Can the US thrive without manufacturing?

[ccbatson]

Isn't it obvious that I am referring to every individual? It should be by the context.

[Det_ard]

I'm more than a little skeptic about Det_ard's graphs. Apparently, when manufacturing output was super low, you could find American made products all over, but now that's its way way way higher, everything you see says Made in China? Ehhh. Plus the guy who wrote that article sounds like he has a major agenda, look at how he writes.

Deny reality at your own peril, Johnlodge. Seriously, if you doubt the numbers you can look them up yourself. The feds publish them every month. And yes, the writer has an agenda. Very perceptive. The facts remain salient.

I shouldn't be surprised anymore how many people will simply dismiss things that don't correspond with their preconceptions, but I am. I think economics is outside the comfort zone of the vast majority of Americans.

[Det_ard]

I don't see how its dubious to use dollars produced to show we are manufacturing more value or why losing industries won't harm the slope of the graph. Its not a graph of manufacturing output per worker; its manufacturing output and manufacturing jobs on the same graph. If we lose an industry, both lines should suffer. However, I did not]ice that the numbers weren't adjusted for inflation so thats at least part of the gain.

To me, it shows that we became more efficient and/or we moved our resources from low end products such as 25 cent toys to higher end products such as prefab housing. When you have a labor cost disadvantage, the rational thing to do is move to products where the labor is a lower percent of the production cost. Thats why the steel industry moved from products such as rebar and rods into higher end products such as hoods and pipelines.

There is another thing that really strikes me because I've generally blamed the loss of jobs on NAFTA and blamed NAFTA on Clinton. Manufacturing output had its steepest improvement from 1992 to 2000, a period when manufacturing jobs remained relatively stable. Then, after 2000, output growth returned to previous levels during a period that job growth became negative. So, while its obvious that the worst trade-off was after 2000, its still unclear whether trying to save the low end manufacturing jobs would have increased or decreased output growth or even whether NAFTA can account for both trends.

Dollar figures are adjusted for inflation and expressed in year 2000 dollars.

I do think you're right about a shift of low-skilled manufacturing overseas. That leads to a loss of generally low-paying jobs. The high-skilled manufacturing is still around and that's where a manufacturing employee can make good middle-class wages. It's not a field for unskilled button pushers though, post-HS education is a must, as is a decent level of intelligence. No more "check your brain at the door".

[Sstashmoo]

Quote: "The high-skilled manufacturing is still around"

They are shipping ALL skill levels of jobs and equipment out of this country. There are some high skilled jobs still here. The companies are in hock up to their ears, hanging on by a thread and 80% of their work force is laid off. Pick up a newspaper.

Anyone that thinks our economy is doing well has a real problem grasping any sort of reality. Or too afraid to.

Here is the validity of data explained: "The fundamentals of our economy are strong" Bush right before the housing bubble crashed.

[Sstashmoo]

Key is "not sure if we can afford to wait that long "

We can't, we're going to hit terminal velocity so to speak and there is going to be no turning around. That's why I often mention the urgency in which our horrific trade situation needs to be addressed. And no one seems to be doing anything about it except planning new ways to BORROW cash to dump on a dying economy. So stupid.

"Stimulus plans" as someone else pointed out are like "priming a pump" How many times do they plan on priming this pump before they realize the pick-up has a huge leak? Doing the same thing over and over and expecting a different result.

[Kevgoblu]

I am not sure what we can do to stop it though, unless we start a trade war. I think that the future of American manufacturing is going to have to be constant innovation to stay just ahead of the overseas manufacturers. Of course, as the overseas workers see their bosses getting super rich, they will also start to demand American-level wages and benefits. I am not sure if we can afford to wait that long though.

Sounds nice in theory. But wasn't the Ipod a product of American invention? And what happened to it? As soon as the product took off in popularity, production was immediately outsourced to China. Now the only people in America who make any money associated with Ipod are the high school kids selling them to you at the Ipod store or Best Buy. No high paying jobs there.

[ccbatson]

As soon as free market policies reign supreme in this country, these problems will go away.

[Flanders]

I am not sure what we can do to stop it though, unless we start a trade war. I think that the future of American manufacturing is going to have to be constant innovation to stay just ahead of the overseas manufacturers. Of course, as the overseas workers see their bosses getting super rich, they will also start to demand American-level wages and benefits. I am not sure if we can afford to wait that long though.

If they do, the global corporations probably would just move their operations to another nation, but with 1.1 billion in India, and 1.3 billion in China, and growing, for every disgruntled worker who is employed, there are or will be thousands upon thousands of unemployed peasants ready and willing to take their place.

It appears to me that there will continue to be an inevitable leveling of wages worldwide, with only the most talented, criminal, political, and fortunate living in the lap of luxury. It would not be so painful a change in the US IF the cost of living was reduced as rapidly as wages will, but ever rising energy and food prices alone will prevent that from happening.

[ccbatson]

If, as Obama is want to do, the oppression of corporate freedom reaches a tipping point...Atlas will shrug.

[Flanders]

If, as Obama is want to do, the oppression of corporate freedom reaches a tipping point...Atlas will shrug.

Your so-called "Atlas" was permitted to pervert true capitalism by striking deals for unbalanced trade with communist and repressive nations starting in the 1970s. Obama has little to do with what already is waay past any significant recovery, courtesy of Blue Dog Democrats and Republicans who were and are in DC.

Oh, and the correct term is wont, [[predisposed) not "want".

[ccbatson]

Those are not the Atlases that I am referring to...those are the corporate socialists, looters, and second handers.

[Flanders]

Those are not the Atlases that I am referring to...those are the corporate socialists, looters, and second handers.

Take a look at some the top 100 outsourcing corporations in 2008, according to IAOP, amongst them are familiar names, such as IBM, Aramark, EDS, Hewlett-Packard, Unisys, Pitney Bowes, Diebold, ect..

http://www.outsourcingprofessional.o...t/23/152/1197/

If these are not the "Atlases" you are referring to, then who is?

[mjs]

Actually, "Atlas Shrugged" answers this thread perfectly- Can the US thrive without manufacturing? D'Anconia and Reardon, the book's Atlases, were manufacturers and the book's main thesis was that the country would collapse if they were gone.

[Detroitej72]

Those are not the Atlases that I am referring to...those are the corporate socialists, looters, and second handers.

Open your eyes man. The greedy capitalist companies will always expect corporate welfare, in the name of "doing business". Take a look at the companies that keep the bulk of their opperations in this country, you'll see that is because of corporate welfare. Companies pit one country and sometimes one state against each other to get the cheapest labor and land. All they care about is making the biggest profit, with no reguard to the employees.

[mjs]

"Atlas Shrugged" was much more complex than big business versus the public. Though the author clearly wasn't a fan of unions or the new deal, it was most critical of government suppport of business, especially incentives, bailouts, and subsidies on the concept that if they needed them, they shouldn't be in business. It's about a struggle involving a group of business and labor leaders that lived off of manipulating federal policies, an academic/religious group that manipulated logic to sell the manipulator's ideas, citizens that were manipulated, citizens that weren't, a government that sold out, and the people that got things done, the Atlases. Some of the Atlases were business executives, but the leader was an engineer who became a laborer, and some others were blue collar. They all worked in manufacturing and none of them were in government, academics, or the services.

This black and white ficticious world is the main thing that makes you realize the book's theories are too simple for a complex world. The author tried to seperate the Gates and Iacoccas of the world from the Nardellis and Jeff Skillings, but the problem and ideas fall into a spectrum making it impossible to clearly categorize them. It also treats certain economic rules of thumb as certainties, is unconcerned with foriegn competition problems, and completely ignores problems created by externalities. However, its one of the most thought provoking books ever written.

[rb336]

When I read it in 10th grade, I thought AS was badly written, but I was intrigued enough to finish it. When I attempted to re-read it 10 years ago, I did find it thought-provoking, but the thoughts were
"I found this interesting?"
"People buy this crap?"
"There are a bunch of people who base their ideology on this crap?"

There are certainly things I agree with Rand about -- religion springs to mind. the bulk of her writings are so simplistic they are laughable

[mjs]

One of the things I thought was that this could happen if liberal extremists get everything they want, but 1984 is what happens if conservative extremists like Rand get everything they want. It made me glad to be in America where democracy and open debate means that neither side gets everything they want.

Rand would answer the above question, no, turning raw resources into useful products is the only true way to create wealth. But then she'd argue that there should be no automotive bailouts. The larger question is whether these two arguments are compatible and if it matters if you're asking about the long term or short term.

[ccbatson]

Objectivism would never result in a "big brother" government, or statist/fascist/totalitarian/authoritarian society...remember that the individual, and individual liberty are the core values of objectivism.

[mjs]

Ok, batson, it may not create a big brother government, but while she makes some good points about over regulation, that doesn't prove that no refulation is the answer. Government is supposed to step in when your individual advantage harms the group you are a part of. One example is where everyone gets the same compensation regardless of intelligence or effort, but there's others.

Say there's no government regulations and you make long term stable mortgages and I make risky ones that I quickly flip. I figure that if it starts going south, I'll just walk away with my earlier gains. Since I'm making more short term profits, I'm going to buy you out so I can use your assets to make more high risk high return loans. To protect the publicly traded bank that your grandfather created, you have to make risky mortgages as well. We both know its a disaster in the long run, but we're now in a race to the bottom. Then when the mortgages all go to hell, you'll start losing money doing something you didn't want to do and I'm so big and powerful that I'll threaten to spike the value of your collateral and bankrupt your mortgagees. How did an unregulated market help you there? Did you really have an individual choice? Should I gain more than you? I did do what was in my best interest.

You also figure its good to become a monopolist in your industry, but if I supply you and I'm a monopoly owner because my grandfather did excellent work, I can do nothing all day, improve nothing, and still stick it to you. Once again, how did an unregulated market help you? I'm doing whats in my best interest and we have reached a free market price. The fatal flaw in Atlas Shrugged is that a free market only works when there's competition and only reasonable regulation can ensure competition. Too little regulation can squash competition just as eaily as too much.

[mjs]

Bats, by the way. I'm against Obama's automotive bailouts almost as much as I was against Bush's bank bailouts. I think that rather than allowing the main companies to survive by closing divisions and their dealerships, a bankruptcy court should have forced them to spin them off and sell them. Competiton would have driven the industry out of the funk that 50 years of oligopoly put into them into and competition would have decided which plants and dealerships were going to survive. But, special interests didn't want that because the employees would also have had more competiton and had to work harder for less. I can't see a Penske owned Saturn giving top market bonuses or allowing early Fridays during periods that market share slides.

[Sstashmoo]

Quote: "a bankruptcy court should have forced them to spin them off and sell them. Competiton would have driven the industry out of the funk that 50 years of oligopoly put into them into and competition would have decided which plants and dealerships were going to survive."

Only if it's etched in stone somewhere that states we must have an auto industry. It isn't. We are on the verge of watching our automotive industry take the same path the electronics industry did, we simply won't have one. The automotive industry, or whats left of it, must be saved. It is truly our last vestige of manufacturing throughout the midwest.

[mjs]

The risk of losing the entire market, foriegn subsidies, and the fact that the market is at a low are why I don't oppose it as much as the bank bailouts. However, the Japanese subsidies were in response to the US subsidies that created the EV1 so while its a relevant factor, it pisses me off that big three are being rewarded for starting a subsidy battle.

Restructuring the banking industry is just like pulling a band aid, its better to do it quick and take it all at once. If Citi went under, their assets wouldn't have vanished; the mortgages and houses would continue to exist. They would have just to be sold for a lower price to more responsible lenders. And mark my words, in a year or two, we're going to learn the troubled banks used TARP to screw taxpayers by dumping all their fraudulent loans that occurred from their sloppy rush for easy profits.

[rb336]

Objectivism would never result in a "big brother" government, or statist/fascist/totalitarian/authoritarian society...remember that the individual, and individual liberty are the core values of objectivism.

and eventually those who have amassed the vast majority of the wealth would have the rest of the people in thrall to them. Want a job? better go to this church. Want a job? better not complain about the lack of safety. Want a job? better be willing to work for sub-subsistence wages. Want a place to live? well, we have our corporate housing we can give you. oh, by the way, you have to do whatever we say or you will lose your job, and since you will still owe us on the house, the food, the everything from the company store, you will also go to debtor's prison

[ccbatson]

Doesn't work that way...a complex system of internal forces such as supply and demand for labor, competition from other producers getting a leg up by securing and maintaining a happier workforce...etc.

[rb336]

Doesn't work that way...a complex system of internal forces such as supply and demand for labor, competition from other producers getting a leg up by securing and maintaining a happier workforce...etc.

yes, it does work that way unless you are talking about natural supply/demand curves, which haven't existed in the modern era, and couldn't exist in the modern era. there are plenty of examples from the robber barons to the coal mining "company towns" to the drug cartels in S. America