The reason we need manufacturing is because the middle class is decimated. None of us tech workers feel it because we don’t live in neighborhoods that have been decimated by it. We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that have been destroyed by it.

Too many people say it will take “years” to get factories operational. That’s why Elon is there. He knows and has done this, to point out which regulations need to be axed in order to improve the time to market for new factories. Trump will listen to him and get rid of any regulation that doesn’t make sense, or even regulations that do make sense but take too much time. For better or worse factory building will be faster over the next 3 years.

Now that we have these greenfields for new manufacturing opportunities, instead of standing there with your arms crossed, shaking your head why the idea won’t work, how can you take advantage of this new opportunity to get rich?

Remember the JFK "We choose to go to the moon" speech?

(I wonder how many of this defeatist articles are financed by China somehow).

Let me make a national security argument: China will move against Taiwan. Chinese ambitions do not stop there. They want Japan, South Korea, the Philippines, and many more nations as their new territories.

We saw international trade cut off in WW1 and again in WW2. It will happen again, and soon.

We are better off with an incremental step-down in trade from tariffs than a sudden cut-off. That is what Donald Trump's tariffs are doing.

>You don’t have people who insist on being paid in cash so that they can keep their disability payments, while they do acrobatics on the factory floor that the non-disabled workers cannot do.

>Chinese workers much less likely to physically attack each other and their manager. They don’t take 30 minute bathroom breaks on company time. They don’t often quit because their out-of-state mother of their children discovered their new job and now receives 60% of their wages as child support. They don’t disappear because they’ve gone on meth benders. And they don’t fall asleep on a box midshift because their pay from yesterday got converted into pills.

>Sadly, what I describe above are not theoretical situations. These are things that I have experienced or seen with my own eyes.

Really? How does he know if someone is on disability? How he know many of these are not seen in China? If they aren't then why aren't they? I don't think it is as simple as work ethic.

What I don't understand is, why would people even want the US dollar and its service industry if we can't produce sufficiently any more? And what about future conflicts in the world? The US can't even produce enough saline solution or disinfectant wipes, let along active pharmaceutical ingredients? Did people see what China goods we tariff on? We tariff China for advanced materials, electronics, machineries, and etc, yet China tariffs on our raw materials and agricultural goods. And we think the US can maintain its wealth by behaving like a colony of China? When there's a conflict between us and China, what do we do? Beg them for the life essentials? And we keep yelling to punish Russia and help Ukraine to win the war and we should, but with what? We can't even out produce artillery shells faster and cheaper than Russia, or drones faster and cheaper than China. Admiral Yamamoto used to say that he saw so many factories and chimneys in Philadelphia that he knew that those industries could turn into efficient war machines if Japan ever declared war on the US. Would he be able to say the same today?

As for what we can, wasn't the US a manufacturing powerhouse until early 2000s? BTW, the US is still a manufacturing powerhouse in some sectors, but we just can't make things cheap enough with good quality because we pretty much destroyed our light industry. Didn't China have nothing and it was heavy investment from the western world that helped China grow so fast and so rapidly? Then, why can't we shift investment back to the US and bring our key industries back? We kept talking about technical difficulties, yet we ignore the necessity of the matter.

This.

The iphone, while impressive, is not the end all be all of American manufacturing. The major goal is to bring back tool makers and increase industrial density.

>Chinese manufacturing labor isn’t just cheaper. It’s better.

>In China, there are no people who are too fat to work.

This is obviously just dumb anti-american propaganda. Since this article isn't written in good faith it's not worth my time to debunk point by point.

wtf is the plan for the 5-10 years in between?

Globalization is a fact of the world today and the best path to better lives for everyone is through mutual cooperation and policies that lift all boats.

Trump's goals and attempts to change this are foolhardy.

Everything wrong and right with the author's thesis. Our present day high-end manufacturing, agriculture, and innovation are already facing the steepest tariffs from a broad range of countries. The uneven playing field extends to IP theft, heavily subsidised and protected industries abroad and other forms of unfair competition like port traffic manipulation or burdensome legislation.

The author think that "targeted tariffs" would have a different effect from what we see now with trade war and retaliatory threats, market instability and uncertainty. This is false, but also ultimately harmful to our "agricultural drone industry". It's hard to have a niche industry without the larger picture, and it's hard to have "drones" without knowing how to manufacture constituent parts and having a reliable domestic supply chain for such. A domestically sourced supply chain encourages innovation and adaptation to immediate customer demands and goods can arrive in days or hours instead of weeks or months. Innovative requests to parts makers aren't immediately harvested by Chinese industrial spies and knowledge and technological advantage can remain local for longer, allowing for time to progress again before others can catch up.

Encouraging lazy and unoriginal drone manufacture in moated "made in USA" assembly lines is precisely the low-end type of job that "no one wants to do" and will inevitably produce the least capable drones the least efficiently or profitably. Our manufacturing and industrial capacity needs to be the world's best and most cost competitive because nothing else will do.

Only automation can save American industry. There will be "fewer" jobs but they will require skill and training. Robot management and supervision and repair and update and retooling will all require a large labor force. Creating robots and the software they run on will continue to be an important and large sector of the software industry. But manufacturing is only about jobs in the way that having a healthy agriculture industry is "about jobs", hardly at all.

Manufacturing real goods is the difference between servility and freedom given that modern war in the nuclear age also entails producing billions of tonnes of metal and blowing it up in distant countries, and could require replacing percentages of the global shipping tonnage that would be destroyed in a major conflict. It requires manufacturing thousands of substation transformers and the aa systems to defend them.

If we had invested strategically into a variety of heavy and light industries over the past 30 years, we almost certainly would have invented better processes and formulae for making things than we currently possess. We could have more globally competitive steel, even more advanced finished products and the knowledge and experience to "make anything better and more profitably than anyone". Industrial production and manufacturing make up roughly 15% of US GDP today. "Bringing back manufacturing" might increase that number significantly but it's hard to see how or why it would need to be more than 30% outside of wartime. That wouldn't even require a doubling of the jobs involved because much of this would have to be automated.

I agree with the author's emphasis on education and "fixing" things being critical in the execution of any kind of industrial renaissance. If the tariff fight lowers tariffs globally, that is a small move in the right direction of leveling the playing field and rewarding domestic producers who are globally competitive.

This, without even considering for a moment that China is 4+ times the US.

1- Tariffs will bring some manufacturing back to the US. The before/after tariff pricing presented in the article is fiction- price points cannot simply be doubled, consumers will reject it, pricing is extremely complicated and sensitive, Apple would have already had the iPhone set at $616 if they believed that was an attainable price for the volume. Apple is among the most profitable companies in the world, in part thanks to their mastery of labor exploitation.

2- Weak industrial supply chain- we have an incredible supply chain and industry can hop right on. Trains, planes, and automobiles galore. Extremely adaptive and we have plenty of room to expand. Auto manufacturers dont seem to mind building in the US, slightly more complicated than the toys that Molson sells.

3- We dont know how to make it: some things sure, most things: yes we do. We do have some additional capacity building required but this is not some crazy challenge. The beautiful thing about it is that, for the stuff we cant make easily, we can just pay the tax and keep in motion. It becomes a simple optimization calculation.

4- effective cost of labor- this is a challenge for sure but it has significant upside implications for American labor and the American lower and middle class. Again, this is a simple optimization. He points to all the fraud in the American system and the slave-like conditions of the Chinese system as if those are things things that shouldn't be addressed / barriers to entry for US? US needs lots of improvements that should be addressed not matter what.

5- Infrastructure- I seriously doubt the electricity stats but accepting it at face value, we have endless gas and sunlight in the west, US can adapt here as well. China notably does NOT have endless gas supplies.

6- Made in America will take time- OK? I am here for it!

7- Uncertainty- I would love to see them permanent. But locking in some wins from 4 years of America-first, modernized manufacturing base will go a long way.

8- Most Americans are going to hate manufacturing- why is that something you get to declare and presume? I think Americans will love job opportunities.

9- The labor does exist, we are just paying them to not work. it's an epidemic and circular problem. A bigger current issue is that we also dont have enough jobs to put low skilled workers to work. We need more low-ish complexity but reliable jobs.

And so on...

Here's another example: a market that has been completely dominated by China: consumer drones. Believe me when I say this, I hate DJI and while I have one, I refuse to use it because of all the security implications. How many European and US companies are competing with them? Quite a few actually but the big names off the top of my head are Parrot and Skydio. I own both a Parrot and a Skydio and the quality of both is amazing. Yet they are still barely keeping up with DJI and at 5x the cost despite the demand - DJI still holds 90% of the market share. I can justify the price because of my privacy concerns but that's 1/1000 people. For most people it's always going to be a trade-off between price and quality+privacy.

If you want to enforce all that through tariffs, just put 5000% tariffs so that the local manufacturing cost will be the same as the cheap import and you solved the problem. How many people will be willing to spend 100 bucks for a pair of socks? That's a different story. The soviet union attempted something similar for several decades while trying to copy western technology. Anyone that knows a bit of history can tell you how that ended. Spoilers: not a success story.

I feel like we in the US have a horrible split evaluation of ourselves: either we're supreme or we're doomed. Both sides of that split are emotional states, not useful facts.

House prices are at an all time high. Cost of living is becoming unbearable. So, $25 dollar menial jobs are scoffed at, because of inflation. Inflation is due to out of control printing/spending and government debt. Debt is due to big government, capitalist greed and oligarchy. Capitalist greed is due to economies of scale when offshoring. Oligarchy and big government is due to an entrenched lobby system. Lobby system is due to the cost of electioneering and bad decisions by successive governments.

It goes on and on.

Root cause: Systemic rot. Diagnosis: Failing empire Prognosis: UK (if the fall is managed)

Maybe they didn't with their words, but they surely did with their money!

This post is specifically about Industrial Policy: https://en.wikipedia.org/wiki/Industrial_policy

But other effective interventions are anti-trust and demand-inducing regulation (e.g. people want to fly because they know it's safe).

Markets do not mean that an Industrial strategy / Industrial policy is not needed.

Markets respond to incentives created by such a strategy.

What you might call capitalists very much plan. They don't believe in central planning where one "guy" makes a plans and everyone else implements them, but they do plan.

It's a very thinly veiled protection racket. People do tend to repeat the plays that they know.

The points are correct but rather than bring “all manufacturing back”, the goal should be to aim for an 80:20 or 70:30. And it will still take decades, but at least with a far better chance of success.

For companies that rely on a global supply chain, manufacturing and even raw materials should aim for mostly global but a guaranteed 20 to 30% local.

It’s one way to offset a real market problem, where unchecked market forces drives all production offshore or “nearshore; leaving the nation vulnerable to supply chain disruptions.

For essentials like grains, I’d even argue that the nation should opt for an 70:30. It’d be insane for us to offshore the majority of production.

It'll be easier to teach folks hard work, it's very difficult to change a culture when 1. A huge sector of our legal system geared towards it 2. People can easily get rich off of it.

To paraphrase Kennedy: "We choose to [bring back manufacturing]. We choose to [bring back manufacturing] in this [or the next] decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win, and the others, too."

We will do it, and we will win, whatever that means.

There seems to be no actual plan to actually bring back manufacturing (this would require different tariffs, loans, tax accounting rules, etc). And there seems to be no targeting of china (everywhere is being tariffed, allies and enemies, strategic suppliers and places with no trade with the USA etc)

Let me add some thoughts:

1) Capacity, not cost, is the main driver for nearshoring. All things being equal, a manufacturer would rather produce a product in the US than overseas. The cost of modern products is mostly parts & material, not labor. When you add logistcs expenses, the theoretical cost advantage of overseas vs local is not that great. Remember:the people on the other side of the border are capitalists too! They want to keep most of the surplus of nearshoring to themselves! The problem is that there simply is no capacity, both in facilities and especially in people.

2) What matters even more than capacity is the first derivative of capacity. In other words: how quickly can I spin up a new factory if I win a big deal? How quickly can I spin one down if the client goes away? How long will it take me to get a permit to connect my new factory to the highway? In the US, these costs and timelines are massive. Real estate, permitting, hiring. There is an order of magnitude difference here, in cost and time.

3) The labor problems are real. I don't want to disparage the american workers I work with, because they are amazing. Truly fantastic craftsmen. But they are hard to find. You'd be surprised how many people show up who can't read or can't read a tape measure. How hard it is to find people that want to work 8 hours a day, 5 days a week. By contrast, in our overseas facility we have qualified workers literally showing up at our gate every day asking for work.

In other words, the root cause problems with american manufacturing are—-surprise surprise!--the same problems as with other parts of the US that are in decay:

- Disfunctional local government, especially around permitting, construction, housing and transit

- Disfunctional education & healthcare systems.

- A lack of strategic investment in infrastructure (rail, highways)

- A social safety net that is totally out of whack, with a high cost burden for employers & employees, with little to no immediate quality-of-life benefits for the working population

Tariffs solve exactly zero of those probems!

Competition is extremely high initially, products will be ridiculed for being expensive and low quality. Companies will fail and go bankrupt, workers will suffer from that.

"Bringing manufacturing back" is a path of pain, not a way to fast economic success. There is no way to change that, tariffs will certainly not change it. Are Americans ready to leave their office job and work overtime in factories and engineering departments? No, automation will not do this for you, you are competing with a country which knows far more about automation than you do. To compete with them you need to be better and cheaper.

Lastly look how Germany struggles, right now. Their industry is in large parts starting to loose any competitive edge and will continue to do, unless very significant cuts are made somewhere. You can not keep the same living standards while someone is doing twice your work for half your costs.

The main show-stopper to them is the lack of working knowledge about precision tooling manufacturing.

For example, some of the best power machine tools in the world came from Germany and from Bridgeport, CT between 1910 and 1965. There are/were moderately large, 1 micron runout milling machines such as Moore No. 2 and No. 3. These things generally aren't made anymore and not many people know the tricks and processes to make similar or equivalent machines that make other tools and machines. Like that the unshielded body heat of an operator can swing the runout of a precision machine in an otherwise climate-controlled environment.

"There is no duty drawback for exporting. In the past, even in the United States, if you imported something and then exported it, the tariff you paid on the import would be refunded to you. They got rid of that..."

My understanding was that duty drawback—where import duties are refunded if the imported items or their components are later exported—is still broadly available in the U.S., though with certain exceptions (like steel/aluminum tariffs under Section 232 or trade within USMCA countries).

Is he referring specifically to recent tariff changes or targeted exceptions rather than a general elimination? Or has there been a broader policy shift I'm missing?

We build about 100 SM-6 missiles a year. How long does this last against a peer? 12 hours?

I don't know if tariffs are the best way to do this but some manufacturing must come back one way or another.

It is really that hard. Look what happened in Arizona. TSCM brought the most complex semiconductor chip making supply chains to the US on a vacant piece of land in NW Phoenix in about 4 years. And it wasn't just TSMC that invested in the Arizona site, but also companies like Linde ($600M), APS ($100M), Sunlit Chemical ($100M), Air Liquide ($60M), and Chang Chun ($300M).

Maybe others can comment, but are semiconductor chips the most complex thing to manufacture in the world? Not sure but the Arizona TSMC supply chain proves it can be done.

This is the big difference between a tariff regime that is credible in such a way that the business community can plan investment around it, and the current one that has mostly just caused chaos and confusion.

But a person used to be able to graduate high school and get a job that could support a house with a yard, a car, a non-working spouse and children.

How we get that level of prosperity back? That's the people really want. Tariffs are simply a means to that end.

I wish people would stop writing articles about 100% criticizing tariffs and instead write articles 50% about criticizing tariffs and 50% brainstorming alternative solutions to achieve the same objective.

Out of all examples one could pick, this is the worst, as Corning Gorilla glass is actually made in the USA (Kentucky), and used by all other manufacturers.

1. https://vendettasportsmedia.com/michael-jordan-wasnt-that-ba...

What a mess this country is in.

I agree with just about everything in the blog post, except, the underlying Michael Jordan baseball analogy example. Does the analogy hold if we swap Michael Jordan for let's say... Bo Jackson? He really was very good at a number of sports before his hip injury.

"America" doesn't underestimate or overestimate things. People do. So which American people underestimate the difficulty of bringing manufacturing back? Name names, or it didn't happen.

The VAST majority of what is wrong with our society (political and obviously economic) can be traced to this. It's the expectation that every economic endeavor must show a return on investment - forever. That every entity must strive to optimize the bottom line every day of its existence. Optimizing for growth above all else crushes and consumes everything.

Increasing local manufacturing will only create more opportunities for people to be indentured to a company that literally hates their existence.

A company is forced to build here in the U.S. and people are supposed to rejoice they now have another option for their lives to simply be tolerated and disposable?

Why would anyone want to go back to an economy that can be run by a third worlders? What is our competitive advantage then?

Economics works when the people do the things they are most efficient at. If a person in China can make iPhones for cheaper than an American, LET THEM. Our citizens should be designing them instead, because that's what we train our citizens to do.

Trump and the Republicans really do think of our citizens as third worlders performing manual labor like we were oxen.

"I'm a first generation American..."

Kirk

Back to the article, I'm no expert on tariffs, but explaining things to people and trying to understand where they "are" (I'm a social worker, so this is SW-speak) are two things I've spent my policy career doing. If I hear one more quilter (I make and sell one-of-a-kind quilts) say that the solution to the high price of quilting fabric (because of tariffs) is returning manufacturing to the US and Trump is our savior for recognizing this, well, I don't know what I'm going to do other than share the link to this blog.

This means that nobody will even start moving production back yet, they will pay lip-service, do the minimum to get along for this term, and hope for the best for the next one.

It's difficult to address the giant article full of misrepresentations point by point. It's tough to see it up at the top of HN. Wish that I could do something to correct the misinformation that is being disseminated.

This person has a vested interest. They manufacture cheap crap in China (or Vietnam, I don't care) for American kids to suck on. What more do you need to know?

The tldr of that post is: - To be really good at making robots, you need to iterate fast

- To iterate fast, you need all component manufacturers nearby (or you’ll be wasting weeks shipping parts from somewhere else)

- To be really competitive at manufacturing, you need to be good at robotics.

- If you’re missing all of these pieces, it will be hard to catch up with (say) China, which has been exponentially growing in every possible aspect of manufacturing for decades. Not only do we not have strong manufacturing, but we don’t have strong robotics companies, don’t have many of our own robotics components companies, and don’t even have much in terms of raw materials. Whereas China has been investing heavily in every single one of these areas.

Bringing manufacturing back means investing in all aspects of the supply chains which lead to technical innovation in manufacturing, which is really hard to do when the supply chain is set up to pull from our current competitor.

Economists are full of bs. They keep framing everything as impossible and when something good happens later, going against all their predictions, they call it a miracle... Maybe these economists are just projecting by assuming everyone else is just as incompetent as they are.

Of course if society was made up only of economists, we'd still be living in caves, worrying about the difficulty of bringing firewood back to the cave.

Ah, those were the days.

The era of making up tall tales about the supposed value of money via all sorts of futures and stocks and financial instruments the feeble mind can scarely understand cannot be over soon enough.

The value of money manifests when its exchange for physical goods.

If the Communist fairy waved her magic wand about and distributedall the wealth of the rich to every american equally, half of the people would decide to buy a new car with their newfound wealth next day, only to find out the supply of cars hasn't increased.

There'd be like 10% more cars sold, with people bidding over each other to actually get access to that supply, which would trigger massive inflation in practical terms, revealing the emperor had no clothes all along.

I think this problem is much, much, much harder than most people think. Almost every single society — except for Japan, AFAICT — is getting hit by this issue, but each in their own, novel way, that covers every possible "obvious" solution.

Yes, America too could build out this capability by aggressively investing in it for a couple of decades.

People were going bananas about 10% inflation and the price of eggs before the election. They're not ready to 2X all consumer goods prices.

Automation is what took the jobs away.

To fix housing all you need to do is build more homes. America has plenty of land for that.

Globalist trade promoters are just short-term wishful / magical thinkers. It's magical thinking that you can create this social and economic imbalance via outsourcing it to the other side of the globe, without consequences over the long run. It's wishful thinking that there are enough upper middle class jobs / lifestyle for everyone that took Calculus.

Do you understand that labor is priced into the cost of the product? Who is going to buy all of these American products made by highly paid unionized workers?

I understand the Rust Belt situation sucks, but people can’t afford to buy everyday consumer goods made with American labor. I’m wearing an American made pair of shoes right now that is 20-30x more expensive than a pair of shoes from Walmart, and even ‘less expensive’ US made shoes like Red Wing are 10-15x as expensive. Now imagine paying 10-30x more for everything, it’s not sustainable.

Seemingly, this is going to magically happen? Where are the programs to make sure this does happen? Erecting tariffs is one thing, but having an actual plan and executing on said plan is another. So far, all I see is rising prices and looming threats of job cuts due to slow downs which stem from increased costs, and there is nothing coming to buffer that.

Let alone, the investment capital isn't moving in this direction. As of this writing, the general posture of the Republican donor class is 'wait and see how long the tariffs last' not 'lets invest in American industry again'

>Because usually the best-paying jobs were in factories, especially if you didn't have a college degree. A lot of towns in the Rust Belt were economically dependent on a local factory -- think cars or steelmaking. Often, part of the reason these factories were so high paying is because the jobs were unionized.

Emphasis mine. Do you believe that the modern Republican party is pro union? Do you really think they won't undermine organized labor even if jobs come back in some form? Even though the modern Democratic party have a spotty history on labor issues, the Republicans have shown for 40 years to be the anti labor party. They rarely - if ever - pass legislation that is pro labor. This administration isn't proving to be different in that regard either, and it wasn't different the first time around.

>I grew up in the Rust Belt and I'm old enough to properly remember when some of those factories were still operating. I saw with my own eyes what used to be a respectable blue-collar community decay into an economic wasteland.

So did I. Hallowed home town and all. One of the poorest in the state I grew up. You know what else never happened? Sustained public policy to help these areas. There were largely no programs to help transition workers from one industry to another. We don't have comprehensive safety nets and retraining / re-education programs for workers. We lack all of that. Why aren't we starting by implementing those programs? Its rather wishful thinking that bringing manufacturing back to the US, that it will end up in these same areas to begin with, because manufacturing is very different than it used to be. I doubt most of these areas would be good places to re-build manufacturing capacity in the US. What manufacturing is done here is already concentrated in the South which precludes huge chunks of the traditional rust belt.

BTW we don't talk enough about the gigantic loophole in the thirteenth amendment: Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction. [emphasis added]

1 https://www.bloodinthemachine.com/p/flyover-country

This post is basically correct. The Chinese will accept being exploited way harder than we will! Good going communism!

This shit is why I will resist Marxist bullshit with all of my fiber forever. Fucking barracks communist no matter how hard they try to claim “nah we don’t support that”.

Of course there are a lot variables in the above. As time goes one automation gets better. You can buy cheap robots for some common operations, and a good engineer with good CAD can run various automated analysis to ensure fit and then export to the robot and build even a single part cheaper than the human - amortizing the cost of the robot over thousands of different single parts made this way. However as the widget gets more complex you reach the point where humans are needed. In some cases you just have humans to take the parts off of one machine and put them into the next, but it is still humans. We can automate even that, but often the robot to do that would cost more than a human for 10 years.

I've always been associated with mid-size (< 500 million/yr) where much of that 'wisdom' sounded good but didn't work out so well in practice. Sadly for the consulting folks, it isn't actually possible to lean out an entire supply chain and still maintain the ability to respond to market fluctuations. Being lower on that food chain, if you lay off reliable operators/maintenance during something like the COVID slump then you are screwed when business comes back because you can't rehire/train fast enough to fill orders that are needed 'next month'.

It's not much different in other industries though, so many layers of subcontracting to finally get to a potentially illegal immigrant that does the actual work.

Biden's infrastructure and funding bills were basically doing exactly this, and their foreign policy largely aligned with this goal as well.

I was not a huge Biden fan early in his presidency (Breaking the rail union strike and the complete lackluster response to actually prosecuting criminality in the outgoing admin were not my desired policies - democrats are markedly too corporatist in general).

But his infrastructure bills were sorely needed practical steps to doing a lot of good for a lot of folks in the US. There's a reason so many politicians then tried to take credit for them (incl Trump).

"Approximately 51.2% of Americans with hypertension (high blood pressure) are currently taking medication to lower their blood pressure."

That is not a temporary thing. Most of those people will be on drugs the rest of their unnatural lives. So when the availability of said drugs is gone, 51.2% of Americans will go into full rebound and their BP will spike for several days to weeks. Their risk of stroke and heart attack will go off the charts as any ER doctor can attest to. What should we do for those poor souls?

US manufacturing accomplishes higher prices and US only reach.

[1] https://www.mckinsey.com/industries/energy-and-materials/our...

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It used to be that the Chinese economy was based on just cheap labor. It's now increasingly based on cheap energy and automation. Replicating that elsewhere needs to start with modernizing energy infrastructure. Without that, there is no chance of competing. Manufacturing is energy intensive. So, cheap energy is indeed a key enabler.

The cost per kwh is a good one to call out. I think the medium term target for that should be < 1 cent per kwh. Effectively it trends to zero because there is very little marginal with solar, wind, and batteries other than the depreciation of infrastructure, equipment, etc. over time.

Yes, not your fault, I believe the AUTHOR meant to compare absolute production.

> China allocates much more to industry and/because it allocates much less to personal consumption

Let's not fall into the same hole: In relative terms, US residential is more than 2x of China's residential power use, but that's relative to the much larger production use. In absolute terms their residential power-allocation is not that different actually:

CN: 15% (1.2 trillion kWh)

US: 35% (1.46 trillion kWh)

Now, on a per-capita basis the difference is staggering, as China consumes 20% less to serve 4x the population...

If that Russia equivalent invades an Ukraine equivalent, despite both instances being considered unthinkably crazy, what are we going to do? Or, what will China do, to us?

Or they wanted access to sell to the Chinese market and they did whatever it took to get it.

This bizzare "we'll bring back manufacturing and be ready all the time" thing seems to imagine you'll just turn the local widget maker over to knocking out high temperature stealth composites for hypersonic missiles real quick.

Which is of course the story of a lot of American manufacturing: it's hard to get a hobby run of PCBs because all the PCB makers are optimized for large orders for defence procurement (and the clearance, supply line and stuff requirements that brings).

That has its own issues.

Not sure if it's still the case, but the Yangtze River used to be one of the most polluted water bodies on earth.

No real need for us to make economic or investment preparations for that eventuality. It does us no good in the life we do have to say, "Well, I can't invest in the US because in the worst case, non of our secret weapons function fully, Russia blows us away, and all my real estate and manufacturing investments go up in smoke." We'd sit around never improving anything, because it will all go away in the worst case.

Best to assume it won't go away because we won't go to war with Russia or China, (or even maybe the EU nowadays? Who knows?). Anyway, we should make investment decisions on the "we aren't gonna go to war" basis. If war happens, well, we're dead and all the investments are destroyed anyway so.. yeah.. nothing you can do. Can't even get out of the continental US in 15 minutes, so you can't even save yourself let alone your investments.

I’m not denying the existence of American imperialism entirely, but let’s be real about its scope compared to old school empires.

What do you think the odds are that the CHIPS act will make the US capable of building TSMC-level chips?

Calculating the value of an insurance isn't complex. First, you calculate (1) the cost of the insurance, then (2) a rough idea of the probability that you'll need it, and (3) the cost of the insured-against-event occurring.

The problem here is that no one in their right mind believes the CHIPS act will make the US capable of producing chips on par with those of TSMC, so it's not actually an insurance. More like a political show — see, we doing something!

There are localized problems - and it's all very similar to the post-Thatcher UK - but you cannot be serious in imagining that employment would magically return to the exact spots it left. In fact that's one of the sub-problems OP talks about: so you want a US Shenzen. Where are you going to put it?

(UK equivalent: we're discussing keeping Scunthorpe blast furnaces open, so that we can have a "secure" supply of "domestic" steel .. made entirely from imported ingredients. Because the mines the plant was built to refine are empty)

Areas gutted, jobs lost and some lesser number of jobs with less benefits and pay created elsewhere.

So many political ideas seem to only be allowed to be discussed if you can add a garnish of racism or xenophobia to them.

I have seen this in my own country when mega corps build highly automated data centres that only employ a few local cleaners and security guards.

It's not much different than how a young child will blame anyone else for something that's gone wrong / they got caught doing. Maybe our society should do a better job promoting responsibility and allowing parents to offer oppertunities for children to be responsible; instead of infantalizing everyone entirely until some magical number has passed and suddenly they're an adult who was never previously empowered to be responsible.

That is not going to happen.

https://www.investopedia.com/terms/u/unskilled-labor.asp

It says "to sell into Europe" not "to buy from Europe". In first case I, the EU buyer, owe VAT.

In second case whoever buys may be owed a VAT rebate. But it's not selling any more.

Individuals (sole traders, contractors etc) can claim VAT rebates. You don’t have to have a lawyer or an accountant if you’re prepared to figure out the rules yourself.

Yes, indeed, in the US even a poor person is relatively wealthier than someone in a war-torn African country. But humans are social creatures. We compare ourselves not with "the poor kids in Africa", but with the business owner in the adjacent zip code.

As for "unrealistic" expectations: why do business owners expect to take an unrealistic percentage off the top of everyone's labor? What made them worthy of such a huge amount?

Yup!

Do you have a stake in whether the people in your community work unsafe jobs for poverty wages?

Yup!

From Claude:

"Stakeholder capitalism is a model where businesses focus on serving the interests of all parties affected by the company's operations - including employees, customers, suppliers, communities, and shareholders. The core belief is that companies should create value for all stakeholders, not just investors.

Shareholder supremacy, on the other hand, is a model where a company's primary or sole purpose is to maximize returns for its shareholders. This view, popularized by economist Milton Friedman in the 1970s, holds that businesses have no social responsibility beyond making profits for their owners while following the law."

Shareholder supremacy is a recent meme and it's wildly, obviously antisocial.

Canada and the US have been to court multiple times over NAFTA violations (sometimes Canada is at fault admittedly).

https://www.international.gc.ca/trade-agreements-accords-com...

If manufacturing becomes more efficient at using labor from automation that seems like that would lower the number of available jobs wouldn't it?

Unless consumption grows with the increase in output so that more factories are needed to meet the demand?

If you need 1000 cars and automation takes it down to 10 people from 100 people before, where are those 90 other people to get jobs?

Unless you grow the need for cars to 10000.

Simplification I know, but I am confused at how manufacturing is supposed to endlessly support a large "less-complex task" labor supply while simultaneously providing a good standard of living?

Why does there need to be corruption and abuse?

Why do they have to expose their workers to pollution?

As far as I know, none of those things are required for manufacturing.

There isn't anything physically stopping America from doing what China is doing. We literally did it first (in modernity)! Albeit for too short a time before the robber barons and foreign interests retook control.

I saw a headline yesterday that says there are more pets than children in Japan. How long until this is true in the US? The truth of the matter is that there is no workforce left in the United States, and will be less of one by the time manufacturing does spin up. In WWII, the Army was happy at how many of the young men there had come from farms and were familiar with using/driving heavy equipment, how many knew some welding, etc. Then after the war, that translated right back into mnufacturing there these now older men were familiar with "making things". They could do actual labor. How well will the part-time baristas and Uber Eats delivery drivers and Dollar General shelf stockers do on the assembly line?

>if we shift a lot of people to manufacturing someone needs to take the jobs they leave.

If we could bring back manufacturing, then we would need to restructure our society such that those jobs lesser/menial jobs could go undone (or be automated). But we can't really bring it back, and they will bring in others on any number of weird visas no one has really heard of to do the lesser/menial jobs which are the only ones left. The people who set this in motion aren't even just retired, they're already dead of old age and there's nothing anyone can do about what's coming.

Tech isn't winding down; tech, as the sector that draws the most investment based on long-term development, had the biggest response to tight monetary policy designed to slow the entire economy down, but that response demonstrates that tech is where most of the marginal dollar goes.

> Manufacturing could prepare us for the next wave, whatever that might be.

Trying to work our way down the raw materials -> manufacturing -> finance/services ladder that countries usually try to work their way up for maximum prosperity in globalized trade isn't going to prepare us for anything other than lasting economic decline. And why would “manufacturing”—which you can't build generically, but only by specific, usually impossible to reallocate to a different use that isn't closely similar without sacrificing most of the value, major capital investments in particular subareas of manufacturing, prepare us for anything else even ignoring that we’d have to regress to do it?

Just because we ended the era of cheap money to try and stop runaway inflation doesn't mean the tech boom is winding down.

Look at everything that's happening with gene editing, in physics, with the jwst, with LLMs and robotics and computer vision, with alt energy sources, batteries, in material sciences, etc.

I mean this is such a myopic take. We are in just now in an era where people are now capable of finding needles in needlestacks.

You are confusing easily manipulated economic vibes that feel bad right now with the rapid approach of a complete overhaul of the human experience.

The U.S. has basically supported the strip mining of our economy by value sucking predatory investment firms. There is a reason why China have more robotics per capita in their factories than we do and it has to do with a complete failure in strategic thinking, long term planning and ultimately a hatred for our youth.

2. Profits.

3. Refined products can be exported to countries that don't have refinement capabilities. Not just the US and China. This gives Canada better trade leverage.

4. Security. A big one that's emerged in the last few weeks.

I don't see either Poilievre or Carney talking about this which is disappointing but not unexpected.

If automation took those jobs then why aren't all those automated factories in USA?

They’re an environmental nightmare and very, very thin margins.

I wonder where they were on election day, when they had a choice. The record of business owners voting D is .. not great.

No, that's where you have it backwards they are being paid more. That's the exact reason why they are buying that house when you say "who the fuck can afford that".

Ironically, they are also the ones being exploited the most by the top 1%.

An amazon warehouse sorter will never create or do anything that makes amazon much more money than what they are paid. They get $18/hr for producing $21/hr of value, doing the same static task all day everyday. Amazons "profit margin" on these workers is almost nothing.

The lead cloud architect though gets paid $350k/yr, but can design a single change that will make amazon $30-40 million/yr. The profit margin on them is insane. And they are the ones outbidding everyday people on things, driving up costs.

Back 60 years ago, everyone was much more clumped around the same (lower) income, so the houses where smaller and the prices more amenable to more people.

This may be more accurate than you realize. Both Democrat and old Republican party rhetoric and policies were pro-globalization/offshoring, with the occasional exception such as CHIPS (and corn subsidies). It's not surprising nobody believed they were changing direction, if for every "we're bringing semiconductors back", they heard ten "your car is German your phone is Chinese your tacos are Mexican, how dare you interfere with glorious Free Trade!"

From a statistical point of view, that's probably to be expected. Kind of like how open umbrellas get rained on more.

When a hard-to-hire minority gives way to a big growth in the workforce, by definition the majority arrive after the change.

I’ll also challenge the assumption that these companies only do R&D if it’s immediately profitable. For example, Microsoft and Google both are investing heavily in quantum computers despite the fact that it’s unclear that that is a profitable endeavor (or profitable to be the ones putting the upfront capital so early). Google also has the X moonshot lab that is trying to do similar things to Bell Labs. I think there’s just a lot of romanticism of the golden age when developments were relatively easier because we hadn’t exhausted the low hanging fruit of applied quantum and material sciences.

Patents do not work - because the rule of law does not exists without the international order and goverments have a tendency to trade away such cases for protection of big players.

  However. Bell Labs did it, so what sort of humility existed then that (mostly) does not exist now?!?

("Unintentionally moderate"[1-2] business thinkers like PG/YC partners do it all the time)

  Wonder if hubris is necessary for continued survival of the economy.

>Have to be an asshole or something

[2] https://archive.today/latest/coralcap.co/2022/02/why-japanes...

Because it would be very easy to abuse. It would be oh-so-easy to give an employee training worth $200k - in the company's estimate - and then force them to stick around for years.

"But nobody made them agree to that!"

Sure, and nobody makes anyone take on a bad loan from a shady car dealership, or a bad mortgage sold by the same people who tanked the economy, etc., etc.

And...why are people immediately quitting to work somewhere else? Your idea of addressing the problem is by saddling employees with debt and forcing them into literal wage slavery rather than fixing the problem of companies not paying people enough to stay.

50+k of training over a 40 year career requires salary bumps for retention, but the first set of training should have paid for itself before you’re offering the next.

What tax breaks has he aimed at these people beyond some of the overtime and tipping (which is expected to only equate to about $2K)?

Instead:

>The largest tax cuts would accrue to the highest-income families, the Treasury said.

> Household in the top 5% — who earn more than $450,000 a year, roughly — are the “biggest winners,” according to a July 2024 analysis by the Urban-Brookings Tax Policy Center. They’d get over 45% of the benefits of extending the Tax Cuts and Jobs Act, it said.

> A Penn Wharton Budget Model analysis on the impacts of the broad Republican tax plan had a similar finding.

> The bottom 80% of income earners would get 29% of the total value of proposed tax cuts in 2026, according to the Wharton analysis, issued Thursday. The top 10% would get 56% of the value, it said.

I haven't met any injection molding shops in the US that do a huge amount of specialty parts like toys. The industry tries to get as many medical device jobs as possible.

Of course, the 3d printers themselves are probably being made in China.

Fix health care - socialism isn't the only answer despite what many hear will say.

Fix school - it shouldn't be all sit at your desk but that is what we get. Bring back gym class. Make kids get practical experience building the things they designed (that is shop class). Math could be fun - but most teachers don't believe it themselves, and so they haven't a hope of passing that on to students.

People had the exact same concerns and fears when electronics manufacturing started shifting to Japan like 50 years ago-- they went in the same way up the value chain that China did, and they started losing a lot of the industry with rising wages, too, exactly like what we see with China => Vietnam/Indonesia/... nowadays.

I think 90% of the whole political debate about the economy is misplaced nostalgia combined with problematic local wealth inequality-- poor countries lifting themselves up by manufacturing stuff for low wages is how the whole system is actually supposed to work from my perspective; describing that as "ripping off the American people" is completely unhinged, misinformed self-delusion to me.

The message of "we're gonna find some way to undo some of the damage of off shoring and find some way to put heavy industry back to work" has been included in one way or another in every presidential candidates platform at least as far back as Obama's first term.

The specifics change from party to party and candidate to candidate but this isn't a new thing. The common man has been clamoring for some sort of change from the status quo for the better part of a generation now. It's only recently that the situation has become such a priority that elections are won or lost on it.

I fully expect that whatever administration comes next will continue on the path of on-shoring, if perhaps in a more reasonable way.

>It is also incompatible with the US since a lot of corporations made bank due to offshoring and will fight it every way they can since they don't want to deal with costly US labor who can unionize or sue you for millions if they break a finger at work

The people who actually run manufacturing and heavy industry really resent the current off-shoring status quo. They only do it because the sum total of other policy pushed by short sighted wall street financiers and/or environmental/labor advocates makes it the only viable option. I think they'd be happy to come back if doing so was financially viable, they just want it to be predictable (something current policy making surely isn't, lol) so they can plan around it because investments in those industries are made on decades long timelines.

I think we're at the point now where there's the political will to let the punch press eat some fingers to keep the factory open.

A good example is the general global approach to Net Zero. It's slow, methodical, science based, negotiated.

But if anyone brings up planning for 2050 it's usually in the context of "It's all bullshit, politicians are crap, they're just lying to you and kicking the can down the road till they retire" (and if you scratch the surface you'll have even chance that the person saying that has been radicalised into not even believing there's a problem to be solved).

But only the US is in and out of the Paris agreement etc.

But did we run that experiment while foreign alternatives were nearly or equally expensive? That's the real test, and whether foolish or not that's what they are trying to do with tariffs.

> Lower-productivity jobs mean less income for workers

Are you suggesting former factory workers all became scientists and engineers? If that's true then fantastic. But I'd like to see evidence that what they are doing now is somehow more productive.

> Our poorest states have higher GDPs per capita than many "rich" western EU countries.

Is the result of that a higher median income, or is it a reflection of a higher wealth inequality?

You're mistaking the rhetoric he uses to sell this idiocy to the rest of the country for a good-faith argument.

I'm looking at the first chart, "Manufacturing Sector: Real Sectoral Output for All Workers" [1]. It grew until Q2 2000, when it was at 97.2. In Q4 2024 it was at 98.6. And let's not ignore how almost all leading semiconductor manufacturing (which are in and required for nearly everything) has moved to East Asia.

[1] https://fred.stlouisfed.org/series/OUTMS

agreed but Trump just gutted the CHIPS act for no other reason than because it was enacted by Biden (the typical "undo everything the last prez did" just like Trump 1.0).

You can argue that Intel is a badly run company, not worth saving etc etc, but if want to save US manufacturing, then Intel, and its ecosystem, would be the first place to start. Otherwise, TSMC, Samsung and China (still playing second-fiddle but investing billions to catch up) will dominate. Certainly better than trying to keep coal plants open.

Ideology aside it's really hard to find _any_ rational thought behind these moves.

What do Democrats have to do with Republican candidates in a Republican primary?

Indeed.

I attended an injection molding conference and one of the panel discussions was about the poor state of hiring and retention. I stayed expecting to hear the standard complaints about the fact that injection molding was considered "obsolete" (really?), the pipeline was too weak so wages were out of hand and there was too much churn. I was interested in which companies were hiring off the people so much that it warranted a panel session.

Then I heard the complaints of what their primary competitor was: Amazon warehouses. They were losing injection molding workers to freakin' Amazon floor jobs!

I lost it and lit off on an absolute rant about how if a company couldn't keep their employees from joining one of the objectively worst employers in the country then they absolutely deserved to go bankrupt.

I, very suddenly, made both a bunch of friends and a bunch of enemies that day.

This is for things like process workers in Petro/chemical plants, mechanics for assembly or machining, painters, construction workers, plumbers, electricians, all kinds of stuff. The government also subsidizes the apprentice program so it's very cheap to train young workers.

The people who choose this path generally end up pretty well off, being able to buy a house or apartment by like mid to late twenties and make even more later.

Anymore? Arguably, the US never did. Ask, for example, the people living in Caribbean or Latin American countries what happened when they elected leaders that the US disliked.

Or Iran. Or Italy. Or Congo. And so on.

Or ask the Indonesians about the mass killings in their country in 1965-1966, supported by the US. Around 500,000 people died, though some estimates put the number of deaths at 1,000,000. Ask the Filipinos about how the US propped up their military dictatorship back in the 1970s-1980s.

I could keep going, but I think you get the point. The US has never been sincerely interested in democracy -- only strategically. The illusion that the US cared about democracy was a primarily Western luxury.

I don't think it's a good idea to assign Trump's beliefs, or those of his administration, to America as a whole. Any more, frankly, than it's a good idea to assign those of his opposition to the country as a whole.

Boris Yeltsin in Aug 1991 called for "Russian Federation to reserve the right to review its borders with any adjacent republic" [0]. Yeltsin did that for a couple of weeks - until Leonid Kravchuk (Ukraine's last Chairman of the Supreme Soviet of the Ukrainian SSR and Republic of Ukraine's first president) said he will not support Yeltsin in dissolving USSR. By then the Baltics were already independent countries, but Yeltsin still needed Ukraine's Belarus' and Kazakhstan's support to get rid of Gorbachev.

So Yeltsin acquiesced the borders at that time, four months followed up with the Belovezha Accords and USSR dissolved without a fight a couple of weeks later.

I think what we see today is are some repressed conflicts being fought out in the open.

[0] https://www.nytimes.com/1991/08/27/world/soviet-turmoil-yelt... - free to read with NYT registration

Very graceful.

The Roman way started to fail when they moved to the foederati model, where there would be units of, say, only Goths under a Gothic commander. That proved dangerous.

You say it's a bad idea, so it's a bad idea for an American citizen to join the armed forces too?

(Source - worked in int'l remittances w/ African receiving countries)

and

last time I brought up Africa someone from there said their country was an exception

Making what are essentially strategic decisions in this "shoot from the hip" fashion is what lands us repeatedly in these situations. By way of illustration, let me try one from the 1980's out on you:

"By acting against Iran that means I applaud men like Saddam Hussein and Osama Bin Laden"

(In fairness to the americans who made that colossal blunder, I'll assume that, to them, it seemed a good idea at the time. They were simply not long term thinkers. So no one ever asked, "Hmm, what comes next though?")

We, as a people, need to start thinking a bit further ahead than the ends of our noses.