Why Manufacturing's Last Boom Will Be Hard To Repeat (msn.com) 92
American manufacturing's postwar boom from the 1940s through the 1970s resulted from conditions that cannot be recreated, a story on WSJ argues. Global competitors had been destroyed by war. Energy was cheap. Unions could demand concessions without fearing job losses to foreign rivals.
Strikes were frequent in steel, auto, trucking, rubber and coal mining. That relentless pressure from an organized working class raised real wages and created fringe benefits including health insurance and retirement pay. Government support for unions kept executive salaries at just a few times median income. Stock buybacks were illegal or frowned upon. President Eisenhower declared at the 1956 dedication of the AFL-CIO national headquarters that "Labor is the United States."
The system began unraveling by the mid-1960s. The Vietnam War drained federal coffers. Inflation accelerated as government deficits exploded. Nixon abandoned the gold standard in 1971, unleashing currency volatility. The 1973 OPEC oil embargo quadrupled energy prices. Foreign competition returned from Japan, Korea and West Germany. American companies carried mounting legacy costs like pensions that discouraged investment in upgrades and research.
Milton Friedman declared in a 1970 New York Times essay that the social responsibility of business is to increase its profits. Clinton signed NAFTA in 1993 and championed the World Trade Organization in 1995. Bethlehem Steel employed around 150,000 people in the mid-1950s. The company filed for bankruptcy in 2001. Its former hometown plant in Bethlehem, Pa., is now a casino.
Strikes were frequent in steel, auto, trucking, rubber and coal mining. That relentless pressure from an organized working class raised real wages and created fringe benefits including health insurance and retirement pay. Government support for unions kept executive salaries at just a few times median income. Stock buybacks were illegal or frowned upon. President Eisenhower declared at the 1956 dedication of the AFL-CIO national headquarters that "Labor is the United States."
The system began unraveling by the mid-1960s. The Vietnam War drained federal coffers. Inflation accelerated as government deficits exploded. Nixon abandoned the gold standard in 1971, unleashing currency volatility. The 1973 OPEC oil embargo quadrupled energy prices. Foreign competition returned from Japan, Korea and West Germany. American companies carried mounting legacy costs like pensions that discouraged investment in upgrades and research.
Milton Friedman declared in a 1970 New York Times essay that the social responsibility of business is to increase its profits. Clinton signed NAFTA in 1993 and championed the World Trade Organization in 1995. Bethlehem Steel employed around 150,000 people in the mid-1950s. The company filed for bankruptcy in 2001. Its former hometown plant in Bethlehem, Pa., is now a casino.
Who signed NAFTA? (Score:5, Informative)
Just for the record: George Bush (R) negotiated and signed NAFTA in 1992 but he wasn't able to get the corresponding US bill passed before the end of his term, so Bill Clinton (D) signed the US law in 1993. Both presidents supported NAFTA.
Re:Who signed NAFTA? (Score:4, Insightful)
Both presidents supported NAFTA.
They both went to Yale. Both parties share the same elitist agenda. The debate is about important issues where there is disagreement. Like what bathroom should transgender women use.
NAFTA wasn't good for workers (Score:1, Troll)
Clinton knew that and his solution to it was the kind of out of touch nonsense you get from over-educated Democrats. Well meaning and useless.
His plan and his wife's plan was for all of us to go get advanced college degrees and
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It's also worth noting that NAFTA obliterated Mexico's smaller farmers which massively ramped up illegal migration from Mexico to the US.
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Workers jobs did not just disappear to automation here. They went to China along with the capital workers had created to improve Chinese workers more productive so they could compete with American workers who were still using outdated technology. Had that money been invested here, automation wouldn't have just eliminated jobs, it would have just created more productive jobs.
The argument that globalization wasn't the cause of American workers declining living standards is propaganda to sidestep taking respon
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Also, Donald Trump renegotiated and extended NAFTA in his first term.
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Also, Donald Trump renegotiated and extended NAFTA in his first term.
Well, he renamed it and made minor changes around the edges so he could claim that it was broken and he fixed it. And then, of course, proceeded to violate the agreement he signed.
The biggest mistake (Score:5, Insightful)
Is we let manufacturing happen in countries that are our direct rivals, instead of friendly countries. All because we wanted cheap stuff. I don't care about cheap goods anymore, we throw too much away.
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I've not ever considered the EU a direct rival. Free trade is the real rival, making Wall Street our own rival. Wall Street likes free trade. Main Street never has.
The EU isn't a rival. European companies might be rivals of American companies, and vice versa. Economically speaking, that's no different from competing with domestic companies.
That's another goofy thing about contemporary economic and political reporting. Countries don't trade and don't compete economically. People do. Talking about a country doing this or that economically is just shorthand for saying some of the people in the country did this or that.
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Talking about a country doing this or that economically is just shorthand for saying some of the people in the country did this or that.
No it isn't. Its just recognizing that it is societies as a whole that accomplish things, not individuals.
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No it isn't. Its just recognizing that it is societies as a whole that accomplish things, not individuals.
That is a deep philosophical issue: is a society just an aggregation of individuals or something more? It's been a central question of ethics and politics since at least the Enlightenment and probably longer.
I deeply feel society is just a shorthand description for the collective action of individuals and issues should primarily be viewed through the lens of how it affects individuals. Evidently you feel differently. I doubt we'll settle this issue here, smarter people than us have struggled with it for cen
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That is a deep philosophical issue: is a society just an aggregation of individuals or something more?
Maybe abstractly. But I think in reality its obvious that human beings are almost completely incapable of surviving without the support of other human beings much less thriving. Individuals in the United States are not better off based solely on their personal actions.
deeply feel society is just a shorthand description for the collective action of individuals
No point in arguing with belief.
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When land and property keep going up in price (become "more valuable"), the retirement and investment funds go up.
There are real estate investment funds. But they are a very tiny part of the market and an even tinier part of retirement investments. And property taxes have nothing to do with increasing the value of land. They don't even necessarily increase when the value of the land and the property on it increases. Which is not to say people don't own property, they do. Home equity is often people's largest asset.
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Oh sorry we can't allow healthcare because a black guy instituted it.
"Racism" is not the answer to every fucking political disagreement. The black guy in question did just as well as a percentage of the electorate (or better) than the white guys in the three presidential elections since he left office.
The government is currently shut down because, apparently, the "affordable" care act is so affordable that the emergency subsidies put in place during Covid now need to be made permanent, or, apparently, even people with six figure incomes can't afford it. I don't see "skin c
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Anyone who lives in America and thinks racism doesn't play a role in every political controversy is someone who thinks they can go swimming without getting wet. The reality is there are people for whom race is the central issue. But there are even more people who see "black people" or "people of color" or "not white" as distinct from people who are white. In fact, for Americans that is taken for granted. The reality is that Obama's father was not African-American, his mother was white and he was mostly rai
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Per capita Peru had the months COVID deaths per million population. Thanks for playing.
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And it originated from the (R) side. It's actually more properly known as RomneyCare as that was a fundamental pillar of his platform. Obama just adopted it thinking the (R) side would support one of their own proposals.
Re:The biggest mistake (Score:4, Insightful)
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The reason for the "huge revenue stream to the health insurance industry" was because they were mounting opposition to any reform. Obama felt it was the only way to get some reform. And maybe it was, but it had the effect of promulgating a stupid system where the poor still have a difficult time affording health care. And it gave the opposition that dumb talking point of "let the market figure it out". The market was what got the U.S. into the health care expense crisis.
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The reason for the "huge revenue stream to the health insurance industry" was because they were mounting opposition to any reform.
I think its important to look at who influenced that debate. It was not a bunch of family doctors, small town hospitals or insurance agents. It was medical equipment manufacturers, large hospital networks, drug companies and insurance companies with close ties to the same ruling elite that helped elect Obama as one of their own.
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We have a one-drop rule in America. If either of your parents is black, you are black, all the way back to the dawn of time.
Where is that rule written other than your imprinted racist view of the world?
This is a simple matter of definitions.
So all the mostly white descendants of Thomas Jefferson and Sally Hemmings are black? Lets talk about reality rather than definitions. There are all sorts of issues associated with being born into the community of descendants of American slaves. Your own race is only one small part of that.
Is it race or class? (Score:4)
A huge reason why liberal ideology failed was focusing on identity when class was the bigger issue. You want to help those police shooting victims?...get them a better job...lower the crime rate in their area. Very few of the police doing the shooting were confirmed white supremacists. Most were scared for their safety. Should they be?...were they lying?...you can debate that...but there is no evidence they targeted men because of their race. Many of the officers had black spouses, children, or were black themselves. So...is it race?...maybe...is it because the police were in a dangerous impoverished crime-ridden neighborhood and afraid?...well...I'd say that's a lot more likely. So by obsessing about race, you're not helping the victims, and you're alienating the white poor left behind....and you know who's not alienating them?...
Making cops less racist will do little to help the black community...getting them out over poverty?...that'll do a lot...but that's a lot harder....and most liberals are confident they're not racist...are you confident you're not classist?
But regardless of motives...identity politics is a losing issue. Most minorities want a job and a good standard of living...not to be pandered to. And you can't fucking help them if you can't win an election. Making everything about race alienates white voters and hate them as much as you like, you typically need them to win an election.
Few things piss off economically struggling blue collar white voters more than wealthy educated upper middle class (mostly white) women telling them to "check their white privilege"...when they're living paycheck to paycheck and wondering which utility is least likely to shut them off if they underpay this month.
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Oppression is a multi-variable equation.
Of course it is. For Obama the consequence of racism is inconvenience while trying to get a cab. He is never going to find himself dying on the ground with a cop's knee on his neck. A poor white guy living in that same neighborhood in south Minneapolis is far more likely to have that kind of run in with police. That doesn't mean race is not part of the equation.
Identity is used to claim ownership of other people's experience. So the son of a college President can talk about how "our neighborhoods" were redl
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Few things piss off economically struggling blue collar white voters more than wealthy educated upper middle class (mostly white) women telling them to "check their white privilege"...when they're living paycheck to paycheck and wondering which utility is least likely to shut them off if they underpay this month.
I doubt that is true. There are plenty of other things to piss off blue collar voters, white and black alike. Most or them don't care what wealthy educated upper middle class women think. That image is just classic stereotyping of both.
What is true is that "white privilege" is not remotely evenly distributed. The reason race works so well to divide the working class is exactly that. White privilege may give the white coal miner and advantage over a black coal miner. Focusing them on that difference leaves c
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Ask yourself why healthcare is so expensive relative to the rest of the planet. After salaries, the biggest cost to any employer is paying for health insurance. This is problem unique to only the USA.
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I haven't seen any emphasis on this factor but look at the correlation between per capita GDP and per capita healthcare costs:
https://ourworldindata.org/gra... [ourworldindata.org]
That is a strong correlation!
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because demand for healthcare is basically bottomless
No, the supply of health care is bottomless. Whether needed or not, health care is sold to people to increase the revenue for the health care industry.
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Tying healthcare to employment in the way that the US has is a mistake. You've destroyed the ability of people to participate in a free market to sell their services because they can't risk losing their healthcare. It also leaves you with a pool of unemployed people who could become productive if they got treatment for chronic conditions but can't get treatment because they are not employed.
Add to that the fact that everyone in the pipeline pads prices because it's going to be paid for via insurance, and it
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"Racism" is not the answer to every fucking political disagreement. The black guy in question did just as well as a percentage of the electorate (or better) than the white guys in the three presidential elections since he left office.
The "black guy in question" is perhaps the biggest bug up the ass of the "orange guy in question" who's wreaking even more havoc on healthcare than on the rest of the US social safety net. At least a large part of the motivation for that is Trump's racism; so yes, racism bloody well IS at least part of the answer to THIS fucking political disagreement.
How well Obama did back in the day is irrelevant, now that he's a bogeyman living rent-free in Trump's defective-from-birth-and-now-dementia-addled brain.
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Is we let manufacturing happen in countries that are our direct rivals...
I don't understand the fixation on manufacturing. It's as if people think that's the only way to create value. There are lots of other ways, as witnessed by 80% of the US economy being services (e.g. banking, insurance, health care, education, professional services, entertainment, and my industry, software development).
We decreased our manufacturing jobs because we had other, more productive, things for Americans to do. Or to put it another way, our comparative advantage is in services, not manufacturing.
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No, it was not because we wanted cheap stuff. No politician ran on cheap stuff, hell no politician ran on globalisation or mass immigration. That was all railroaded by the elite. The only politicians and media who were protesting it, were on the extreme fringe.
We the people are guilty of a lot of things, but we didn't vote for this.
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we let manufacturing happen in countries that are our direct rivals, instead of friendly countries. All because we wanted cheap stuff. I don't care about cheap goods anymore, we throw too much away.
I am continuously flummoxed by people like you thinking that you or your opinion matters. The only thing that matters as far as people in your position are concerned are what the masses do as a whole. As a whole, the masses prefer cheap shit regardless of external costs because the masses are unable to put 2 and 2 together to get 4.
YOU DON"T MATTER. The only thing that matters is what can be manipulated. None of our leaders are leading. They are taking. From you. So I guess you matter a little bit.
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Talking about it doesn't hurt anything, yeah you have to have a tipping point to create change. Not talking about it is probably worse. Now there are 30+ people that are thinking about this instead of 1.
Corporations have no social responsibility. (Score:5, Insightful)
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Taxes. The word you're looking for is taxes.
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Consequences. The word you're looking for is consequences.
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Honestly, the problem was Co. v. Riggs (203 U.S. 243 (1906)) that established corporations be treated legally like people.
The moment this happened it was the beginning of the exoneration of c-suites from the consequences of their actions. I suspect that if these individuals' freedom and wealth were liable for the consequences of their choices, the subsequent century would have played out rather differently.
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Hindsight being 20-20, we should have built guillotines the next year.
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I genuinely don't understand why slashdots downvote mafia attacked my former post as troll. Unless I miss my guess I have a fair couple of stalkers that just downvote every post I make, and then pepper my comments with bottish AC replies about Trump and No Kings. :|
Anyway, to your point, if you haven't seen it, I offer for your amusement something relative to your comment from the great Trevor Moore:
https://www.youtube.com/watch?... [youtube.com]
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And that is the problem.
Successful companies produce great products at prices people are happy to pay, making everyone involved better off. How's that not being socially responsible?
That was the essence of Friedman's point, that serving customers is and ought to be the only goal for a company. You tell you're doing that well by measuring your profit.
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Successful companies produce great products at prices people are happy to pay, making everyone involved better off.
Or they make crappy products at outrageous prices that people are happy to pay and make everyone's life miserable. But the only thing that matters is that they make a profit.
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Or they make crappy products at outrageous prices that people are happy to pay and make everyone's life miserable.
Huh. What crappy products do you buy that you're miserable about after buying? Why do you feel badly after the purchase? If this happens on a regular basis, why is that?
I buy lots of things that which I'd like to be cheaper and have some additional features, but I'd also like to ride a luck dragon to work. That I can't buy the exact product I want at the price I want is no reason to for me to be upset. I chose to buy the product in front of me for the price being asked and I could have chosen differently.
In
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Huh. What crappy products do you buy that you're miserable about after buying? Why do you feel badly after the purchase? If this happens on a regular basis, why is that?
Lots of people buy crappy products because they are cheap and then they break.
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Lots of people buy crappy products because they are cheap and then they break.
That's the first half. How about the second? Are they miserable?
I buy cheap products which break all the time. I'm mature enough to realize I made a choice of buying a cheap product which wouldn't last instead of an expensive one which would.
(Here's my favorite story. I wanted to install some crown moulding. A friend suggested I buy the cheapest compound miter saw I could from Harbor Freight. I did. The arm snapped in half right after I completed the room. But that was OK, the room was done, I could afford
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I buy cheap products which break all the time. I'm mature enough to realize I made a choice of buying a cheap product which wouldn't last instead of an expensive one which would.
The point was the company doesn't care, they are just trying to make a buck. Their success does not depend on your happiness. So this is not always true:
successful companies produce great products
And if that harbor freight saw had broken mid-project you would have been miserable.
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The point was the company doesn't care, they are just trying to make a buck. Their success does not depend on your happiness. So this is not always true:
Well, sure. No one is responsible for my happiness but me. How in the world would a company know I'd actually prefer a high-cost, long-lasting product if that's not what I buy? A company can only assume that if I keep buying low cost products over high cost ones, that's what I actually prefer and that's what I'm happiest with. Now, if a company makes products I turn out to not be happy with after buying, they won't get any return business, I'm going to tell my friends to avoid them and that's not a great wa
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If the company has sold you a more expensive saw would it have made any difference?
Think about how you phrased that. "The company sold..." That makes it sound like I had no say in the matter.
I had a lot of say in the transaction. I could have chosen a more expensive, precise, and durable saw. I could have picked the lowest cost one I could find. I could have rented. I could have borrowed one from a friend. I could have decided the entire project was not worth it. I had almost all the choice and power, the company had very little.
So, I find your premise misplaced. The company couldn't have
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It's not just that, it's that too many industries don't want to modernize, and too many people don't want anything near them to change (NIMBYs).
Take the cheap energy issue. There is loads of cheap energy. We have a massive fusion reactor that is fuelled for billions of years, providing more power than we could ever use, and the technology to harvest it. Some countries are taking advantage of that, but many European and US ones are stuck with high energy costs because they refuse to. That's a choice, not an
Definition of "boom" (Score:2)
Manufacturing jobs - why? (Score:3)
Also this is the golden age for those who own a house. Don't think of wealth, think about consumption.
The over 50 will continue to live in luxury till they are
Re:Manufacturing jobs - why? (Score:4)
The ability to turn raw materials into finished goods is a core competency of any society and economy.
Manufacturing has higher pay that many other industries. Besides, we need assembly line jobs because that's all some people can do. But they also need tech and engineering to support them, managers to manage, sales to sell, accountants to count, etc.
It is very short sighted to think manufacturing is not beneficial to our society.
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It is very short sighted to think manufacturing is not beneficial to our society.
He never said he doesn't value more manufacturing, just that he doesn't want more manufacturing jobs. Those aren't the same things, which is something the US electorate has been slow to learn.
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You can't go a single day without using something that required manufacturing.
You can't go a single day without using something that required agriculture either, but that doesn't mean agriculture provides the kind of jobs that appeal most people, let alone enough jobs to be a pillar of employment in first-world countries.
Manufacturing is clearly been going in the same direction and further progress in automation is inevitably going to push it further that road in the future.
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Everyone says that 'nobody wants to do those kind of jobs', and misses the fact that it's also a variable that could be altered. Those jobs being 'low value' is a societal opinion, and opinions can change. Do a promotional campaign valuing agriculture and manufacturing. Put up some government-funded starter homes reserved for those who take jobs in certain industries. Give those who want it (and have the academic credentials to do it) after 10 years a free-ride through university. Set up some defined-benefi
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Re:Manufacturing jobs - why? No UNION jobs. (Score:2)
I can go weeks without needing to buy any physically manufactured stuff.
No you can't. Other people are just buying the stuff for you. But in answer to your question, there is a mythology that what we lost were googd paying "manufacturing jobs". But there were always a lot of crappy paid manufacturing jobs. What was actually lost was good paying UNION jobs where workers negotiated for decent wages and benefits instead of all the money going into the executives pockets. Manufacturing companies with great wages all had powerful unions the demanded them and enforced that demand, of
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The article seems to define "boom" with this sentence: "The golden age--and middle-class prosperity".
We've been over this a dozen times. No doubt we'll be over this a dozen more.
What's goofy about this mindset is the middle class today is way, way better off than the middle class in 1960. Houses are larger and more luxurious, cars are safer, food is more abundant, healthy, and inexpensive, travel is cheap, education is more widespread, entertainment is more varied and better (except rock and roll, that peaked about 1972). No one can look at our material standard of living now and honestly say they think th
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You're right if one values iPads. Others value family formation.
You know what's the beauty of living now? We have the option to use a tablet or not. We didn't have that choice in 1960.
Maybe I use my tablet to have a (free!) video call with my kids who live hours away. Maybe you and I have a conversation about economic growth, informed by data we have at my fingertips in other tabs. Maybe I close the device and talk to my wife about my day at work and her new hobby. The world is our oyster, much more so than it was 60 years ago.
Automation (Score:1, Interesting)
Automation has devastated the middle class. We don't like to talk about it. Google that 70% figure and you'll find a link to the article and the study that goes with it.
We are a country where if you don't work you don't eat. And we are running out of work. We are likely to see 25 to 30% on employment in the lifetime of a 50-year-old. The last time we hit thos
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Lower wages were only a small part of it. The next logical step in mass production was to combine products from different brands. Why make socks for just one brand, when you can make socks for a hundred brands, mostly identical except for the logos and dye colours? And why ship the cotton from where it is grown to the US, and the re-export it to Europe for sales, when you can just have a factory next to the fields and then ship directly from there to retail?
Now we are into the next phase, which is the facto
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We are a country where if you don't work you don't eat.
You post this over and over and it's just not true. Lots of people who don't work continue to eat. Anyone can give anybody else food, parents, children, friends, charity donors. Nobody is stopping you or anyone else from giving food to anybody you want to.
But what you want is the ability to force other people to provide you with food (and presumably clothing and shelter and entertainment) without compensation. Essentially you want slaves who will provide you what you want without any obligation on your part
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There are homeless people wandering around all over the place, they produce nothing, ever, yet somehow food just keeps materializing for them. In fact they hardly resemble truly destitute people actually starving around the world. I'm glad that's how it is here and wouldn't want it any other way but it'
There's a recipe for repetition in the summary (Score:2)
American manufacturing's postwar boom from the 1940s through the 1970s resulted from conditions that cannot be recreated, a story on WSJ argues. Global competitors had been destroyed by war.
I believe I see a possible path to repetition.
Incredibaly poor argument (Score:5, Insightful)
A lot of the things he mentioned were totally irrelevant to the manufacturing boom.
Here are the things that actually mattered:
1) Post WW 2, total lack of international competition. When most of the industrialized countries were bombed to crap, there was a period of 5 -ten years when they had to buy American to fix their factories, and then they had 5-10 years when they were focused on rebuilding the rest of their country.
2) Baby Boom. 20 years after the war ended, there was a short period of time (10-15 years) when there was a whole lot of young people and very few old people. This was a boom to both industry and to a lesser extent scientific research.
3) Scientific advancement without paying the cost. That same period of 30 years or so that gave us industrial advantages also gave us scientific advancements. But they had hidden costs we would pay for later. Pollution. For a short time we were also benefiting from new products without realizing the damage we were doing to the planet. This lead to immediate industrial growth that we are STILL paying off the disadvantages from.
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All correct. Don't forget that also the US was reaping vast amounts of cash from allied nations repaying loans, which benefited the US and hampered the countries paying. I don't think we in the UK finished paying until something like 2006?
Recovery is impossible (Score:2)
The MBA program's goals in the 60s werre maximizing profit and lowering costs. Those, combined with corporate greed and extreme union activity drove American manufacturing off-shore.
Congratulations! Labor and management fucked each other. Now, everyone loses except for shareholders who reap the profits.
Summary's causes are out of order (Score:2)
Wasn't the last "new" new thing... (Score:2)
Wasn't the last "new" new thing, 3-d printing supposed to be the next industrial revolution, only at home? The industry returning to the cottage, and all that delightful utopian futurism? The return of manufacturing, only at a personal level.
A home person could 3-d print an engine support bracket flange for their Saturn automobile, Or a new pot handle for their Sunbeam electric kettle, or a valve knob for your Bernz-O-matic cigarette lighter, all from your home. ???
JoshK.
Paying more taxes (Score:2)
Social responsibility is reducing the burden of the the uneducated, the sick, the hungry and the homeless. Making more money does not reduce that burden: Paying more taxes, reduces that burden. But the US government has spent 40 years helping their richest people pay less tax.
Depression followed by War which is won (Score:2)
is the only way to get a manufacturing boom in the past.
Why is this? Wars redirect resources due to national emergencies (real ones, not conjoured up ones). After a depression and a war, tons of manufacturers and there are surplus resources which need to be reallocated to peacetime purposes.
As the the glut of manufacturing capability pearmeates through the peacetime economy, it lifts the living standards for most people. This lasts for a while, but then
it starts being chipped away at by companies competing
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Interesting idea. Not to mention the colonialization of resources that goes with war (to the victors...).
The new model seems to be investment in R&D (cough... AI, cough...) to increase efficiency (which also corresponded with America's manufacturing dominance), but that has taken a backseat to profit taking and hype.
And so we are back to the prospect of war.
So what your are saying is... (Score:2)
Seems like the plot of a derange sci-fi novel.