Globalization is rolling back. It's about to be boom times in America as long as the politicians from all parties can actually move from one troth to another and actually pass bills.
Cars, and EVs in particular have strong protectionist laws in the US that make it more expensive to import vehicles than to build them locally. There are a few other sectors like semiconductor fabs where we have started to introduce protectionist policies but I haven't seen any movement to expand those types of policies to most other manufacturing sectors.
That's that magic of concentrated benefits and diffuse harms. The inverse is manufacturing workers who suffer concentrated harms from cheaper foreign competition and everyone else enjoys the slight benefit of cheaper TVs.
Seems to be almost daily news stories about huge capital investment in manufacturing in the US, a couple billion here, a couple billion there. Was I just blind to these 5-10 years ago?
Geopolitics: China's sudden shift to authoritarianism under the new emperor has everyone fleeing for the exits as the US and Europe abandon the project to bring China into the club.
Economics, Neoliberalism is dead. The pandemic killed it. Policy makers well understand the economy can tolerate a lot of disruption.
Politics: Dispossessed voters turning to fascism has sharpened politicians and sane business leaders minds.
Global Warning and new Tech: Solar, wind, batteries, and the need to faze out fossil fuels creates risks and opportunities. Risks will be born by those that try business as usual.
Increased automation: Low skilled dirt cheap labor is less important than it was 20-30 years ago. That changes the balance point between low cost offshored labor and the pain in the ass that offshoring is.
> Policy makers well understand the economy can tolerate a lot of disruption
If I understand you correctly, this is my reading of the pandemic as well. We suddenly all realized there is a _ton_ of slack in the system. On the individual level, but as well as societal.
Yeah exactly. Instead of the economy being a delicately balanced machine that you don't dare touch. It turned out you can push it really hard and it'll hold together. At that point the idea that if you change industrial policies the whole thing will collapse and it'll be your fault went out the window. Policy makers have vastly more confidence in 2024 than they did in 2019.
Geopolitics: China's sudden shift to authoritarianism under the new emperor has everyone fleeing for the exits as the US and Europe abandon the project to bring China into the club.
No. This is simply because the US and other developed economics do not want competition from Chinese companies. Chinese companies are moving up in the value chain which is a threat economically to the US and allies. It's nothing new. It's the same playbook used on Japan.
“When governments permit counterfeiting or copying of American products, it is stealing our future, and it is no longer free trade.” So said US President Ronald Reagan, commenting on Japan.
Not convinced: Not enough workers with the appropriate expertise to outmatch China and there is no appetite to import more people from either side of the aisle (despite what you might hear in the news).
>But people might be more happy walking, biking, etc.
No scenario where division does not increase especially after this upcoming election.
These local factories exist due to automotive manufacturing "domestic content" laws, as opposed to whatever JIT manufacturing philosophy Toyota might have. Pushed by the UAW and signed by Reagan in the 1980's, the US has many foreign car factories in the US as a direct result.