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> US manufacturing is about to be reinvigorated One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty muc

by mlyle 2y ago

> US manufacturing is about to be reinvigorated One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster. And the share of the workforce has fallen even faster, as the actual manufacturing has moved towards higher value items and greater degrees of automation. I think the actual outcome of this policy is mixed. I think it was a big case of corporate welfare that will result in somewhat increased chip production in the US. I think this is a win for national security. I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life.

jojobas 2y ago
This might be true, but the rust belt is called that for a reason. I also wonder what's the share of non-disposable products in US and other Western countries manufacturing.
- mlyle 2y ago
  > This might be true, but the rust belt is called that for a reason. > > as the actual manufacturing has moved towards higher value items and greater degrees of automation. US manufacturing has moved away from things like primary metals, which the steel belt had focused on, and towards things further up the value chain. https://www.nist.gov/sites/default/files/styles/2800_x_2800_limit/public/images/2023/11/15/Figure%202-10.png?itok=8TeNHa-I https://www.nist.gov/sites/default/files/styles/2800_x_2800_... Manufacturing fell from 25% of GDP in 1947 to 12% in 2015... but real GDP increased by 10x. So, the value of manufacturing output went up by ~4x over that span. https://www.stlouisfed.org/on-the-economy/2017/april/-/media/project/frbstl/stlouisfed/blog/2017/april/blogimage_manunomgdpshare_041117.jpg https://www.stlouisfed.org/on-the-economy/2017/april/-/media... What really went away were the jobs.
  - llamaimperative 2y ago
    Just further evidence of the accelerating returns to capital. It just makes less and less sense for America to be engaged in highly wealth-distributive (i.e. labor intensive) activities, more sense for it to engage in capital-intensive ones which, by definition, accrue further benefit to the owners of that capital. Yikes!
    - starspangled 2y ago
      But industry cries out for more immigration to suppress wages because they don't have enough workers (or at least, not enough leverage in the labor market as they would like), so I'm not sure if that tracks.
      - deleted 2y ago
        [deleted]
      - weweersdfsd 2y ago
        They will keep crying that, no matter the actual labor market situation. My country has low wages, high unemployment, and yet businesses similarly cry for more immigration, as they always want to find the most desperate worker who accepts the lowest wage possible. That's the reality of modern capitalism.
        deleted 2y ago
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        eru 2y ago
        Have you considered that those foreigners are humans, too? Or do you believe in out-of-sight-is-out-of-mind?
        weweersdfsd 2y ago
        Of course they are humans like everybody else. But I do not support mass migration as a tool for bringing the wages further down and exploiting workers. I think the rich should be taxed much more, and that money used to reduce poverty & improve education globally. It's not migration itself that is the problem, but the fact many migrants are in a position where they can be exploited more easily than native workers. In ideal world businesses would have to pay a fair livable wage, no matter where they build factories, or receive migrants from.
  - Shog9 2y ago
    The jobs, and in many cases the expertise held by the people working those jobs. I think this was the angle epistasis was coming from: not just that chips are physically being formed within the boundaries of the US, but that citizens are involved, being trained and garnering the practical experience that comes with being intimately involved. So, so much of this sort of experience has been lost over the past few decades, and the fallout is palpable: how many discussions have played out right here surrounding the challenges of manufacturing anything, even trivial bits of plastic, at scale without spending years traveling across the world, dealing with language and cultural mismatches, ensuing mistakes and quality issues? We're in a weird place now, wrt manufacturing skill - there are still plenty of individual crafters, folks who can make one-off or small runs of high-quality goods... For a pretty high cost per/ea. But scaling is troublesome; to hit that economy of scale requires a lot more people with maybe journeyman-level skill, folks who cut their teeth in a large operation and are looking to specialize - and those large operations aren't here.
mitthrowaway2 2y ago
> US manufacturing has pretty much been constantly growing By dollar value, perhaps, but that mostly means the US makes lot of high-value microchips, a field that has made (well-documented) exponential progress over the past decades. It is still consistent with US manufacturing capabilities regressing in other key aspects, such as machine tools, injection molding, shipbuilding, consumer goods, and so on.
- mlyle 2y ago
  > US manufacturing capabilities regressing in other key aspects, such as machine tools, injection molding, shipbuilding, consumer goods, and so on. But this is exactly what Econ 101 tells you to expect to happen (and I teach Econ 101 ;) . Countries specialize to maximize comparative advantage. If you are the US and can manufacture high value items at a lower opportunity cost (or high value services at a lower opportunity cost), you will, but this means giving up on doing other things you could use the resources for. The net result is that US manufacturing output in real dollars has increased 4x, in the past 70 years. At the same time, its share of the economy has shrunk (because other sectors have outgrown it), and many lower value manufacturing subsectors have been largely abandoned.
  - lotsofpulp 2y ago
    > but this means giving up on doing other things you could use the resources for. Aka giving up the security and being more vulnerable to volatility. The pendulum can swing too far, as resilience cannot be measured in dollars.
    - mlyle 2y ago
      Sure. As I pointed out, something like the CHIPS Act may be good for US resilience and national security, but is unlikely to be good for US economic output.
    - _DeadFred_ 2y ago
      Up until recently we all naively believed 'a rising tide lifts all ships' meant we'd all choose to get along and everyone would benefit.
pavon 2y ago
Do you have a source for this? In the past when I've been told this, the statistics referenced where based on whether a company was classified as being in in the manufacturing sector, not based on which jobs were classified as manufacturing. This included companies that were classified that way due to historical inertia, or based on their global industry but actually had little to no manufacturing in the US. Based on that I have a hard time knowing what to believe, and would love to be pointed to more accurate information.
- parhamn 2y ago
  If you go by manufacturing jobs, BLS seems to have the data going back to 1939. Peaks at 18.4m jobs in 1969. Currently at about 12.9m. N.B. the current U.S. population is 1.6x the population of 1969. https://data.bls.gov/timeseries/CES3000000001 https://data.bls.gov/timeseries/CES3000000001
  - macleginn 2y ago
    Average productivity per manufacturing worker in the US grew on average by 3% per year in the 1950–1980s and 4% per year in 1990s (https://www.bls.gov/opub/mlr/2002/06/art4full.pdf https://www.bls.gov/opub/mlr/2002/06/art4full.pdf), i.e. its current output is comparable with that of ~50m people working in 1969, so a 30% decrease in total manufacturing employment was probably well compensated for (putting aside the social welfare point of view).
- speleding 2y ago
  > Do you have a source for this? There are reams of economic literature trying to estimate whether government intervention in the market was a good idea. Most of the time it doesn't turn out great. So the parent's suggestion "probably won't be a win for economic output" is a pretty safe bet. Often governments will use "security" as an argument to keep steel, shipbuilding, etc, in the country. That argument is not really possible to evaluate on economic grounds.
  - corimaith 2y ago
shortrounddev2 2y ago
I think politicians hook onto manufacturing as an ideal of an industry which should pay well and has a low barrier to entry. If manufacturing grew 15% every year but employed 15% fewer people every year due to automation, it would be considered a catastrophe. The reason most people want more manufacturing in the US is because they want manufacturing jobs. It is only within the last few years since the pandemic that we started to care about domestic manufacturing as a matter of national security
- DanielHB 2y ago
  > low barrier to entry > they want manufacturing jobs Shame most of those jobs in high tech factories are not low barrier to entry...
- throwaway48476 2y ago
  The real benefit of local manufacturing is that it makes related industries dramatically more efficient. For example electronics in the pearl river delta. You can buy everything locally and get prototypes in hours.
philwelch 2y ago
> I think this is a win for national security. I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. National security and global freedom of navigation are essential preconditions for our current level of economic output and quality of life. In the long run, it’s not an either/or.
- mlyle 2y ago
  Well, sure. The essential tradeoff is always figuring out how much to economically kneecap yourself in the short term to maintain economic independence in the long term. And, of course, if you overshoot and the other guys outgrow you as a result, that limits your ability to be secure as well.
  - philwelch 2y ago
    Not all economic growth contributes to national security the same way. In particular, outsourcing a large share of your manufacturing to your primary geopolitical adversary is a poor strategy.
- nebula8804 2y ago
  Well maybe your quality of life but for the common man in the US? There only seems to be hopelessness on the horizon. It makes you think, who are we really fighting for? As someone who also feels like the future is trending downward, I hope we can at least get some crumbs from the top.
  - eru 2y ago
    > There only seems to be hopelessness on the horizon. [...] As someone who also feels like the future is trending downward, [...] What are you talking about? We are living in an age of unprecedented global peace and prosperity. Most people never had as good as today, and things are set to improve further.
    - 2y ago
knallfrosch 2y ago
"just its share of GDP has fallen" The little "just" does a lot of work here. It means people in the manufacturing industry are being left behind.
- tempestn 2y ago
  It does not mean that, especially given the next sentence, "And the share of the workforce has fallen even faster."
ninetyninenine 2y ago
Yeah China has only ever really been a major player for about 3 decades. In a third of a century it has Actually SHRUNK American manufacturing to the point where there was genuine knowledge loss. It was cheaper to manufacture things in China so we used China, and now America doesn't even have the capacity to manufacture anything on the scale of China. >just its share of GDP has fallen as other sectors have grown faster I think this is inn-accurate. You're looking at a century of data but China only took 1 decade to overtake the US. We're now three decades in and the overall decline of American manufacturing is pretty evident.
- breerbgoat 2y ago
  I see empty factories in Shenzhen and Donguan, and massive unemployment in Guandong in September 2024. And I raise you full factories in Vietnam.
  - deleted 2y ago
    [deleted]
  - ninetyninenine 2y ago
    True. That shift would be in the last couple of years. Maybe Vietnam is next China. But this is still an emerging event. What China did to the US already happened.
    - bluGill 2y ago
      Vietnam doesn't have the population to be the next China. I wish them the best, but their time will not last nearly as long as China. (or more likely it lasts as long but it is shared with a bunch of other countries in Asia, Africa, and/or South America)
      - thimabi 2y ago
        Nowadays, with so much automation going around, Vietnam can afford to become the next China even without a comparable population. Not that I think it will, but see the story of the Four Asian Tigers to realize how smaller countries can suddenly have a much bigger importance to the world economy.
AnthonyMouse 2y ago
> One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster. And the share of the workforce has fallen even faster, as the actual manufacturing has moved towards higher value items and greater degrees of automation. The last part is missing something important though. If we're measuring "output" in dollars and the US is doing the parts (like aircraft manufacturing) that globally don't have a lot of competitors, the high "output" is from high prices rather than high production, and then what we're doing is surviving in the markets where there isn't a lot of competition and getting killed in the markets where there is. There are three problems with this. The first is that it implies the US isn't competitive in competitive markets, which is a sign that something is very messed up. The second is that the markets where other countries aren't competitive tend to get eroded over time. The US essentially had a lock on the auto market in the mid-20th century; not anymore. What happens when China starts making globally competitive aircraft? And the third is that supply chains matter. If you give up on the low margin stuff instead of figuring out how to make it competitively domestically (e.g. via automation) then foreign competitors have a leg up when it comes to making the high margin stuff for which the commodities are inputs. > I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. Relying on "free markets" actually requires free markets. If other countries are willing to subsidize their industries until they drive manufacturing out of the US, that's not a free market. It's the equivalent of a monopolist using dumping and tying to leverage their existing monopoly into new markets, but with a country acting as the monopolist and therefore being exempt from antitrust enforcement. Doing the same thing in return is not likely to be an efficient strategy, but neither is the status quo. The main alternative would be to realize that the thing we've been calling "free trade" is not actually that and a country that subsidizes its industries until its US competitors exit the market has to be dealt with as an abusive monopolist, e.g. via tariffs and similar policy levers, since antitrust laws don't apply to foreign governments.
- bluGill 2y ago
  We are not only measuring in dollars. We measure tons of steel, number of cars produced and so on. Not all of those measures are growing, but many are. While market share has gone down, total production is up. Take cars - https://www.bts.gov/content/annual-us-motor-vehicle-production-and-factory-wholesale-sales-thousands-units https://www.bts.gov/content/annual-us-motor-vehicle-producti... US production is up greatly in 2019 (that is before Covid - the chart doesn't have after Covid numbers to work with). US production is up by a lot since 1960. However in 1960 the US population was lower, and your typical family only had one car (women often didn't even have a drivers license). Thus you see market share is down while production is up.
anovikov 2y ago
Moreover, share of GDP has been falling because prices of manufacturing goods have been all falling vs inflation, pressured by foreign competition and by productivity improvements, while rest of the economy - services - face none of that: they usually (except corner cases like call centers) can't be outsourced abroad, and output there depends strongly on labor inputs (e.g. waiters) thus making productivity stagnant almost by definition. So there isn't a problem about manufacturing, never has been. Problem is strictly about manufacturing employment, which is of course, inexorably falling and will continue doing so and every politician promising to reverse it is a blatant liar. It's falling much like farm employment has been falling 40-70 years ago, sure it's traumatic, ruins livelihoods of millions of families many of which will never recover, destroys not just their personal finances but their source of pride and sense of self in many ways. But just like it didn't result in decrease in food output back then (quite the opposite happened), it doesn't result in dearth of manufacturing products now.
- eru 2y ago
  You could outsource more services and automate them more. But many service industries are protected by laws and regulations from such competition and improvements.
throw156754228 2y ago
> I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. We've got China cheating with their massively deflated currency, so how the market allocates capital is already screwed.
- tw1984 2y ago
  you probably didn't read news lately. your CNY deflation theory is no longer being cooked by your MSM for a good reason - if the CNY deflation claim is true, then it means the Chinese economy has probably already surpassed the US economy not just in PPP but in real term as well. That would cause huge load of issues for the US which is never prepared to be the No.2.
ClumsyPilot 2y ago
> I think it was a big case of corporate welfare that will result in somewhat increased chip production in the US. I see two issues with this: One, this is the same kind of subsidies and meddling with the markets that we accuse China of doing. If we are adopting state-led approach, it can be done in a serious manner without being hypocrites. But that would also require admission of some mistakes. Two - why is it seen as okay to give tax breaks to an engineering company, why not give tax breaks to engineers themselves instead? Companies are imaginary, people are real, why not give incentives to individuals? At least that money won’t be squirrelled away in tax heavens.
- eru 2y ago
  Just don't hand out tax breaks to politically favoured groups, but clean up the overall tax system to make it simpler and saner.. But that's hard to do politically.
chrisweekly 2y ago
> "I don't think ... probably won't be a win" Accidental double-negative, right?
jrcii 2y ago
> US manufacturing has pretty much been constantly Middle class manufacturing jobs have fallen off a cliff and completely destroyed huge swaths of our country. Take a tour around Bridgeport, CT sometime as a great example. The northeast is littered with towns like this. These executives and their buddies in Congress mortgaged our middle class for profits by sending all our industry to Asia.
darby_nine 2y ago
> I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. Cuz letting it manage itself works so well
- chaos_emergent 2y ago
  I think the statistics he cited actually make that case
  - darby_nine 2y ago
    ...compared to what? Growth is just one way of representing market health, and it's one that is typically pushed by capital for obvious reasons. If you're talking about efficiency or productivity, you don't need markets for either of these, you just need any kind of economy to work with. Industrialization only intersects with markets (or capitalism for that matter), they aren't the same thing.
- convivialdingo 2y ago
  Agreed. Even the premise that it was always cheaper to manufacture abroad is flawed in many respects as Congress subsidized offshoring over many years as part of an effort to encourage globalization. Companies often receive massive tax breaks with write-offs to close US plants, tax credits, zero percent import duties, and lower overall tax rates by shifting their profits and losses through offshore banks. In many respects profitability has most often been determined by the policies we subsidize. and for decades those policies were essentially all in for the benefit of offshoring. Comparing the actual cost of production by location is far more complicated than just the cost of materials and labor when there are so many subsidies and policies involved.
  - themaninthedark 2y ago
    Not to mention the demonetization of the working class(i.e. the dumb redneck stereotype) and the job class itself with the association of manufacturing jobs as dirty and unneeded with the goal of a service economy as the new future. https://www.forbes.com/sites/stevedenning/2012/01/31/is-the-us-in-a-phase-change-to-the-creative-economy/ https://www.forbes.com/sites/stevedenning/2012/01/31/is-the-... https://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/ https://www.forbes.com/sites/stevedenning/2011/08/17/why-ama...
edgyquant 2y ago
It doesn’t elude people, they just think that the 80% of manufacturing that isn’t high end shouldn’t have left and that it was criminal for it to have been shipped overseas at the expense of middle America.
- Veliladon 2y ago
  I mean, how are people supposed to afford all this high tech shit if they can't work decent paying jobs without a degree and the welfare state has been hollowed out? Manufacturing used to provide that. Are companies just going to fight for a constantly shrinking middle class? Or just turn into gacha companies looking to hook a whale? Sell a single doll for $46,000?
- mywittyname 2y ago
  A lot of it stuck around. I grew up in the rust belt and tons/most of my friend's parents worked at one of the many factories that were, and are still around. Think dog food, plastic molding, car part manufacturing, and glue. Not the big stuff that people think of when they think of manufacturing though. I think if you start to deep dive into the industries that left, you'll find the reasons were often more complicated than simple labor costs. American companies did get out-competed by foreign firms in a lot of key areas. America is large, but they can't expect to be the best in the world at every industry. If an entire country focuses on a specific niche for long enough, it's possible they will become the best. Samsung and TSMC are incredible companies that didn't happen by accident. And yeah, the USA might not compete at that level on the global stage, but the American economy is also not so completely dominated by one megacorp either. Also, a lot of manufacturing, especially the high tech stuff, is highly automated. So these massive factories don't generate the same number of jobs they once did. And the jobs they do generate are often technical. More maintenance and calibration of machinery, and less putting bottle caps on.
  - themaninthedark 2y ago
    Tell me specificly which niche that Samsung focuses on: >Product: Clothing, automotive, chemicals, consumer electronics, electronic components, medical equipment, semiconductors, solid-state drives, DRAM, flash memory, ships, telecommunications equipment, home appliances >Services: Advertising, construction, entertainment, financial services, hospitality, information and communications technology, medical and health care services, retail, shipbuilding, semiconductor foundry https://en.wikipedia.org/wiki/Samsung https://en.wikipedia.org/wiki/Samsung Samsung is also very closely tied to the Korean government. >I think if you start to deep dive into the industries that left, you'll find the reasons were often more complicated than simple labor costs Care to share any of the reasons? Here are reasons that I know about; EPA regulations, OSHA regulations, their supply base relocating. https://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/ https://www.forbes.com/sites/stevedenning/2011/08/17/why-ama... Don't get me wrong though, we shouldn't roll back our regulations but we should however ensure that what we buy is manufactured in that same conditions that we would demand at home.
tivert 2y ago
> One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster. > ...I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. I think the problem you're having is you're thinking of manufacturing in terms of dollars, like an aloof economist.
chlodwig 2y ago
that US manufacturing has pretty much been constantly growing for the past century; Really? Every time I see this claim its based on some citing some statistical mismash that the person citing does not understand and cannot explain. How much tonnage of merchant shipping does the USA build in 2020s versus the 1960s? How many TVs and computer monitors does the United States make in 2020s versus 1990s? How many tons of steel does the USA make in the 2020s versus the 1970s? Of tool steel? How many nuclear reactors are produced in the USA in 2020s versus the 1970s? How many railway rails graded for high-speed trains are produced in the USA in 2020s versus 1980s? How many CNC mills are produced in the USA in the 2020s versus the 1980s? How many artillery shells are produced in the USA in 2020s versus the 1980s? How many jet engines are produced in the USA in the 2020s versus the 1980s? How many car engines blocks are produced in the USA in the 2020s versus the 1980s? How many computer hard drives are produced in the USA in the 2020s versus the 1990s? How many motherboards are produced in the USA in the 2020s versus the 1990s? (Also, adjust all the comparisons above for population growth, we should be comparing manufacturing production per capita) If you think that these comparisons are misleading because there are 'quality changes' please tell me exactly how you quantify these changes in quality.
- mlyle 2y ago
  Ignoring the thrust of the argument above, and missing the entire subthread where the nuance of how the US has redeployed its economy for comparative advantage is discussed and debated, to type that over and over was a bit of a waste of your time, IMO. Reading it wasn't a good use of mine. If you read the surrounding argument and want to discuss some further point not covered, I'm here.
  - chlodwig 2y ago
    I've read the thread and have been very familiar for decades with these debates. There are two separate questions: 1) Has USA manufacturing increased or declined in its output (measured in things, not $)? 2) If output has declined in terms of things, is this ok because of comparative advantage? Is this ok because the US mains a competitive edge in the highest value most technically advanced products? As for 1), you say "The net result is that US manufacturing output in real dollars has increased 4x, in the past 70 years." Are you familiar with the term "researcher degrees of freedom"? "manufacturing output in real dollars" is an impossibly complicated statistical construct with infinite researcher degrees of freedom. There are infinite opportunities for "Getting Eulered" https://slatestarcodex.com/2014/08/10/getting-eulered/ https://slatestarcodex.com/2014/08/10/getting-eulered/ That is why I insist on starting with the most straight-forward numbers -- how many cars? How much steel? And then layering on adjustments on top of that. If steel is down but it is compensated by some other high value product being up, OK, but show me the calculation, show me the work. Otherwise your argument boils down to "Trust the US government's impenetrable statistical calculations, we are getting richer comrade" As for 2), when I first heard that argument from the most prestigious and credentialed economists twenty-five years ago, my toys and clothes said "Made in China" while advanced technical products like my computer motherboard was made in the USA. Now it's OK that the motherboards are all made abroad and because the most technically sophisticated motherboards are made in the USA. Well, it seems to me like the areas where the USA has comparative advantage in making the most technically advanced products is becoming a smaller and smaller every year. Just this year we are made aware of how much Boeing has lost ground to Airbus. Seems to USA is increasingly reliant on low-tech exports like soybeans, or worse, exporting dollar bills. It seems to me like our trade deficit is gaping wide, which means our real export is living off our status as the global reserve currency. Which feels nice until ones military might is no longer able to support that status (see 16th century Spain). Seems to me that the US is losing ground on military relevant manufacturing -- particularly drones but also steel, ships, etc. And without that, it will not be able to maintain its status as reserve currency in the long run.
bwanab 2y ago
> I think this is a win for national security. I think that's largely the point. Obviously, it's a balancing act, but when market forces create a situation that is incompatible with national security it really is the governments job to address the situation even if, as in the case with Chinese EVs, it means a bit of pain for consumers.
ddingus 2y ago
Let me tell you a story: Tektronix lifted the Portland Oregon region right up. Was called silicon forest. At that time, Tek was funding startups its employees thought up after working for Tek, getting great education provided directly by the company as well as through college partnerships. Tek also literally trained a workforce here by educating any of its employees and by doing programs with suppliers to do the same. I am a product of that time. A drive through this region in the 80's and early 90's was awesome! Shops of all kinds, Tek itself had COMTEK which could make damn near anything, and opportunities abounded! Howard Vollem died and the MBA took over. COMTEK was torn down, work was sent overseas, education stopped, startup funding stopped, and soon a drive through this region looked very different: hair nails and laundry. While large scale manufacturing has grown, the rest has suffered huge! Our military can't find the capacity it needs! And they, along with aerospace, are the best customers there are, with auto in some parts too. The rest has been gutted. That is what we need to fix. It matters. If companies won't do what Tek did, and that is invest in the region and it's people, and they won't because getting max dollars at any cost matters more than sustainable business does, then we must have robust small to mid sized manufacturing. Where else will our future skilled labor come from? And I left for higher end professional work and software. I can make anything I can draw, it was damn good at it too. Saw way too many places close and there's no way I can raise a family on that and I quit ... tons of us did. The skills I have are rare and in high demand. Young people today can't get them like I did, and that adds right the hell up. You think your arguments make sense. And you are not wrong. They do, but that is not the problem. The problem is for your argument to make sense, a ton of people and manufacturing potential is lost and nobody seems to recognize the massive opportunity costs in all that. And frankly if large companies aren't going to do it and get a return on that investment, then our government damn well should. We do really put our national security at risk doing otherwise.
- mlyle 2y ago
  > Our military can't find the capacity it needs! This has a lot more to do with the stance of the past 30 years to manufacture defense materiel at relatively constant, small rates. There was no capital investment, because why pay to have a huge line that isn't being used. We spent our military dollars on wonder-weapons that would probably win a direct war quickly, but that we can't give to allies in a proxy conflict. Going so far was a strategic mistake. > And they, along with aerospace, are the best customers there are, Military are terrible customers, especially if you're a subcomponent manufacturer. Gravy might pour, it might not; it's very unpredictable. You spend a lot of effort and business just evaporates. > Howard Vollem died and the MBA took over. On the flip-side, can you imagine being the high-cost Tek of old in today's test equipment marketplace? Tek already struggles to compete against cheaper, adequate solutions. So much of that market has commoditized out. > nobody seems to recognize the massive opportunity costs in all that. Actually, that's exactly what I'm talking about, in both directions. Having a ton of manufacturing means we would have opportunity costs in the other direction. We've traded the manufacturing we had 50 years ago for other things. It's not possible to specialize in "everything."
tmaly 2y ago
If the rumors about Elon's robots are true, I see a lot of manufacturing coming back to the US. However, I do not see this benefiting regular workers.
20after4 2y ago
Just about all "made in USA" products today are "assembled in the USA from global materials/components." This usually means that the absolute bare minimum of work is done in the USA in order to claim US origin. For example, pillows that are sewn over seas from foreign fabric and the only part that is done here is inserting the filling and closing the final stitch. The US was once a global leader in textiles and now virtually all of that industry is gone. The same goes for many many other industries.
- 20after4 2y ago
  From the 1930s until the 1990s, Rawlings Sporting Goods produced high quality sporting goods in Missouri. In my home town they made hand-stitched Baseball Gloves, Footballs and starting in the 1980s, Injection Molded baseball helmets. They also made all of the team jerseys for little league and high school sports in another town near by. They employed ~200-300 people in my town and probably 1000 more in a couple of other factories in other towns. In the late 90s all of that was moved to China. The same thing happened with hundreds of companies across almost every industry. Anyone who claims that industry in the USA wasn't totally gutted in the 80s and 90s is using some creative accounting or just flat out lying.
h_tbob 2y ago
As Henry Hazlitt said The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups
thehappypm 2y ago
This might be true, but the number of jobs has fallen. It kind of comes from our measurement of GDP. If you have a high-tech factory that employees 10 people to make a $10,000 unit price electronic, that can easily become more GDP per factory than one that sells nails and screws for a penny each with 100 employees.
EricE 2y ago
RE: National Security see his sobering thoughts on the supply chain: https://timculpan.substack.com/p/what-supply-chain-security-really https://timculpan.substack.com/p/what-supply-chain-security-...

by mlyle 2y ago

jojobas 2y ago

This might be true, but the rust belt is called that for a reason. I also wonder what's the share of non-disposable products in US and other Western countries manufacturing.

mlyle 2y ago
> This might be true, but the rust belt is called that for a reason. > > as the actual manufacturing has moved towards higher value items and greater degrees of automation. US manufacturing has moved away from things like primary metals, which the steel belt had focused on, and towards things further up the value chain. https://www.nist.gov/sites/default/files/styles/2800_x_2800_limit/public/images/2023/11/15/Figure%202-10.png?itok=8TeNHa-I https://www.nist.gov/sites/default/files/styles/2800_x_2800_... Manufacturing fell from 25% of GDP in 1947 to 12% in 2015... but real GDP increased by 10x. So, the value of manufacturing output went up by ~4x over that span. https://www.stlouisfed.org/on-the-economy/2017/april/-/media/project/frbstl/stlouisfed/blog/2017/april/blogimage_manunomgdpshare_041117.jpg https://www.stlouisfed.org/on-the-economy/2017/april/-/media... What really went away were the jobs.
- llamaimperative 2y ago
  Just further evidence of the accelerating returns to capital. It just makes less and less sense for America to be engaged in highly wealth-distributive (i.e. labor intensive) activities, more sense for it to engage in capital-intensive ones which, by definition, accrue further benefit to the owners of that capital. Yikes!
  - starspangled 2y ago
    But industry cries out for more immigration to suppress wages because they don't have enough workers (or at least, not enough leverage in the labor market as they would like), so I'm not sure if that tracks.
    - deleted 2y ago
      [deleted]
    - weweersdfsd 2y ago
      They will keep crying that, no matter the actual labor market situation. My country has low wages, high unemployment, and yet businesses similarly cry for more immigration, as they always want to find the most desperate worker who accepts the lowest wage possible. That's the reality of modern capitalism.
      - deleted 2y ago
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      - eru 2y ago
        Have you considered that those foreigners are humans, too? Or do you believe in out-of-sight-is-out-of-mind?
        weweersdfsd 2y ago
        Of course they are humans like everybody else. But I do not support mass migration as a tool for bringing the wages further down and exploiting workers. I think the rich should be taxed much more, and that money used to reduce poverty & improve education globally. It's not migration itself that is the problem, but the fact many migrants are in a position where they can be exploited more easily than native workers. In ideal world businesses would have to pay a fair livable wage, no matter where they build factories, or receive migrants from.
- Shog9 2y ago
  The jobs, and in many cases the expertise held by the people working those jobs. I think this was the angle epistasis was coming from: not just that chips are physically being formed within the boundaries of the US, but that citizens are involved, being trained and garnering the practical experience that comes with being intimately involved. So, so much of this sort of experience has been lost over the past few decades, and the fallout is palpable: how many discussions have played out right here surrounding the challenges of manufacturing anything, even trivial bits of plastic, at scale without spending years traveling across the world, dealing with language and cultural mismatches, ensuing mistakes and quality issues? We're in a weird place now, wrt manufacturing skill - there are still plenty of individual crafters, folks who can make one-off or small runs of high-quality goods... For a pretty high cost per/ea. But scaling is troublesome; to hit that economy of scale requires a lot more people with maybe journeyman-level skill, folks who cut their teeth in a large operation and are looking to specialize - and those large operations aren't here.

mitthrowaway2 2y ago

> US manufacturing has pretty much been constantly growing By dollar value, perhaps, but that mostly means the US makes lot of high-value microchips, a field that has made (well-documented) exponential progress over the past decades. It is still consistent with US manufacturing capabilities regressing in other key aspects, such as machine tools, injection molding, shipbuilding, consumer goods, and so on.

mlyle 2y ago
> US manufacturing capabilities regressing in other key aspects, such as machine tools, injection molding, shipbuilding, consumer goods, and so on. But this is exactly what Econ 101 tells you to expect to happen (and I teach Econ 101 ;) . Countries specialize to maximize comparative advantage. If you are the US and can manufacture high value items at a lower opportunity cost (or high value services at a lower opportunity cost), you will, but this means giving up on doing other things you could use the resources for. The net result is that US manufacturing output in real dollars has increased 4x, in the past 70 years. At the same time, its share of the economy has shrunk (because other sectors have outgrown it), and many lower value manufacturing subsectors have been largely abandoned.
- lotsofpulp 2y ago
  > but this means giving up on doing other things you could use the resources for. Aka giving up the security and being more vulnerable to volatility. The pendulum can swing too far, as resilience cannot be measured in dollars.
  - mlyle 2y ago
    Sure. As I pointed out, something like the CHIPS Act may be good for US resilience and national security, but is unlikely to be good for US economic output.
  - _DeadFred_ 2y ago
    Up until recently we all naively believed 'a rising tide lifts all ships' meant we'd all choose to get along and everyone would benefit.

pavon 2y ago

Do you have a source for this? In the past when I've been told this, the statistics referenced where based on whether a company was classified as being in in the manufacturing sector, not based on which jobs were classified as manufacturing. This included companies that were classified that way due to historical inertia, or based on their global industry but actually had little to no manufacturing in the US. Based on that I have a hard time knowing what to believe, and would love to be pointed to more accurate information.

parhamn 2y ago
If you go by manufacturing jobs, BLS seems to have the data going back to 1939. Peaks at 18.4m jobs in 1969. Currently at about 12.9m. N.B. the current U.S. population is 1.6x the population of 1969. https://data.bls.gov/timeseries/CES3000000001 https://data.bls.gov/timeseries/CES3000000001
- macleginn 2y ago
  Average productivity per manufacturing worker in the US grew on average by 3% per year in the 1950–1980s and 4% per year in 1990s (https://www.bls.gov/opub/mlr/2002/06/art4full.pdf https://www.bls.gov/opub/mlr/2002/06/art4full.pdf), i.e. its current output is comparable with that of ~50m people working in 1969, so a 30% decrease in total manufacturing employment was probably well compensated for (putting aside the social welfare point of view).
speleding 2y ago
> Do you have a source for this? There are reams of economic literature trying to estimate whether government intervention in the market was a good idea. Most of the time it doesn't turn out great. So the parent's suggestion "probably won't be a win for economic output" is a pretty safe bet. Often governments will use "security" as an argument to keep steel, shipbuilding, etc, in the country. That argument is not really possible to evaluate on economic grounds.
- corimaith 2y ago

shortrounddev2 2y ago

I think politicians hook onto manufacturing as an ideal of an industry which should pay well and has a low barrier to entry. If manufacturing grew 15% every year but employed 15% fewer people every year due to automation, it would be considered a catastrophe. The reason most people want more manufacturing in the US is because they want manufacturing jobs. It is only within the last few years since the pandemic that we started to care about domestic manufacturing as a matter of national security

DanielHB 2y ago
> low barrier to entry > they want manufacturing jobs Shame most of those jobs in high tech factories are not low barrier to entry...
throwaway48476 2y ago
The real benefit of local manufacturing is that it makes related industries dramatically more efficient. For example electronics in the pearl river delta. You can buy everything locally and get prototypes in hours.

philwelch 2y ago

> I think this is a win for national security. I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. National security and global freedom of navigation are essential preconditions for our current level of economic output and quality of life. In the long run, it’s not an either/or.

mlyle 2y ago
Well, sure. The essential tradeoff is always figuring out how much to economically kneecap yourself in the short term to maintain economic independence in the long term. And, of course, if you overshoot and the other guys outgrow you as a result, that limits your ability to be secure as well.
- philwelch 2y ago
  Not all economic growth contributes to national security the same way. In particular, outsourcing a large share of your manufacturing to your primary geopolitical adversary is a poor strategy.
nebula8804 2y ago
Well maybe your quality of life but for the common man in the US? There only seems to be hopelessness on the horizon. It makes you think, who are we really fighting for? As someone who also feels like the future is trending downward, I hope we can at least get some crumbs from the top.
- eru 2y ago
  > There only seems to be hopelessness on the horizon. [...] As someone who also feels like the future is trending downward, [...] What are you talking about? We are living in an age of unprecedented global peace and prosperity. Most people never had as good as today, and things are set to improve further.
  - 2y ago

knallfrosch 2y ago

"just its share of GDP has fallen" The little "just" does a lot of work here. It means people in the manufacturing industry are being left behind.

tempestn 2y ago
It does not mean that, especially given the next sentence, "And the share of the workforce has fallen even faster."

ninetyninenine 2y ago

Yeah China has only ever really been a major player for about 3 decades. In a third of a century it has Actually SHRUNK American manufacturing to the point where there was genuine knowledge loss. It was cheaper to manufacture things in China so we used China, and now America doesn't even have the capacity to manufacture anything on the scale of China. >just its share of GDP has fallen as other sectors have grown faster I think this is inn-accurate. You're looking at a century of data but China only took 1 decade to overtake the US. We're now three decades in and the overall decline of American manufacturing is pretty evident.

breerbgoat 2y ago
I see empty factories in Shenzhen and Donguan, and massive unemployment in Guandong in September 2024. And I raise you full factories in Vietnam.
- deleted 2y ago
  [deleted]
- ninetyninenine 2y ago
  True. That shift would be in the last couple of years. Maybe Vietnam is next China. But this is still an emerging event. What China did to the US already happened.
  - bluGill 2y ago
    Vietnam doesn't have the population to be the next China. I wish them the best, but their time will not last nearly as long as China. (or more likely it lasts as long but it is shared with a bunch of other countries in Asia, Africa, and/or South America)
    - thimabi 2y ago
      Nowadays, with so much automation going around, Vietnam can afford to become the next China even without a comparable population. Not that I think it will, but see the story of the Four Asian Tigers to realize how smaller countries can suddenly have a much bigger importance to the world economy.

AnthonyMouse 2y ago

> One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster. And the share of the workforce has fallen even faster, as the actual manufacturing has moved towards higher value items and greater degrees of automation. The last part is missing something important though. If we're measuring "output" in dollars and the US is doing the parts (like aircraft manufacturing) that globally don't have a lot of competitors, the high "output" is from high prices rather than high production, and then what we're doing is surviving in the markets where there isn't a lot of competition and getting killed in the markets where there is. There are three problems with this. The first is that it implies the US isn't competitive in competitive markets, which is a sign that something is very messed up. The second is that the markets where other countries aren't competitive tend to get eroded over time. The US essentially had a lock on the auto market in the mid-20th century; not anymore. What happens when China starts making globally competitive aircraft? And the third is that supply chains matter. If you give up on the low margin stuff instead of figuring out how to make it competitively domestically (e.g. via automation) then foreign competitors have a leg up when it comes to making the high margin stuff for which the commodities are inputs. > I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. Relying on "free markets" actually requires free markets. If other countries are willing to subsidize their industries until they drive manufacturing out of the US, that's not a free market. It's the equivalent of a monopolist using dumping and tying to leverage their existing monopoly into new markets, but with a country acting as the monopolist and therefore being exempt from antitrust enforcement. Doing the same thing in return is not likely to be an efficient strategy, but neither is the status quo. The main alternative would be to realize that the thing we've been calling "free trade" is not actually that and a country that subsidizes its industries until its US competitors exit the market has to be dealt with as an abusive monopolist, e.g. via tariffs and similar policy levers, since antitrust laws don't apply to foreign governments.

bluGill 2y ago
We are not only measuring in dollars. We measure tons of steel, number of cars produced and so on. Not all of those measures are growing, but many are. While market share has gone down, total production is up. Take cars - https://www.bts.gov/content/annual-us-motor-vehicle-production-and-factory-wholesale-sales-thousands-units https://www.bts.gov/content/annual-us-motor-vehicle-producti... US production is up greatly in 2019 (that is before Covid - the chart doesn't have after Covid numbers to work with). US production is up by a lot since 1960. However in 1960 the US population was lower, and your typical family only had one car (women often didn't even have a drivers license). Thus you see market share is down while production is up.

anovikov 2y ago

Moreover, share of GDP has been falling because prices of manufacturing goods have been all falling vs inflation, pressured by foreign competition and by productivity improvements, while rest of the economy - services - face none of that: they usually (except corner cases like call centers) can't be outsourced abroad, and output there depends strongly on labor inputs (e.g. waiters) thus making productivity stagnant almost by definition. So there isn't a problem about manufacturing, never has been. Problem is strictly about manufacturing employment, which is of course, inexorably falling and will continue doing so and every politician promising to reverse it is a blatant liar. It's falling much like farm employment has been falling 40-70 years ago, sure it's traumatic, ruins livelihoods of millions of families many of which will never recover, destroys not just their personal finances but their source of pride and sense of self in many ways. But just like it didn't result in decrease in food output back then (quite the opposite happened), it doesn't result in dearth of manufacturing products now.

eru 2y ago
You could outsource more services and automate them more. But many service industries are protected by laws and regulations from such competition and improvements.

throw156754228 2y ago

> I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. We've got China cheating with their massively deflated currency, so how the market allocates capital is already screwed.

tw1984 2y ago
you probably didn't read news lately. your CNY deflation theory is no longer being cooked by your MSM for a good reason - if the CNY deflation claim is true, then it means the Chinese economy has probably already surpassed the US economy not just in PPP but in real term as well. That would cause huge load of issues for the US which is never prepared to be the No.2.

ClumsyPilot 2y ago

> I think it was a big case of corporate welfare that will result in somewhat increased chip production in the US. I see two issues with this: One, this is the same kind of subsidies and meddling with the markets that we accuse China of doing. If we are adopting state-led approach, it can be done in a serious manner without being hypocrites. But that would also require admission of some mistakes. Two - why is it seen as okay to give tax breaks to an engineering company, why not give tax breaks to engineers themselves instead? Companies are imaginary, people are real, why not give incentives to individuals? At least that money won’t be squirrelled away in tax heavens.

eru 2y ago
Just don't hand out tax breaks to politically favoured groups, but clean up the overall tax system to make it simpler and saner.. But that's hard to do politically.

chrisweekly 2y ago

> "I don't think ... probably won't be a win" Accidental double-negative, right?

jrcii 2y ago

> US manufacturing has pretty much been constantly Middle class manufacturing jobs have fallen off a cliff and completely destroyed huge swaths of our country. Take a tour around Bridgeport, CT sometime as a great example. The northeast is littered with towns like this. These executives and their buddies in Congress mortgaged our middle class for profits by sending all our industry to Asia.

darby_nine 2y ago

> I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. Cuz letting it manage itself works so well

chaos_emergent 2y ago
I think the statistics he cited actually make that case
- darby_nine 2y ago
  ...compared to what? Growth is just one way of representing market health, and it's one that is typically pushed by capital for obvious reasons. If you're talking about efficiency or productivity, you don't need markets for either of these, you just need any kind of economy to work with. Industrialization only intersects with markets (or capitalism for that matter), they aren't the same thing.
convivialdingo 2y ago
Agreed. Even the premise that it was always cheaper to manufacture abroad is flawed in many respects as Congress subsidized offshoring over many years as part of an effort to encourage globalization. Companies often receive massive tax breaks with write-offs to close US plants, tax credits, zero percent import duties, and lower overall tax rates by shifting their profits and losses through offshore banks. In many respects profitability has most often been determined by the policies we subsidize. and for decades those policies were essentially all in for the benefit of offshoring. Comparing the actual cost of production by location is far more complicated than just the cost of materials and labor when there are so many subsidies and policies involved.
- themaninthedark 2y ago
  Not to mention the demonetization of the working class(i.e. the dumb redneck stereotype) and the job class itself with the association of manufacturing jobs as dirty and unneeded with the goal of a service economy as the new future. https://www.forbes.com/sites/stevedenning/2012/01/31/is-the-us-in-a-phase-change-to-the-creative-economy/ https://www.forbes.com/sites/stevedenning/2012/01/31/is-the-... https://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/ https://www.forbes.com/sites/stevedenning/2011/08/17/why-ama...

edgyquant 2y ago

It doesn’t elude people, they just think that the 80% of manufacturing that isn’t high end shouldn’t have left and that it was criminal for it to have been shipped overseas at the expense of middle America.

Veliladon 2y ago
I mean, how are people supposed to afford all this high tech shit if they can't work decent paying jobs without a degree and the welfare state has been hollowed out? Manufacturing used to provide that. Are companies just going to fight for a constantly shrinking middle class? Or just turn into gacha companies looking to hook a whale? Sell a single doll for $46,000?
mywittyname 2y ago
A lot of it stuck around. I grew up in the rust belt and tons/most of my friend's parents worked at one of the many factories that were, and are still around. Think dog food, plastic molding, car part manufacturing, and glue. Not the big stuff that people think of when they think of manufacturing though. I think if you start to deep dive into the industries that left, you'll find the reasons were often more complicated than simple labor costs. American companies did get out-competed by foreign firms in a lot of key areas. America is large, but they can't expect to be the best in the world at every industry. If an entire country focuses on a specific niche for long enough, it's possible they will become the best. Samsung and TSMC are incredible companies that didn't happen by accident. And yeah, the USA might not compete at that level on the global stage, but the American economy is also not so completely dominated by one megacorp either. Also, a lot of manufacturing, especially the high tech stuff, is highly automated. So these massive factories don't generate the same number of jobs they once did. And the jobs they do generate are often technical. More maintenance and calibration of machinery, and less putting bottle caps on.
- themaninthedark 2y ago
  Tell me specificly which niche that Samsung focuses on: >Product: Clothing, automotive, chemicals, consumer electronics, electronic components, medical equipment, semiconductors, solid-state drives, DRAM, flash memory, ships, telecommunications equipment, home appliances >Services: Advertising, construction, entertainment, financial services, hospitality, information and communications technology, medical and health care services, retail, shipbuilding, semiconductor foundry https://en.wikipedia.org/wiki/Samsung https://en.wikipedia.org/wiki/Samsung Samsung is also very closely tied to the Korean government. >I think if you start to deep dive into the industries that left, you'll find the reasons were often more complicated than simple labor costs Care to share any of the reasons? Here are reasons that I know about; EPA regulations, OSHA regulations, their supply base relocating. https://www.forbes.com/sites/stevedenning/2011/08/17/why-amazon-cant-make-a-kindle-in-the-usa/ https://www.forbes.com/sites/stevedenning/2011/08/17/why-ama... Don't get me wrong though, we shouldn't roll back our regulations but we should however ensure that what we buy is manufactured in that same conditions that we would demand at home.

tivert 2y ago

> One thing that I think that frequently eludes people in this discussion is that US manufacturing has pretty much been constantly growing for the past century; just its share of GDP has fallen as other sectors have grown faster. > ...I don't think the government applying such levers to change how the market allocates capital probably won't be a win for economic output or quality of life. I think the problem you're having is you're thinking of manufacturing in terms of dollars, like an aloof economist.

chlodwig 2y ago

that US manufacturing has pretty much been constantly growing for the past century; Really? Every time I see this claim its based on some citing some statistical mismash that the person citing does not understand and cannot explain. How much tonnage of merchant shipping does the USA build in 2020s versus the 1960s? How many TVs and computer monitors does the United States make in 2020s versus 1990s? How many tons of steel does the USA make in the 2020s versus the 1970s? Of tool steel? How many nuclear reactors are produced in the USA in 2020s versus the 1970s? How many railway rails graded for high-speed trains are produced in the USA in 2020s versus 1980s? How many CNC mills are produced in the USA in the 2020s versus the 1980s? How many artillery shells are produced in the USA in 2020s versus the 1980s? How many jet engines are produced in the USA in the 2020s versus the 1980s? How many car engines blocks are produced in the USA in the 2020s versus the 1980s? How many computer hard drives are produced in the USA in the 2020s versus the 1990s? How many motherboards are produced in the USA in the 2020s versus the 1990s? (Also, adjust all the comparisons above for population growth, we should be comparing manufacturing production per capita) If you think that these comparisons are misleading because there are 'quality changes' please tell me exactly how you quantify these changes in quality.

mlyle 2y ago
Ignoring the thrust of the argument above, and missing the entire subthread where the nuance of how the US has redeployed its economy for comparative advantage is discussed and debated, to type that over and over was a bit of a waste of your time, IMO. Reading it wasn't a good use of mine. If you read the surrounding argument and want to discuss some further point not covered, I'm here.
- chlodwig 2y ago
  I've read the thread and have been very familiar for decades with these debates. There are two separate questions: 1) Has USA manufacturing increased or declined in its output (measured in things, not $)? 2) If output has declined in terms of things, is this ok because of comparative advantage? Is this ok because the US mains a competitive edge in the highest value most technically advanced products? As for 1), you say "The net result is that US manufacturing output in real dollars has increased 4x, in the past 70 years." Are you familiar with the term "researcher degrees of freedom"? "manufacturing output in real dollars" is an impossibly complicated statistical construct with infinite researcher degrees of freedom. There are infinite opportunities for "Getting Eulered" https://slatestarcodex.com/2014/08/10/getting-eulered/ https://slatestarcodex.com/2014/08/10/getting-eulered/ That is why I insist on starting with the most straight-forward numbers -- how many cars? How much steel? And then layering on adjustments on top of that. If steel is down but it is compensated by some other high value product being up, OK, but show me the calculation, show me the work. Otherwise your argument boils down to "Trust the US government's impenetrable statistical calculations, we are getting richer comrade" As for 2), when I first heard that argument from the most prestigious and credentialed economists twenty-five years ago, my toys and clothes said "Made in China" while advanced technical products like my computer motherboard was made in the USA. Now it's OK that the motherboards are all made abroad and because the most technically sophisticated motherboards are made in the USA. Well, it seems to me like the areas where the USA has comparative advantage in making the most technically advanced products is becoming a smaller and smaller every year. Just this year we are made aware of how much Boeing has lost ground to Airbus. Seems to USA is increasingly reliant on low-tech exports like soybeans, or worse, exporting dollar bills. It seems to me like our trade deficit is gaping wide, which means our real export is living off our status as the global reserve currency. Which feels nice until ones military might is no longer able to support that status (see 16th century Spain). Seems to me that the US is losing ground on military relevant manufacturing -- particularly drones but also steel, ships, etc. And without that, it will not be able to maintain its status as reserve currency in the long run.

bwanab 2y ago

> I think this is a win for national security. I think that's largely the point. Obviously, it's a balancing act, but when market forces create a situation that is incompatible with national security it really is the governments job to address the situation even if, as in the case with Chinese EVs, it means a bit of pain for consumers.

ddingus 2y ago

Let me tell you a story: Tektronix lifted the Portland Oregon region right up. Was called silicon forest. At that time, Tek was funding startups its employees thought up after working for Tek, getting great education provided directly by the company as well as through college partnerships. Tek also literally trained a workforce here by educating any of its employees and by doing programs with suppliers to do the same. I am a product of that time. A drive through this region in the 80's and early 90's was awesome! Shops of all kinds, Tek itself had COMTEK which could make damn near anything, and opportunities abounded! Howard Vollem died and the MBA took over. COMTEK was torn down, work was sent overseas, education stopped, startup funding stopped, and soon a drive through this region looked very different: hair nails and laundry. While large scale manufacturing has grown, the rest has suffered huge! Our military can't find the capacity it needs! And they, along with aerospace, are the best customers there are, with auto in some parts too. The rest has been gutted. That is what we need to fix. It matters. If companies won't do what Tek did, and that is invest in the region and it's people, and they won't because getting max dollars at any cost matters more than sustainable business does, then we must have robust small to mid sized manufacturing. Where else will our future skilled labor come from? And I left for higher end professional work and software. I can make anything I can draw, it was damn good at it too. Saw way too many places close and there's no way I can raise a family on that and I quit ... tons of us did. The skills I have are rare and in high demand. Young people today can't get them like I did, and that adds right the hell up. You think your arguments make sense. And you are not wrong. They do, but that is not the problem. The problem is for your argument to make sense, a ton of people and manufacturing potential is lost and nobody seems to recognize the massive opportunity costs in all that. And frankly if large companies aren't going to do it and get a return on that investment, then our government damn well should. We do really put our national security at risk doing otherwise.

mlyle 2y ago
> Our military can't find the capacity it needs! This has a lot more to do with the stance of the past 30 years to manufacture defense materiel at relatively constant, small rates. There was no capital investment, because why pay to have a huge line that isn't being used. We spent our military dollars on wonder-weapons that would probably win a direct war quickly, but that we can't give to allies in a proxy conflict. Going so far was a strategic mistake. > And they, along with aerospace, are the best customers there are, Military are terrible customers, especially if you're a subcomponent manufacturer. Gravy might pour, it might not; it's very unpredictable. You spend a lot of effort and business just evaporates. > Howard Vollem died and the MBA took over. On the flip-side, can you imagine being the high-cost Tek of old in today's test equipment marketplace? Tek already struggles to compete against cheaper, adequate solutions. So much of that market has commoditized out. > nobody seems to recognize the massive opportunity costs in all that. Actually, that's exactly what I'm talking about, in both directions. Having a ton of manufacturing means we would have opportunity costs in the other direction. We've traded the manufacturing we had 50 years ago for other things. It's not possible to specialize in "everything."

tmaly 2y ago

If the rumors about Elon's robots are true, I see a lot of manufacturing coming back to the US. However, I do not see this benefiting regular workers.

20after4 2y ago

Just about all "made in USA" products today are "assembled in the USA from global materials/components." This usually means that the absolute bare minimum of work is done in the USA in order to claim US origin. For example, pillows that are sewn over seas from foreign fabric and the only part that is done here is inserting the filling and closing the final stitch. The US was once a global leader in textiles and now virtually all of that industry is gone. The same goes for many many other industries.

20after4 2y ago
From the 1930s until the 1990s, Rawlings Sporting Goods produced high quality sporting goods in Missouri. In my home town they made hand-stitched Baseball Gloves, Footballs and starting in the 1980s, Injection Molded baseball helmets. They also made all of the team jerseys for little league and high school sports in another town near by. They employed ~200-300 people in my town and probably 1000 more in a couple of other factories in other towns. In the late 90s all of that was moved to China. The same thing happened with hundreds of companies across almost every industry. Anyone who claims that industry in the USA wasn't totally gutted in the 80s and 90s is using some creative accounting or just flat out lying.

h_tbob 2y ago

As Henry Hazlitt said The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups

thehappypm 2y ago

This might be true, but the number of jobs has fallen. It kind of comes from our measurement of GDP. If you have a high-tech factory that employees 10 people to make a $10,000 unit price electronic, that can easily become more GDP per factory than one that sells nails and screws for a penny each with 100 employees.

EricE 2y ago

RE: National Security see his sobering thoughts on the supply chain: https://timculpan.substack.com/p/what-supply-chain-security-really https://timculpan.substack.com/p/what-supply-chain-security-...