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The US spent decades transitioning from a manufacturing economy to a service economy, deliberately. Now there's a populist making political hay, throwing out n

The US spent decades transitioning from a manufacturing economy to a service economy, deliberately. Now there's a populist making political hay, throwing out numbers about trade deficits, which ignores revenue from services. Yes, there is have a trade deficit on goods, that was a long-term strategy because services were a superior investment. Manufacturing is an inferior way to make money unless you're planning to go to conventional war, and since the US is a nuclear superpower it's never going to get into an existential boots-on-the-ground Serious War again unless it just wants to cosplay. Nukes make conventional war for survival irrelevant. So: it took decades to burn the boats with manufacturing, and trying to rebuild them in a few years is a hilarious folly. It absolutely will not go anywhere, and honestly shouldn't anyway. There is real danger, however, that the US burns the boats on the carefully crafted service sector as well.

jasonsb 1y ago
A service economy is an utopia or a scam if you wish. You don't have to be a conservative to understand this. That being said, maybe you shouldn't burn bridges with the biggest producer in the world when you're trying to be a "service economy".
- coliveira 1y ago
  That's the big issue, the US needs to understand they can't force the world to do things forever because there is a dependency that cannot be broken anymore. The time when this decoupling was possible is over, from now on only diplomacy can work.
Barrin92 1y ago
>Manufacturing is an inferior way to make money sure in the sense in which operating an airline or high speed rail network makes you less money than running an ad or porn website but the world doesn't run on money, it runs on infrastructure. I believe we have a term for civilizations that value money over power, we call them decadent. If you're content living in Mark Zuckerberg's slop metaverse that's a possible route to go down but it's important to understand that the world will belong to countries that focus on what powers that entertainment dystopia, and the US has some competitors who have the good sense to understand that the material world matters.
- mullingitover 1y ago
  > operating an airline or high speed rail network makes you less money than running an ad or porn website Airlines and high speed rail systems are also services. Heck, even Tesla's real value isn't in manufacturing, it's in the (delusional, but nonetheless) belief that they're going to make an absolute killing on services at some point in the future. They could probably sell off their manufacturing arm and their stock price would increase.
crote 1y ago
> Nukes make conventional war for survival irrelevant. So how come Russia hasn't annexed Ukraine yet? And why spend literally hundreds of billions of dollars a year maintaining a conventional military when you already have nukes? And when are you going to press that button? Do you nuke Eurasia the second they cease diplomatic communications? When a cargo ship heading to LA founders for mysterious reasons? When a small detachment plants a flag on Little Diomede Island? When they capture Attu Island? When they land troops on Hawaii? When they declare war? When they are walking in San Francisco? When they capture Salt Lake City? When they are 15 minutes away from the missile fields? When DC falls? What do you imagine the world is going to look like afterwards? If you fired too soon, how are you going to stop the revolution breaking out after you've killed hundreds of millions of innocent people? If you fired too late, why bother? The country is lost already, surely you're not going to nuke yourself? Besides, that's assuming the existential war happens in the US itself. The US isn't self-reliant, and it will never be. Are you going to nuke any country refusing to sell critical materials to the US? Sure, the US has started wars in the Middle-East for oil before, but nukes?
- carlosjobim 1y ago
  > So how come Russia hasn't annexed Ukraine yet? Russia is not fighting for their survival in Ukraine, even though Ukraine is.
- coliveira 1y ago
  Russia doesn't need to use nukes for that.
  - beeflet 1y ago
    clearly they do
- deleted 1y ago
  [deleted]
- lossolo 1y ago
  Exactly this. If you do not have the capability to produce as much conventional weaponry as your enemy (especially if that enemy also has a nuclear arsenal) then you've lost. Sitting in the Whitehouse facing the red button, you ask yourself which city are we willing to trade by pushing that button? Millions in New York or Los Angeles? That's why they will never use nukes. To retain world hegemon status and protect your interests, you need conventional military strength. Because if your aircraft carriers are sunk and the vast majority of your fleet is disabled or destroyed, what will you do? Your shipbuilding capacity is so low that you've basically already lost, you can't project power overseas without a fleet and you can't reproduce it fast enough. What are you going to do then nuke them? They will retaliate, and every decision maker knows that. No one will choose to kill millions/tens of millions of their citizens because they lost a fleet thousands of kilometers from home.
ryandrake 1y ago
I don't know why people romanticize 1950-style manufacturing jobs so much, like they are some kind of objectively ideal job. These jobs really weren't great. Bunch of dudes standing at an assembly line all day physically busting their asses and sweating it out. Sometimes in a physically hazardous environment. Sometimes breathing stinky and/or harmful chemicals. Sometimes surrounded by ear-damaging loud noises. Sometimes mind-numbingly repetitive work. This work sucks! And we should be happy that as a country we managed to transition our economy away from depending on this kind of work! Why on earth are we trying to bring it back?
- Stephen_0xFF 1y ago
  Nostalgia more than anything. At the time a factory job could buy you a home out of high school, have a wife that stays home and takes care of the children. The factory job itself is a red herring. What people actually want is a post WW2 baby booming economy.
  - walthamstow 1y ago
    Agreed. For that economy to come back, you need all possible competitors to be weak and poor, in the mid 20th century that meant either still agrarian (China) or rebuilding after war (Japan and Europe). It was a unique moment and it's never coming back.
    - pessimizer 1y ago
      This doesn't make any sense at all. The reason China is dominant in manufacturing isn't because the other countries of the world were weak and agrarian and rebuilding after war. What would be awesome is if half-assed finance bro speeches weren't being thrown around as serious macro.
      - joomla199 1y ago
        They were talking about economic boom, not manufacturing dominance.
yibg 1y ago
I hear people (media, politicians) talk about bringing manufacturing jobs back to America, but I haven't heard too much well articulated reasons for why. There are issues with national security, reliance on less than friendly nations etc. For instance, we'd want to grow our own food, even if importing would be cheaper. But those surely aren't the majority of manufacturing jobs. Given the choice of increasing the number of high paying, high skills jobs or the number of relatively low skill, dangerous manufacturing jobs, why wouldn't we choose the former?
- nradov 1y ago
  Global supply chains seem to be gradually breaking down due to a mix of politics, demographics, and armed conflicts. Everyone has become accustomed to the post-WWII system of global free trade but historically it is an aberration and everything will eventually revert to the mean. I wouldn't be surprised if China disintegrates into another civil war within the next few decades. We can't necessarily rely on foreign countries to make stuff for us anymore so if we want to have stuff we might have to make it ourselves.
  - anonymars 1y ago
    > China disintegrates into another civil war within the next few decades I'm curious about your reasoning on this. China was not the one at the top of my list of "Major world powers likely to have a civil war sooner than later"
    - lossolo 1y ago
      Agree. At this point, a civil war is more likely in the United States than in China.
    - nradov 1y ago
      China has had major internal violent conflicts many times: in 1967, 1960, 1937, 1916, 1856, and so on. Another civil war probably isn't imminent but based on historical patterns it's entirely possible in our lifetimes. There could be an external shock in terms of a severe disruption in food or energy imports, or an internal power struggle between CCP factions. Xi Jinping isn't immortal and no one can predict what might happen when he leaves power.
huevosabio 1y ago
Thank you, absolutely agree.
pessimizer 1y ago
> The US spent decades transitioning from a manufacturing economy to a service economy, deliberately. I have no idea what this is supposed to mean other than individual rich people started outsourcing labor to poor countries because they were allowed to import the products of that labor back into the country cheaply. > Now there's a populist making political hay, throwing out numbers about trade deficits, which ignores revenue from services. This is just nonsense. The trade deficit includes services, and grows a negative balance of payments that has been growing for 50 years. It would be different if that money were used for investment, but that money was just given to the wealthy. Reversing the trade deficit will not be enough. It's not that the government is debt-ridden, it's that the nation is debt-ridden. We're borrowing foreign cash to buy foreign imports. All we have left is to sell off land, buildings, and exclusive franchises. But that's populist. As in the population that won't just be able to move to a country that isn't broken. I mean, every single part of this is wrong, and there's nothing in it that resembles an economic argument. We need to bring manufacturing to the US because we need to produce something in order to be paid. We have no advantage in services, we only pretend to have one because we have wealthy people who import talent and who are themselves immigrants. We are not only not working, but are badly educated. I have no idea why you think that the world will continue to feed America for free, forever. What we're doing is selling the furniture and the fixtures, and pretending like everything is just fine. And the people who inherited the furniture and the fixtures are like, yup, nothing's wrong.
- trollbridge 1y ago
  The U.S. is still a leader in agricultural, although that’s heavily dependent on oil and cheap oil. Note that a place like Brazil is also a leader in ag… and one of the reasons they got to that position was through heavy protectionism to develop their own industries.
- stackedinserter 1y ago
  > we need to produce something in order to be paid I would even say we need to produce something in order to remain a sovereign nation. If we buy everything from China, we're governed by China.
culll_kuprey 1y ago
> unless it just wants to cosplay Do not underestimate this as a real population.
hedora 1y ago
The crazy thing is, due to coordinated propaganda campaigns, people don't realize that the Biden administration got people to invest in US factories at an unprecedented rate. Trump's already managed to scare off a lot of that investment, presumably because he wants to protect the trade deficit. Here's a graph of actual private investment money going into factories in the US since 1950. It proves my point: https://fred.stlouisfed.org/series/C307RC1Q027SBEA https://fred.stlouisfed.org/series/C307RC1Q027SBEA I guess the tariffs are serving some other purpose, like forcing foreign governments to bribe him under-the-counter(?) That'd explain his rapid increase in net worth since taking office.
- baggachipz 1y ago
  Biden was a relatively mediocre president (which I sure miss), but his administration was amazing for America. They laid the foundation for long-term prosperity, which is entirely squandered now. Such a shame.
ahmeneeroe-v2 1y ago
"Services" are actually fake and it turns out you need to be able to make things to survive. Not for ROI or for trade deficits, but because the world manufacturer sets the rules.

jasonsb 1y ago

A service economy is an utopia or a scam if you wish. You don't have to be a conservative to understand this. That being said, maybe you shouldn't burn bridges with the biggest producer in the world when you're trying to be a "service economy".

coliveira 1y ago
That's the big issue, the US needs to understand they can't force the world to do things forever because there is a dependency that cannot be broken anymore. The time when this decoupling was possible is over, from now on only diplomacy can work.

Barrin92 1y ago

>Manufacturing is an inferior way to make money sure in the sense in which operating an airline or high speed rail network makes you less money than running an ad or porn website but the world doesn't run on money, it runs on infrastructure. I believe we have a term for civilizations that value money over power, we call them decadent. If you're content living in Mark Zuckerberg's slop metaverse that's a possible route to go down but it's important to understand that the world will belong to countries that focus on what powers that entertainment dystopia, and the US has some competitors who have the good sense to understand that the material world matters.

mullingitover 1y ago
> operating an airline or high speed rail network makes you less money than running an ad or porn website Airlines and high speed rail systems are also services. Heck, even Tesla's real value isn't in manufacturing, it's in the (delusional, but nonetheless) belief that they're going to make an absolute killing on services at some point in the future. They could probably sell off their manufacturing arm and their stock price would increase.

crote 1y ago

> Nukes make conventional war for survival irrelevant. So how come Russia hasn't annexed Ukraine yet? And why spend literally hundreds of billions of dollars a year maintaining a conventional military when you already have nukes? And when are you going to press that button? Do you nuke Eurasia the second they cease diplomatic communications? When a cargo ship heading to LA founders for mysterious reasons? When a small detachment plants a flag on Little Diomede Island? When they capture Attu Island? When they land troops on Hawaii? When they declare war? When they are walking in San Francisco? When they capture Salt Lake City? When they are 15 minutes away from the missile fields? When DC falls? What do you imagine the world is going to look like afterwards? If you fired too soon, how are you going to stop the revolution breaking out after you've killed hundreds of millions of innocent people? If you fired too late, why bother? The country is lost already, surely you're not going to nuke yourself? Besides, that's assuming the existential war happens in the US itself. The US isn't self-reliant, and it will never be. Are you going to nuke any country refusing to sell critical materials to the US? Sure, the US has started wars in the Middle-East for oil before, but nukes?

carlosjobim 1y ago
> So how come Russia hasn't annexed Ukraine yet? Russia is not fighting for their survival in Ukraine, even though Ukraine is.
coliveira 1y ago
Russia doesn't need to use nukes for that.
- beeflet 1y ago
  clearly they do
deleted 1y ago
[deleted]
lossolo 1y ago
Exactly this. If you do not have the capability to produce as much conventional weaponry as your enemy (especially if that enemy also has a nuclear arsenal) then you've lost. Sitting in the Whitehouse facing the red button, you ask yourself which city are we willing to trade by pushing that button? Millions in New York or Los Angeles? That's why they will never use nukes. To retain world hegemon status and protect your interests, you need conventional military strength. Because if your aircraft carriers are sunk and the vast majority of your fleet is disabled or destroyed, what will you do? Your shipbuilding capacity is so low that you've basically already lost, you can't project power overseas without a fleet and you can't reproduce it fast enough. What are you going to do then nuke them? They will retaliate, and every decision maker knows that. No one will choose to kill millions/tens of millions of their citizens because they lost a fleet thousands of kilometers from home.

ryandrake 1y ago

I don't know why people romanticize 1950-style manufacturing jobs so much, like they are some kind of objectively ideal job. These jobs really weren't great. Bunch of dudes standing at an assembly line all day physically busting their asses and sweating it out. Sometimes in a physically hazardous environment. Sometimes breathing stinky and/or harmful chemicals. Sometimes surrounded by ear-damaging loud noises. Sometimes mind-numbingly repetitive work. This work sucks! And we should be happy that as a country we managed to transition our economy away from depending on this kind of work! Why on earth are we trying to bring it back?

Stephen_0xFF 1y ago
Nostalgia more than anything. At the time a factory job could buy you a home out of high school, have a wife that stays home and takes care of the children. The factory job itself is a red herring. What people actually want is a post WW2 baby booming economy.
- walthamstow 1y ago
  Agreed. For that economy to come back, you need all possible competitors to be weak and poor, in the mid 20th century that meant either still agrarian (China) or rebuilding after war (Japan and Europe). It was a unique moment and it's never coming back.
  - pessimizer 1y ago
    This doesn't make any sense at all. The reason China is dominant in manufacturing isn't because the other countries of the world were weak and agrarian and rebuilding after war. What would be awesome is if half-assed finance bro speeches weren't being thrown around as serious macro.
    - joomla199 1y ago
      They were talking about economic boom, not manufacturing dominance.

yibg 1y ago

I hear people (media, politicians) talk about bringing manufacturing jobs back to America, but I haven't heard too much well articulated reasons for why. There are issues with national security, reliance on less than friendly nations etc. For instance, we'd want to grow our own food, even if importing would be cheaper. But those surely aren't the majority of manufacturing jobs. Given the choice of increasing the number of high paying, high skills jobs or the number of relatively low skill, dangerous manufacturing jobs, why wouldn't we choose the former?

nradov 1y ago
Global supply chains seem to be gradually breaking down due to a mix of politics, demographics, and armed conflicts. Everyone has become accustomed to the post-WWII system of global free trade but historically it is an aberration and everything will eventually revert to the mean. I wouldn't be surprised if China disintegrates into another civil war within the next few decades. We can't necessarily rely on foreign countries to make stuff for us anymore so if we want to have stuff we might have to make it ourselves.
- anonymars 1y ago
  > China disintegrates into another civil war within the next few decades I'm curious about your reasoning on this. China was not the one at the top of my list of "Major world powers likely to have a civil war sooner than later"
  - lossolo 1y ago
    Agree. At this point, a civil war is more likely in the United States than in China.
  - nradov 1y ago
    China has had major internal violent conflicts many times: in 1967, 1960, 1937, 1916, 1856, and so on. Another civil war probably isn't imminent but based on historical patterns it's entirely possible in our lifetimes. There could be an external shock in terms of a severe disruption in food or energy imports, or an internal power struggle between CCP factions. Xi Jinping isn't immortal and no one can predict what might happen when he leaves power.

huevosabio 1y ago

Thank you, absolutely agree.

pessimizer 1y ago

> The US spent decades transitioning from a manufacturing economy to a service economy, deliberately. I have no idea what this is supposed to mean other than individual rich people started outsourcing labor to poor countries because they were allowed to import the products of that labor back into the country cheaply. > Now there's a populist making political hay, throwing out numbers about trade deficits, which ignores revenue from services. This is just nonsense. The trade deficit includes services, and grows a negative balance of payments that has been growing for 50 years. It would be different if that money were used for investment, but that money was just given to the wealthy. Reversing the trade deficit will not be enough. It's not that the government is debt-ridden, it's that the nation is debt-ridden. We're borrowing foreign cash to buy foreign imports. All we have left is to sell off land, buildings, and exclusive franchises. But that's populist. As in the population that won't just be able to move to a country that isn't broken. I mean, every single part of this is wrong, and there's nothing in it that resembles an economic argument. We need to bring manufacturing to the US because we need to produce something in order to be paid. We have no advantage in services, we only pretend to have one because we have wealthy people who import talent and who are themselves immigrants. We are not only not working, but are badly educated. I have no idea why you think that the world will continue to feed America for free, forever. What we're doing is selling the furniture and the fixtures, and pretending like everything is just fine. And the people who inherited the furniture and the fixtures are like, yup, nothing's wrong.

trollbridge 1y ago
The U.S. is still a leader in agricultural, although that’s heavily dependent on oil and cheap oil. Note that a place like Brazil is also a leader in ag… and one of the reasons they got to that position was through heavy protectionism to develop their own industries.
stackedinserter 1y ago
> we need to produce something in order to be paid I would even say we need to produce something in order to remain a sovereign nation. If we buy everything from China, we're governed by China.

culll_kuprey 1y ago

> unless it just wants to cosplay Do not underestimate this as a real population.

hedora 1y ago

The crazy thing is, due to coordinated propaganda campaigns, people don't realize that the Biden administration got people to invest in US factories at an unprecedented rate. Trump's already managed to scare off a lot of that investment, presumably because he wants to protect the trade deficit. Here's a graph of actual private investment money going into factories in the US since 1950. It proves my point: https://fred.stlouisfed.org/series/C307RC1Q027SBEA https://fred.stlouisfed.org/series/C307RC1Q027SBEA I guess the tariffs are serving some other purpose, like forcing foreign governments to bribe him under-the-counter(?) That'd explain his rapid increase in net worth since taking office.

baggachipz 1y ago
Biden was a relatively mediocre president (which I sure miss), but his administration was amazing for America. They laid the foundation for long-term prosperity, which is entirely squandered now. Such a shame.

ahmeneeroe-v2 1y ago

"Services" are actually fake and it turns out you need to be able to make things to survive. Not for ROI or for trade deficits, but because the world manufacturer sets the rules.