps a less heavy-handed approach would be to actually enforce existing anti-trust laws against Big Tech so that they're not able to monopolize America's best and brightest? Also, as a Physics PhD holder myself, I dislike that Physics PhDs are held up as the archetypal smart people to be allocated in society's best interest. My opinion is that most of them, myself included, were foolish to go that far in their education and would have better served themselves, and society, if they had stopped at a BS. We could unlock a large economic gain if we went back to fairly matching job responsibilities with the minimum required education.
- deleted 5y ago
  [deleted]
dnautics 5y ago
> Just looking at the sheer amount of work gone to optimize ad clicking is insane. It's circular -- while I think ads are absurd and am actively trying to remove as many of them from my life as possible, it's not like technologies that have been subsidized by optimizing ad clicking haven't come back around to help science out.
- Swenrekcah 5y ago
  Are you referring to ad tech somehow being useful or that some of FB/Google pet projects ultimately funded by ads have been useful? Just curious, especially if you mean the former.
  - 5y ago

11thEarlOfMar 5y ago

What metrics are you observing that lead you to conclude that the American middle class has met its demise?

mdorazio 5y ago
There have been many articles written on this topic. I think Pew paints a pretty good picture of the overall decline [1]. [1] https://www.pewresearch.org/social-trends/2015/12/09/the-american-middle-class-is-losing-ground/ https://www.pewresearch.org/social-trends/2015/12/09/the-ame...
- 11thEarlOfMar 5y ago
  Thanks. According to Rand[0], the % of households in the middle class has shrunk, primarily because they are moving into the upper class. While technically, yes, the middle class is shrinking, it's not for a negative reason (from the perspective of the middle class themselves). Overall, American households are increasingly wealthy, class divisions notwithstanding. [0] https://www.rand.org/blog/2021/05/most-americans-consider-themselves-middle-class-but.html https://www.rand.org/blog/2021/05/most-americans-consider-th...
  - matthewdgreen 5y ago
    I don’t think that’s really a fair summary of the article and it elides many of the nuances, such as the fact that the “increase in wealth” you cherry-pick is due to demographic changes (workers getting older and thus having higher salaries) whereas the other measures in the article all point to declines. But more to the point: does this summary reflect your actual experience?
    - 11thEarlOfMar 5y ago
      The word that caught my attention was demise. It doesn’t square if you believe that the US is seeing record employment and record stock market returns, as more than 50% of US households have stock-based investments. I was asking, and still hoping to see, the metrics and data that point to demise of the US middle class.

baybal2 5y ago

> "For someone in the middle class, there has never been a better year to live in China. That comes down to the entrepreneurs, who are creating businesses to please people." Every rich Chinese I know is trying to leave China now. This includes even very well placed regime insiders. A PLA 2 star general almost forcefully sent his daughter to live in Canada at the peak of COVID travel restrictions. I knew her from my days in a Canadian college. A grandson of some revolutionary hero whom I took misfortune to acquaintance with by helping his daughter practice English, started recently asking me how immigration to Canada works, and if he can get along there without knowing English. Even most zombiefied, hardcore pinkos who were going flag waving at West Georgia have shut up for good, and got in line for Canadian passports. From the middle class you mention, factory owners I knew who were the most staunch, and stalwart when it came to hostile business environment, are now shutting down, selling at n-times discount, and pretty much running from the country. It's done for.

deanCommie 5y ago
I think you're making the point. North America is for the rich. There is no better place to be RICH (better than even Europe). Western Europe is probably the best place in the world to be poor. It seems that China is now the best place in the word to be middle class. (I know very little about it, just basing it on the article and the other discussion here). That the richest want to leave China for North America is not an indictment of China, it's an indictment of North America.
- thewarrior 5y ago
  Yea you’re exactly right. The elite of every non first world country are busy trying to immigrate to the US or one of the Anglo nations. It doesn’t say much about whether a country will continue to rise or not.
- deleted 5y ago
  [deleted]
- ryanqian 5y ago
  North America is the country for rich of the earth.