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> 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

> 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!
  - FrustratedMonky 3y ago
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"!

_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!
- FrustratedMonky 3y ago

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"!