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America is getting an AI gold rush instead of a factory boom

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Re: America is getting an AI gold rush instead of a factory boom

#381

Post by lesuorac »

al_borland wrote: post #339
baq wrote: post #310

Earlier quoted context omitted.

The thing is, minimum wage there pays for 10 people on the floor in Asia and the cost of the factory is approximately the same. There’s no economic sense to build a factory in the states… which is where all the government subsidies enter the stage, but the budget is already running a war time deficit. It’s going to be so much worse for those small used-to-be-factory cities until the printer starts for real, and then…

Tariffs are used all over the world for this exact reason, which is what is being attempted now. It will take time for it to pay off, more time than the current administration has, which is likely why business will drag their feet. I think economic benefit goes beyond just having the lowest price. Having good jobs for people in the country means they have money to spend. If people make next to nothing, all they can a…

But there is a good jobs in the country. His brother has to travel 100 miles to work it.

Tariffs won't resolve this issue. Either the goods becomes too expensive to import and are made here or the aren't.

In the case that they're made here then some other good will no longer be produced (if you could magically make both then you would've in the first place). And so your citizens are worse off because they produce the same amount (or less) and pay more for it.

In the case that they're not made here then you just pay more in tariffs and are worse off.

The problem with global trade is that when you trade 10 apples for 10 bananas it doesn't need to be distributed to your citizens equally. So if you go from an economy producing 5 apples and 5 bananas where everybody gets one of each to one where 3 people get 8 apples and 10 bananas the other 2 get 2 apples the GDP still grew from 10 to 20 but people are worse off. Throwing in tariffs to get back to the 5 apples 5 bananas will cause a recession.

The better solution is to increase the top tax rate and redistribute 2 additional apples and bananas to the bottom 2 and then everybody is still better off.

I leave it as an exercise for the reader to figure out why Trump & Republicans want tariffs as opposed to a higher tax rate.

Re: America is getting an AI gold rush instead of a factory boom

#382

Post by red-iron-pine »

mattlutze wrote: post #351
3D30497420 wrote: post #296

Earlier quoted context omitted.

It would also require a degree of consensus and quality of leadership which is completely lacking.

A degree of consensus and unity in leadership which is foreign to current American culture.

bollocks. there is profound unity and direction in US leadership, and has been for years -- it's all written by the Heritage Foundation and funded by a few oil and tech billionaires.

it's been like that since before George W Bush was lock-step with Fox News and a GOP led Congress.

the only difference is in 2025 the billionaires funding these things are as foreign as they are domistic

Re: America is getting an AI gold rush instead of a factory boom

#383

Post by trollbridge »

pessimizer wrote: post #284
mullingitover wrote: post #44

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 g…

> 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 ignor…

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.

Re: America is getting an AI gold rush instead of a factory boom

#384

Post by trollbridge »

nemo44x wrote: post #323

Do we even have people to work in the factories? I know a guy who started as a worker and is now a plant manager and he says their biggest problem is finding qualified people (high school or equivalent) that are willing to show up every day. Many get their first check and then suddenly stop showing up and then return 2 or 3 weeks later looking for work. A lot of younger people it seems like value flexibility over hig…

Instead of blaming the workers, they should figure out how to make workers want to show up and find out the incentives they need.

Here’s a start: daily pay (there are a bunch of fintechs out there that will do this for you). My buddy who does construction does this. It filters out people who need a quick fix of cash on day 1 instead of wasting two weeks on them.

View labour unions as a friend, not an enemy, who will figure out where to get more workers and how to keep them willing to show up to the job.

Re: America is getting an AI gold rush instead of a factory boom

#385

Post by hyperbovine »

tclancy wrote: post #302
mikewarot wrote: post #133

Having worked in a job shop, a factory that did gears down to quantity one, I became quite aware of the differences between IT, my previous job, and actual physical production. The machine tools were all made 50+ years ago. Changing anything was a dangerous thing to do, because you might cause jobs that have known and reliable setups that are done a few times a year in quantity, to fail, erasing the profits for the j…

There is a really interesting generation gap issue in the replies to your comment. What I perceive as younger people are horrified at the idea of fifty year old tools while the older folks are thinking (I imagine) “if the tools have lasted that long they must be well-honed and very good”. Of course, this could simply be the perspective of someone turning 50 this year.

> What I perceive as younger people are horrified at the idea of fifty year old tools

My students are shocked (horrified?) to learn that they're basically running 50-yr old Fortran code when they use scipy.minimize to train their fancy little neural nets.

Re: America is getting an AI gold rush instead of a factory boom

#386

Post by trollbridge »

bgwalter wrote: post #56

They are now open about it. Musk tweets about a new company Macrohard, which does not manufacture itself ( https://xcancel.com/elonmusk/status/1977281341264740625#m ): "Our goal is to create a company that can do anything short of manufacturing physical objects directly, but will be able to do so indirectly, much like Apple has other companies manufacture their phones." In other words, we are a knowledge economy and…

In other words, a middleman trying to extract big markups, which seems to be a lot of businesses these days (like W09 AirBNB).

Re: America is getting an AI gold rush instead of a factory boom

#387

Post by red-iron-pine »

nvader wrote: post #180
mikewarot wrote: post #133

Having worked in a job shop, a factory that did gears down to quantity one, I became quite aware of the differences between IT, my previous job, and actual physical production. The machine tools were all made 50+ years ago. Changing anything was a dangerous thing to do, because you might cause jobs that have known and reliable setups that are done a few times a year in quantity, to fail, erasing the profits for the j…

I'm not arguing with your overall conclusion. However, the hardware situation you described sounds very brittle to me. If the machine shop is so tightly constrained and error-phobic, that sounds like there's very little space of tinkering, exploration or innovation. Unless that was your overall point, that capacity in hardware manufacturing has rotted away to the point where things are hanging on by a thread.

> If the machine shop is so tightly constrained and error-phobic, that sounds like there's very little space of tinkering, exploration or innovation.

for many machine shops the level of physical risk is > 0, often by a large amount.

making widgets for X means handling large quantities of red hot metal; even simple stuff that's easy to get your hands around often shoots tons of oil, gas, and metal shavings in volumes that could hurt or cripple people.

if my dev VM gets borked I reboot or revert it, but factories aren't so simple

Re: America is getting an AI gold rush instead of a factory boom

#388

Post by lesuorac »

ap99 wrote: post #254
yibg wrote: post #136

Earlier quoted context omitted.

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 numb…

It's about leverage, which you mentioned. If you have no leverage during a negotiation and your counterpart has can say 'no' without having to give up anything then you're screwed. America doesn't have to be the best manufacturers, but we do need to have the ability to say, "fuck it we'll build it ourselves" when the other side of the table says something we don't like. And anyone living in the fantasy utopia where t…

But you don't have to build it yourself.

If China wants to play hardball then Vietnam can make the goods. This is the great system we had until Trump decided he'd piss off every country. We had a very much you vs the world when doing diplomacy as USA but now it's just you vs USA which is a much weaker position.

Re: America is getting an AI gold rush instead of a factory boom

#389

Post by schmidtleonard »

tclancy wrote: post #312
petermcneeley wrote: post #80

Earlier quoted context omitted.

Or you could have trade borders.

Not that I would doubt the guy who let Mike Tyson hit him in the head or anything, but don’t we have decades of research showing the negative effects of those?

Sure, decades of research by think-tanks hell-bent on pumping the assets of their sponsors at any cost to others.

"Trade Wars are Class Wars" by Klein and Pettis is a good counterpoint.

Re: America is getting an AI gold rush instead of a factory boom

#390

Post by nradov »

baq wrote: post #311
nebula8804 wrote: post #228

Earlier quoted context omitted.

There is a demographic implosion coming soon. You look at a video like this and count how many humans there are to make this $20-30 speaker and you realize that this $20 speaker is not going to be automated, its just going to go away as an option. [1]: https://www.youtube.com/watch?v=yFYxSX6xP2U

India will gladly accept those factories for a few decades.

If that's true then why hasn't India changed government policy to make it a more attractive location for manufacturing?
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