It seems to me we would have a shortage of engineers, mill rights, machinests etc. I know a lot of that is easier and quicker than it used to be but it is still a gigantic undertaking.
In 1940 the US was spending <2% of GDP on military.
By 1943 it was about 34% of GDP.
I dont know what % was due to manufacturing, but domestic manufacturing of military equipment was a huge part of the war effort.
However a tremendous amount of that budget growth was wages to soldiers. Another hefty fraction was to car & truck manufacturers doing what they always did: making cars and trucks. But painting them green at the factory exit delivering them to the army, not to showrooms.
The complexity of modern anything is 10 to 100 to 1000x the complexity of everything in WWII.
It’s the work of decades to “reindustrialize” the USA, whatever cockamamie idea that might actually represent.
ISTR at the beginning of Covid that we discovered we couldn’t simply push a button and churn out ventilators. Or even N-95 respirators.
When many think about reindustrialization or increasing manufacturing in this country, it seems they envision the creation of new jobs. If the US does succeed in this endeavor, I wonder how many jobs will actually be created for individuals as opposed to robots. There will be new jobs, but I doubt it will involve the numbers people may imagine.
You do realize a lot of manufacturing still takes place in the USA?
It’d be useful if the OP tells us whether the goal is to achieve economic autarky from raw material extraction to finished goods production, or whether the goal is to provide well-paid employment for millions of ill-educated people with little mental curiosity who’re scattered thinly across lots and lots of economically backwards dead end small towns and a few dying cities.
Big difference in the list of obstacles to achieving those two goals. And there is no reason to suppose that solving one does much of anything for solving the other.
It’s difficult to address this point unless you could perhaps narrow down a bit more what you mean by ‘reindustrialization’?
Trump is the one who thinks that tariffs can lead to a reindustrialization, so perhaps the question should be directed to the White House?
This article from CNN Business had some good information.
Trump’s policies won’t lead to reindustrialization simply because this takes a long term investment. Business people don’t see a long term tariff strategy–they expect the tariff changes will be gone with the next administration. And considering how fickle Trump is the tariff changes could well be gone in a few months.
So at the most manufacturers might add an extra shift or re-open a just closed factory.
I totally agree. It’s pure madness.
I doubt that anyone else in this administration thinks the tariff strategy is working but they all have to support the idea.
The two problems I see with reindustrialization are:
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Americans don’t want to work for slave wages. This makes American labor-based manufacturing VERY expensive compared to other parts of the world. Even with high tariffs and shipping costs, it’s still going to be cheaper to produce things in places where slave labor (or close to it) is the norm.
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People like me exist. I design industrial automation equipment for a living. If we are going to build new factories in the U.S., they are going to be highly automated, which means very few new jobs will be created.
WWII is in no way a predictor. The government literally told companies to stop doing whatever they are doing and switch over, and told other companies to go out of business because they would use scarce resources. The government then gave billions of dollars to the companies for conversion, allocated them materials, and bought up every bit of output. The government didn’t have many environmental regulations or other obstacles to new building. People not in the workforce - mostly women and blacks - were recruited by the millions. All this at a time when very little was imported from other countries, so many factories that were part of the supply chain already existed in America and more billions - and that’s billions were the equivalent of trillions today - were spent building new ones
None of that applies to the current day. The government is not handing over billions or trillions of dollars for conversion. The government is not guaranteeing to purchase all output. The small factories in the supply chain are mostly not in America. It is much more difficult to build new factories. The workforce does not have millions of new bodies to throw at the problem, even if the factories were willing to forego automation.
It would take a generation for America to switch back to all American production. The cost of goods would make them unaffordable if they existed, but they wouldn’t exist because all the new factories would go out business because nobody would be buying from them. America would sink into a Greater Depression but so would the rest of the world with trillions of dollars taken out of the global trade system.
Madness is a totally inadequate word.
Meanwhile, China has poured hundreds of billions into developing its industrial production and transportation infrastructure. And that took three or four decades.
With the cost of land, labor, and capital nothing compared to our own. However much money the Chinese did actually spend, the USA would need to spend 10 to 20x as much to achieve the same amount of industrial capacity.
I thought this was interesting. How did China finance their industrial boom. I am starting to feel like an industrial base is a serious resource that should be maintained at a level at least big enough to rapidly adapt to any major changes in the world. Also developing Mexico’s industrial base and maintaining close relations with them.
In general, planned economies work less efficiently than free.
In the case of the US joining WWII, there was 1) broad acceptance of the goal, throughout the economy, 2) an entire untapped female workforce, and 3) an opportunity to reorient the existing production capacity from consumer goods to military.
We don’t have any of those three.
In general, the only people who think it’s a good idea are workers in the Rust Belt. And it seems likely that the President’s aim was, purely, to break the Blue Wall - which overlapped the Rust Belt. The whole thing seems to have been an exercise in vote buying from a special interest group.
Outside of child labor, there’s no untapped workers. The best that the effort can hope for is that a recession creates enough unemployment that manufacturing can hire up. But it seems unlikely that tariffs - which largely deal with physical goods - will produce unemployment in non-manufacturing industries. As such, you’re not really creating extra labor for manufacturing, you’re just redistributing them according to those best able to withstand the shocks caused by tariffs. E.g. raw steel production might grow while airplane production shrinks. In general, you just move labor up the production line to more simple, basic components and the US leaves it place of strength in high-end, precision engineering. We go from being a leader in one field to be an overpriced catching-upper in fields that we’ve outgrown.
And, again, minus the acceptance of the goal, I don’t see factories getting reformatted for production of more basic goods. They’ll just trim their workforce and stay in business with higher prices. The owners don’t want to sink the capital costs to change their products, for something that’s unlikely to stay in place over the long run.
ETA: @HoneyBadgerDC two posts up …
How did the Chinese finance it all? Debt. Mountains and mountains of debt that would have crushed them if they weren’t an autoritarian state that simply ordered everyone in the finance biz to pretend the bonds will be paid off some day. And then used capital controls to prevent anyone (rich or poor, but mostly rich) with any financial sense from expatriating all their capital to a safer country without that debt overhang.