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

rand.org

461–470 of 523 posts

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

#461

Earlier quoted context omitted.

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 desir…

The US didn't get to be the worlds global superpower out of nowhere. You formed alliances in the west and have pushed your global economic agenda for what, seven decades, with Europe going along with it (along with many other countries), including fighting in wars the US pushed for. That is what you got in return for your military backing. The US also didn't get into the cold war because of Europe,. MAGA won't sell t…

Again, I'm explaining, not endorsing.

I believe the reason it feels like I'm pushing is that in a sense, I am: I'm not adding any caveats or disclaimers to that narrative or explaining why other narratives do or don't matter. I think counter narratives to the ones supporting these tariffs are already well understood by most people here. The original person I was responding to was asking why this happened (presumably because it seemed irrationally stupid, as I think it does to most people here), and what I'm pushing for is an understanding of the point of view which explains it. If you understand the concerns of MAGA and the strategic concerns of the US Military the tariffs make sense. They might not make sense in relation to other concerns, and maybe it's wrong to be so focused on those concerns at the expense of other concerns like relationships with allies. But they do make sense from that point of view.

In order to repair international relations with allies, the root causes of these tariffs first needs to be understood and addressed. If this is simply viewed as a madman irrationally leading a horde of rednecks to punish allies, and the other strategic concerns are just considered window dressing to excuse that madness, the grievances of those who empowered Trump will remain and the strategic weaknesses will continue to be an anchor weighing the US down and interfering with our capacity to maintain relationships and enforce international law.

The narrative of the MAGA base is that middle America and the rust belt was in fact victimized by global economic policy. The benefits you mention about the world buying American services and getting into foreign wars didn't benefit the MAGA constituency, it hurt them. Yes, everyone benefits from cheaper goods and America in particular is able to buy more of them due to the fact we issue the global reserve currency, but on net the average middle class American family in an industrial town lost more than they gained.

That narrative is not the whole narrative. I am well aware that there are more people in the world than just MAGA that are feeling the opposite about all of these tariffs, and they have legitimate grievances. But the MAGA narrative is not false. Just like the narrative about betrayal on the part of allies and economic partners is not false. Just like the narrative I presented about domestic supply chains and strategic weakness is also not false (and is the narrative I'm most biased towards/what I care about most). In order to look for a balance point that maximally benefits everyone, all of the different narrative threads need to be understood.

In order to prevent a repeat of this situation in the future (if any semblance of the previous order can be re-established after the US secures it's domestic supply chains and repairs it's middle class, and I have no idea what the likelihood of that is), any re-establishment of global supply chains needs to ensure it doesn't erode domestic capacity and that there's an actual plan for how to maintain the middle class through either some degree of protections for domestic industry or a more effective plan to transition the middle class into services.

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

#462
post #339

Earlier quoted context omitted.

> The U.S. already manufactures warships, though, and we’re already by far the best at it. We very slowly build a small number of incredibly expensive ships. For any other value of "manufacturers warships", Korea or Italy are better and more reliable. Also, it's not clear if aircraft carriers are survivable in a vaguely peer context. Missiles and drones have come a long way. > Australia just cancelled a deal with Fra…

Wouldn't you be better off buying ships from allies? Nobody does everything.

We were literally buying Frigates from Italy, because they build really good frigates and we can't build a mid-size ship worth a damn it seems.

LMAO does the Navy pay tariffs?

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

#463
post #353

Earlier quoted context omitted.

Good one! Aleksandr Solzhenitsyn wrote something similar: Enforcing equity means nobody has freedom. When people are free, there is no equity.

You might want to read up on Solzhenitsyn. Wrote some very important books, but not someone you want to quote on ethics.

He's right on this one.

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

#464

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…

I think it's a rational reaction to peak oil. One way or another, we're going to phase out fossil fuels in the next few decades, either through depletion or climate action or market incentives. That implies reduced mobility, higher shipping and travel costs, and shortened supply chains. Preparing for a more local world and reducing reliance on global supply chains seems a prudent long term strategy.

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

#465

Earlier quoted context omitted.

> have to go somewhere. Consider the vast increase in government spending and entitlements. As for the declines, the US free market has steadily become less and less free market.

Taxes as a % of GDP have been relatively flat over the last 60 years, and on average have been lower over the last 25 years so claiming the government or "entitlements" are the culprit doesn't scan. https://www.ceicdata.com/en/indicator/united-states/tax-reve... Claims that the market has become less free are perfectly baseless and a non sequitur here as even if that claim was true and verifiable it does nothing to e…

Have you counted state & local taxes, as well as the deficit? All those count. Washington State has heaped on a lot of new taxes in the last few years. California has done even worse.

> Claims that the market has become less free are perfectly baseless

So the mountains of new regulations have no effect?

Consider all the thousands of burned out houses in LA. So far, only 4 building permits have been issued.

In Seattle, constant burdens by the City Council heaped on the rental business have driven out a lot of landlords (things such as free lawyers for tenants), resulting in a shortage of affordable housing. Those don't show up as government spending, but they retard the market anyway.

The same goes with minimum wage hikes.

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

#466

Earlier quoted context omitted.

When people like Sanders talk about wealth concentration in billionaires like Musk, how did Musk make his money with negative sum games, regulatory capture, etc.?

Oh boy. There have been tomes written on how Musk's companies are set up around capturing government subsidies. If you're earnestly interested, such analyses are not hard to find. The stock market itself is a shining example of regulatory capture - a perma-bubble due to fake "fiscal responsibility" political marketing that causes massive streams of newly printed money to be handed out to banks to dump into the asset…

So how much subsidy did Musk receive for SpaceX? (The answer is $0.)

SpaceX is worth around $390 billion.

> some of Musk's riches are due to actual wealth creation

Very generous of you! LOL

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

#467
post #335

Earlier quoted context omitted.

I disagree the EU is peaceful because of democratic peace theory and because of the political union not because of trade. If it was just economic and some of those countries were authoritarian I could easily border conflicts turning into wars

It really hasn’t been particularly peaceful. The last dictatorship was in the 1970s? The last World War the 40s? The US might have had a civil war but it went in and came out the other side with the same borders, government, and constitution. Still going strong since the 18th century.

Yes but how much among democracies?

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

#468
post #435
post #407

Earlier quoted context omitted.

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 concentratin…

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

That's probably correct. However, if you tax $100b at 40%, then the person has only $60b to invest in creating more wealth.

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

#469
post #323

Earlier quoted context omitted.

I think it won't change much because frankly the peace trade theory has not worked out very well. I think it was first formulated around WW1 and didn't stop it or WW2. Most modern wars don't make financial sense when accounting for everything but they are still fought. Often over stupid reasons. For example Russia invaded Ukraine despite trade partnership with Ukraine and EU. https://en.wikipedia.org/wiki/Democratic_…

> https://en.wikipedia.org/wiki/Democratic_peace_theory has a better run I don't think so: for example the Weimar Republic is a counterexample. Or a modern example is the current war between Ukraine and Russia (both are democracies even though in Russia some particular president and party has a lot of influence). Both of these examples show that even in a democratic country under specific circumstances it can happen…

I wouldn't consider Putins Russia a democracy especially in 2014 after the Medvedev shuffle. Putins dislike and lack of understanding of democracy and how it lead Ukraine in a different path towards the EU was probably a major factor in his decision to invade

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

#470

Earlier quoted context omitted.

Gold isn't really wealth any more than paper money is. Consider Spain, which looted S America of gold and silver. How did that work out for Spain? Spain had lots of inflation as a result, and didn't get any wealthier. The same thing happened with both the California and Yukon gold rushes. The same thing happens when the government prints lots of money. What creates wealth? People creating goods and services that peop…

>Gold isn't really wealth any more than paper money is. Any scarce resource people want is worth very much. Be it gold or bitcoin. You can't make gold (technically you can by transmuting elements but it will cost you more gold than the gold you will produce) but you can mine it with great cost. Why do you think Amazon warehouse workers are payed less than Amazon coders? Because it's easier to find a warehouse worker…

As Spain discovered, when gold is used as money, and the supply of gold increases, the value of gold drops accordingly (i.e. inflation). As you said, the law of supply and demand.

Looting S America of gold did not make Spain wealthy.

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