[lettergram]

My father was one of the last tool makers in the US working for Molex. They spent years teaching the Chinese, the Chinese would disassemble all molds sent over to China and often break them, so my fathers team would have to fix / rebuild them.

They spent years training the Chinese side-by-side in the US.

In the end they still haven’t exactly caught up to the quality we had in the US. However, they now have 5x the tool & die makers in China.

To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade.

There are enough people still here to teach and expand the Industry. However, if you don’t start now. Like today. We won’t ever recover. Once enough manufacturing is gone, it’ll be impossible to come back - we are almost there.

You are competing against a foreign power who uses slaves. You either let free people work for what ever wage they can achieve or we risk becoming slaves ourselves.

[AnthonyMouse]

> To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade.

Part of the problem here is that the existence of some kind of universal "more regulations / less regulations" slider is an illusion. It allows the problem to be cast in partisan terms when that isn't the problem at all, because the problem isn't more or less lines of regulatory code but rather higher or lower regulatory efficiency.

Some regulations save a thousand lives at a 0.02% increase in costs. Repealing those is bad. Enacting them is good. Some regulations save two lives at a 5000% increase in cost, which could equally be saved by some less expensive regulation. Enacting those is bad. Repealing them is good.

The real problem is that politicians lack the qualifications and incentives to do this well. If good rules don't exist, then someone gets hurt and there is a call for "more rules" rather than "better rules". Politicians who don't know what they're doing pass bad rules. The bad rules cause costs to exceed what they are in China, so manufacturing moves to China. Then the local lobby for improving the rules evaporates because there are no longer local manufacturers to propose or lobby for more efficient rules, and the continued existence of those rules on the books causes no more to form.

We clearly need to throw away the existing rules -- they're not working -- the question is, how do we actually get better ones?

[readams]

The problem here -- and perhaps the main problem in all our politics -- is that large swaths of the electorate do not understand the concept of second order effects. Regulations are always good because they consider only the first order effect. That is, the goal of the regulation is usually a laudable one that everyone would support. But you have to look at the costs and unintended consequences of the regulation to really know whether it's a good idea.

This is something that eludes most people, especially among progressives.

[dv_dt]

The long term studies say our political leadership largely ignores the desires of the electorate. This make the problem more likely that our political leadership likely understands the second order effects, but ignores the long term effects chasing short term gain.

[phkahler]

They think you can legislate outcomes. The reality is they need to design a system to produce that outcome.

[Lammy]

I think many more people understand second-order effects than you imply, but I think they understand that those second-order effects hurt certain groups of Americans more than others.

[umvi]

> Some regulations save a thousand lives at a 0.02% increase in costs. Repealing those is bad. Enacting them is good. Some regulations save two lives at a 5000% increase in cost, which could equally be saved by some less expensive regulation. Enacting those is bad. Repealing them is good.

Not to get political but this reminded me of covid-19. Masks and social distancing are an obvious 0.02% increase in costs that save a thousand lives. Lockdowns and extended stay-at-home orders and shutting down businesses so that we start needing to send out trillions upon trillions of stimulus cash to keep companies and people afloat start to cross into "save 2 lives at a 5000% increase in cost" territory

[NZGumboot]

I totally agree that lockdowns are super expensive, and should only be used as a last resort, but I think you're missing the purpose of lockdowns. The purpose is not to save the lives of <however many people are dying right now>. The purpose is to bring the R number <https://www.bbc.com/news/health-52473523> below one, so that the number of sick people doesn't increase to the point where the health care system is overwhelmed (which would lead to a substantially increased death rate).

Taiwan is an example of a country that managed to eliminate covid-19 without lockdowns, so it is possible, but part of their success is likely due to the fact that the authorities acted very early to impose strict quarantine rules and contact tracing (when there were fewer than 10 new cases per day!) AFAIK every other country that has managed to eliminate community transmission has done so via lockdowns.

[slaw]

The purpose of lockdowns and other methods to fight with covid-19 was to keep old people alive for few more months.

'The observed temporary excess mortality likely arises because people in vulnerable groups die weeks or months earlier than they would otherwise, due to the timing and severity of the unusual external event.' https://www.medrxiv.org/content/10.1101/2020.11.11.20229708v...

[ldng]

That is not the point and never was ! When your hospital is saturated by people that ultimately will survive but need 3 to 4 weeks to recover, you're going to die from anything but covid.

You're in a car crash? To bad hospital is saturated. You got 4th degree burn in a burning building? To bad hospital is saturated.

Do you realise that is the problem?

[slaw]

Sweden's hospitals were never saturated despite no lockdown. Italy's hospitals are saturated every flu season.

Hospitals are saturated, because we want to keep these people alive for few more months. Younger people don't need hospitalization.

You are in car crash, too bad hospitals are only admitting people with covid. This is current situation in Poland.

[nemothekid]

I agree with your view wrt to regulations, but doesn't the article paint a different story? I'm wondering if I understood the article wrong -

As I understand it, the US status as a global reserve currency requires us to maintain a perpetual trade deficit - other countries need dollars and we must give it to them. This is done by buying goods from overseas which has eroded our manufacturing base, as the foreign demand for the dollar is greater than the local demand (which means there is a cheaper manufacturing market).

I'm not sure what regulation you could enact here that wouldn't severely depresses other sectors as they exist today.

[AnthonyMouse]

The status as a reserve currency requires dollars to flow into other countries, but that doesn't mean it has to be in exchange for manufactured goods. Example: US individuals or businesses buy real estate or stakes in local businesses in foreign countries with US dollars, causing US dollars to flow into those countries. Rents collected from the properties or businesses are used to buy more properties or businesses rather than being extracted from the country.

[nemothekid]

Labor is likely the most plentiful asset any developing country has as well as it's a system that doesn't require much legal overhead. Manufacturing goods would be the easiest asset any country could produce - trying to own an asset in a foreign nation is an expensive endeavor that requires military might (the middle east probably being the most pertinent example). Trying to collect rents requires the maintenance of an international legal system that will rule fairly. I'm not saying it's impossible, but that manufacturing requires way less overhead to maintain.

[zozbot234]

The flip side of a current account deficit is a capital account surplus. To the extent that the informal notion of a "global reserve currency" means anything economically, that's perhaps the best description of it. Such an investment surplus would tend to improve the country's economic base over time, far more than implied by any direct effect of the trade deficit.

[tekknik]

I agree with you, but one point is (and clearly these are not accurate numbers you posted) these 0.02% cost increases add up. One regulation may only increase the cost 0.02%, but 1000 at the same industry increases it 20%. And all of them increase the cost of entry. If you increase the cost of entry, then you’ll get less competition as smaller business that could turn into flourishing enterprises simply never take off or even get started because someone in their garage can’t find a profitable path. Or afford a lawyer to explain the legal hoops you have to jump through. Recently I was quoted $10k to have a lawyer explain to me 2 points about importing liquor. The result, I didn’t start the business. This is more of a problem IMO

[specialist]

I'm adopting Michael Lewis' "market referee" rhetoric.

https://atrpodcast.com

Fused with Graeber and @dredmorbius phrasing where "deregulation" means "pro-monopoly" and "anti-competitive".

I'd like to learn more about "regulatory efficiency".

--

Law (et al) is much like source code. Technical debt, path dependencies, tooling stack, managing complexity and risk. You get the idea.

So of course there's evergreen debates about refactoring, rewrites, paradigms.

[rpier001]

I wonder if import taxation that reflects externalities (pollution) and costs that we carry to reduce suffering (child labor, minimum wage) would make a difference.

[a3camero]

Rules on paper aren’t rules in reality. Enforcement of law, and the way it’s experienced (or not) is far more important than what’s written in the law books, and the enforcement part is much less transparent, and impossible to know at the time the rule is passed.

[complexmango]

Google ‘regulatory capture’

[diryawish]

Very well put - efficient and diligent deregulation would be a great thing to see.

[namdnay]

Without a very strong (and therefore expensive) social security net, “Letting people work for whatever wage they can achieve” is slavery. See 19th century Britain

Germany still has a strong industrial base, without a race to the bottom and with strong unions. So it is possible :)

[inglor_cz]

"Germany still has a strong industrial base, without a race to the bottom and with strong unions. So it is possible :)"

A lot, and I mean a LOT, of German industrial base is now located abroad, in Poland, Czechia, Slovakia, Hungary, Romania. These countries are rather close, but because they belonged to the Soviet Bloc, their economic development was retarded so much that local wages are 20-30 % of wages in Bavaria, but the workforce is qualified and the infrastructure adequate. This is a historic anomaly you do not have in the U.S.

Come here (I am in Czechia) and look around, the countryside around cities is absolutely dotted with German-owned factories that mostly produce parts. Those parts are then moved by trucks to Germany where the final product is assembled - and so the miracle of higher "work productivity" in BRD is created. Of course you have nominally higher productivity if you finalize products.

This is, by the way, how Viktor Orbán gets his political way. Hungary is absolutely vital part of German industrial base and German industry gets premium conditions on the ground. So for all the shouting about values and rule of law, German CDU/CSU and Orbán always find a way to coexist.

And as for race to the bottom, look to former East Germany. There, people want German wages from German bosses. They do not get them, most of the industry moved abroad where cheaper workforce is. Former GDR is an economic periphery where anti-system parties command majority of the vote.

[cloudinshape]

You have to square the circle.

Wages in the US are artificially high because of the dollar's position, but the US needs to either a) match the wages of the countries producing similar stuff or b) increase productivity and value to the levels of countries like Germany.

Since b) requires decades in factories, supply chains, trade agreements and most importantly training in actually producing things which means science and engineering, exactly the occupations an increasingly large portion of the US population has been taught to abhor, it is very unlikely to happen. The US has spent the last decades destroying all those things, so the only real option is to sadly let wages fall to levels markets are willing to pay for. It will bring a lot of suffering but is the consequence of decades of mismanagement and complacency, and it is unavoidable so it will either happen by will or by force. And we know it won't happen by will.

Of course there is always c) keep forcing the rest of the world to pay for the US standard of living while they themselves live beneath their means, but that is the actual problem now so how much longer can it last?

[8note]

There is also d) the owners take smaller profits

[CountSessine]

The average operating margin for the S&P 500 is 10.53% (although that may have been 2018). And economists are worried that even that is high - traditional manufacturers like Ford typically manage operating margins of ~5%. Workers are already getting 95%. And then everything after that like R&D, marketing, and capital amortization has to come out of that 5%. And then finally a bit is left over for earnings for the owners. You’re mistaking wealth for income. Surely the workers could use more wealth, but what we’re discussing is the price of goods and this is operating revenue and income. And workers already get the lions share of this.

If you’re going to make US manufactured goods cost competitive with foreign goods, much of it has to come out of that 95% operating revenue that is operating expenses, most of which will be employee wages. There’s no way around this.

[hannasanarion]

workers are not getting 95%. Corporate profit and revenue is at an all time high, but wages are down since the 1980s. All that corporate growth goes into price fixing schemes and mergers to establish monopoly, and "consulting fees" to suspiciously named LLCs in the Caymans.

[CountSessine]

Read some 10-Qs for some big companies sometime. You might be surprised. Like I said - S&P 500 average operating margin was 10.53% a couple of years ago. And that’s crazy high - probably because of pharma stocks and the US’ dysfunctional generic drug regulation.

[sudosysgen]

This isn't a correct way of looking at it. You're assuming that the sum total of profit generated is in that one manufacturer. It isn't the case. You have subcontractors that also make an additional ten percent, then materials coming from a supplier that takes another ten percent, which comes from raw material suppliers that make yet another 10%, and then you're going to have consultants in R&D and marketing that might make even more than 10%, and so on. So it really can end up quite a bit higher than that.

[CountSessine]

Possibly - although if your suppliers have operating margins that are as wide as yours, or wider, it might actually make sense to just buy them and take those earnings for yourself. I wonder how many of Ford's suppliers have an operating margin as wide as Ford's 5%?

[cloudinshape]

I know these discussions always end up in worker vs owner debates, but what I'm talking here is about the nation.

Factories will need to adjust their prices, now you take that as you will, and if one is naive one can think it means executives will take a pay cut while workers do not, but in the end it mean less wealth for everyone, less money for taxes, less money for shareholders, less money for executives, and of course less money for workers. That is less wealth for the nation.

So yes, owners will take smaller profits, along with everyone else.

[southeastern]

>keep forcing the rest of the world to pay for the US standard of living while they themselves live beneath their means, but that is the actual problem now so how much longer can it last

Our entire society is built on this, though. Silicon Valley wouldn't exist if electronics couldn't be produced for comparatively cheaper overseas. You bring up an interesting moral point, but if you're serious about that there's a lot of reckoning society will have to deal with. It's not just going to affect minimum wage lol. It'll affect wages across the board. You're really talking about totally reforming the economy

[tomcam]

> Silicon Valley wouldn't exist if electronics couldn't be produced for comparatively cheaper overseas

Silicon Valley literally exists because it was an electronics manufacturing center.

[CountSessine]

When someone is beating you, the least you can do is copy them. We could start by copying German worker councils (unions) - but no one in management or labour here wants that. Labour hates company unions and still dreams of building labour monopolies like they had in the 60’s and that’s exactly what worker councils were designed to prevent. And managers want to be able to bust unions which isn’t legally allowed with worker councils.

So I guess not?

[stjohnswarts]

In the traditional sense, it is not the same as slavery, not by a long shot. I do agree with unions becoming prominent again. Not everything has to be a bargain basement priced items. I personally try to hit something in the middle, and often look for an American made version (or European) it can be extremely hard though, and impossible for 99% of electronics.

[RhodoYolo]

Do you think the 19th century is a good anecdote for what would happen nowadays? Setting minimum wage seems to create this standard that may do more harm than good. Increasing the 'standard' harms the 'middle-class' and this 'standard' may set the wages lower than entitled per job.

[birdyrooster]

Wealth inequality is a problem you can’t fix by reducing the income of the poor.

[cloudinshape]

Which is exactly the problem: wealth inequality can't be solved by fixing wages.

Asian or "factory" countries (not necessarily from Asia but for illustration) have an "artificially" held minimum wage, which indirectly subsidizes the US minimum wage. This is happening to all wages not just minimum wages mind you, so the market needs rebalancing. Wages need rebalancing, taxes need rebalancing, but most wages, including the minimum wage need to come down (in real terms not necessarily in fiat terms).

[RhodoYolo]

I never said that or really proposed a solution, simply stated a problem as i saw it - Which makes sense why i got downvoted. I don't really know the answer with minimum wage but i tend to lean more 'darwinistic' in my philisophies. I wish there was more inherent economic incentive, where everyones salary was more closely tied to their contribution and efforts but I guess thats too much to ask for in this world where non performers and non-productive members of society are given this 'unalienable right' to live off the products of society just for being human.

[nemothekid]

>I wish there was more inherent economic incentive, where everyones salary was more closely tied to their contribution and efforts but I guess thats too much to ask for in this world where non performers and non-productive members of society are given this 'unalienable right' to live off the products of society just for being human.

It's hard to parse what you are asking for - what more economic incentive would you imagine there to be; I think the problem with this line of thinking is that you are taking a far too simplistic model of the world where our problems are caused by people being "lazy". I think the world you are wishing for existed - it's probably the hunter/gatherer model; any more sophisticated organization of civilization requires some level of socialization. I think your "darwinistic" approach is a flawed philosophy upon which it build a nation or a global superpower.

It's interesting because the article posits, and makes a very good case for, systemic issues that has caused the erosion of manufacturing base - however politically we are unable to move beyond simply understood talking points such as "minimum wage".

[bawolff]

As a general rule, yes, i think all things being equal, history tends to repeat itself.

Of course, all things aren't always equal, but if you're going to argue its going to be different this time around, i think there is some onus to argue why the present would be different from the past.

[hourislate]

>Germany still has a strong industrial base

It's because they build the machines to build the product the Chinese manufacture. The Germans have forced themselves to be at the top of the Manufacturing Food Chain (engineering, etc) while letting the Chinese/Rest of the world build the crap we buy.

I don't think we could get there manufacturing the "Trinkets" the Chinese mostly manufacture, that is a a race to the bottom where either automation or cheap labor win.

[incrudible]

Your impression of China manufacturing "mostly Trinkets" is decades out of date.

Chinese manufacturing is now at a very high level, to the point where many western brands have effectively become "fabless", leveraging the fact that Chinese brands still struggle with poor reputation even domestically. In this symbiotic relationship, the fact that Germany is literally "the land of virtue" in Chinese might play a role.

Chinese labor has now too become relatively expensive, its economy is moving to become a service economy, and manufacturing gets outsourced from China to even cheaper countries.

[hakfoo]

What I always wondered: are German products that much better, or is it a meme?

The thought that comes to mind is when American railways tried to import German locomotives in the 1960s. They were appealing because they offered higher horsepower ratings than anything domestic, but they required too much babying and maintenance to keep healthy and were quickly scrapped. I hear strikingly similar things from people buying German cars today-- everything tends to be expensive to keep running after the warranty expires.

I wonder if American manufacturing needs to develop its own meme. I'd suggest the old line about GM products-- they'll run poorly for a lot longer competing products run at all. That could be a compelling argument when you're selling to a manufacturing sector that's rolling out in low-development countries with unstable infrastructure, poor environmental conditions, and low-training staff.

That gives us a niche we can target and use as a base to re-bootstrap ourselves into competitiveness. We need to be decidedly better than bottom-bit Chinese (etc.) tooling, which is probably still within our abilities, and if we overdeliver there, we can begin to position American-made as a premium choice.

[count]

A large part of the expense on the cars is import tariffs and shipping/freight expense. Upkeep on a German car in Germany is substantially less expensive.

[geitir]

All I know is I've been in an Audi and the center console had so much unnecessary stuff going on. It's a stereotype for a reason German stuff is performant and precise but over engineered

[tachyonbeam]

Tesla is trying to do exactly what you describe. Build "the machine that builds the machine", as Elon Musk would say.

I agree with you that trying to compete on low-cost, low-margin is a race to the bottom. We could conceivably bring manufacturing of iPhones back to America. I would also imagine that manufacturing of silicon is largely automated, so the US could try to build the best fabs.

[te_chris]

Tesla has done some reverse Chinese equity investment swap thing and is now at least somewhat a Chinese company building manufacturing capacity and innovation in EVs. Musk is a lot of things, and one thing is clear: he’s an opportunist more than a US economic nationalist. He will not be the saviour of American industry.

[kamaal]

>>one thing is clear: he’s an opportunist more than a US economic nationalist. He will not be the saviour of American industry.

Reading this as a non-American. Isn't 'opportunity' the whole reason behind immigration?

If your country relies on continuous supply of heroes and not sound systems and policies, no one single person can save you.

[te_chris]

Hey I’m a non American too, and Musk himself is South African, which is kind of my point.

[tachyonbeam]

Please clarify what you mean by "Chinese equity investment swap thing".

[te_chris]

https://seekingalpha.com/article/4339781-teslas-transformati...

[andrekandre]

> he’s an opportunist more than a US economic nationalist

its called being a capitalist; anyone leaving money (capital) on the table by favoring thier home country will get squashed by those who dont...

[roenxi]

The number of powerful economic nationalists in US history can be counted - if the US is lucky - on one hand.

Assuming that the goal is saving the American industry (whatever that means) - if the plan is 'good people will save it' then failure is already baked in. That plan never works. The plan should be 'whoever saves it will become fabulously and disgustingly wealthy' - then greedy opportunists will save it for you and people can go protest about how greedy they are.

Relying on good people to act is dicey. Relying on greedy people to act is a safe path.

[sgnelson]

I've got to add my two cents to this discussion...

You discuss tool and die makers, a very highly skilled profession; one that I would argue takes many years of training and labor to master. I would further argue that in the manufacturing world, when it comes to hands on work, tool and die guys are near the very top.

Yet at the same time, you talk about cutting the minimum wage. Tool and die makers (of any sort) aren't going to be working for minimum wage.

While I don't disagree with the importance of American manufacturing, I think your prescription is wrong. We don't need lower wages, we need better education, more apprenticeships, more buy in from industry to spend money on training their employees. Because sooner than people think, China will have labor cost parity with the US, and we'll find that labor cost isn't solely the reason they are a manufacturing power house.

[ralph84]

China treats workers like shit and the environment like shit. The US wouldn’t win a race to the bottom and shouldn’t try.

Instead companies who manufacture in China should be taxed at much higher rates to account for the negative externalities they benefit from otherwise.

[stjohnswarts]

we could if environmental and personal costs were factored into prices. The woudl take a lot of political will that I don't think we have though

[alex_anglin]

Competing in a race to the bottom ought to beg the question about what alternatives and options are. Focusing on efficiency and quality are two examples that would probably be a better long-term bet, with fewer negative secondary effects.

[southeastern]

I don't know why more people aren't saying this. Is it really a majority opinion on this site that a race to the bottom is a good, or even tenable idea?

[nextweek2]

That's the strategy of the Germans.

[koolba]

We all want to be like Germany, but do we have the sheer force of will?

[simonh]

They aren’t slaves, they’re just people extremely happy to get a wage of $10k per year, which would be unobtainable for most of them any other way. The fact that this means they under cut US manufacturing wages by more than half isn’t really their fault.

As for bringing back manufacturing home, you need to find two things to make that work. First massive subsidies and tariffs to drive up the cost of foreign imports, imposing huge costs on tax payers and consumers; and tens of millions of people willing to work in factories. The US long term unemployment rate in 2019 was about a third of a percent. Where are you going to find the money, and where are you going to find the people?

[pnutjam]

I say taxes aren't necessary. Just hold companies accountable for every step in their manufacturing chain. They need to audit and ensure factories address meeting or standards for the workers.

I don't mean wages, I mean safety, overtime, etc. Labor needs to be valued at home and abroad.

[simonh]

I'm all for holding companies accountable for their supply chain management, but within reason. I can't see the US government accepting EU employment contract, health, safety and business practices imposed on the US arbitrarily. There has to be some flexibility. Let's be clear, the west has reaped _staggering_ economic benefits from opening up China. Of course there have been costs too, some of them painful, but that's always the way with economic change.

[pnutjam]

It's not the other country accepting, it's ensuring the company adheres to certain standards in it's supply chain. Any penalties would be assessed against the US based company.

[onepointsixC]

He's not referring to all Chinese laborers, but Uyghurs who were first sent to re-edcation camps and then sent off to factories all against their will.

[simonh]

A reprehensible and horrific crime for sure, which I don’t want to trivialise, but not an economically consequential one in the grand scheme of things.

[schemescape]

> To compete, you really do have to cut minimum wage

The article points out other ways to reduce the cost of domestic labor: namely, shifting away from high payroll taxes and severing the link between health insurance and employment.

[CraigJPerry]

>> To compete, you really do have to cut minimum wage. You have to loosen regulations

That’s not what Germany has done but there’s little doubt that Germany’s manufacturing ability is held in a higher regard globally.

So i challenge the “have to”. It’s the unproven talk of a particular tribe but i stress unproven since economics is a social science. That means there’s lots of science but is fundamentally stories we tell each other and not akin to, for example, the unassailable truth of gravitational pull.

[kevingadd]

How will cutting the minimum wage help in the long run? People earning the current minimum wage already struggle to afford rent and food. Can you really expect to get quality work from someone who has to work 4 jobs to be able to pay rent and is sleeping 4 hours a night?

You're not going to defeat China by cutting wages unless you address the societal issues that cause US wages to be high. We already haven't raised the federal minimum wage in decades.

[ClumsyPilot]

> "You either let free people work for what ever wage they can achieve or we risk becoming slaves ourselves."

We should work for slave-like wages voluntarily or have it forced upon us?

This is a poorly thought out argument. Cost of living, housing, etc. is obviously different in US, you might end up with less income than is necessary for survival. What makes you think you will be able to find any workers at all, let alone those trained to the necessary standard and skill?

It should be obvious that appropriate responce to a crime (slave labour) being committed is not to commit the same crime yourself.

Any products with stolen materials, stolen labour, or stolen taxes should not be allowed on the market at all.

[zhdc1]

In all fairness, the same is happening to China as well. Manufacturing as a percentage of GDP has been declining every year since 2010, and iirc manufacturing in total value has stagnated entirely in many provinces over the last couple of years.

Manufacturing is still moving to SE Asian countries (Viet Nam in particular), but even there producers are increasingly moving production in India and East Africa because of rising costs (e.g., wages).

[confidantlake]

I am not so sure about the loosen regulations thing. The US had periods of time with virtually no regulations. Rivers caught on fire, people were maimed and died of industrial accidents at much higher rates, water was unsafe to drink, ect. The countries now without much regulation are usually poor, dirty and dangerous. I want to live in a safe, clean, healthy environment.

I agree with you on the tariffs. China should not be able to outcompete us because they pollute and use slave labor. Force them to compete on fair terms.

[sanp]

This is missing the point of the article. The main reason for the current state of affairs is the petro-dollar system and the need for US to run deficits. Changing regulations for domestic manufacturing has very little to do with it.

There are quite a few European countries with very robust manufacturing bases who are far more regulated (both from a labor and capital perspective). So, minimum wages, labor unions etc have little to do with the US' manufacturing base. In fact, one could argue that weaker unions, if anything, have contributed to the decimation of the manufacturing base.

[Zenst]

>To compete, you really do have to cut minimum wage. You have to loosen regulations, and importantly, you have to do massive tariffs / sanctions on China for the next decade.

Not so, import taxes and one avenue that should be explored is true carbon costs/impact factored in. Why should something made locally be more expensive than something made the other side of the World and shipped all that distance. Clearly some impact costs not being factored and the whole carbon aspect should be utilised for many benefits - balancing out imports for one.

[momokoko]

Banning or taxing out of existence foreign investment on real estate and pegging the fed rate to zero will accomplish the same thing without needing to care about minimum wage. Shenzhen minimum wage currently provides workers in China with a higher standard of living than US minimum wage does in the US.

Only difference is that the wealthy in the US will carry more of the burden instead of the working class.

And that’s why we don’t have many advocates for it even though it will solve the manufacturing problem almost overnight

[cloudinshape]

The reason foreign real estate investment is so high is because the dollar is the reserve currency of the world, and since those countries produce so much they have a huge excess of dollars but the US produces so little they have nothing to buy with those dollars. The only thing the US can realistically offer is land, if you ban it it will only accelerate the collapse.

[momokoko]

Banning foreign investment in real estate forces foreign investors into more productive investments while simultaneously lowering the cost of living for workers and cost of business for companies.

Moving inflation to 6% will create millions of working class jobs in the US due to both a weaker dollar and cheaper money supply for value creation.

The losers in all of this are wealthy Americans. They will see their assets depreciate and buying power diminish. And that’s why we don’t do it.

[cloudinshape]

Banning foreign investment will force them to dump dollars and treasury bonds and will accelerate the development of an alternative to it for international trade.

But I guess since what you want is inflation that is one way to get it, tho it will not be 6% but closer to 30%.

Yield curve control has not worked for anyone, it is a death spiral that results in zombie economies, at best.

[momokoko]

> Banning foreign investment will force them to dump dollars and treasury bonds and will accelerate the development of an alternative to it for international trade.

How does this harm a working class American that derives all of their income from working wages as opposed to assets?

> it will not be 6% but closer to 30

Cite and example where a country did not default/print money for their debt payments and inflation went to 30%

> Yield curve control has not worked for anyone, it is a death spiral that results in zombie economies, at best.

How does this harm a working class American that derives all of their income from working wages as opposed to assets?

Lastly, address how any of the above prevents an increase in manufacturing jobs, which was the intent of the measures originally listed.

[cloudinshape]

> How does this harm a working class American that derives all of their income from working wages as opposed to assets?

Their wage-dollars will now buy less stuff.

> Cite and example where a country did not default/print money for their debt payments and inflation went to 30%

The US has the world reserve fiat currency, so there are no examples because a fiat reserve currency has never existed before, but we know hyperinflation is a likely outcome. Now, from the experience we do have, ~30% inflation like in the 70s is the best we can hope for. A zombie economy like japan's would frankly be fantastic given the conditions.

>How does this harm a working class American that derives all of their income from working wages as opposed to assets?

Their wage-dollars will now buy less stuff.

> Lastly, address how any of the above prevents an increase in manufacturing jobs, which was the intent of the measures originally listed.

Don't worry, americans will have plenty of $1/hour manufacturing jobs like asians do now (or the nominal equivalente to $1 in a hyper-inflationary world). The US doesn't have the technical capacity or workforce to compete in high paying manufacturing any more and will take decades of pain to build.

[imtringued]

>Banning foreign investment will force them to dump dollars and treasury bonds and will accelerate the development of an alternative to it for international trade.

Only if they don't find a better alternative than real estate.

[blueblisters]

Moving inflation to 6% will almost certainly not impact any wealthy American with most of their net worth in equity. It will impact working class Americans who have their savings, however little, in bank accounts.

[Gibbon1]

> It will impact working class Americans who have their savings, however little, in bank accounts.

I have about $20k in bank accounts. I owe $450k at 2.5%

6% inflation? Don't throw me in the briar patch!

[imtringued]

It would be more sensible to just build more housing. That way Chinese dollars will end up employing Americans instead of just changing the title on a home. It's quite funny how backwards America is in this regard. They are unwilling to produce more of their primary "export" even though there is no way for production of it to be moved to any other country. Instead every property owner wants a larger slice at the expense of everyone else.

[pbourke]

I am surprised that no one has mentioned punitive taxation of companies that engage in offshoring/higher taxes on foreign direct investment as an alternative to tariffs.

[namdnay]

Taxing companies that offshore favours foreign competition even more, because they won’t be taxed.

[southeastern]

>You either let free people work for what ever wage they can achieve or we risk becoming slaves ourselves.

Minimum wage already isn't really a living wage in much of the country. Rolling back regulations is jumping headfirst into slavery, whereas.. I'm very critical of China but don't see the connection between their expanding industry and slavery. Businesses are diversifying their supply chain in the face of this pandemic.

[coolgod]

> In the end they still haven’t exactly caught up to the quality we had in the US.

Arrogance, this is one of the factors that killed US manufacturing.

[Guthur]

I'm not disagreeing on the spirit of your statement but I wonder if labour costs are really the prime driver of profitability with high tech manufacturing. It may be, but I'd love to see some of the figures, there could be other factors at play such as environment protection for example.

[etc-hosts]

> To compete, you really do have to cut minimum wage.

Minimum wage workers do not think they are making too much money, also there are a lot more of them then you.