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(Washington Post)   Conventional wisdom: US manufacturing is coming back. Reality: no, it isn't   (washingtonpost.com) divider line 84
    More: Sad, Goldman Sachs, U.S., U.S. manufacturing, petrochemicals  
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2920 clicks; posted to Business » on 25 Mar 2013 at 11:12 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-25 11:11:26 AM
Trendy stories of hope =/= Conventional Wisdom.
 
2013-03-25 11:17:42 AM
Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.
 
2013-03-25 11:29:29 AM
Marcus Aurelius: Free trade agreements areAutomation is very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobshave shifted to other forms of employment, but just think how cheap the new smartphones are everything is.

Also, complaining that standard of living of low skilled Americans has not improved as fast as it has unskilled Indians, Chinese, etc. is racist and stupid.
 
2013-03-25 11:33:44 AM
 
2013-03-25 11:37:10 AM

Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.


We would have lost those jobs, anyways. Manufacturing always goes to where it can be done most efficiently; that's how the US got to be #1 in manufacturing in the first place.
 
2013-03-25 11:38:54 AM
That's a mighty smackdown of "conventional wisdom".  I bet you've got some opinions on which musicians are "overrated"
 
2013-03-25 11:41:06 AM

Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.


Fun fact: since NAFTA passed, US exports to Mexico and Canada have tripled.
 
2013-03-25 11:44:59 AM
That's not what Goldman Sachs said at all, you f*cking morons. Their report was actually informative and nuanced, you just plucked out a few soundbites and wrote a doomsday article on it
 
2013-03-25 11:49:14 AM
In the semiconductor business, there are quite a few factories in Asia that are set up as bonded
warehouses, so technically they are US soil and they can legally label the product as 'Made in the USA'
to get around trade restrictions and get DoD contracts.
 
2013-03-25 11:49:40 AM

meanmutton: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

Fun fact: since NAFTA passed, US exports to Mexico and Canada have tripled.


True, but look at what is being exported. What we are doing is shipping them all the parts needed to build the things we want. They ship back the finished product.

http://wiki.answers.com/Q/What_items_does_Mexico_trade_with_the_Unit ed _States gives a good break down.

Look at most computer equipment. Parts are assembled in China, Taiwan and shipped to Mexico. The final product is put together in Mexico, and then shipped to the end consumer.

So while there is still manufacturing done in the US and Canada, it's typically small parts that are shipped south where the final product is made.
 
2013-03-25 11:50:30 AM

DrPainMD: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

We would have lost those jobs, anyways. Manufacturing always goes to where it can be done most efficiently; that's how the US got to be #1 in manufacturing in the first place.


wrong.

Brazil has significantly more labor protections than the US, and is seeing a huge boom in manufacturing.

why? Import tariffs make it prohibitively expensive to produce elsewhere.

most efficient does not mean cheapest.
 
vpb [TotalFark]
2013-03-25 11:50:46 AM

Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.


And think of how many jobs the job creators will be able to afford to create whenever they get around to doing that.
 
2013-03-25 11:56:49 AM

dumbobruni: DrPainMD: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

We would have lost those jobs, anyways. Manufacturing always goes to where it can be done most efficiently; that's how the US got to be #1 in manufacturing in the first place.

wrong.

Brazil has significantly more labor protections than the US, and is seeing a huge boom in manufacturing.

why? Import tariffs make it prohibitively expensive to produce elsewhere.


Which, for those who have any interest in history, is actually how the US got to be #1 in manufacturing.  Protectionism was such a factor that it used to be known, around the world, as the American School (as compared to Adam Smith's ideas, which we rejected for the better part of two centuries).

Students studying economics in Brazil and China are a lot more likely to have heard of List, Carey, and Hamilton than are students studying econ in the modern US.
 
2013-03-25 12:04:49 PM

meanmutton: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

Fun fact: since NAFTA passed, US exports to Mexico and Canada have tripled.


Mexican auto exports have done rather well too.
 
2013-03-25 12:05:29 PM

Lawnchair: dumbobruni: DrPainMD: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

We would have lost those jobs, anyways. Manufacturing always goes to where it can be done most efficiently; that's how the US got to be #1 in manufacturing in the first place.

wrong.

Brazil has significantly more labor protections than the US, and is seeing a huge boom in manufacturing.

why? Import tariffs make it prohibitively expensive to produce elsewhere.

Which, for those who have any interest in history, is actually how the US got to be #1 in manufacturing.  Protectionism was such a factor that it used to be known, around the world, as the American School (as compared to Adam Smith's ideas, which we rejected for the better part of two centuries).

Students studying economics in Brazil and China are a lot more likely to have heard of List, Carey, and Hamilton than are students studying econ in the modern US.


^ This.
 
2013-03-25 12:07:36 PM

Unoriginal_Username: meanmutton: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

Fun fact: since NAFTA passed, US exports to Mexico and Canada have tripled.

True, but look at what is being exported. What we are doing is shipping them all the parts needed to build the things we want. They ship back the finished product.

http://wiki.answers.com/Q/What_items_does_Mexico_trade_with_the_Unit ed _States gives a good break down.

Look at most computer equipment. Parts are assembled in China, Taiwan and shipped to Mexico. The final product is put together in Mexico, and then shipped to the end consumer.

So while there is still manufacturing done in the US and Canada, it's typically small parts that are shipped south where the final product is made.


previous link had some dated graphs.
http://useconomy.about.com/od/tradepolicy/p/Imports-Exports-Componen ts .htm is more up to date, but still shows that the US and Canada export more parts then anything

dumbobruni: DrPainMD: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

We would have lost those jobs, anyways. Manufacturing always goes to where it can be done most efficiently; that's how the US got to be #1 in manufacturing in the first place.

wrong.

Brazil has significantly more labor protections than the US, and is seeing a huge boom in manufacturing.

why? Import tariffs make it prohibitively expensive to produce elsewhere.

most efficient does not mean cheapest.


I think that would depend on who is paying. For Brazil it's cheaper to make stuff locally because of the tariffs. The US and Canada will use other countries becuase labor is cheaper and import tarrifs aren't high enough to do otherwise.
If the taxes  to import consumer ready products were higher then the cost of paying someone local to make a product then that 'could' bring back the manufacturing jobs that have been lost, like the automotive sector.
 
2013-03-25 12:23:43 PM

Sasquach: Don't call it a comeback, it never left...


Manufacturing never left; the jobs did.  America will never go back to the days of labor-intensive high-volume assembly lines; American manufacturing is sustained with small-lot cottage industries, ultra-heavy industries (we don't make the t-shirts, we make the machines that make the t-shirts) and a HEAVILY subsidized and horrifically inefficient defense industry.  It's an adaptation, of sorts.

But the biggest threat to U.S. manufacturing isn't political or economic so much as cultural.  For all their political bloviating, Americans really don't give a rat's ass about where their stuff comes from.  The very same factory workers crying about how everyone should buy their stuff go to Wal-mart for imported goods because "it's cheaper".  About the only sector propped up by nationalism is the automotive industry and they can't seem to stay out of financial trouble for more than a decade at a time.  At this point America's been out of light industries for so long that any serious effort to restore it would be hampered by a lack of experienced talent.
 
2013-03-25 12:24:44 PM
Does making hamburgers still count as a "manufacturing" job?
 
2013-03-25 12:52:25 PM
Cheap consumer goods or domestic manufacturing jobs. Pick one.
 
2013-03-25 12:58:38 PM

Unoriginal_Username: So while there is still manufacturing done in the US and Canada, it's typically small parts that are shipped south where the final product is made.


Ah no.  The US remains the number 2 manufacturing power in the world because we are awesome at making stuff.  As long as we can automate it.  Anything that requires actual people to assemble something - we punt abroad.
 
2013-03-25 01:03:20 PM

gingerjet: Unoriginal_Username: So while there is still manufacturing done in the US and Canada, it's typically small parts that are shipped south where the final product is made.

Ah no.  The US remains the number 2 manufacturing power in the world because we are awesome at making stuff.  As long as we can automate it.  Anything that requires actual people to assemble something - we punt abroad.


Well, #1 if you go by $ value of the goods.
 
2013-03-25 01:06:52 PM
Gun and ammo manufacturers are doing quite well right now.
 
2013-03-25 01:12:48 PM

dragonchild: Sasquach: Don't call it a comeback, it never left...

Manufacturing never left; the jobs did.  America will never go back to the days of labor-intensive high-volume assembly lines; American manufacturing is sustained with small-lot cottage industries, ultra-heavy industries (we don't make the t-shirts, we make the machines that make the t-shirts) and a HEAVILY subsidized and horrifically inefficient defense industry.  It's an adaptation, of sorts.

But the biggest threat to U.S. manufacturing isn't political or economic so much as cultural.  For all their political bloviating, Americans really don't give a rat's ass about where their stuff comes from.  The very same factory workers crying about how everyone should buy their stuff go to Wal-mart for imported goods because "it's cheaper".  About the only sector propped up by nationalism is the automotive industry and they can't seem to stay out of financial trouble for more than a decade at a time.  At this point America's been out of light industries for so long that any serious effort to restore it would be hampered by a lack of experienced talent.


I know this all too well. Fortunately, I work for a company that makes a relatively large product so shipping whole product is (mostly) prohibitively expensive (for the industrial class of products; the consumer grade stuff is still made en mass in the PRC). Oddly, we do often buy industrial tooling from overseas for cost reasons....a mold for an injection machine that costs us (at our in house tool/machine shop no less) $15,000, can be imported for $8000.....and, scarily, the stuff they're putting out is every bit as good as we can do ourselves.
 
kab
2013-03-25 01:44:56 PM
http://www.thefiscaltimes.com/Articles/2013/03/19/Welcome-to-the-Jobl e ss-US-Manufacturing-Boom.aspx#page1

It will be really interesting to see what happens when the "everyone must work 40 / week" social model becomes not only unrealistic, but impossible to satisfy from a job creation point of view.

We're actually well on the way to that point now, but don't quite realize it as a society.
 
2013-03-25 01:59:12 PM

DjangoStonereaver: In the semiconductor business, there are quite a few factories in Asia that are set up as bonded
warehouses, so technically they are US soil and they can legally label the product as 'Made in the USA'
to get around trade restrictions and get DoD contracts.


[Citation Needed]
 
2013-03-25 02:49:05 PM
You're the jerk... jerk:Automation is very good for the bottom line. Sure, Americans have shifted to other forms of employment, but just think how cheap everything is.

But it's not going to stop there.
Automation will continue to improve.
Software is getting better, and if the Singularity ever occurs, there will be very few safe jobs in the world. I work in Accounts Receivable for a very large REIT. I code and apply hundreds of millions of dollars in payments every year. Yet I like to think that the only reason it takes a human to do my job is that other companies' AP department still use humans to do that job. Someday it will be almost entirely automatic on both sides.

The end game of technological capitalism is one guy who repairs the robots that repair the robots that repair all the other robots that do and make everything.

What then?
 
2013-03-25 02:49:35 PM
So they are done with the pump bit and it's time for the dump?
 
kab
2013-03-25 02:56:24 PM

Cubicle Jockey: What then?


Then folks either kill each other over some perceived lack of 'enough' for everyone, or society adapts, and individuals become far more free to pursue their own interests.

Either way, capitalism goes bye-bye.
 
2013-03-25 03:03:40 PM
Is this the thread where people debate the truth of Ross Perot's warning that the giant sucking sound we would hear after the advent of free trade agreements would be all the manufacturing jobs leaving the United States?

You know, the free trade agreements we were told by politicians would lead to more jobs, not less?

Why, I'll bet the usual asshats will try to convince us that that highly automated manufacturing is exactly the same thing as manufacturing jobs.

Well, as long as the obscenely wealthy are getting rich quicker, I'm sure it's perfectly fine.
 
2013-03-25 03:06:43 PM
Not that I know as much as GS, but from what I've understood manufacturing has made a recovery, but manufacturing jobs have not due to automation.  We're making things but with fewer people.
 
2013-03-25 03:09:21 PM

dumbobruni: Brazil has significantly more labor protections than the US, and is seeing a huge boom in manufacturing.


Bonus: A fairly significant decline in their GINI coefficient (decline is good) and poverty.

media.economist.com
 
2013-03-25 03:49:08 PM
My prediction:

Within 20 years, 3D printing technology will progress to a point where it will make manufacturing a thing of the past.
 
2013-03-25 03:49:50 PM

Cubicle Jockey: dumbobruni: Brazil has significantly more labor protections than the US, and is seeing a huge boom in manufacturing.

Bonus: A fairly significant decline in their GINI coefficient (decline is good) and poverty.

[media.economist.com image 595x367]


Not really a significant drop in GINI and still among the worst in the world. 

Also their GDP growth isn't special compared to other emerging markets.

Bottom line, Brazilians are poorer than they would be without insane labor protections.
 
2013-03-25 03:50:15 PM

King Something: Does making hamburgers still count as a "manufacturing" job?


I remember a few years back when the Dept of Labor wanted to include Starbucks baristas as manufacturing workers.
 
2013-03-25 04:02:39 PM
It because we don't pay high enough wages. Pay people more and they will produce more. They'll make more money, hire new people, rinse and repeat.
 
2013-03-25 04:14:52 PM
 
2013-03-25 05:13:09 PM

mcreadyblue: King Something: Does making hamburgers still count as a "manufacturing" job?

I remember a few years back when the Dept of Labor wanted to include Starbucks baristas as manufacturing workers.


[Citation Needed Again No Really Stop Posting Crap Like This Without Cites]
 
2013-03-25 05:52:23 PM

Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.


Having just shelled out over $500 for an unlocked smartphone, I'm not sure I see your point.
 
2013-03-25 08:04:36 PM
The election is over, time for the truth.
 
2013-03-25 09:24:10 PM
rebeccaedwards.org
 
2013-03-25 10:12:25 PM

AiryAnne: It because we don't pay high enough wages. Pay people more and they will produce more. They'll make more money, hire new people, rinse and repeat.


That's called generating weatlh, and the 1% won't be having any of that when it's much easier to suck on the more lucrative quarterly profit margin shifting it all around and funneling it up.

Also, slave labor is the only labor they'll consider.
 
2013-03-25 11:30:56 PM

You're the jerk... jerk: Marcus Aurelius: Free trade agreements areAutomation is very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobshave shifted to other forms of employment, but just think how cheap the new smartphones are everything is.

Also, complaining that standard of living of low skilled Americans has not improved as fast as it has unskilled Indians, Chinese, etc. is racist and stupid.


The standard of living as measured by inflation adjusted income has been flat for all but the wealthiest Americans since the early 1970s. No improvement in purchasing power at all. For the wealthy elite on the other hand it has increased dramatically.

So not only has the standard of living of low skilled Americans not improved as much as it has for unskilled Indians or Chinese, it has not in fact improved at all. I do however think it's a good thing that the poor in China and India are slowly being dragged out of abject poverty.
 
2013-03-26 12:08:32 AM

ajgeek: AiryAnne: It because we don't pay high enough wages. Pay people more and they will produce more. They'll make more money, hire new people, rinse and repeat.

That's called generating weatlh, and the 1% won't be having any of that when it's much easier to suck on the more lucrative quarterly profit margin shifting it all around and funneling it up.

Also, slave labor is the only labor they'll consider.


I'm starting to wonder if one of these days, maybe not soon, but sometime, the pendulum is going to swing back the other way, people are going to get sick of that shiat, and you'll start seeing the labor unions coming back with a vengeance. They've done a fair job of hobbling them, but I have to wonder if strength in numbers of pissed off workers is going to change the momentum.

Right now, we seem to be headed straight back toward the glory days of the industrial revolution, with the company towns, no overtime, and little to no safety and environmental regulation...you know, stuff that Teddy Roosevelt railed against as a Republican. Oh, wait, he was a trust buster that created the National Parks system. Must have been a socialist then.
 
2013-03-26 01:39:02 AM

MithrandirBooga: My prediction:

Within 20 years, 3D printing technology will progress to a point where it will make manufacturing a thing of the past.


Miniature "Amrecian flags" for some, leaky yoda mugs for others!
 
2013-03-26 02:19:04 AM

buzzcut73: ajgeek: AiryAnne: It because we don't pay high enough wages. Pay people more and they will produce more. They'll make more money, hire new people, rinse and repeat.

That's called generating weatlh, and the 1% won't be having any of that when it's much easier to suck on the more lucrative quarterly profit margin shifting it all around and funneling it up.

Also, slave labor is the only labor they'll consider.

I'm starting to wonder if one of these days, maybe not soon, but sometime, the pendulum is going to swing back the other way, people are going to get sick of that shiat, and you'll start seeing the labor unions coming back with a vengeance. They've done a fair job of hobbling them, but I have to wonder if strength in numbers of pissed off workers is going to change the momentum.

Right now, we seem to be headed straight back toward the glory days of the industrial revolution, with the company towns, no overtime, and little to no safety and environmental regulation...you know, stuff that Teddy Roosevelt railed against as a Republican. Oh, wait, he was a trust buster that created the National Parks system. Must have been a socialist then.


The authoritarians have been very successful in equating labor unions with socialism and socialism with communism.
 
2013-03-26 03:33:43 AM

DrPainMD: Marcus Aurelius: Free trade agreements are very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobs, but just think how cheap the new smartphones are.

We would have lost those jobs, anyways. Manufacturing always goes to where it can be done most efficiently; that's how the US got to be #1 in manufacturing in the first place.


Well, no. The US got to be #1 in manufacturing because all of the other major centers for manufacturing were either in the communist block, bombed flat during WWII, or both.
 
2013-03-26 04:00:18 AM

dragonchild: Sasquach: Don't call it a comeback, it never left...

Manufacturing never left; the jobs did.  America will never go back to the days of labor-intensive high-volume assembly lines; American manufacturing is sustained with small-lot cottage industries, ultra-heavy industries (we don't make the t-shirts, we make the machines that make the t-shirts) and a HEAVILY subsidized and horrifically inefficient defense industry.  It's an adaptation, of sorts.

But the biggest threat to U.S. manufacturing isn't political or economic so much as cultural.  For all their political bloviating, Americans really don't give a rat's ass about where their stuff comes from.  The very same factory workers crying about how everyone should buy their stuff go to Wal-mart for imported goods because "it's cheaper".  About the only sector propped up by nationalism is the automotive industry and they can't seem to stay out of financial trouble for more than a decade at a time.  At this point America's been out of light industries for so long that any serious effort to restore it would be hampered by a lack of experienced talent.


Even if they cared, it is one thing to be willing to spend a little more for American made.

It is another to spend the ludicrous amount of time required to figure out which stuff really is American made. And that is if such an option even exists in a given category.

So like you say, people check into it on major purchases like a car.
 
2013-03-26 04:13:11 AM

Cubicle Jockey: You're the jerk... jerk:Automation is very good for the bottom line. Sure, Americans have shifted to other forms of employment, but just think how cheap everything is.

But it's not going to stop there.
Automation will continue to improve.
Software is getting better, and if the Singularity ever occurs, there will be very few safe jobs in the world. I work in Accounts Receivable for a very large REIT. I code and apply hundreds of millions of dollars in payments every year. Yet I like to think that the only reason it takes a human to do my job is that other companies' AP department still use humans to do that job. Someday it will be almost entirely automatic on both sides.

The end game of technological capitalism is one guy who repairs the robots that repair the robots that repair all the other robots that do and make everything.

What then?


What then, is we have an honest discussion about what human beings bring to the table. There will certainly be a bit less shiat work in the future. But I think we have actually gone about as far as automation will allow us to go. And in many areas, too far.

Robots do. They can't evaluate. They can't create. They can't improvise. They do what they are told to do. And even then, they need to be supervised.

The Navy has been trying for years to automate their ships. The reasons are legion. It costs money to feed/clothe/etc a crew at sea. Long duration missions take a toll on the psychological well being of sailors. Life aboard ship is dangerous, even in peace time. If you can reduce the number of crew, you can either build smaller ships, or use the space that used to be devoted to berthing and stores for weapons or other mission spaces.

The LCS was designed with this concept in mind. And at the start, they thought they could get away with 40 crew. (A frigate of about the same size and mission is manned by about 120.) Well after putting the ships to sea, they found they really needed 50. The automation is nice, but they crew was in a constant state of playing catch up. They were also running into a problem of how to train crew if the people running the ship never have a break. Also, the commanding officers were getting tired if having to swab the decks. (No, seriously, there were so few crew, the COs had to help out with housekeeping.)

Now, if the US Navy, with billions of dollars at it's disposal, a burning desire to automate, and the best minds in technology working on the problem have decided that they have reached the limits of automation, and putting out papers outlining that the benefits of increased manpower are X Y and Z, we have reached the end of the rainbow.
 
2013-03-26 04:16:30 AM

Smackledorfer: dragonchild: Sasquach: Don't call it a comeback, it never left...

So like you say, people check into it on major purchases like a car.


My Subaru was made in Indiana. My Ford was made in either Mexico or Canada.

(Shrug)
 
2013-03-26 07:22:26 AM

kg2095: You're the jerk... jerk: Marcus Aurelius: Free trade agreements areAutomation is very good for the bottom line.  Sure, Americans lost massive quantities of good paying manufacturing jobshave shifted to other forms of employment, but just think how cheap the new smartphones are everything is.

Also, complaining that standard of living of low skilled Americans has not improved as fast as it has unskilled Indians, Chinese, etc. is racist and stupid.

The standard of living as measured by inflation adjusted income has been flat for all but the wealthiest Americans since the early 1970s. No improvement in purchasing power at all. For the wealthy elite on the other hand it has increased dramatically.

So not only has the standard of living of low skilled Americans not improved as much as it has for unskilled Indians or Chinese, it has not in fact improved at all. I do however think it's a good thing that the poor in China and India are slowly being dragged out of abject poverty.


Does this statement really make sense to you? Do you think most American's would switch places with a random 1970s family in their income/wealth bucket? Obviously not.

But even if we accepted that, why not point out that this is basically true throughout the developed world. Western Europe hasn't grown much either, neither has Canada. But the median Family in the those places is still poorer than the median family in the US (interestingly it is better to be at the 10th percentile in Europe).
 
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