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The US is building factories at a fast rate

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Re: The US is building factories at a fast rate

#151

Post by wizofaus »

kneebonian wrote: post #89
wizofaus wrote: post #78

Earlier quoted context omitted.

Surely though there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. On that basis I'm not convinced wage growth in SE Asia is the primary reason the US manufacturing industry is deciding to reshore. Is the same phenomenon occurring in other wealthy countries that haven't put in place taxpayer funded incentives to do so?

> there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. Keep in mind costs aren't just what you have to pay people but also things like regional security, the risk of the government nationalizing your company and assets, ability to get skilled/capable/honest people. Basically there has to be a degree of stability, including a centralized…

Mexico stands out to me as a country that hasn't lived up to its potential in that regard. Certainly there's no shortage of potential cheap labour, given the number of refugees making their way across it. And regional security and ability to get hold of necessary skilled workers shouldn't really be an issue, when you have the US right next door. It's hard not to see why it wouldn't be significantly to the US's benefit to ensure Mexico (and other central American countries) can become a global manufacturing hub, so I do wonder what the primary forces working against it might be.

Re: The US is building factories at a fast rate

#152

Post by germinalphrase »

monero-xmr wrote: post #81
epistasis wrote: post #28

Earlier quoted context omitted.

This is the first time I've seen a non-politically motivated accusation that cutting off money had anything at all to do with their failure. The tech reason was that they had a way to make thin film panels which was super promising for driving down costs due to a silicon shortage. But then Diamond based silicon tech emerged, eliminating the silicon shortage and reducing input materials, which outcompeted thin film on…

Of course. But maybe the government shouldn’t be picking winners and losers, and gambling with my tax dollars.

Silicon Valley was built on government investment.

Re: The US is building factories at a fast rate

#153

Post by jjk166 »

Manufacturing employment is roughly at the same place now that it was in 2020, and still substantially lower than where it would have been had the pre-pandemic trend continued, and even that was nowhere near returning the US to pre-2008 levels.

https://fred.stlouisfed.org/series/MANEMP

Construction spending is a terrible proxy for manufacturing - both because the size of a building you need isn't pegged to the value of your output (e.g. a $100 million dollar shop making aerospace components might have a tiny fraction of the footprint of a $1 million sweatshop making t-shirts), and because the cost of factory construction is determined by the cost of construction in general (i.e. if there was a real estate boom building residential buildings then you're competing with that for construction materials, equipment, labor, etc).

Re: The US is building factories at a fast rate

#154

Post by FrustratedMonky »

quickthrowman wrote: post #147
FrustratedMonky wrote: post #100

Earlier quoted context omitted.

Why the downvotes? The US totally was the driving force around creating and growing globalization. How is this not known to be true, its history at this point.

I think your comment would be received better if you rewrote it without the part about ‘so many people don’t read history’. For what it’s worth, I upvoted that comment before reading the one I am responding to. This community can be picky about tone and phrasing (which I believe keeps things mostly civil), don’t take the downvotes personally. Some users may have felt the ‘not reading history’ part was targeted at the…

Thank You. Yes, No need for me to be pre-emptively snarky.

Re: The US is building factories at a fast rate

#155

Post by FrustratedMonky »

bsder wrote: post #83
FrustratedMonky wrote: post #47

Earlier quoted context omitted.

Didn't TSMC say that its new US factory would be 30% more expensive. US labor being the problem.

A mere 30% more so that job is here instead of China is a bargain--especially for something that has loads of national security implications.

No doubt. I should say, 30% non-judgmentally. It is worth it for other reasons.

Re: The US is building factories at a fast rate

#156

Post by ch4s3 »

standardUser wrote: post #130
ch4s3 wrote: post #103

Earlier quoted context omitted.

So my point is that protectionism undermines things like innovation by creating protected industries that don’t need to be innovative. Maintaining order is an odd goal for an economic policy no? But on that note, France is probably the most protectionist among developed western nations. Yet they have created a situation where a third of young people can’t find work and social cohesion is unraveling.

I didn't say governments were always good at it. But every one of the East Asian tigers owes its first-world status to aggressive industrial policy. And despite France's issue with unemployment and immigration, you'd still rather be born there than almost any other nation on the planet. And I'd add, NASA is industrial policy. ARPA is industrial policy. University funding is industrial policy. Government-directed inve…

I would argue that both China and Vietnam owe most to their success to market reforms and not to particular industrial policies. Prior to Deng, China couldn't even produce enough food, and they had industrial policy for years(every 5 in fact). South Korea is a US satrap that has been showered with development dollars since the 1950s, and even still the economy took off after liberalization and a turn to democracy. Moreover SK's cozy connection between state an industry spawns endless scandal, is eroding trust in the state, has create a perverse system of cram schools and test taking to get onto corporate ladders that is absolutely crushing young people there, and a number of other social and political problems. Japan has also seen its industrial policy turn to shit. The bending to Toyota's quixotic dream of hydrogen cars has hobbled the whole auto industry there and has stalled the roll out of any charging infrastructure for EV. They were well positioned due to a history in auto engineering and electronics to have become an EV powerhouse and a leader in battery tech, but industrial policy fucked that up, because policy makers were convinced that Toyota the national hero knew better.

The 5th Republic has been teetering on the edge of collapse for the last few. years, so I wouldn't be so bullish on France.

BY ARPA I'm not sure if you're referring to the Advanced Research Projects Agency or the American Rescue Plan which is now stupidly called ARPA sometimes.

Um yeah, NASA was pretty cool back in the day when they were shooting V2s at the moon. But later efforts like the shuttle were kind of boondoggles because it was tethered to goofy military spying stuff, so it ended up being shitty for science and a dead end for anything commercial. That's not really a great success story for industrial policy IMHO.

Re: The US is building factories at a fast rate

#157

Post by wizofaus »

bobthepanda wrote: post #111
wizofaus wrote: post #78

Earlier quoted context omitted.

Surely though there's still plenty of places in the world that, on the basis of labour costs, it would be vastly cheaper to operate than in the US. On that basis I'm not convinced wage growth in SE Asia is the primary reason the US manufacturing industry is deciding to reshore. Is the same phenomenon occurring in other wealthy countries that haven't put in place taxpayer funded incentives to do so?

Japan and Korea have plenty of domestic manufacturing. Europe also has some off shoring into the peripheral countries into its customs union. The issues are generally that in the next largest potential cheap manufacturing sources (South Asia, SE Asia, Africa) they’re either not big enough or have extremely poor logistics and red tape. A big part of the East Asian miracles have been extensive infrastructure and bureau…

How is south Asia possibly not "big enough - it's literally based around the most populous country in the world! But yes, obviously logistics and friendly regulatory regimes are a big part of it. (FWIW I was including China/Japan/Korea in "SE Asia" in my post. Obviously all three have now developed beyond the good sources of cheap labour that they had started out as in the last 50 or so years. But there are still other plenty of potential candidates to follow the same path, both in Asia and elsewhere in the world).

Re: The US is building factories at a fast rate

#158

Post by FpUser »

NoMoreNicksLeft wrote: post #69
FpUser wrote: post #43

Earlier quoted context omitted.

Problem with this policy is that it will prevent poor countries from ever getting up the ladder. It also ignores the fact that many advanced human right respecting countries got there not without plundering less fortunate for generations.

How is that a problem for the United States, for instance? Do officeholders in the United States have any responsibility to people in foreign countries beyond that in ratified treaties? Do we have any moral obligation to make restitution for our great-great-grandparents' crimes to the great-great-grandchildren of the victims? And what level of punishment is going too far?

You do not have to do shit. But you do not live in the vacuum and unless you take interests / complaints of the other parties into considerations sooner or later you would face problems. Karma.

Re: The US is building factories at a fast rate

#159

Post by ChuckMcM »

obblekk wrote: post #2

> The US has added around 800,000 jobs in manufacturing employment over the last two years, employing around 13 million workers It's too early to know, but if it turns out the solution to decades of economic misery for middle class blue collar workers was 1. 50% tariffs on China, and 2. $100B of subsidies to chip makers and green tech... The reversal of Reaganomics we're living through will become permanent for at le…

I suspect that the reliance on China for manufacturing combined with what sort of sanctions would be enacted when they attempt to invade Taiwan, would encourage the US and its European allies to insure they had a good manufacturing base to rely on. We have seen a number of things from the war in Ukraine but two that I think have been really impactful were the challenges of ramping up munition production in the US and the impact of factories rolling out thousands of inexpensive drones/week and those drones being deployed on the battlefield gave everyone a reassessment of some of the national security risks of globalization. Basically the lesson is that industrial war requires an industrial base. In WW2 the US had a vibrant industrial base that could be pivoted to providing war material.

Industrial base takes time to spin up, but if you have solid economy (as the US currently does) then using monetary policy and other incentives to push capital toward industrial base development is good for the country. It also plays well on TV since these factories are revitalizing towns and cities that previously were suffering from a lack of industry.

As a result, I don't see these shifts so much as a "reversal of Reganomics" so much as a realization from the Russian-Ukraine war that "globalism" isn't something authoritarians really like. And if you're primary trading partner is run by an authoritarian regime, that is bad.

Re: The US is building factories at a fast rate

#160

Post by patmorgan23 »

monero-xmr wrote: post #81
epistasis wrote: post #28

Earlier quoted context omitted.

This is the first time I've seen a non-politically motivated accusation that cutting off money had anything at all to do with their failure. The tech reason was that they had a way to make thin film panels which was super promising for driving down costs due to a silicon shortage. But then Diamond based silicon tech emerged, eliminating the silicon shortage and reducing input materials, which outcompeted thin film on…

Of course. But maybe the government shouldn’t be picking winners and losers, and gambling with my tax dollars.

Wasn't solyndra given a loan that requires repayment? Government funded grants, loans and research are reasonable for developing damn near all of our fundamental tech. The internet has it's origins as ARPANET to connect universities/military installations.
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