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America's advanced manufacturing problem and how to fix it

americanaffairsjournal.org

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Re: America's advanced manufacturing problem and how to fix it

#181

Post by TheOtherHobbes »

polygamous_bat wrote: post #136
ChatGTP wrote: post #93

Earlier quoted context omitted.

Just because a behavior may end up profitable for its owners doesn’t mean we should be just accepting it as a society I 100% agree with you, but isn’t this how capitalism works? I do notice similar sentiments to use more frequently on HN lately. Feels like people are actually aware there are problems now but unsure what’s to be done?

Random thought, but perhaps trying to enshrine "customer or consumer rights" and "employee rights" as seriously as "shareholder rights" would be a good step.

What we have now is quite literally economic apartheid. Poor people are not allowed into the same spaces, not given the same legal and ethical privileges, denied adequate education and healthcare, increasingly barred from owning property (because "markets")... among many other challenges.

The model is that you can buy your way out of this slavery if you're talented (ruthless) and well-connected enough.

Otherwise you die, and no one - at least no one who matters - cares.

Re: America's advanced manufacturing problem and how to fix it

#182

Post by i_am_proteus »

joe_the_user wrote: post #14
mensetmanusman wrote: post #4

I work in one of the last remaining large industrial manufacturing labs in the US. Some of my colleagues worked at Bell before that was shuttered. My sense from talking to the previous generation is that financialization of the US has started (finally) failing the American people. The previous generation cashed in on major profits by off shoring (Kodak), but we overdid it. In a round about way our company is run by p…

Yeah, "financialization" is absolutely the answer and the articles' claim of lack institutional integration (or whatever) seems wrong. You can look at how Boeing gutted it's highly skilled Pacific North West operations to move lower skilled, lower paid areas elsewhere and generalize this to a multitude of similar industries.

>American financial markets favor a capital-light production model, or one of no production at all. Jack Welch was well aware of this in his transformation of GE from an engineering company—one cofounded by Thomas Edison—to a financial engineering company. In 1985, during his early years as CEO, he canceled the company’s “factory of the future” initiative consisting of automation systems, robotics, and ad­vanced machine tools, which would have allowed GE to catch up with Siemens and Japanese competitors in its offerings. Instead, that same year he acquired RCA, parent company of the television broadcaster NBC. Eventually, 60 percent of company profits came from GE capital. Welch’s strategy worked, at least for a while: in 1993, GE became the world’s most valuable company, before the stock price collapsed during the great financial crisis and GE was broken up.

>The assessment of author David Gelles, in his critical biography of Welch, The Man Who Broke Capitalism, is that “instead of trying to fix American manufacturing, he effectively abandoned it, and would soon start shuttering factories around the country and shipping jobs overseas.” Welch once stated, “Ideally, you’d have every plant you own on a barge to move with currencies and changes in the economy.”

Arguably, the article discusses financialization as a cause.

Re: America's advanced manufacturing problem and how to fix it

#183

Post by katbyte »

chii wrote: post #91
dwallin wrote: post #86

Earlier quoted context omitted.

Just because a behavior may end up profitable for its owners doesn’t mean we should be just accepting it as a society. Also viewing a company as just a collection of assets owned by capital can be somewhat limiting. Companies are generally made up of human employees, and many schools of thought treat employees as one of several stakeholders in a company and assign various rights to them and various responsibilities t…

> we should be just accepting it as a society. This problem is solved using the court system, and then legislation system. Things which _should_ be unacceptable needs to be made illegal. And over time, this has indeed been the case. Things like environmental regulations etc are the examples. > various responsibilities to the company for them i think the employees are reading too much into this responsibility, because…

companies behaving badly is bad for society as a whole, so allowing the "owners" ie shareholders to make a quick short term buck at the cost of employees or a local factory that supports the town because "it doesn't make ENOUGH" money chips away at society and drags down the country all so a couple people can make a quick buck destroying 1000s or 10,000s of lives and/or entire towns.

putting financial success for the shareholders above all is the reason for so many things wrong right now,

Re: America's advanced manufacturing problem and how to fix it

#184

Post by justinclift »

Good luck with that. :(

Rent seeking behaviour is so deeply entrenched in US-led business culture, that any time potential advances are figured out they are viewed through the lens of "can we patent this?".

If the answer is "No", then funds for developing that potential advance - eg concept dev, prototyping, potential field testing - just don't exist.

It's not about being able to improve manufacturing. It's become "what's the greatest ROI on spending these dollars? Can we lock in a monopoly around it somehow too?".

While that short sighted foot gun approach remains prevalent, "fixing" the advanced manufacturing problem is going to proceed pretty damn slowly.

Outright abolishing all patents might get things going in the right direction, but the heart attacks that would cause in business circles makes that impractical. ;)

Re: America's advanced manufacturing problem and how to fix it

#185

Post by SyzygistSix »

wisty wrote: post #177
CPLX wrote: post #47

Earlier quoted context omitted.

This is the closest thing to an answer. The economy has essentially been ruined by looting. People finding ways to strip out assets from companies. Variations on this include private equity racking up debt and bankrupting companies. Executives doing stock buybacks to boost their options while hollowing out the company's resources. Hedge fund management fees. It's everywhere.

I think China deciding to dig itself out of poverty is a big factor with both good and bad effects (and absolutely staggeringly big effects).

Can you imagine the magnitude of the humanitarian and environmental crisis China would be if they had not industrialized and joined the global market? A country that size full of uneducated farmers and first generation coal power plants would be a nightmare for everyone, not just China.

Re: America's advanced manufacturing problem and how to fix it

#186

Post by hnthrowaway0315 »

This is simply because the American elites have chosen a different way to prosper. They have chosen, to reach the top of the world, and then ripe the easier and larger pies. The might of the US military protects the interests of the financial institutions (and some other oligarchs), and this can go on as long as the US military is strong enough. It is thus NOT the interest of the American elites to promote manufacturing. Not only that, even the American people are getting used to it too, they too do not want to work in manufacturing, tiring and non-prestigious.

I don't really see a way to reverse everything. It is not about investing more in education or patching up policies. We are talking about a whole generation, maybe two, of elites and (some of the) people who profit from globalization. You simply cannot rely on the hands to chop themselves off. This is going to be a violent, bloody process because changing tides in politics is always bloody, literally. This is also going to touch the cake of numerous upper-middle class interest groups: landlords, bankers, you name it, anyone who prosper from the last 40 or so years, especially last 10 years since the first QE. Why? Because you are basically saying, OK I'm going to create a new group of middle class people but hey the cake is just that big so I need to cut someone else's piece.

Of course, everything has a cheat. The cheat, which I believe was already chosen by the American elites, is to instill conflicts globally and create mass exodus of highly skilled workers from other countries to the United of States.

Re: America's advanced manufacturing problem and how to fix it

#187

Post by bryanrasmussen »

chii wrote: post #79
CPLX wrote: post #47

Earlier quoted context omitted.

This is the closest thing to an answer. The economy has essentially been ruined by looting. People finding ways to strip out assets from companies. Variations on this include private equity racking up debt and bankrupting companies. Executives doing stock buybacks to boost their options while hollowing out the company's resources. Hedge fund management fees. It's everywhere.

> People finding ways to strip out assets from companies. If those people don't own the company, what is the owner doing by allowing this to happen? If those people _are_ the owners, then there shouldn't be a problem, since it's their own company, and they ought to be allowed to do anything they wish. Including short term reward for long term loss (if it is worth it in their eyes). So i dont think it's "looting" (imp…

I think you have a sort of 1920s view of companies that there are 'owners' instead of investors who don't exercise nearly as much control as the people who are brought in and do the looting.

anyway in this case the term "looting" is meant to do things that will be of benefit to the people to the company that will in the short term maybe benefit the company but in the long term destroy it. The short term benefit often aligns with what benefits the looter, but this alignment is not hard and fast.

Re: America's advanced manufacturing problem and how to fix it

#188

Post by SyzygistSix »

0xDEAFBEAD wrote: post #158
sudosysgen wrote: post #148

Earlier quoted context omitted.

CEOs are employed by the board, the board is made of major stockholders, those are pensions funds and other investors mainly interested in stock prices. No need for conspiracy theories or pitchfork waving, it's just all working exactly how it's openly designed to.

If you were a major shareholder in a company, would you favor a CEO who ran it into the ground?

For short term profit that I can walk away with? That is very different from building long term value. Both are profit. One profits from creation and has long term recurring benefits, the other profits from extraction, which only happens once. Both building a fire and building a house profit from a supply of wood. But they are pretty different in terms of long term pay off.

Re: America's advanced manufacturing problem and how to fix it

#189

Post by namibj »

jwells89 wrote: post #22
Animats wrote: post #12

Note the absence of tax policy changes that favor manufacturing. Here are a few: * A tax on financial transactions. This is sometimes called a "Tobin tax". The US financial services sector has doubled in size as a fraction of the economy. It's currently around 12%. That's an overhead cost, and a big one. Could be half that. * A tax on advertising. The tax deductiblity of advertising as a business expense should be li…

Big agree on UL certification of electronics imports. So much dangerous stuff is coming in and getting sold in places like gas stations where customers probably won’t suspect safety issues.

Is it currently legal to just sell your DIY power supply to US consumers? Or is there still like FCC certification required? Assuming, say, a USB-C charger.

Re: America's advanced manufacturing problem and how to fix it

#190

Post by SyzygistSix »

kranke155 wrote: post #44
pphysch wrote: post #38

Earlier quoted context omitted.

This explanation doesn't quite convince me, because if this really were the primary issue, USA could have globalized its consumer base not just for low quality products and pop culture, but high quality development. I think the root problem is political: recognizing that USA's extraordinarily successful mid-century economic model was the result of a compromise by the ruling capitalists to avoid facing a European-styl…

I think that’s also fairly accurate. I always had a weird feeling on how the Scandinavian countries were in close contact with the Soviet Union and that might have influenced them to follow a more hybrid societal model than other Western countries. I haven’t done enough research to explain it either way. I do think physical capitalism exhausted itself, but it was more in the 90s and 00s that we see more psychological…

It is fairly typical for poor, undeveloped countries to use a more centrally planned economy. The sheer lack of capital, as well as business and industrial know-how dictates that. Socialism and Communist parties were relevant in the 70s and 80s in Western Europe but later on were rejected as they were no longer relevant to their developed economies.

It makes me recall one of my favorite cars that was never built, the Norwegian Troll. The government decided not to expend their limited capital to the company as they could trade fish for Ladas to get cars.

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