571–580 of 1001 posts
The part that blows my mind is timing. It's going to take years to get anything up and running. Yet tariffs are cutting supply immediately. wtf is the plan for the 5-10 years in between?
Economists are full of bs. They keep framing everything as impossible and when something good happens later, going against all their predictions, they call it a miracle... Maybe these economists are just projecting by assuming everyone else is just as incompetent as they are.
Of course if society was made up only of economists, we'd still be living in caves, worrying about the difficulty of bringing firewood back to the cave.
Earlier quoted context omitted.
Yes climbing the value chain was a necessity for nations like China. But in the US popularized in the 90's, was a business strategy trend that strongly discounted the value of long term capital investments - particularly for this discussion, investment in factories. They do require extra management attention and they do tie companies to strategies in longer time frames at lower margins - but they deliver long term va…
You make that sound like it was emanating from the business community - the US has had a pretty significant period in there of 0% interest rates determined by a central committee. Return on capital doesn't really matter in a low interest rate environment, the important thing is access to the lending markets. Investors making sensible investments would have been eaten alive by those focusing on companies that were liv…
I agree with the rest of your comment, though. The US public markets reward creative accounting and mortgaging the future for quarterly gains. GE and Jack Welch are a great historical example.
> China generates over twice as much electricity per person today as the United States. Why? This appears to be completely wrong? All the stats I can find say that the US has about 4x the per capita electricity generation of China. Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight. > If you’re building a new factory in the United States, your investment will a…
> Other than that it seems to be mostly good points, especially the overall one: you cannot do this overnight. It's annoying Americans were given only two choices - offshoring is great and let's keep doing it, and, as you say, the opposite, meth-fueled let's bring back manufacturing overnight. The kind of slow and steady protection and promotion of home-grown industry that China and most of Asia so successfully used…
I think this is because China is an autocracy, so they can make long-term plans. Democracies that swing as wildly as the US currently does is no place for that, and that's not limited to the new administration.
Earlier quoted context omitted.
The solution is to pay everyone a living wage, regardless of job, and disconnect healthcare from employment. Lots of inertia against those ideas though. So, instead, "good manufacturing jobs" is the parroted point. Any job is a good job if you can live off of it. (tariffs do nothing to address labor shortages in healthcare, teaching, and other domestic service based sectors, for example)
That’s a solution of human rights and is orthogonal to becoming competitive to China. No question human rights needs to be fulfilled and we need to pay people living wages. But the conversation here has he orthogonal goal of being competitive with China as well. I can assure you just paying everyone living wages is one of the main reasons why we are not competitive with China. It’s the main reason why China is beatin…
They aren't though. In America, "Paying living wages" always means "pay way more", because America underpays labour and overcharges for literally everything (products, services, basic cost of living -- every product on American soil has a insane profit margin on it)
In China, "Paying living wages" doesn't necessarily mean "pay labor more", because they have stronger control over pricing and margins, so it often actually means "make orgs charge way less".
You end up with Chinese folks living in a major city in China, with a 2bed apartment that costs $200USD/month, and a meal out cost $2USD/each, cars that start at like $6k, and they get paid $5USD/hr, but they feel like they're living well, despite only making around $640USD/month, because they can save 10% of their income each month, and have like 40% of their income as discretionary spending, and still get to own their apartment.
But in the US, a 2bed apartment in a big city like that costs at least $2,000/month or more, a meal out there costs at least $20/each, and a basic starter car starts at like $26k, so you can pay someone in a ostensibly-"high labor cost" job of $20/hr, and they feel like their constantly underwater, and have zero chance of ever owning a home, because they only have like 20% of their income as discretionary spending, and they can't save anything at all. (and that's before we even mention differences like how you don't have to worry about being hit with a crazy bill for an ER visit or an Ambulance in China, but Americans have to worry about that 24/7/365).
(It's the same reason many American's dream of getting a job in Europe and leaving the US, because despite making less money-on-paper, you get to generate more real wealth and do so with less life risk and life stress)
The Factories and the labor pool and the infrastructure being absent in the US is hard to solve for, of course -- but it isn't even the hardest part of any of this. The American view of capitalism would have to be completely rewritten to be more diverse, more equitable, and more inclusive to Americans who do actual labor, before Americans could be anywhere close to competitive with most of these Chinese industries.
The amount of pooh-poohing of this idea is even more than I would have expected from HN, despite tech’s love of belittling others ideas. The reason we need manufacturing is because the middle class is decimated. None of us tech workers feel it because we don’t live in neighborhoods that have been decimated by it. We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that…
> We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that have been destroyed by it. Blue collar workers were the first to push for globalization, because they suddenly could afford a lifestyle that used to require the salary corresponding to a couple of steps upper in the corporate ladder. A blue collar salary suddenly could provide for many more amenities... til the…
The irony now about Chinese goods is that those of us that can afford it avoid them as much as possible. I check every product that I buy on Amazon to make sure they aren’t made in China because they could be sending me poisoned goods.
Earlier quoted context omitted.
> We have all benefitted from globalization immensely but we don’t have neighbors, families or friends that have been destroyed by it. Blue collar workers were the first to push for globalization, because they suddenly could afford a lifestyle that used to require the salary corresponding to a couple of steps upper in the corporate ladder. A blue collar salary suddenly could provide for many more amenities... til the…
Blue collar workers never pushed for globalization because they knew exactly what would happen, they would lose their jobs and they did. The irony now about Chinese goods is that those of us that can afford it avoid them as much as possible. I check every product that I buy on Amazon to make sure they aren’t made in China because they could be sending me poisoned goods.
Maybe they didn't with their words, but they surely did with their money!
Earlier quoted context omitted.
Well, money talks and it's hard to choose the other option. On one hand bring manufacturing back to US and pay them higher, because otherwise the pay in McDonald's is better with a less demanding physical (cmiiw, don't live in US). On the other hand, keep manufacturing outside of US for cheaper labor to keep price low and having bigger margin. It's an easy choice to make. And again this is not a US specific problem,…
The thing is also that absolutely nothing about the overall situation changed meaningfully over the last 50 years or so. People had the exact same concerns and fears when electronics manufacturing started shifting to Japan like 50 years ago-- they went in the same way up the value chain that China did, and they started losing a lot of the industry with rising wages, too, exactly like what we see with China => Vietnam…
When Trump said that new manufacturing facilities would be fast-tracked to being able to build their own on-site power plants because the grid is "at risk of bombing", I've come to think that the whole political debate is really about: What the hell are we going to do if WWIII happens?
Manufacturing capability and capacity is an incredibly precious resource if you find yourself in a large scale war, and there is growing concern (realistic or not) that America has given it away/lost it. It makes no difference in peaceful times, but there is growing belief that the era of peace is coming to an end.
In fact, if you take a higher level view of what is going on, like the wanting to annex Canada and Greenland, it seems the entire motivation for it all is preparing for the possibility of war with Russia (and China).
Building a new factory needs a few years from idea to start of planning to production. 2 years if you are really really quick maybe, 4 to 6 years might be more realistic. The term for the current administration ends in 3.5 years and the next one probably won't be lead by Trump, so things will change. This means that nobody will even start moving production back yet, they will pay lip-service, do the minimum to get al…
The wise thing to do is to at least make steps in the direction of on-shoring or at least make your plans and investments compatible with it.
Earlier quoted context omitted.
Yes climbing the value chain was a necessity for nations like China. But in the US popularized in the 90's, was a business strategy trend that strongly discounted the value of long term capital investments - particularly for this discussion, investment in factories. They do require extra management attention and they do tie companies to strategies in longer time frames at lower margins - but they deliver long term va…
You make that sound like it was emanating from the business community - the US has had a pretty significant period in there of 0% interest rates determined by a central committee. Return on capital doesn't really matter in a low interest rate environment, the important thing is access to the lending markets. Investors making sensible investments would have been eaten alive by those focusing on companies that were liv…
I also think a significant influence on the Fed was a financialized business community demanding 0% interest.