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The article fails at diagnosing the crux of the problem... which is that you need to deliberately weaken the value of the dollar in order to make manufactoring
by cyber_kinetist 2y ago
The article fails at diagnosing the crux of the problem... which is that you need to deliberately weaken the value of the dollar in order to make manufactoring economically viable at any capacity (labor is just too expensive for products to be competitive globally). This means US needs to let go of its dollar being the reserve currency... which will not only mean the end of consumerism in the US (no more cheap imported goods), but also the US no longer being dominant in world politics anymore (and consequently the downfall of the neoliberal world order). Probably no US citizen will actually have the guts to go through this voluntarily... but noticing the current government deteriorating in real time with Trump and Musk we might actually see this happening anyway in a few years.
The real issue is something called the Triffin dillema (https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma) - a country that has its currency as a global reserve currency will inevitably have a huge deficit in terms of international trade. Everyone wants these dollars since it is required to participate in any economic activity, so dollars are continuously going to move out of the country, and the value of the dollar will rise even with an astronomically large trade deficit. This means that exporting will be very expensive, but importing will be cheap, which established the backbone of US consumerism (cheap goods!). Basically the majority of the middle/upper class are living out of the value of the US dollar (mostly working in "bullshit" professional jobs, since their actual real job is consuming goods), while most of the remaining necessary blue-collar labor to support the country (ex. agricultural jobs, since you can't offshore them) are done cheaply by illegal migrants and slave (prison) labor.
- tim333 2y agoI think the problem is more comparative advantage. Say the Vietnamese are good at making things in factories while terrible at making Hollywood type movies, while Americans are good at making things in factories and also good at making movies, it makes sense for Vietnam to do the factories and America the movies regardless of exchange rates.