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Have a Nice Day

nytimes.com

11–13 of 13 posts

Re: Have a Nice Day

#11

The title is politically loaded. There's something that article is trying to say vis-a-vis government subsidies and free trade, but it never quite materializes, at least I couldn't understand it. But I had no trouble understanding the political outrage it is dripping with.

He's mad that even though the government is administering a massive Keynesian stimulus as are a lot of others right now, including China, unlike those countries none of it seems to be routed towards solar power eagerly enough to create a big market for it here, and the resultant manufacturing jobs. So if you decide to bet the farm on solar and cover the roof of your house/commercial building with panels, you'll have to import them which negatively affects our balance of trade - even if you want to buy an American brand like AM.

I personally don't have a manufacturing fetish, but a lot of people are deeply worried about the comparative advantage in cheap labor that exists in China and neighboring countries, because not so long ago you could make a good living and provide for your family with a skilled labor job in an American factory, and many of those jobs have evaporated or been devalued as manufacturing has been exported.

There is not as much money in service work and IP creation doesn't involve as many people as manufacturing, so there's a lot of quite skilled and hard-working people who are unable to get decent and dignified work. A young or single person can easily contemplate relocating to an area of greater economic activity, but if you're middle-aged and have a family that may not be a practical option. This is reason there are so many crappy little web development and design companies out there, people who saw the change coming in time have tried to switch towards digital manufacturing with varying degrees of success. But many feel there's a lot less money in digital development than in physical manufacturing - after all, physical manufacturing doesn't employ just factory works, but machinists, construction workers, truckers, truck builders and so on.

Think of it like the dustbowl agricultural failure that led to mass migration during the great depression, but with factories instead of farms. If employment doesn't recover within the next 12 months, there will be a great deal of pressure after the 2010 elections for punitive tariffs on imports a la Smoot-Hawley, which will include computer equipment since most of it is manufactured in Asia. Outsourcing will continue apace, not least because it's currently absurdly cheap to ship the stuff from there to here, exacerbating the problem.

Outsourcing manufacturing has been very good for consumers and I feel that evolving towards a more globalized economy is a Good Thing, but while large wage differentials persist it's very destructive of small-scale wealth that depended on wages from local manufacturing. Most people are not, and don't want to be, entrepreneurs, and are angry because they invested a lot of hard work in building up their family's capital only to see their 'business model' (work hard, get paid) shredded.

Re: Have a Nice Day

#12
post #6

Importing solar panels from China is not even remotely similar to importing oil from the Middle East. If we derived our energy primarily from solar power, we wouldn't need a constant stream of solar panels to keep doing it, the way we need a constant stream of oil now. Also, since the company that makes the machines that makes solar panels, we could easily start producing them for ourselves if China suddenly decided…

Quite true, buying solar panels is a capital spend rather than an operating cost. But if a trade war broke out, it would take a year or two to build the physical manufacturing facilities here, and we'd be at a competitive disadvanatage until that is done.

If you think of trade economic warfare - and a great many people do, whether we agree or not - then physical goods are the ammunition. We do not fully understand a software-based economy yet, and for the foreseeable future software still has to run on a physical substrate, most of which takes place overseas.

Suppose, just for example, we had a trade war with China and began levying punitive tariffs. China responds by, say, telling the companies that currently manufacture iPhone hardware to stop supplying Apple and start building a 4g version for the Chinese market. The government there has the economic and political heft to do that. It would not be a rational decision, but remember that rationality in war = predictability and thus defeatability. Surprise is a key strategic element.

Well, where would Apple be if their suppliers suddenly cut them off? Sure, they could take their designs to manufacturers in other countries, even in the US. But it would probably take a year to ramp up production with sufficient quality control. What do you think would happen to their stock price?

Re: Have a Nice Day

#13
post #3

I don't think the article is about solar panels, not really. It's how America doesn't produce anything anymore. The USA is "Consumers 1.0" but 2.0 is taking over elsewhere. The next leap in solar might not even be invented in the USA, it certainly won't be produced here.

> It's how America doesn't produce anything anymore.

This article is about an American company that produces equipment that makes solar panels and microchips.

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