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The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

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Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#431

Post by didericis »

munksbeer wrote: post #400
didericis wrote: post #264

Earlier quoted context omitted.

The message is absolutely America first, and the motivation to boost the middle class through reindustrialization is a huge factor. The desire to eventually back out of defense commitments in Europe is not in contradiction to that. The political will to commit troops and to defend Ukraine simply isn’t there, especially not while Taiwan is looming. Wanting Europe to reindustrialize and handle it’s own defense allows A…

Ok, I did watch the video. He does make a lot of points which sound plausible to a casual like myself. I'm still sceptical. It's pretty clear that there is real distaste for Europe in the MAGA sphere. I really find it hard to believe that this is all an act, a ploy, to boost Europe's own economy. Everything I've witnessed about MAGA suggests this type of long range thinking is just a coping wish. I think it's much si…

You are correct that there is a lot of distaste for Europe within the MAGA base. Although it’s important to note most of the distaste is about subsidizing their defense so they can have welfare states at the expense of US taxpayers, and a distaste for EU leadership. A lot of MAGA are friendly with other populist movements in Europe.

Again, I don’t think it’s an either or, and I don’t believe this is a ploy. The desire to reduce commitments in Europe and to have long term changes in trade is genuine.

The core motivation of the base is simple: middle America wants their industrial jobs back.

The motivation of advisors like the people at Hoover, military strategists and other intelligent higher ups is to deal with the weaknesses (present and future) that both Covid and Ukraine made obvious.

These are in alignment.

And yes, the MAGA base desire for a return of manufacturing came before the understanding of strategic weakness. That doesn’t mean the strategic motivations are a cope: I don’t think it’s a coincidence the bureaucracy were only willing to go along with this after both Covid and Ukraine discredited a lot of previously held beliefs about the state of the global order and the need for a course correction.

It’s also important to note politics and “cope” are basically the same thing. Everything is compromise.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#432

Post by forgetfreeman »

mmooss wrote: post #363
forgetfreeman wrote: post #354

Earlier quoted context omitted.

"The economy works because people make these value-increasing transactions. I take $10 of inputs, manufacture $20 worth of output, and sell it to you for $15." You pretty much nailed the arguments in favor of trade protectionism right there. Import cheap unprocessed raw materials, export expensive finished goods, capture the majority of value created in the process.

How does that support protectionism? For one thing, it involves imports and exports, which requires trading partners who will want to sell you things too. Maybe the argument for colonialism? Regardless, countries that largely operate without protectionism or colonialism have become the wealthiest in the history of the world, without any real competition. There's not much argument remaining.

The goal isn't to block all trade in favor of a purely domestic market. That would be stupid as now your manufacturing base is limited to the quantities of raw materials that can be produced locally and you're burning through non-renewable strategic assets just to float domestic day to day activities while simultaneously artificially limiting your available market for finished goods.

This is manufacturing economy 101 and how the US built and defended it's manufacturing base before the pivot to a "service" economy. China's trade strategy mirrors this, as is evidenced by the last 30-ish years of constant bitching by trade wonks and pundits.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#433

Post by LastTrain »

lesuorac wrote: post #415
mmooss wrote: post #266

Earlier quoted context omitted.

> historically very popular When? Not for a long time. Slavery and witchcraft were historically very popular ... > when you buy stuff you're losing wealth That's a incredible failure of understanding. I can't believe that's the basis of mercantilism. Why would anyone buy something? If you buy a house for $100,000, your wealth remains the same - you replace $100,000 in cash with a $100,000 house (ignoring complexities…

> > historically very popular > When? Not for a long time. Slavery and witchcraft were historically very popular ... The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular. If the end of my post wasn't clear, I'm not a fan of Mercantilism but one does need to understand the other side. Although a big critique I have of Globalism is that the gains from trade ar…

> The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular.

When did globalism stop being popular?

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#434

Post by abstractanimal »

consumer451 wrote: post #254
lesuorac wrote: post #158

Earlier quoted context omitted.

It's an economic theory - https://en.wikipedia.org/wiki/Mercantilism The general idea is that when you buy stuff you're losing wealth so if you never buy anything then you never get poorer. Since we constantly dig gold up from the ground we still get richer over time even if nobody buys our stuff. This is also why its importantly to gain colonies (Greenland/ Canada) or mineral rights from other countries so that the…

My main concern is that de-globalizing trade will remove a large barrier for real kinetic war. Bombing your economic partner is generally a dumb move, and that has been pretty nice for humanity in the last ~50 years.

This is a pretty old idea that goes back to debates over David Ricardo's theory of comparative advantage in the early 1800s.

> “Free trade is God’s diplomacy. There is no other certain way of uniting people in the bonds of peace than by the bonds of interest.” - Richard Cobden

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#435

Post by runako »

nickpp wrote: post #407
PaulDavisThe1st wrote: post #321

Earlier quoted context omitted.

Two societies. In each one, someone buys $20 of art supplies, paints a masterpiece and it sells for $100,000. In one society, a marginal tax rate system taxes the artist with an upper rate of 92%, and they end up retaining about $50,000 of the income, with the rest flowing back into the control of the society (via its government). In the other society, a margin tax rate system taxes the artist with an upper rate of 2…

In the first society, the probability of the artist completing and selling that masterpiece is correspondingly lower, since money is a strong motivator and even artists have bills to pay. Thus the first society tends to create less value overall, since value creators are demotivated by punishing taxation. Because of that, prospective buyers for that piece of art will be overall poorer so they will bid less for it, pu…

The example is bad because nobody thinks of $100k as "concentrated wealth" and your argument has some purchase at those numbers.

At $100 million, $1 billion, $10 billion, or $100 billion, the argument you put forth does not make sense.

There is no motivational quantum for attaining the second, or third, or fourth billion, much less the 200th.

Incidentally, most of the people who might be considered to be concentrating wealth do not and have not done so primarily on the basis of their labor and creativity like in the example. There is no credible argument that Jim Walton ($119 billion net worth) ever built or created anything of value anywhere near commensurate with his wealth. His path from $30 billion to nearly $120 billion had nothing to do with rewarding him for value creation.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#436

Post by dgfl »

LastTrain wrote: post #433
lesuorac wrote: post #415

Earlier quoted context omitted.

> > historically very popular > When? Not for a long time. Slavery and witchcraft were historically very popular ... The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular. If the end of my post wasn't clear, I'm not a fan of Mercantilism but one does need to understand the other side. Although a big critique I have of Globalism is that the gains from trade ar…

> The wikipedia article places it as 16th to 19th century which is a longer time period than Globalism was popular. When did globalism stop being popular?

Did you happen to miss recent US news?

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#437

Post by aleph_minus_one »

jmward01 wrote: post #142

I keep seeing people advocating that the idea that we should build everything, and every piece or everything, here is a good one. Why? Is this just an isolationist dream? The reductive, absurd, extreme of this is why don't individual people go out and build all their own stuff like cars and houses. Let's all go out and learn how to mine and refine metal ore so we can get started on building the family sedan! There is…

> The reductive, absurd, extreme of this is why don't individual people go out and build all their own stuff like cars and houses.

This is not absurd: 3D printing is a possible (next) stepping stone towards enabling this long-time dream.

The problem rather is (as very, very often) the huge amount of red tape and regulations that prevents individuals from experimenting with such ideas and bringing them forth.

So, if you look for the root of an evil in the world, it can often be found in the laws and regulations, and the politicians who passed them.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#438

Post by aleph_minus_one »

protocolture wrote: post #355
oceanplexian wrote: post #347

Earlier quoted context omitted.

I don’t see that happening since the US has historically been the least protectionist of nations. The EU loves protectionism. The single market is totally dysfunctional with a recent study saying it was equivalent to a 45% tariff between member states for manufacturing, a 110% for services. If this is the cohort you expect to save the world economy with free trade I certainly wouldn’t be betting real money on it.

I mean, China, Japan and South Korea are sitting down to determine a possible opening of markets between them. I would have thought Japan and China hated each other more than they hated Trump but it seems otherwise.

> I would have thought Japan and China hated each other more than they hated Trump but it seems otherwise.

I believe they still hate each other much more than Trump, but under the given circumstances even archenemies can reach temporary (likely unstable) pragmatic agreements as long as these agreements are clearly advantageous to all of the involved archenemies involved.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#439

Post by notTooFarGone »

aleph_minus_one wrote: post #437
jmward01 wrote: post #142

I keep seeing people advocating that the idea that we should build everything, and every piece or everything, here is a good one. Why? Is this just an isolationist dream? The reductive, absurd, extreme of this is why don't individual people go out and build all their own stuff like cars and houses. Let's all go out and learn how to mine and refine metal ore so we can get started on building the family sedan! There is…

> The reductive, absurd, extreme of this is why don't individual people go out and build all their own stuff like cars and houses. This is not absurd: 3D printing is a possible (next) stepping stone towards enabling this long-time dream. The problem rather is (as very, very often) the huge amount of red tape and regulations that prevents individuals from experimenting with such ideas and bringing them forth. So, if y…

You act like you should be able to 3D print a car and be allowed to drive it. Let's talk about seatbelts - is this another of those damn regulations????! How about airplane security? I should be allowed to build a helicopter and fly to new york! God damn gubbernment.

On the day any of that is allowed I built my hut and leave society for good.

Re: The Decline of the U.S. Machine-Tool Industry and Prospects for Recovery (1994)

#440

Post by PaulDavisThe1st »

nickpp wrote: post #407
PaulDavisThe1st wrote: post #321

Earlier quoted context omitted.

Two societies. In each one, someone buys $20 of art supplies, paints a masterpiece and it sells for $100,000. In one society, a marginal tax rate system taxes the artist with an upper rate of 92%, and they end up retaining about $50,000 of the income, with the rest flowing back into the control of the society (via its government). In the other society, a margin tax rate system taxes the artist with an upper rate of 2…

In the first society, the probability of the artist completing and selling that masterpiece is correspondingly lower, since money is a strong motivator and even artists have bills to pay. Thus the first society tends to create less value overall, since value creators are demotivated by punishing taxation. Because of that, prospective buyers for that piece of art will be overall poorer so they will bid less for it, pu…

> In the first society, the probability of the artist completing and selling that masterpiece is correspondingly lower, since money is a strong motivator and even artists have bills to pay.

I live near the (supposedly) largest art market in the USA, and I know a large number of artists here for whom two things are true:

1. they cannot make a living from just their art. 2. they will create art whether they make a living from or not.

Thus, the claim that taxes on their art income act as a disincentive to create just holds zero water for me. In fact, less than zero. It betrays a fundamental lack of understanding of why all the artists I admire actually do what they do.

This also applies to most of the people I admire in almost every field. I don't know of any example where the motivation was such that increased taxation would have acted as a disincentive. That's true even for Bezos @ amzn.

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