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The US is building factories at a fast rate

• obblekk 3y ago
  > The US has added around 800,000 jobs in manufacturing employment over the last two years, employing around 13 million workers It's too early to know, but if it turns out the solution to decades of economic misery for middle class blue collar workers was 1. 50% tariffs on China, and 2. $100B of subsidies to chip makers and green tech... The reversal of Reaganomics we're living through will become permanent for at least another generation, and for good reason. Maybe a good time to start a company selling to the government.
  • _trampeltier 3y ago
    There are not just tariffs to china. It's became expensive for all countrys to sale things to the US. 10 years ago, we produced a lot for the US market in our factory, now I think, almost nothing.
  • ChuckNorris89 3y ago
    > solution to decades of economic misery for middle class blue collar workers was 50% tariffs on China Who could have thought that manufacturing using western labor and laws, can't compete with manufacturing in a totalitarian regime with no respect for human lives/rights or the environment? /s Free trade should only happen as long as the trading partners share similar laws and regulation on human rights and environmental protections, otherwise people and the environment get screwed for the sake of corporate profits, so tariffs should always be in place to level the playing field and prevent such exploitations.
    • justrealist 3y ago
      You don't even need that. Requiring reciprocal open markets would have gone a long way. Don't allow Google or US media imports? Sorry, you can't export cheap manufactured goods.
  • nimish 3y ago
    Bad free trade deals likely did more than Reaganomics here. NAFTA + China-WTO accession really did not help American manufacturing.
    • FpUser 3y ago
      W in WTO stands for the World. It does not say anything about the US.
      • enraged_camel 3y ago
        I mean, neither do any of the words in 'NATO' but the alliance has been immensely beneficial for the US.
        • amanaplanacanal 3y ago
          I suspect it has been way more beneficial to Europe than the US. The US could already defend itself, the smaller countries in Europe not as much.
          • lesuorac 3y ago
            I mean if the US can keep the front lines of the hypothetical Warsaw Pact vs NATO fight in Europe it's really good the US since they won't get bombed. A lot of American Exceptionalism comes from the fact that EU got absolutely destroyed by world wars while the US got to keep chugging along.
          • tut-urut-utut 3y ago
            No. NATO is a terrorist organisation that bombed an European country just to show it could do or unpunished.
    • standardUser 3y ago
      Reagan launched the Uruguay Round of trade negotiations that led to the creation of the WTO, which itself resulted from the Bretton Woods system and the General Agreement on Tariffs and Trade (pre-cursor to WTO) that were established after WWII. The US had been on that trajectory for a long time before Bill Clinton put it into overdrive!
  • mgr86 3y ago
    > Maybe a good time to start a company selling to the government if only I knew what the government wanted to buy. Besides weaponry that is.
    • AndrewKemendo 3y ago
      https://sam.gov/ https://sam.gov/
    • wmf 3y ago
      You don't want to be the main character of War Dogs II?
    • atlasunshrugged 3y ago
      Gov also isn't just federal, there's state and local! In general, the federal government is really bad at procuring pure software products (with some exceptions like Scale AI). Edit to add: If you're building in the space, YC cofounder matching also does events targeted to gov once in a while, and I personally am doing some ideating if you want to chat
      • moneywoes 3y ago
        Would love too, I work for tech a company selling to gov now have a focus on tech and gtm Email in profile
    • HeyLaughingBoy 3y ago
      "All you young fellas building tech companies that aren't making any money, meanwhile Town Hall has a contract out for $100k/year to clean the floors and no one's bidding on it." --Some old dude about 15 years ago.
      • jhallenworld 3y ago
        From sam.gov: https://sam.gov/opp/57075abba039462f8ed76c2641de3394/view https://sam.gov/opp/57075abba039462f8ed76c2641de3394/view "The contract requirements are geographically spread over the State of Alabama in the following counties: Clarke, Monroe, Wilcox, Dallas, Autauga, Lowndes, Montgomery and Elmore along the R.R. “Bob” Woodruff Lake, William “Bill” Dannelly Reservoir and Claiborne Lake. Alabama River Lakes consists of approximately 1,092 miles of shoreline, 39,452 acres of water and 68,006 acres of land. Facilities include 6 Class A campgrounds, 38-day use/land water access areas, 9 Multi-purpose Areas, 3 Visitor Centers/museum, 9 maintained but undeveloped Natural Resource areas, 2 Contractor maintenance Compounds, along with a Resource Management Office and other associated operational facilities. Provide services for maintenance, repair, minor construction (as defined in AR-420-1 and DA PAM 420-11) including all planning, supervision, administration, labor, equipment, materials, supplies, and replacement or repair parts that is required for performance of this contract. The contract scope of work will include, but is not limited to, some or all of the following types of work: maintenance and repair of buildings, facilities, offices, water and electrical systems, concrete structures, maintenance facilities, operational areas, roadways, vehicles, boat docks, bathhouses, washhouses, toilets, gatehouses, security fences, sanitary disposal systems, launching ramps, playground equipment, bulletin boards, game courts, playgrounds, telephone lines, picnic sites, campsites, and other related facilities."
  • monero-xmr 3y ago
    Maybe we shouldn’t consider this a success while subsidies are happening? We also gave $535 million to Solyndra to manufacture solar panels in 2009 and they imploded once our tax dollars stopped being funneled (as much) to them: https://en.m.wikipedia.org/wiki/Solyndra https://en.m.wikipedia.org/wiki/Solyndra The real test will be once they stop taking our taxes and handing it to businessmen if they can stand on their own merits. Until then this is charity to the private sector.
    • jtbayly 3y ago
      Charity to one part of the private sector, paid for by all the other parts of the private sector. Or more realistically, charity to one part of the private sector paid for by all of our great grandchildren.
    • standardUser 3y ago
      Charity is when you get nothing in return. This is called industrial policy and this country was a lot better off when it had one.
      • ch4s3 3y ago
        That's a bold claim. Coming out of WWII the US had virtually the only operational factories in the world. Arguably protectionism caused incumbents to become moribund and fall behind foreign firms. The steel industry is a great example. By the time tariffs came down US steel plants were half a century out of date and producing steel that was either too expensive or too low in quality compared to competition. For another angle on just steel, the Chinese industrial policy caused such a glut of steel that they were frantically searching for things to do with all of it, and ended up doing a bunch of stupid and wasteful projects that diverted funds from more useful endeavors. The US also protected furniture and garment production into the 90s. Had that not been the case, the transition int hat industry likely would have been much smoother and no so apocalyptic for workers. Underlying your claim is the notion that technocrats can or could ever know what an economy as large and complicated as the US "should" be producing.
        • 3y ago
  • balls187 3y ago
    3. Global pandemic making it nearly impossible for the #1 Consumer Economy to fulfill demand. And recall Globalization was championed by Bill Clinton. Donald Trump pumped up Tariff’s against China. Joe Biden pushed for chip and green subsidies.
    • FrustratedMonky 3y ago
      I hear this a lot about Clinton, as if it is a condemnation. Seems conveniently forgotten that it was a Republican Congress, and Republican's were the ones pushing globalization, to help big business with all that cheap labor. And Clinton went along with it to be 'bipartisan'.
    • libraryatnight 3y ago
      Do we think globalization failed? because it seems to me it's just getting rebooted from the business side. The cultural impact seems too out of the bag, railing against globalization in a Clinton context just seems like bad lens to be looking through
    • whoopdedo 3y ago
      2019 was the icing on a cake that began baking in 2011 when a combination of earthquakes and flooding crippled supply chains.
  • api 3y ago
    Part of why the US working class has been so angry isn't just the economic misery but the decades of being gaslit by politicians pretending that outsourcing to countries with no OSHA, no EPA, no concerns about carbon emissions, no workers rights, no unions, and radically lower wages is going to create jobs in America. It's a clearly absurd proposition on its face. Of course that's going to depress wages and destroy jobs, especially in manufacturing. I'm all for free trade with other free countries with similar levels of rights for workers and concern for the environment. Outsourcing elsewhere should be taxed proportionally to the gap in these areas. If you want a simple to implement solution, a tax on a combination of wage disparity and CO2 emission disparity would be enough to capture most of the relevant differences. The latter can be very objectively checked using satellite imaging.
    • FpUser 3y ago
      Problem with this policy is that it will prevent poor countries from ever getting up the ladder. It also ignores the fact that many advanced human right respecting countries got there not without plundering less fortunate for generations.
      • NoMoreNicksLeft 3y ago
        How is that a problem for the United States, for instance? Do officeholders in the United States have any responsibility to people in foreign countries beyond that in ratified treaties? Do we have any moral obligation to make restitution for our great-great-grandparents' crimes to the great-great-grandchildren of the victims? And what level of punishment is going too far?
        • FpUser 3y ago
          You do not have to do shit. But you do not live in the vacuum and unless you take interests / complaints of the other parties into considerations sooner or later you would face problems. Karma.
          • anlaw 3y ago
  • golergka 3y ago
    3. Fracking. Cheap, abundant energy which is uniquely close both to very educated labour pool and either the most navigable river basin in the world, or the ocean. Saudi Arabia, Russia and other countries may have more oil than US, but it's too far from there places where it would be usable for manufacturing.
    • epistasis 3y ago
      And fracking itself was developed with massive amounts of government subsidy, which is conveniently forgotten whenever the issue of "subsidies" comes up. There's also the political motivation of banks, which blindly trusted fossil fuel investments, leading to massive investment that was unprofitable in the first round of fracking. When it comes down to it, fossil fuels are surviving, and continue to survive, largely as a cultural and political effort, as much as a technology effort. And once we move away from them we will be saving massive amounts of money that can be directed towards improving the economy in other areas that improve people's lives rather than damage their lungs and cause climate change.
  • rufus_foreman 3y ago
    >> "The reversal of Reaganomics" March 28, 1987: "President Reagan decided Friday to impose punitive 100% tariffs on a wide variety of goods produced by Japanese electronic giants in retaliation for Tokyo’s failure to abide by the semiconductor trade agreement between the two nations" -- https://www.latimes.com/archives/la-xpm-1987-03-28-mn-698-story.html https://www.latimes.com/archives/la-xpm-1987-03-28-mn-698-st... That Reagan? 50% tariffs are rookie numbers.
    • majormajor 3y ago
      Reagan also jacked up the national debt pumping $$$$ into defense technology and hardware development, but I suspect you know that neither tarriffs nor unrestricted government spending without an eye towards the debt is what "Reaganomics" is popularly remembered as. Outside of the more immediately-public-facing stuff like tax cuts, Reagan's legacy is very much a "do what we say, not what we did" situation.
      • rufus_foreman 3y ago
        >> "Reagan also jacked up the national debt pumping $$$$ into defense technology and hardware development" That sounds like manufacturing jobs to me.
        • majormajor 3y ago
          Yes, exactly.
          • rufus_foreman 3y ago
            >> Yes, that was the point? The original post's point seemed to me to be "Reaganomics was bad for manufacturing jobs", and listed tariffs and subsidies as two things that are good for manufacturing jobs that were a reversal of Reagonomics. Do you agree that was the original point? But Reagan implemented both tariffs and subsidies that were good for manufacturing jobs. So how are tariffs and subsidies a reversal of Reaganomics?
  • mistrial9 3y ago
    also Senator Dianne Feinstein's deceased husband Richard Blum, who personally built a fortune in China-> mfg outsourcing..
  • alexose 3y ago
    Another important factor is that China's workers make more money than they used to, especially relative to the West. There's not as much of a cheap-labor-arbitrage opportunity as there was in the early 2000s. Here's a chart illustrating this point: https://i.insider.com/532ccb18eab8eadc39f33da6 https://i.insider.com/532ccb18eab8eadc39f33da6
    • FrustratedMonky 3y ago
      Exactly. The factories follow the Cheap Labor. From US to China, then it was China to Thailand/SKorea, then from Thailand to India. Probably don't have chain correct, and it is different for different industries. But there was definitely a progression of 'local salary goes up', 'time to move to next cheapest country'.
      • omegaworks 3y ago
        A race to the bottom for globalized capital, capable of making cross-border moves with a freedom denied to labor in any meaningful capacity.
      • wizofaus 3y ago
        Surely though there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. On that basis I'm not convinced wage growth in SE Asia is the primary reason the US manufacturing industry is deciding to reshore. Is the same phenomenon occurring in other wealthy countries that haven't put in place taxpayer funded incentives to do so?
        • kneebonian 3y ago
          > there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. Keep in mind costs aren't just what you have to pay people but also things like regional security, the risk of the government nationalizing your company and assets, ability to get skilled/capable/honest people. Basically there has to be a degree of stability, including a centralized government that can provide a certain level of law and order in order to attract capital. Otherwise you have to price in the costs of missing a day of work because the factory is being shelled by government/anti-government groups, etc. Corruption is fine, bribes are fine, because they can be priced in and managed, what can't be managed, planned for and predicted is instability. For the record my bet on where the next big booms will be is Indonesia, Mexico and to a lesser extant west Africa.
  • csomar 3y ago
    > Maybe a good time to start a company selling to the government. Why do you think this sudden rise in industrial investment? The US didn't turn attractive overnight. This is the "economy" selling to the government their $280Bn CHIPS package. > It's too early to know, but if it turns out the solution to decades of economic misery for middle class blue collar workers was A 50% tariff does not affect attractiveness. You did not address the core issues, as the tariff will hide it. What will happen is free market economy at play: As the issues are hidden behind tariffs/protectionism, the US will keep falling behind China until you are significantly behind that you can't catch up. Then you become a real third-world country.
    • libraryatnight 3y ago
      I dunno, my wife works in commodity management and the number of companies she's helped get out of China lately is staggering and they've straight up begged her not to move at times. Begged. I can't imagine how this looks higher on the food chain.
    • anlaw 3y ago
      Economic philosophy always ignores the real humans who will exist regardless what cherry picked economic markers indicate. Reality will never care about any human philosophy. Humans will invest agency in interesting things regardless of some model in a vacuum anyone can conjure. Finance is has something very in common with religion; something humanity has zero obligation to perpetuate. You have no idea what you’re talking about because we’ll just “fix” the philosophy to align with the reality. Trying to “fix people” to serve the philosophy is not happening.
  • NoMoreNicksLeft 3y ago
    Is a 2020s factory in any significant way similar to a 1970s factory? Given a factory from each era that produces roughly the same product and quantity, how many are employed at each? What are their inflation-adjusted wages? It seems difficult to believe that modern factories can employ enough people for your blue collar middle class dreams to become reality. The difference in population alone is 200M vs 330M. And even modest improvements in automation has the modern factory at something like half the personnel of the 70s-era factory for the (roughly) same output.
    • wizofaus 3y ago
      Only half, over 50 years? That would imply less than 1.5% productivity growth rate on average, pretty sure it's been higher than that!
      • NoMoreNicksLeft 3y ago
        To be fair, I'm having trouble thinking of many examples of factories that might even be comparable. Auto and auto parts, obviously, are still big. But then I can't come in and say "tires" (included in the previous). What's even left?
        • vel0city 3y ago
          There's a number of factories around me. They make things like: Semiconductors Telecommunications equipment Elevator/Lift equipment Agricultural equipment/trailers Aeronautical parts (both mechanical and electronic/sensor) Planes Helicopters Printing services Nutrition supplements Cars Just a few off the top of my head. These all seem to be growing a lot, as I see a lot of new buildings all the time. Many of these are definitely for domestic consumption, I'll grant you that.
  • deeg 3y ago
    My guess is that the increase in tariffs had little, if anything, to do with it; the article doesn't mention it but does cite CHIPS and the IRA. If anything the tariffs were one of the causes of our recent spike of inflation. My own opinion is that 40 years of globalization have lifted a billion people out of poverty and now the global pay scales aren't so vastly different. It is becoming more economically viable to produce things in the US. (Which will also put pressure on higher inflation.)
    • nickff 3y ago
      Has any manufacturing facility supported by the CHIPS and Science Act been completed or made operational? The parent commenter is citing manufacturing employment numbers, which are unlikely to be impacted by prospective factories. Has the Inflation Reduction Act had any positive impact on manufacturing either? Its main provisions seem to be related to economic redistribution, climate change, and infrastructure, all of which may have long-term impacts on industry and employment, but don't seem to have done much in those areas yet.
    • sh34r 3y ago
      CHIPS/IRA was the carrot. The tariffs, sanctions, rampant IP theft, supply chain shocks, Chinese lockdown labor shortages, specter of global conflict, energy shortages, etc were the stick. I suspect the whole is greater than the sum of the parts. Organizations are not rational robots that weight every factor and risk optimally. The conversation is probably more just wild gesturing at everything while cargo cult mentality takes over in the dozen boardrooms that control a majority of economic activity.
    • refurb 3y ago
      Wasn't the CHIPs act passed less than a year ago? The 800,000 is over the last two years.
  • wefarrell 3y ago
    I doubt these are the stable union jobs with decent benefits from 50 years ago. If we really want to reverse Reaganomics we need to increase taxes on corporate profits, capital gains, and inheritance.
    • User23 3y ago
      How do you see that working? I mean what’s the operational mechanism that drives union jobs from wealth taxes?
      • wefarrell 3y ago
        I never implied a causal relationship, they are two sides of the same coin.
        • missedthecue 3y ago
          If we want to... we need to... that's what you said and that reads plainly to me like you are implying a causal relationship.
      • eppp 3y ago
        If you increased tax receipts you could justify more government building and partnerships or grants. Make those grants pay union scale or require union contracts.
        • User23 3y ago
          US federal government spending obviously isn’t constrained by tax receipts. You’d think that would be clear in this day and age of consistent trillion dollar annual deficits. Thus spending programs should be judged based on outcomes and not nominal cost. I’m all for a strong middle class. However, I don’t see how an inheritance tax that forces children to sell their parents farm or business to pay estate taxes is supposed to accomplish that though. If I wanted a large permanent asset-free working class I’d definitely aggressively tax intergenerational wealth accumulation, resting assured that the upper classes would easily dodge it with trusts, corporations, expatriation, or some other tax avoidance strategy. That sounds like an excellent strategy to crush the remaining middle class.
  • no_wizard 3y ago
    I had a professor remark once (this is circa 2009) that we should all learn a highly skilled trade around advanced manufacturing because eventually offshoring will reverse itself and by your early 30s you'll be in a prime position to profit immensely off the re-shoring of advanced manufacturing equipment and processes Maybe he was right. I'm in my early 30s now, and I don't regret becoming a software engineer, but all the highly skilled tradesmen I've met in the last 5 years make at least what I do, often more, and have the benefit of actually owning their own businesses or real, meaningful slices of other ones. I'll boldly admit I don't think I would like over physical labor and I do wonder about the toll of it long term, but they make a killing, especially the ones willing to travel all over the US. Granted, the highest earner I know has both a degree in CS and Industrial Engineering, and goes all over the place working with industrial robotics and makes piles of money doing it. More than elite SV companies in the last 3 years, IIRC, if you discount the stock based compensation package (simply salary to salary comparisons) its north of 300K. And arguably better retirement benefits, I think 12% goes to the 401K and they get bonuses every quarter right now. Well invested I bet he'd come out ahead. Can't for the life of me remember the name of the company though. EDIT: forgot to mention the folks making tons of money on the DoD now starting to require things made in the USA and sourced raw materials from either inside the US or from friendly approved countries from the last few years either, and I don't think that's going away any time soon. They've in the last 2-3 years started paying lots and lots of money to get suppliers that are US based and source their raw material from friendly nations only, and they pay alot of money to make it worth while.
    • nojvek 3y ago
      I really envy anyone working in Industrial Robotics. It's such a fascinating field. Automating physical things is so much more rewarding than automating digital things.
      • no_wizard 3y ago
        Maybe not surprisingly, the real money in this field is in maintenance and ensuring uptime. The robots are cool to develop too but its really hard to get a job doing that directly unless you're a startup with funding from a VC or have an incredibly good resume, but there is a cottage industry of people (businesses or business units usually) that make lots of money maintaining deployed fleets and developing patches / augmentations for existing robotics. I think its hard to break into in some respects, compared to other fields (you need some certifications iirc in addition to a degree) but my limited, anecdotal exposure suggests its quite interesting and lucrative. That said, my sample size is small, and on the other end of the spectrum, I know a few folks who maintain complex CNC equipment and develop software for it (using a language I don't recongize, I think its proprietary) and while they make good money, its not better than you can make as a senior engineer at a reputable place as a web developer, for example.
  • vineyardmike 3y ago
    3. Covid disruptions to the supply chains coming out of China revealed how expensive and risky it was to manufacture there.
  • ChuckMcM 3y ago
    I suspect that the reliance on China for manufacturing combined with what sort of sanctions would be enacted when they attempt to invade Taiwan, would encourage the US and its European allies to insure they had a good manufacturing base to rely on. We have seen a number of things from the war in Ukraine but two that I think have been really impactful were the challenges of ramping up munition production in the US and the impact of factories rolling out thousands of inexpensive drones/week and those drones being deployed on the battlefield gave everyone a reassessment of some of the national security risks of globalization. Basically the lesson is that industrial war requires an industrial base. In WW2 the US had a vibrant industrial base that could be pivoted to providing war material. Industrial base takes time to spin up, but if you have solid economy (as the US currently does) then using monetary policy and other incentives to push capital toward industrial base development is good for the country. It also plays well on TV since these factories are revitalizing towns and cities that previously were suffering from a lack of industry. As a result, I don't see these shifts so much as a "reversal of Reganomics" so much as a realization from the Russian-Ukraine war that "globalism" isn't something authoritarians really like. And if you're primary trading partner is run by an authoritarian regime, that is bad.
    • obblekk 3y ago
      Not blaming Reagan specifically, but the consensus that emerged in the early 80s was that all GDP growth was good, even if it skewed away from manufacturing toward finance, etc. This basic belief allowed us to write trade deals that reduced manufacturing capacity relative to non-manufacturing. Totally agree with you the Ukraine war has been incredibly important in previewing what would have been much worse in a Taiwan war.
    • eep_social 3y ago
      Great comment. I think supply chain risk through peak COVID is also a huge factor giving this shift momentum. Supply chain shocks were comprehensible and visible to most Americans and impacted practically every business owner. It kickstarted renewed calls for localism and reassessments of worst-case scenarios for business continuity. Bringing up the home industrial base is a necessity for shortening those supply chains and bringing that risk under control. Reducing risk from suppliers based in countries where government policy is less predictable or west-aligned was also highlighted by the pandemic. Shanghai locked down in May 2022, for example, and I am sure many Americans were surprised and annoyed at the time. The one-two of COVID then the Russia-Ukraine war seems to have knocked us into a new alignment. Remains to be seen how it plays out against our current, difficult social backdrop.
  • cryptonector 3y ago
    > The reversal of Reaganomics Reagan wanted to get the U.S. back on the gold standard, which leads to balanced trade. He was talked out of it by Fed chair Volker. What you call Reaganomics goes back to Nixon. I suppose that's probably just as well for you, but I don't think any administration between 1971 and 1991 (or even 2011 or now even) really thought "hey, let's take blue collar jobs and send them to Japan, and later China! haha! suckers!". Nixon didn't take the U.S. off the gold standard because that was something he yearned to do -- he did it because it was the only way to fund the then federal deficit. Sure, we would have been better off staying on a gold standard and being forced to cut that deficit, but every politician from Nixon onward -Democrat and Republican alike- kicked that can into the future. It's a non-partisan issue. Getting off the gold standard created easy credit junkies everywhere, and here we are. Junkies don't care about ideology.
    • throwaway2037 3y ago
      Reagan wanted to get the U.S. back on the gold standard, which leads to balanced trade. Thank you to share. I was surprised to confirm this through a simple Google search: "Did Regan want the gold standard?" Sample result: In 1981, for example, former U.S. President Ronald Reagan created a “gold commission” which decided not to go back to the gold standard. Thank goodness they said "no"!
• ajross 3y ago
  This is CHIPS and IRA at work, largely. The government decided we needed more manufacturing, paid people money to do that, and... now we have more factories and manufacturing jobs. People get all balled up over policy decisions like this because of politics, but the truth is that Keynesian economics is pretty simple to understand and it works exactly the way you'd expect it to work.
  • Kon-Peki 3y ago
    > This is CHIPS and IRA at work, largely That's what the article says, but the chart in the article casts quite a bit of doubt on that explanation (it's obviously an accelerator). Indeed, two paragraphs later, the article states "Census Bureau data reveals manufacturing construction spending has escalated from January 2020 until April 2023 in every region except New England and the Mid Atlantic." If you assume that people make plans before spending a lot of money, you would think that the tipping point was back in 2019 or so. In fact, I know people that make machines that are used to make and outfit factories and they've been running at capacity for a long time. You might think it's crazy looking at that chart, but factory construction in the USA is currently constrained by availability of parts and people. People want to spend more than they're currently spending...
    • ajross 3y ago
      First, the rise in spending is 2x. That's a huge effect, and there's nothing in 2019 that would explain it reasonably. And it only leads the bills' enactment by a few months. Isn't the more obvious hypothesis that people started investing speculatively a few months ahead of the bills? I mean, these bills largely amounted to campaign promises. It was abundantly clear after November of 2020 ensured a trifecta government that something along these lines was going to pass. Second: you're basically making stuff up with that 2019 argument. That's not the way incentive spending works at all. If you have free money on the table as a corporate executive you record that revenue immediately, you don't put it in the bank to "plan". In fact, most bills like this make it largely impossible to "save" the funding anyway, and for exactly this reason: politicians want their results now, now in the next administration.
• deleted 3y ago
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• m0llusk 3y ago
  There are many factors involved. Just to point out one, when the freeze and blackout hit Texas many makers of adhesives got stuck with volatile products in pipes and pumps. The reconstruction effort from that has been big enough that it is still going on.
• jakearmitage 3y ago
  OK, now we need immigration reform to actually get enough people to work on everything.
  • mwbajor 3y ago
    I want to make sure americans have the first shot at the job but I also want to make sure that the USA does brain drain the rest of the world so that there is absolutely no way to compete with us. I am all for immigration reform as long as it prioritizes americans heavily. This means no H1B abuse but with congress getting massive subsidies from H1B mills, I don't think this will happen.
    • FpUser 3y ago
      >"I also want to make sure that the USA does brain drain the rest of the world so that there is absolutely no way to compete with us." "The rest of the world" might have a little problem with that.
      • mwbajor 3y ago
        Yea I know. Everyone should bargain in their people's own self interest.
      • bsder 3y ago
        > "The rest of the world" might have a little problem with that. Good. Smart people having more leverage will topple places with shitty governments faster or consign those countries to the dustbin.
        • jl6 3y ago
          If all the smart people leave, are the remainder really going to be more effective at toppling shitty governments?
          • gumballindie 3y ago
• totalZero 3y ago
  I'm not cheering the victory until I can buy a made-in-USA iPhone. China totally outclasses the USA when it comes to manufacturing. https://www.statista.com/chart/28031/manufacturing-racing-bars/ https://www.statista.com/chart/28031/manufacturing-racing-ba...
  • esotericimpl 3y ago
    [dead]
  • edgyquant 3y ago
    When it comes to light manufacturing, sure, but they’ve struggled to just get to a point where they can do sophisticated heavy manufacturing at any kind of quality and this has been the result of US policy helping them out here. It wasn’t until Trump that this process ended and it became policy to not allow China to build a competitive heavy manufacturing industry. We will see if they pull through and become a rival in that regard as well; but I’m betting that now we’ve cut off their military from our tech and are pushing our companies out of China that they stagnate. This comment gives a better perspective https://news.ycombinator.com/reply?id=36247499&goto=threads%3Fid%3Dmarianatom%2336247499 https://news.ycombinator.com/reply?id=36247499&goto=threads%... Their “miracle” was a US creation, a policy to build them up to create a counterbalance to Russia. It’s gonna take ten years to tell, but China is already feeling these effects and feeling them hard.
    • dirtyid 3y ago
      This was situation 10+ years ago. PRC's been phasing out low value add light industry for years. US export controls tried to limit PRC modernization even pre-Trump (see 5axis CNC bans, trying to cripple PRC compute under Obama). US didn't help - they were outplayed despite efforts to contain PRC progress. Yet PRC inidgenous heavy industries now basically competitive in nearly every sector hence trade wars since PRC indigenous efforts are increasingly displacing western products. Exception being aerospace and semi both of which are closable gaps. Everywhere else PRC has more or less caught up. By most metrics, PRC's already pulled through and still rapidly climbing up value chain, innovation indexes etc. The "effects" is PRC increasingly entrenched in supply chains everywhere, including friendshore destinations that's basically reassembling PRC components - see PRC trade with said destinations increasing proportional to US imports from said countries. It's how PRC went from capturing $8 in assembling fees from each iphone 3G to 25% of value add since iPhoneX. Or how PRC become largest car exporter. That linked comment is also cherry picked stupid. PRC exports to US/west near record levels, WHILE exports to global south has officially surpassed western bloc, i.e. PRC is MORE factory of the world than at any point in the past. The drop in exports is due recent to global economic downturn that saps demand everywhere, but it's sapping from hilariously record high exports during covid. Meanwhile PRC export:GDP is like 20% down from 35% high in 00s, i.e. it's one of the less export dependant major economies in the world responsible for substantial global exports (including heavy industry) but it's not even an export driven economy anymore. On demographic front, the reality is PRC is minting OECD combined in skilled talent every year and last 5 years of PRC topping citation (controlled for quality), innovation index is just lag affect of PRC growing with fraction of that talent. The PRC miracle is basically doing all that with ~20% skilled workforce, because at PRC scale that's enough to be globally competitive. Now it's in process to grow that competitive workforce to 50-70% skilled in next 30 years, which is adding anohter couple US worth of talent into the mix.
• marianatom 3y ago
  Meanwhile in China: - exports plunge by 7.5% in May, far more than expected https://www.cnbc.com/2023/06/07/chinas-exports-plunge-by-7point5percent-in-may-far-more-than-expected.html https://www.cnbc.com/2023/06/07/chinas-exports-plunge-by-7po... - profit tumbles 18% in April https://www.reuters.com/world/china/china-industrial-profits-tumble-4th-straight-month-april-2023-05-27/ https://www.reuters.com/world/china/china-industrial-profits... - chip progress stagnating. Oppo chip design unit completely shut down https://techcrunch.com/2023/05/12/oppo-chip-disbands-phone-china/ https://techcrunch.com/2023/05/12/oppo-chip-disbands-phone-c.... Japan stops shipping semiconductor equipments to China https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-chip-export-curb-to-China-will-take-effect-in-July https://asia.nikkei.com/Business/Tech/Semiconductors/Japan-c.... China is still stuck on 14nm chips. - multinationals moving supply chains out of China faster than ever. Tesla asks Chinese suppliers to build plants in Mexico (June '23) https://cnevpost.com/2023/06/08/tesla-asks-chinese-suppliers-plants-mexico-report/ https://cnevpost.com/2023/06/08/tesla-asks-chinese-suppliers.... BYD make EVs in Vietnam (May '23) https://www.reuters.com/business/autos-transportation/chinese-automaker-byd-make-evs-vietnam-2023-05-08/ https://www.reuters.com/business/autos-transportation/chines.... On top of older news this year that Apple wants Foxconn to move out 50% of its production lines from China by 2025. And Dell's production completely out of China by 2027. China is no longer the "world's factory". It will stagnate for 10+ years, similar to Japan's lost decades, but with worser birth rate than Japan today. It reported 8M babies in 2022, low that was last reached in 1940s. We've never seen a large portion (25%+) of a large modern economy vanish in a span of a few years. (factories moving out, which decreases downstream economic activities such as real estate and retail).
  • AnimalMuppet 3y ago
    8 million babies for a population of 1.2 billion? Woah. Back of the envelope, that's something like half replacement rate.
    • marianatom 3y ago
      Yeah and that's not the crazy part. There's a 50% drop in marriage rate in 2023 compared to 2022.
• seatac76 3y ago
  This is great news, just anecdotally I have personally seen 3 large factories come up in my state in the last 2 years. All related to EVs and battery supply chain but still quite the pace.
• Xcelerate 3y ago
  Perhaps I'm just bad at economics, but it always seemed to me that the countries making all the stuff would eventually hold all the power (and I say this as someone working in tech who produces nothing tangible). The fact that it costs exorbitant amounts to construct new buildings, railways, etc. in the U.S. and how our cities almost look antiquated or frozen in time compared to Asian cities shows that we missed a generation or two and probably need to catch back up now.
  • onlyrealcuzzo 3y ago
    Compared to A Tier cities in some Asian countries? Does Santa Barbara or NYC really look antiquated compared to Mumbai? Or Da Nang? Or Fukuoka? Maybe if you're trying to compare Detroit to Shenzhen or Tokyo.
    • FrustratedMonky 3y ago
      Fuka What you say to me?
      • FrustratedMonky 3y ago
        Guess the play on words with Fukuoka wasn't funny.
        • anonymouskimmer 3y ago
          u ok?
    • scythe 3y ago
      Santa Barbara is a small town with a college/tourist/military economy. New York is an outlier by US standards in every sense, but if you've ridden the subway there you know it feels old, even though it's one of the best systems in the world on paper.
    • mitthrowaway2 3y ago
      Fukuoka is probably a bad example for your point. It almost makes Tokyo look antiquated by comparison.
• 8f2ab37a-ed6c 3y ago
  Good.
• Animats 3y ago
  Nice. China becomes less of a competitor on costs as wages rise there. Once the manufacturing wage differential gets into the 4:1 range, offshoring is less attractive. In the 2:1 range, offshoring starts to be a lose. That happened with Japan two decades ago.
  • revskill 3y ago
    [flagged]
    • mrits 3y ago
      [flagged]
• 11thEarlOfMar 3y ago
  In order for this to be effective, these factories need to be able to produce at a desirable profit. The reason so much manufacturing drained out of the US in the first place was corporations seeking improved profits. That's not to say many won't succeed, but we need to ensure that global competitiveness is imbued into these operations. Southeast Asia and India remain inexpensive.
  • FrustratedMonky 3y ago
    Didn't TSMC say that its new US factory would be 30% more expensive. US labor being the problem.
    • bsder 3y ago
      A mere 30% more so that job is here instead of China is a bargain--especially for something that has loads of national security implications.
      • FrustratedMonky 3y ago
        No doubt. I should say, 30% non-judgmentally. It is worth it for other reasons.
    • UncleOxidant 3y ago
      Yep, this is why re-shoring manufacturing to the US is (and will be) inflationary. For about 30 years we were exporting inflation to places like China.
  • Clubber 3y ago
    I think this is accurate. I also think the EPA had a lot to do with it as well.
  • Axsuul 3y ago
    Geopolitical risk is a thing too. Making less on profit now offsets the potential disruption on all exports if China were to fight a proxy war with the US.
• dcdc123 3y ago
  Maybe this is why politicians seem to trying to ruin all education. They want generations of undereducated assembly line workers.
• zoklet-enjoyer 3y ago
  I work in a factory. I'm there right now. It's ok
  • UncleOxidant 3y ago
    What're you making?
    • zoklet-enjoyer 3y ago
      Dietary supplements. Mixing up raw materials and encapsulating them. Pretty chill job
      • Solvency 3y ago
        I shudder to think of all of the "materials", documented materials and undocumented bonus materials, going into these completely non-FDA-regulated supplements.
        • zoklet-enjoyer 3y ago
          We are audited by the FDA, UL, and NSF. Also a company that does organic certification but I forgot what they're called. Our raw materials are tested by our lab when they're received and again after mixing/encapsulation. You don't know what you're talking about.
  • moneywoes 3y ago
    Are the margins as high as people say
    • zoklet-enjoyer 3y ago
      It depends on the product, but generally, yeah.
• vgchh 3y ago
  It’s about time. We probably need to go even faster, like face melting faster to remain competitive/relevant. Frankly though, this is just one of the dimensions. There is also the “people will need to work harder” dimension. That will be a harder adjustment for people. Nevertheless this is a good news
• mrangle 3y ago
  This isn't necessarily the win that some people think that it is. Do you like your standard of living? For most, you should when compared. That comes from one type of economy. This is another type, incoming. And there are no guarantees as to what your change in standard will be. One rhetorical question might be: is your standard of living better or worse than in China, which is replete with factories? Neither does Bangladesh have a factory shortage. Who owns the factories being built? It will surprise some to know that foreign ownership will be heavy. One objective trend is foreign pressure to reduce the cost of exported goods, which means foreign buyer downward pressure on wages as exported goods make up larger portions of the economy. Don't expect wages to be in Federal Reserve Notes. Do expect a continuing rise in corpocracy and feudalism. Do expect large pools of immigrant labor that will serve to minimize wages.
  • golemiprague 3y ago
    [dead]
• StrangeATractor 3y ago
  Great! But I imagine a lot of jobs we'd expect to be gaining will be automated. With the state of AI and robotics this trend will accelerate. We also lose a lot of interdependency which has its own problems.
• jjk166 3y ago
  Manufacturing employment is roughly at the same place now that it was in 2020, and still substantially lower than where it would have been had the pre-pandemic trend continued, and even that was nowhere near returning the US to pre-2008 levels. https://fred.stlouisfed.org/series/MANEMP https://fred.stlouisfed.org/series/MANEMP Construction spending is a terrible proxy for manufacturing - both because the size of a building you need isn't pegged to the value of your output (e.g. a $100 million dollar shop making aerospace components might have a tiny fraction of the footprint of a $1 million sweatshop making t-shirts), and because the cost of factory construction is determined by the cost of construction in general (i.e. if there was a real estate boom building residential buildings then you're competing with that for construction materials, equipment, labor, etc).
  • simonsarris 3y ago
    But also looking at FRED data we see that manufacturing sector productivity has doubled since ~1990, so it's not clear that headcount is the best proxy either. And if we look at industrial production or sector output we're still near (plateauing) all time highs https://fred.stlouisfed.org/series/IPMAN https://fred.stlouisfed.org/series/IPMAN https://fred.stlouisfed.org/series/OUTMS https://fred.stlouisfed.org/series/OUTMS But not everything is a plateau. Fabricated metal reached an all time high post covid: https://fred.stlouisfed.org/series/A32SNO https://fred.stlouisfed.org/series/A32SNO Same with semis: https://fred.stlouisfed.org/series/IPG3344S https://fred.stlouisfed.org/series/IPG3344S
    • 11thEarlOfMar 3y ago
      Would be interesting to see 'profit per employee' over time and see how productivity plays agains employment. Ultimately, we want full employment with competitive wages. Profitability relative to employment should tell us if we're on the right track.
    • jjk166 3y ago
      If you want to see a renaissance of manufacturing employment, then headcount is clearly the metric that matters. The fact is that offshoring of manufacturing was a myth - the jobs never left, the industries just transformed in such a way that old, labor intensive processes were eliminated. Those jobs, and the economic prosperity they brought, are never coming back. It's merely a coincidence that at around the same time US manufacturers were computerizing their operations China was building 1920s level industrial facilities. Certainly none of the data is indicative of a sudden boom in US manufacturing in the past 2 years which could be attributable to any recent decisions or events.
• xupybd 3y ago
  I work in a factory and the opportunities to improve with custom software are huge. Typical MRP/ERP solutions limit the way information flows around a factory. We have custom software running most of everything. It's a lot of CRUD and data pipelines. But wow are our processes easier to automate than I've seen with other systems, such as SAP.
• g9yuayon 3y ago
  I hope this trend is real and will continue. Manufacturing is so important to a country. It creates jobs. It builds talent. It stimulates innovation. It improves the lives of millions of people. It keeps a country's defense strong and sustainable. Without a robust and comprehensive manufacturing sector, I don't know how the US can proper in the future. I pains me to see that BYD could produce millions of masks in days in spotless and fully automated factories, while GM workers labored at those manual machines that looked like the scraps from the Soviet Union. Oh, and the $20K toilet? The $200M+ fighter jets? The inability to manufacture the screen of Kindle even if we want to? The list goes on, and I truly want to see the current-day version of the US manufacturing of the roaring ages: cheap, innovative, best workers in the world, full domestic supply chain, and etc.
  • JoeAltmaier 3y ago
    All true ... 50 years ago. Today factories in the US are built automated. No jobs, not for anybody but an accountant, an administrator, a couple of engineers.
    • g9yuayon 3y ago
      Maybe fewer jobs per square feet, but it's the natural evolution of manufacturing. What matters is we need engineers and workers on the floor so we can innovate and develop more senior talent.
      • JoeAltmaier 3y ago
        And to hell with those not rated 'senior talent' I guess.
        • g9yuayon 3y ago
          Why? More jobs are still more jobs, no? In addition, each factories may hire fewer people than 50 years ago, but I hope we have a lot more factories. Having more skillful talent does not contradict my hoping that more Americans will have chance to get a decent job.
• danjoredd 3y ago
  Good. Bringing jobs home is a good idea. It might be cheaper overseas, but making things here where there are stricter safety regulations will get rid if some if the ethical quandaries around buying from a sweatshop. Not to mention that also means that we will hold more power and ensure longer stability...why buy from China that could go to war with our allies and restrict our access to their manufacturers when we can just ask a factory in the next state over to make it?
• kabes 3y ago
  Anyone know the numbers for Europe? I also hear a lot about re-shoring here, but don't feel much is actually moving
• oneTbrain23 3y ago
  There is a mother of all recession happening soon coupled with intense effort to dedollarize. Those factories will end up abandon without recouping their original investments. I have seen how this playout. In the 60s and 50s there were doable because things are cheap and Americans have the Japanese-like ingenuity and innovation. In the 90s, Internet happened and end of cold war. In the 2000s, Chinese supplement worldwide inflations with their cheap goods and students as American human resources together with Indians. In the 2020s USA lost huge chunk of Asian human resources and facing high inflations. Americans still able to hold off due to residue economic growth from Clinton-Bush era. Coming decades they will face immense headwinds with their poorer quality of non Asian immigrants, lack of resources (oil and rare earth no where at Russia level), lack of gold (Fort Knox havnt been publicly audited for more than half century), military weak (Talebans humiliated pentagon and inpending Ukrainian defeat as American sponsored proxy state), population disparity (India+China+Russia+Asean) going to make America looks like 3rd world country population or Monaco at best. Already working in HR fields, I am seeing a lot of capable Americans execs sending their kids to Asia. Some even ditched American citizenships. You can search for extreme end of examples like Severin and Dyson. But those in the "millionaires" range make up the huge bulk of these well to do American leaving western world.
  • proletar666 3y ago
    Are you sane? Oil-wise, America's proven reserves are around 47 billion barrels and russia's 80 billion. Rare metals? See the news piece about the fairly recent Japanese discovery of a huge deposit in their territorial waters (yeah, hard to mine and extract from under seabed but still possible). Population? Russia's population is predicted to fall to ~83 million by 2100, and China has the 2nd worst birthrate in the world after South Korea, ~1.2 (the US has ~1.7, the replacement level is 2.1, but the US compensates it by attracting migrants where China can't, they want maintain their homogeneity to maintain stability, they can't have too much diversity with races, ethnicities, religions, languages and are racist towards immigrants), worse than Japan. It's actually possible (not guaranteed, but still possible) that by the end of the century the US will be more populous than China. russia is entirely irrelevant (except for nukes and raw materials), China is strong but faces too many hurdles. Seems like usual standard anti-Americanism at work. But I agree that India has chance to overtake America (demographic benefit, native exposure of English, democratic governance, huge investments into infrastructure since Modi, etc. They need to keep pumping money into infrastructure, increase spending on education to eradicate illiteracy, on R&D, ensure gender equality, resolve intercommunal tensions and violence between Muslims and Hindus (since religiosity levels tend to fall with growing economies, they'll secularize and become less religious), less red taping, and eventually they'll be on par with America or even stronger). If you're looking for the eventual new superpower, in the long term it will likely be India, not China (let alone russia).
• dfnj 3y ago
  The reason all the factories left the US is because of unfair Chinese currency manipulations. The Chinese have pegged the Yuan to the dollar at a rate of 6 to 1. Since the dollar defines unit labor costs, what pegging the Yuan means is a CEO gets 6 Chinese workers for every 1 American worker. It's really like 4 to 1 when you take into account shipping costs for Ocean and Air freight. Other countries do not enjoy most favored currency status. In other countries, the value of the dollar would change if we had a huge trade imbalance which would eventually equalize. But not with China. But pegging the Yuan is only half the problem. The bigger problem is artificial intelligence and automation. With automation, every job becomes menial and corporations can pay less wages. And eventually, corporations will have total automation where workers are no longer needed. But workers are also consumers. And without consumers having money, our economy will collapse. So every year as we move closer to total automation the workers are begin driven closer into poverty. At some point, to prevent total economic collapse, there needs to be a new source of income for consumers. Consumers need to become the new workers doing the hard work of consuming. Consumers need to be paid for consuming is the only answer for ensuring enough economic velocity so everyone has enough money to get their needs met.