4 ms·

Perhaps it was a bad idea to let it stop happening in the US[1] in the first place? I have acquaintances who told me about this more than a decade ago. We thoug

Perhaps it was a bad idea to let it stop happening in the US[1] in the first place? I have acquaintances who told me about this more than a decade ago. We thought it was stupid to let the production lines go then... and obviously, we were right. [1] https://www.counterpunch.org/2006/04/07/the-saga-of-magnequench/ https://www.counterpunch.org/2006/04/07/the-saga-of-magneque...

droopyEyelids 2y ago
Its easy to throw around words like “stupid” on the internet, especially with hindsight, but how could it have been anything but a complex decision estimating values for many variables? Would they have been able to hit a competitive price while maintaining environmental regs and paying a domestic workforce, would china end up the only other supplier in the world? Can government subsidies be counted on to last multiple administrations?
- BLKNSLVR 2y ago
  Strong disagree, this was obvious if not from the very start, then as soon as the first company that relocated manufacturing started making ridiculous profits. Keeping the retail prices the same whilst more-than-decimating the manufacturing cost? How could it not be obvious that anyone and everyone would follow once there was a proof of concept. When capitalism is measured on incredibly short term performance, with no consideration of long term sustainability or national interest or maintenance of national skills and capabilities. This has been going on since well before the world wide web became accessible to most Western households. Nike started doing it in the 70s and they weren't the first. I've long been confused* to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. *Not really, politicians are just as short-term motivated as business owners. It made sense. But the chickens are now coming home to roost, and they're shitting all over the place and the unprecedented profits have been spent on fancy plastic toys (that are now mostly landfill) instead of any kind of preparation for the inevitable tsunami of chicken shit.
  - lotsofpulp 2y ago
    > I've long been confused* to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. >*Not really, politicians are just as short-term motivated as business owners. Voters also like lower prices today in exchange for higher volatility tomorrow. No one was forced to shop at national businesses rather than local businesses, but people like the lower prices of larger businesses.
    - fooqux 2y ago
      I was taught during grade school that capitalism drives lower prices, and since capitalism is good, it's alluded that paying less money for a product of similar value is almost a moral obligation. That company selling the "same thing" for more is obviously fleecing people and should go bankrupt. That model may have worked hundreds of years ago when comparing horseshoes made by local blacksmiths, and possibly still held up when comparing mousetraps made in the same state / country. But it has issues when applied globally, and we have not adopted fast enough.
      - lazide 2y ago
        If you can pay $5 for something instead of $10, why wouldn’t that be better for you?
        mindslight 2y ago
        It's better for you individually-immediately, but on the larger scale the government policy is that average prices cannot go down. So then the government created enough new money to make the lower priced item cost $10. And due to kayfabe "fiscal responsibility", the government couldn't even spend that new money (representing shared surplus from tech/market progress) on useful things, and instead just dumped it into the housing bubble.
        lazide 2y ago
        What, consequences?!! In my economy? Clearly that isn’t actually why and it’s all the fault of (checks notes) illegal immigrants. I’ll warm up the military transports right now!
myrmidon 2y ago
I don't think that this is an obvious decision at all, and it is very easy to be deceptive about upsides and gloss over the downsides of forcefully retaining domestic industry sectors: If you want to keep industries like this, you are basically arguing that taxpayers should subsidise them-- the jobs you retain are not a straightforward net gain, you pay for the wage difference in tax money (or price, where typically the consumer foots the bill, which is often just like a rather regressive tax). There are good arguments that this is simply necessary for absolutely vital industries like agriculture, which gets a generous ~$20 billion/year to stay local. But it is clear to me that this is not something that you can do for every industry-- that would basically amount to a small-scale planned economy (with all its drawbacks), would be very likely to poach talent from sectors that are actually "more valuable" according to market consensus, and would also be likely to provoke retaliatory actions by international trading partners. For this specifically, I think throwing some hundreds of millions of taxdollars around to keep/reestablish the industry is probably a good deal, but it is rather obvious to me that you have to draw the line somewhere; spending hundreds of billions to maximize autarky would be a really bad idea even though it is easy to make it sound universally good ("local jobs! supply chain safety! trade balance!").
- lesuorac 2y ago
  Pretty sure it's a very obvious decision. Fire your unionized US workforce. Replace them a cheaper non-unionized workforce. Sell the goods at the same price. Increase your current profit margin while protecting future profit margins from unions. Like half the reason why people do manufacturing in China is because all the manufacturing is there. If you had a problem with the item after it's been molded you can go to the molder and see what's going on. Then walk across the street to the plastic supplier to get them to adjust their output to fix your mold issues. That's not a Chinese specific thing, you can have this situation anywhere as long as the industries are co-located.
  - freeone3000 2y ago
    If the American workers aren’t paid better than the Chinese workers then why would they live in America instead of China? It won’t be for the cheap housing and cheap healthcare…
Aunche 2y ago
The US thought it was "stupid" to let shipbuilding jobs leave the US, leading to the Jones Act. This hurt just about every other domestic industry, consumers, and caused the American shipbuilding industry to deteriorate even more.
- dmoy 2y ago
  That's fair, but it can be done in ways drastically different from the Jones Act. The Jones Act fails in large part because it is so indirect. If you instead e.g. buy surplus production (like say we do for farming today), it tends to not totally kill off the industry. If the Jones Act had worked it would have looked genius because it didn't require spending money by the government. It didn't work though.
  - jburbank 2y ago
    Has there ever been something like the Jones act, that has worked? In any western democracy? Honest question. I wonder if the nature of international commerce and large nation domestic policy is too complex and chaotic.
    - freeone3000 2y ago
      The US Army keeps the M1 Abrams line spun up despite a lack of losses to ensure that when losses do happen, it can be replaced. So far the only effective method has been to purchase a fixed amount of the final desired product regardless of actual demand.
    - maxwell 2y ago
      Smoot-Hawley and the Buy American Act, which protected/enabled the Arsenal of Democracy to win the Second World War. Europe's Common Agricultural Policy. Voluntary Export Restraints. Steel and aluminum tariffs. Tech/IP restrictions from the U.S./EU on communist Chinese firms.
      - collinmcnulty 2y ago

droopyEyelids 2y ago

Its easy to throw around words like “stupid” on the internet, especially with hindsight, but how could it have been anything but a complex decision estimating values for many variables? Would they have been able to hit a competitive price while maintaining environmental regs and paying a domestic workforce, would china end up the only other supplier in the world? Can government subsidies be counted on to last multiple administrations?

BLKNSLVR 2y ago
Strong disagree, this was obvious if not from the very start, then as soon as the first company that relocated manufacturing started making ridiculous profits. Keeping the retail prices the same whilst more-than-decimating the manufacturing cost? How could it not be obvious that anyone and everyone would follow once there was a proof of concept. When capitalism is measured on incredibly short term performance, with no consideration of long term sustainability or national interest or maintenance of national skills and capabilities. This has been going on since well before the world wide web became accessible to most Western households. Nike started doing it in the 70s and they weren't the first. I've long been confused* to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. *Not really, politicians are just as short-term motivated as business owners. It made sense. But the chickens are now coming home to roost, and they're shitting all over the place and the unprecedented profits have been spent on fancy plastic toys (that are now mostly landfill) instead of any kind of preparation for the inevitable tsunami of chicken shit.
- lotsofpulp 2y ago
  > I've long been confused* to why there was no legislation to prevent "local" companies from giving away the keys to their kingdoms to foreign countries. >*Not really, politicians are just as short-term motivated as business owners. Voters also like lower prices today in exchange for higher volatility tomorrow. No one was forced to shop at national businesses rather than local businesses, but people like the lower prices of larger businesses.
  - fooqux 2y ago
    I was taught during grade school that capitalism drives lower prices, and since capitalism is good, it's alluded that paying less money for a product of similar value is almost a moral obligation. That company selling the "same thing" for more is obviously fleecing people and should go bankrupt. That model may have worked hundreds of years ago when comparing horseshoes made by local blacksmiths, and possibly still held up when comparing mousetraps made in the same state / country. But it has issues when applied globally, and we have not adopted fast enough.
    - lazide 2y ago
      If you can pay $5 for something instead of $10, why wouldn’t that be better for you?
      - mindslight 2y ago
        It's better for you individually-immediately, but on the larger scale the government policy is that average prices cannot go down. So then the government created enough new money to make the lower priced item cost $10. And due to kayfabe "fiscal responsibility", the government couldn't even spend that new money (representing shared surplus from tech/market progress) on useful things, and instead just dumped it into the housing bubble.
        lazide 2y ago
        What, consequences?!! In my economy? Clearly that isn’t actually why and it’s all the fault of (checks notes) illegal immigrants. I’ll warm up the military transports right now!

myrmidon 2y ago

I don't think that this is an obvious decision at all, and it is very easy to be deceptive about upsides and gloss over the downsides of forcefully retaining domestic industry sectors: If you want to keep industries like this, you are basically arguing that taxpayers should subsidise them-- the jobs you retain are not a straightforward net gain, you pay for the wage difference in tax money (or price, where typically the consumer foots the bill, which is often just like a rather regressive tax). There are good arguments that this is simply necessary for absolutely vital industries like agriculture, which gets a generous ~$20 billion/year to stay local. But it is clear to me that this is not something that you can do for every industry-- that would basically amount to a small-scale planned economy (with all its drawbacks), would be very likely to poach talent from sectors that are actually "more valuable" according to market consensus, and would also be likely to provoke retaliatory actions by international trading partners. For this specifically, I think throwing some hundreds of millions of taxdollars around to keep/reestablish the industry is probably a good deal, but it is rather obvious to me that you have to draw the line somewhere; spending hundreds of billions to maximize autarky would be a really bad idea even though it is easy to make it sound universally good ("local jobs! supply chain safety! trade balance!").

lesuorac 2y ago
Pretty sure it's a very obvious decision. Fire your unionized US workforce. Replace them a cheaper non-unionized workforce. Sell the goods at the same price. Increase your current profit margin while protecting future profit margins from unions. Like half the reason why people do manufacturing in China is because all the manufacturing is there. If you had a problem with the item after it's been molded you can go to the molder and see what's going on. Then walk across the street to the plastic supplier to get them to adjust their output to fix your mold issues. That's not a Chinese specific thing, you can have this situation anywhere as long as the industries are co-located.
- freeone3000 2y ago
  If the American workers aren’t paid better than the Chinese workers then why would they live in America instead of China? It won’t be for the cheap housing and cheap healthcare…

Aunche 2y ago

The US thought it was "stupid" to let shipbuilding jobs leave the US, leading to the Jones Act. This hurt just about every other domestic industry, consumers, and caused the American shipbuilding industry to deteriorate even more.

dmoy 2y ago
That's fair, but it can be done in ways drastically different from the Jones Act. The Jones Act fails in large part because it is so indirect. If you instead e.g. buy surplus production (like say we do for farming today), it tends to not totally kill off the industry. If the Jones Act had worked it would have looked genius because it didn't require spending money by the government. It didn't work though.
- jburbank 2y ago
  Has there ever been something like the Jones act, that has worked? In any western democracy? Honest question. I wonder if the nature of international commerce and large nation domestic policy is too complex and chaotic.
  - freeone3000 2y ago
    The US Army keeps the M1 Abrams line spun up despite a lack of losses to ensure that when losses do happen, it can be replaced. So far the only effective method has been to purchase a fixed amount of the final desired product regardless of actual demand.
  - maxwell 2y ago
    Smoot-Hawley and the Buy American Act, which protected/enabled the Arsenal of Democracy to win the Second World War. Europe's Common Agricultural Policy. Voluntary Export Restraints. Steel and aluminum tariffs. Tech/IP restrictions from the U.S./EU on communist Chinese firms.
    - collinmcnulty 2y ago