To expand on my earlier post. Failure rates of electronic components are measures in failures per billion hours and are extremely low and even lower for components which are to be used for special applications like life support or military. The notion that a significant percentage of electronic components would be defective on arrival is laughable.
Chinese components are fine just like Chinese products are generally fine. Judging made-in-China hi-tech products by the quality of some rubber duck is like judging American airplanes by the quality of the roofing work of a fly-by-night contractor who did a lousy roofing job.
China has a successful space program and just landed some Chinese crap on the moon. It takes more than baling wire to do that.
And, to get back to working conditions in America, what about conditions and wages for jobs which have not and cannot be exported? Who is to blame for the lousy conditions of fast food, retail and other low pay jobs? How do we blame the Chinese for this?
Low paid Americans are being exploited by the American system, not by any job outsourcing to China. That is what American public opinion wants and supports.
I would propose policies to reduce inequality and the best place to start in universal, single payer health care. Reduce military spending and increase social spending. But that is not what the American people want so it is not what they have.
So America has millions of low paid workers who are barely getting by but who will proudly say “I might be starving but my country can bomb any country in the world if it wants to”.
I personally don’t care to bomb anybody [unless they attack us first] and I would be willing to pay a couple bucks more to keep the jobs stateside. But then again I am not the type person that updates her smartphone every time a new one comes out, I still use my droid 1, my desktop is 5 years old, and my laptop is 4 years old - the laptop replaced my previous one that finally had a motherboard failure and died and the new lappy cost what repairing the old one would and was new - replacing one I bought used from ubid. My cars were both bought used, my appliances are about 10 years old. If something breaks, I replace it.
I suppose if I had multiple credit cards [we have none, just use debit cards] and was balancing 2 car payments on top of our almost finished mortgage [been in the same house now for 23 years] and all the game platforms, multiple large format flatscreens [we have 1 tv, a 4 year old flatscreen, 20 inch diagonal. If it were any bigger we would have to sit out in the barn to watch because the furthest we can sit from the tv in the house is 8 feet.] and the usual faux rich debt ridden lifestyle I would object to paying a fair price to have the manufacturing back in the US, with a better minimum wage.
But you know, I would also love to not be stuck with a wheelchair, and unable to find a job where I can telecommute 100% [so I don’t have to worry about a workplace that I can’t actually access in a freaking chair]
Rather than even try to answer that directly first, better to take a step back. What is that you want to accomplish, exactly? Higher GDP per capita, higher median household income, lower unemployment, better defense preparedness, some intangible sense of national ‘balance’ or pride in manufacturing all one’s own stuff?
Then look at the real history of a period of relatively free trade in last few or several decades, as applied to the US, since that’s your example. US GDP per capita has grown healthily, faster than in most other rich countries in recent decades. But median household income has grown sluggishly. Unemployment has had no particular trend, nor particular correlation to say current account deficit. It’s hard to say the US lacks the means to defend itself, and in general I would say defense considerations are very easy to overstate when talking about major macro economic policy changes, quickly become tail wagging dog. Intangibles like pride in home manufacture are just that, and hard to analyze on an objective basis.
So lack of growth in median income is basically the source of dissatisfaction, as far as tangible objective measures. And realizing that puts the discussion in a more productive context I believe. Is free trade, as opposed to general advances in technology (leading to more ‘winner take all’ outcomes in the workplace), general changes in society (single parent homes, etc), immigration, etc really the major reason median incomes haven’t grown much? That’s not at all obvious. In fact most economists believe trade by itself is a relatively small factor in the shift in the shape of the income distribution.
So what I think is a basic unspoken premise of your question, that free trade is the big reason people are less happy about the course of the economy, is highly doubtful.
Then, even as far as this sort of protectionism being ‘one part of the solution’, one can pile up all the other arguments made against it, even as that:
-what about the actions other countries take? Especially consider that the starting point is a long period of relatively free trade, where many American jobs have come to depend on economic activity in other countries. We’re not starting from a point of relative autarky that we’re seeking to maintain. The short answer is that such foreign counter actions could easily be catastrophic, to those countries as well as to the US, but also to us. That alone should torpedo the idea.
-but also the proposal is, basically by its own admission, to raise the price of manufactured goods. Why is this good? Or at least, why wouldn’t we count that aspect against it. Protectionists generally ignore one whole of the equation: the fall in living standards if the same stuff is made to cost more than it has to.
-Since we’ve agreed or should have agreed, that the proposal is mainly collectivist action to make incomes more equal (since we know that GDP/person in the US has grown healthily in general, free trade hasn’t prevented the US getting richer on the whole), why wouldn’t we examine other collectivist actions aimed at the same thing? And we’d find in fact that almost any other policy to even out incomes would be less inefficient than tariffs on goods produced by American industries which aren’t competitive.
Starting at square one we might reject collectivist solutions to income inequality altogether (I personally would). That’s a matter of opinion. But I think that the observation and analysis of facts can lead any reasonable person to the conclusion that American economic angst, long term secular not stuff specific to the 2008-now cycle, is about income inequality. It’s not really that ‘nobody’ will get jobs which pay as much as lower skilled manufacturing jobs which migrated overseas; if that’s lower skilled blue collar workers often won’t. If you average in higher skilled people with good jobs, in many cases facilitated by an open global system, the stats change, to healthy average growth in incomes. The political issue is the distribution of those gains. But protectionism is an extremely inefficient way to combat that. Simply subsidizing the losers in free trade via redistribution taxation is a lot less inefficient, economically.
There is the problem, that American fundamentalism is incompatible with the thought that someone may be getting something they do not “deserve”. You see this over and over. People would rather pay 100 to keep someone in prison than pay 20 for a prevention program which would have prevented him from going to prison.
The article I linked to and the reader comments illustrate how other countries view this American attitude which is in essence: if you are poor you deserve it because others are rich and it is proof that you could be rich if you just weren’t so lazy. And don’t even think of taxing me so you could be a bit better off.
I don’t think it’s fundamentalism as much as it’s apathy. We just want to ignore a problem until it either goes away or it becomes too big to ignore. The result is we often end up using huge programs to do something that could have been resolved with much less effort if we had acted earlier.
I agree this is a definite factor but I wouldn’t be as quick to entirely condemn it as ‘fundamentalism’.
The problem people seek to address with protectionism is broad inequality, not the problems of the underclass like relative* poverty or excessive criminality. The people supposed to benefit from such populist solutions are average people. The issue is really more their own reluctance to be seen as seeking help from others, rather than ‘standing on their own two feet’. And I don’t think such reluctance is entirely bad. Dependency on the government causes real social problems. It’s not some conservative/rightist delusion that it does.
So it’s kind of a dilemma. It’s hard to institute broad based policies to subsidize people, and such policies do have real social drawbacks. But protectionism promises to be phenomenally expensive for every unit of gain it would yield in reducing inequality, and it’s also a natural playground for cronyism and corruption (who figures out out all the complex details in the real modern economy about what’s a ‘finished good’ or ‘raw material’? bureaucrats with politically appointed bosses, according to who has more political pull. That’s how democracy works. That’s why the govt shouldn’t be involved in the economy unless the side effects of it not being involved become truly intolerable).
My solution to the dilemma as I said before is just not to do much about inequality in the US. Stick to the minor palliatives we’ve had so far. I highly doubt society will come out ahead with more radical measures to address inequality by government action.
*there’s hardly any ‘poverty’ in the US that holds a candle to real poverty in most of the world or everywhere over almost all of human history till recently.
It’s a good idea, but you need to get over a lot of neo-liberal ideology to see politicians embrace it. Ha-Joon Chang, an economist at Cambridge, has written quite a bit about this.
That article was great, thank you for sharing it. One adjacent/additional thought:
Most Americans are going to hate manufacturing
Americans want less crime, good schools for their kids, and inexpensive healthcare.
They don’t want to be sewing shirts.
The people most excited about this new tariff policy tend to be those who’ve never actually made anything, because if you have, you’d know how hard the work is.
My added take is that most Americans want manufacturing back because they’re assuming someone else will do the actual work, so they don’t have to love it or hate it. Ironically, they also don’t want immigrants here, the people who’ve been doing a lot more of our more dangerous and repetitive jobs.
I worked for an American manufacturer for 10 years, setting up the Japan sales office for them. While I wasn’t in the manufacturing side, I worked with them quite closely.
I agreed with most of the article, and one of the biggest things is the uncertainty. With Trump out of office (presumably) in a little less than four years, there isn’t any guaranty that the tarriffs will last long enough to justify businesses making enough investments to build factories, establish supply line, source parts and everything else.
The problem is that it would take decades to do this, even if companies wanted to do it. The only way it would even be possible would be if the government would have a master plan and heavily subsidized key industries, much like Japan did after the war. I just don’t see that as being possible.
Well first of all, no. That’s not correct for several reasons:
Unemployment does not mean jobs aren’t available. It also represents an inability to connect work that needs to be done with a person who has the correct skill sets. This is important because simply creating a demand for say automobile manufacturing does not instantly produce thousands of workers with the skills to make cars.
The USA is still a huge manufacturer, second only to China. Many manufacturing jobs have disappeared due to outsourcing but many have also disappeared to automation.
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So my suggestion is twofold:
[ol]
[li]Increase import tariffs on “completed goods” (for lack of a better phrase) – items that are manufactured outside the country[/li][li]Decrease import tariffs on raw materials, which could then be used for manufacturing purposes in the U.S.[/li][/ol]
If the tariffs were adjusted carefully, it would make it cheaper for companies to manufacture goods domestically, even while paying employees the relatively high wages expected in the U.S.
This is such a simple idea, I’m sure a zillion other people have come up with it before, so the fact that it isn’t done suggests that it’s either a lousy idea, or moneyed interests are against it. Can some Dopers fight my ignorance here?
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It’s an idea that’s simple and wrong (and basically what our current president is doing).
Ultimately what you are trying to do is second guess the free market which, left to its own devices, would tend to maufacture products where it makes the most economic sense to do so.
The only solid argument I’ve encountered for trying to bring back manufacturing capacity is the national security angle; that, if the US were at war, having its own heavy industry and rare earth supply could be critical. Of course manufacturing capacity does not necessarily mean many jobs.
The economic arguments largely fall flat. The US already has low unemployment and unfilled manufacturing jobs. (Zero unemployment is unrealistic and would probably also be awful for the economy, as even 5% unemployment already implies labor shortages in many industries because people’s skills are not perfectly aligned with what the market needs at any given time).
And software and services have seen greater productivity growth than manufacturing.
Germany is the poster child of manufacturing in a wealthy country; a focus on precision and high-tech engineering. And yet, the comparative neglect of the software sector has seen a growing gdp gap with the US in the last 20 years.
I wonder if manufacturing capacity necessarily means the capability to manufacture war materiel.
Folks seem to think that their fond, and distant, memories of sewing machine companies producing small arms and companies with large production lines switching from consumer goods to tanks and bombers means that if another big war breaks out the same thing will happen, I don’t think we’ve established that that even could happen.
Also, zero unemployment means the economy also has zero flexibility. As soon as anything unpredictable happens where more people are needed you’re in trouble because the uncommitted people just aren’t there.
You don’t want an economic system with zero “waste”, whether it’s more people or more products than you need, because it’s a system with no margin for error and little ability to adapt.
I believe (unless things have changed in the last few days) that the new spending bill is going to have a provision for no taxes on tipped workers tips. I don’t want to talk about that specifically, but it occured to me that wouldn’t it be better, if your goal was to incentivize manufacturing, to have no taxes on manufacturing wages (perhaps up to a reasonable threshold)? While I think that is just as bad as the idea of eliminating taxes on tips, it would at least align with the supposed goal of increasing manufacturing jobs by making the jobs more attractive to workers.
I suspect that this would let the employers cut wages. Good manufacturing jobs pay reasonably well, especially if you allow unions to organize, so I think the problem is lack of openings, not lack of workers.
Now cutting employer salary expenses might make US manufacturing more competitive, but I suspect not enough to make much of a difference.
America builts plenty of military stuff. Tanks, planes, bombs, etc. What we dont built is cheap plastic toys and cheap polyester clothes that are two sizes too small.