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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

#41

Post by 0xDEF »

mschuster91 wrote: post #7
mdorazio wrote: post #6

Here are the key points the article suggests (it spends quite a long time explaining how we got here): 1) Improve the [government sponsored] Manufacturing Institutes 2) [federally] Back R&D for manufacturing technologies 3) Provide scale-up financing [by the government] 4) Use government procurement power to promote new manufacturing technologies 5) Direct production support [to sectors deemed critical] 6) Provide bo…

> On the second point, the elephant in the room is that smart people in the US can make 2-3X as much in software or finance as they can in manufacturing, so what do you think they're going to pick? Make unions stronger and kill off all of Wall Street finance shenanigans that's purely devoted to creating money out of thin air or skimming (especially HFT). That house of cards is going to crash hard anyway, so best tear…

>Wall Street finance shenanigans that's purely devoted to creating money out of thin air or skimming (especially HFT)

Society is so damn lucky that techbros are politically irrelevant.

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

#42

Post by bell-cot »

Taek wrote: post #40
bell-cot wrote: post #17

Obvious Solution: Re-establish the military draft, but with a far smaller pool of potential draftees - and make sure the families of current & recent members of Congress, Wall Street big-shots, Fortune 500 CxO's, McKinsey consultants, and such are all assigned to serve in front-line "meat shield" battalions on the western shores of Taiwan, just south of Korea's DMZ, etc.

How does this make US manufacturing more competitive?

Is the real problem that US manufacturing is "uncompetitive"? Or is it that actual US-based capability to manufacture advanced and military products at scale is a non-priority for the folks making all the decisions?

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

#43

Post by liquidpele »

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.

I think that’s only half right… the financialization is driven via a priority of short term profits that are incentivized by the market to executives. They play the BS game to just get rich and then dip, company be damned in the long run.

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

#44

Post by kranke155 »

pphysch wrote: post #38
kranke155 wrote: post #36

Earlier quoted context omitted.

The production of physical goods - physical capitalism - no longer had anywhere to go really when most people employed started having a decent standard of living, so we looked for ways to continue infinite GDP growth and we found it in financialisation. It worked but only by destroying/rotting away everything else.

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 capitalism arriving with the first internet products that have no physicality associated with them - social media and networks. Then we have a real (or apparent) exhaustion of physical capitalism.

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

#45

Post by bell-cot »

avs733 wrote: post #18
bell-cot wrote: post #17

Obvious Solution: Re-establish the military draft, but with a far smaller pool of potential draftees - and make sure the families of current & recent members of Congress, Wall Street big-shots, Fortune 500 CxO's, McKinsey consultants, and such are all assigned to serve in front-line "meat shield" battalions on the western shores of Taiwan, just south of Korea's DMZ, etc.

Or maybe just treat blue collar workers better? And enshrine such treatment into law so this doesn’t happen again. That would seem to be simpler

While "treat blue collar workers better" sounds like a nice goal in itself...I fail to see how that would do anything at all to address the problem which the article is about.

In other news - treating your oxen wonderfully will not transmute a wooden moldboard into an iron plow.

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

#46

Post by twoodfin »

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…

A financial transaction tax is a terrible idea.

I own a 100 shares of Apple. Tim Cook goes on CNBC and says he’s all in on printers. So I want to sell my Apple shares and buy Microsoft, where Satya Nadella is pushing Cloud and AI.

I’m being a smart investor, moving a small bit of capital allocation intelligently.

Taxing this decision discourages making it—even if only marginally—and makes capital markets dumber and less efficient.

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

#47

Post by CPLX »

liquidpele wrote: post #43
joe_the_user wrote: post #14

Earlier quoted context omitted.

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.

I think that’s only half right… the financialization is driven via a priority of short term profits that are incentivized by the market to executives. They play the BS game to just get rich and then dip, company be damned in the long run.

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.

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

#48

Post by Animats »

pphysch wrote: post #38
kranke155 wrote: post #36

Earlier quoted context omitted.

The production of physical goods - physical capitalism - no longer had anywhere to go really when most people employed started having a decent standard of living, so we looked for ways to continue infinite GDP growth and we found it in financialisation. It worked but only by destroying/rotting away everything else.

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…

This is correct, well-documented, and not talked about much.

There really was a vast right-wing conspiracy. It started with this memo.[1]

Here's the background: [2]

Understand that, before this, businesses rarely had lobbyists or engaged in political action. That totally changed in the 1970s.

[1] https://www.greenpeace.org/usa/wp-content/uploads/2021/08/Po...

[2] https://billmoyers.com/content/the-powell-memo-a-call-to-arm...

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

#49

Post by mindslight »

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…

I don't see that taxing financial transactions would cause a phase change. Each financial transaction already has an associated cost of the people employed to create it, and yet complexity still grows. The real problem is that the financial industry has access to extreme amounts of cheap leverage, which forces everyone to play (aka the "everything bubble"). Witness all of the crying about interest rates having gone up a modest amount. Interest rates need to be held at least where they are long term, which is still lower than they were before they were dropped to distract from the needless and destructive conquering of Iraq.

I would say that eliminating tax deduction for advertising expenses is the wrong way to go about things as well. Adverting is a bona fide business expense, so it makes sense as a deduction. Rather, a direct tax should be levied on advertising, to account for the externalities of us all having to suffer the cacophony. This could even be done state-by-state rather than federally (a la sales tax).

Wholeheartedly agree on the certification. It blows my mind how cavalier people are about plugging Amazon's gensym branded products into mains power - especially given how shoddy even NRTL-tested products seem to be built!

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

#50

Post by yurishimo »

twoodfin wrote: post #46
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…

A financial transaction tax is a terrible idea. I own a 100 shares of Apple. Tim Cook goes on CNBC and says he’s all in on printers. So I want to sell my Apple shares and buy Microsoft, where Satya Nadella is pushing Cloud and AI. I’m being a smart investor, moving a small bit of capital allocation intelligently. Taxing this decision discourages making it—even if only marginally—and makes capital markets dumber and l…

You can have transaction taxes without penalizing small/micro investors.

It’s criminal how the people who trade stocks for a living get away with paying less taxes as a percentage than their janitors.

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