I’ve been saying for years that anyone, from either party, telling voters that manufacturing jobs are coming back because of this or that policy, is committing a heinous act equal to telling a child that their terminally ill parent is gonna pull through.
China can cheaply manufacture goods because they exploit their workers with low wages, not to mention weak or non-existent safety and pollution regulations.
By conceding defeat that manufacturing can't return to the US, we are tacitly acknowledging that the Chinese system is ethically acceptable.
Do you think it is?
I personally am willing to pay slightly more for a US-made product since I value a living wage for workers, a safe workplace, and clean air. But maybe that's just me.
Half the time nativists are complaining China is getting rich off us, half the time they're complaining that the Chinese are impoverished slave labor.
This is absolutely ridiculous. Typical socialist drivel about how poor people shouldn't have jobs they clearly need unless conditions are perfect, adopted for nativist ends. I might as well say the Midwest shouldn't have factory jobs if they can't have the amenities of the Google campus.
As for whether the Chinese system is unethical - it is, but sadly, that’s now moot. That proverbial train left the station a long time ago. The time to stop it was during the beginning of the neo-liberal era. Now it’s too late.
Even if some progress is made (which for the record, I’m for), it’ll never return to the glory days of the mid twentieth century post-war boom period. So while some manufacturing CAN return, it ain’t enough to save the rust belt to the extent that populists want.
And good luck convincing Americans en masse to pay more for American quality when too few jobs return and wages are kept stagnant.
Richard, It's weird how much your subjective aesthetics about the lack of beauty and desirability of places like the Midwest and Appalachia you use as a justification for what are arguably sound non subjective arguments for not helping people in areas that have lost in the realm of creative destruction. It degrades and distracts from your argument. You go from solid ground into what feels like personal attacks, the way one might dis someone because of the sports team they like or the way they like their chili.
Personally I'd much rather live in the Midwest or Appalachia than anywhere in the deep south. Give me the change of seasons with glorious fall color, pristine white blankets of snow and the rebirth of spring instead of oppressive 100% humidity, fatiguing heat, annoying bugs and deadly hurricanes. Give me the gorgeous mountains, hills and forests of Appalachia over the flat swamps of Florida.
I've lived in San Diego most of my adult life. 40 years now. We have the best climate in the world, But I still miss the change of seasons I grew up with in Toledo... except for the humid summers and the mosquitos.
Yes, agree. It comes off like a kind of adolescent dunk rather than a reasoned argument.
It's also missing some key factors. The Midwest is populous. Ohio is a major swing state. Michigan is big. If your economic "losers" are all concentrated in those places, they can and will express their anger in substantive ways that affect the whole country, as we've seen with Trump. If the distressed regions are able to control the political discourse, all the libertarian arguments in the world won't get anywhere. So Richard's argument seems to abstract away the feedback inputs from economically and culturally distressed areas into the democratic system. That is to say, it's pretty much anti-democratic — the positive vision actually seems to be something more like Chinese authoritarian corporatist capitalism, where you have free markets but no real avenue for democratic feedback.
Of course the argument about the intrinsic undesirability of the Midwest is also just ignorant — the Midwest has gorgeous scenery, especially the Great Lakes shorelines, the Apostle Islands, the Driftless hill zones of Wisconsin, Minnesota, and Iowa, the river bluffs along the Mississippi, the rolling farmland in northern Illinois. Yeah, the flat stretch along I-90 is boring, but that's the only part roadtripping coastal dwellers ever see (that and O'Hare), and there's just a lot more to it than that. And of course Appalachia is one of the most beautiful parts of the country. Beats flatland Georgia or Texas any day.
Unless you count Western Pennsylvania and Southern Ohio as Appalachia, I don't really think job outsourcing has been nearly as relevant to the problems in the region in comparison to the Rust Belt. Appalachia has been most harmed by government failures like the opioid epidemic, the overregulation of coal, and state governments in Raleigh, Richmond, Atlanta, Frankfurt, and Nashville neglecting to develop infrastructure in the peripheral Appalachian regions of their states. Long-standing, ignorant cultural stereotypes about Appalachian people, who are some of the friendliest, hardest-working, and community-driven people in the country, don't help either.
The only unavoidable economic advantage coastal cities in the South and Northeast have over Appalachia and the Midwest (which are two very different regions despite overlapping FWIW) is their easier access to global trade through maritime shipping, which people like Peter Zeihan constantly stress the importance of. However, given how extensive America's highway infrastructure, domestic air freight, and railway networks are (or were), I don't think that is a fully sufficient explanation for why these regions fell behind coastal cities. There is a cultural desirability element to this problem that defies economic explanation. Luckily, I think many people and businesses are waking up to the fact that most of Appalachia is beautiful, affordable, and ripe for development, and that is why there is a large in-migration to southern Appalachia.
Largely agree that an actual strategic trade policy should focus on protecting key industries vs the worst-of-all-worlds strategery that has been imposed upon us, but one overlooked dynamic in the downsides of trade with the PRC is that it does not hesitate to use its leverage to change the behavior of American companies, even in America itself (the NBA self-censored after the GM of the Houston Rockets tweeted support of the Hong Kong protestors, Hollywood modifies scripts in US movies to please Beijing, and Elon of course will defy the will of every government except that of the PRC).
It’s ironic because we used to fantasize trade with the PRC would be a force to increase freedom in China, but instead it became a lever for the PRC to decrease freedom in America.
The almost Greek tragedy in all this is that Trump would be the first president to identify this asymmetry, proclaim it unacceptable, and fuse American state and commercial power to similar ends - yet the man is so comically subject to manipulation by flattery and corruption that Beijing has nothing to fear.
"ADH support targeted assistance to those left behind."
They always say that, but it is has never happened. If it is politically impossible, then it isn't a useful suggestion.
"this would only justify narrow restrictions*
You are really understating the national security considerations. It takes a strong industrial base to fight a war. Already, among other things, we can't make anywhere near the amount of munitions we need.
"It made the US better off overall "
It's widely agreed that nearly all of the income and wealth gains of recent decades have gone to the very wealthiest Americans. So that "overall" is doing a lot of work.
Your assertion is a piece of socialist propaganda meant to inspire self-pity in the masses to hide the fact that they’re much better off due to freedom and to try to get them to adopt a form of nativism that would make them worse off.
The fact--not propaganda, fact--that nearly all of the income and wealth gains of recent decades have gone to the very wealthiest Americans is a serious problem with very broad implications. Telling people nevermind, you're better off because freedom is a ridiculous refusal to even engage the issue.
You can tell people that they should base their judgment on relative gains rather than absolute gains, and that they should be upset their lives got better because some people gained even more. I think it’s evil and will make everyone worse off. But some people do have preferences I consider evil.
Another tour de force. I guess Trump et al. probably believe in tariffs and saving manufacturing jobs. But probably they’re also trying to. Maintain a winning political coalition.
Most manufacturing jobs in America are done by women. Manufacturing has also become high tech in America with most requiring a college degree. It was rhetoric all along. The Economist had a header on it titled manufacturing delusion.
"...sticks to the principles of the Anglo-American tradition, based in liberty, limited government, and a faith in market processes rather than bureaucratic planning to order society."
The Chinese have outcompeted the US by doing none of the things above. Should we view this as another innovation we should embrace? Why limit "creative destruction" to hollowing out the Midwest? Should we apply "creative destruction" to our political system as well?
Option 3: low tarrifs + high rent + high housing costs
Option 2 is the best, but which is better option 1 or option 3? , you touched on this in your essay but you did not argue for either one. Personally I don't know which is better overall.
I think the issue is that the ~30% of Americans who do end up worse off because of these policy moves become BIG mad. If your hometown is destroyed by deindustrialization, you really don't care if the rest of the nation is better off, in fact, you are likely to grow resentful. This resentment along with social media algorithms are like jet fuel for the radical populist movements that we are seeing today.
The arguments against creation and protection of jobs as a policy make some sense for innovation but are deeply flawed from a human perspective.
Flipping the example of renewables (creating more jobs) versus fossil fuels (being more labor-efficient) illustrates this point when taken to the other extreme. If an energy technology becomes so efficient that it supplies all our needs while requiring NO labor except for the owners/managers, you have an industry that enriches the richest beyond comprehension at the expense of the rest of society. Unemployed or underemployed former workers not only depend on safety nets at taxpayer expense but also have less disposable income. Their own standard of living is reduced at least temporarily, and the standard of living for people supplying goods and services to the displaced workers also takes a tiny hit for each widget or service no longer sold.
It is true that great migrations and societal changes have managed to keep unemployment relatively steady despite the current efficiencies in such sectors as farming, heavy industry and retail sales. But this has taken place because of policies that promote both investment in innovation AND jobs.
Focusing policy only on innovation and investment is not the answer because it erodes the working middle class to benefit mainly broligarchs and other billionaires. The government investments and incentives in renewables were touted by the Biden administration as creating good jobs, and they did. But those government investments and incentives also benefitted big energy and cutting edge technologies, and led the way for the future economy until being kneecapped by the current administration. Everybody wins when policies are directed to both jobs and innovation investments.
Ignoring job creation and preservation as a policy is a modern form of trickle down economics, substituting new tech for the coal baron as the trickler. I'd suggest that's not good policy for the whole of society.
Politicians fetishize 'manufacturing jobs' a stand-in for the more general 'well-paying jobs that can that vault families into a middle-class lifestyle', which is what the 'late capitalist' global economy has really decimated in the US. And we're talking about people,Richard, not just statistics. Creative destruction that shunts masses of people into more abundant but shittier jobs, is that your idea of fertilizing the growth of human capital?
In the case of the midwest and Appalachia, the only way those places will ever grow is by having immigrants move there. I think it would be good to give preferential treatment to high-skilled immigrants if they're willing to move to places that have seen better days. The problem is many of those places don't like immigrants and won't want them there. That's their choice, they shouldn't have to take them, but if they want to grow and prosper again they'll have to.
You, and the economists, are making the case that the fact our trading partner is China is irrelevant. That is wrong. China being our trading partner is relevant. China is our adversary. The world will be worse off if China is the global superpower.
If a company (China) were to engage in predatory pricing to eliminate the competition, consumers would benefit from lower prices. However, long term it would be bad from consumers as the lack of competition would result in higher prices.
You are understating the national defense component. Manufacturing capacity...is...national defense capacity.
Well sure, and the US could become an autocracy 'in the future'. Predictions are a dime a dozen. Many thought introducing capitalism to Russia and China would bring them around to 'our side', remember?
I am not making a prediction. China is CCP focused. They have harmed their future prospects because they thought it would strengthen the CCP.
Yes, the same people who thought free trade would lead to democratization are the same people who think changing our trading policies with China is wrong. I am disagreeing with them.
The only thing I am certain of is out lack of industrial base is military liability. If I was certain China's prospects were dimming or they weren't going to try to rule the world, then I would be fine with continuing as is. After all, as Richard points out trade with China makes us richer. I am not certain of that so we need to act accordingly.
If we eliminated our defense spending and spent it on R&D or some other more economically beneficial way it make us richer. If you believe an industrial base is necessary for war, then that is essentially what Richard is arguing for.
I’ve been saying for years that anyone, from either party, telling voters that manufacturing jobs are coming back because of this or that policy, is committing a heinous act equal to telling a child that their terminally ill parent is gonna pull through.
China can cheaply manufacture goods because they exploit their workers with low wages, not to mention weak or non-existent safety and pollution regulations.
By conceding defeat that manufacturing can't return to the US, we are tacitly acknowledging that the Chinese system is ethically acceptable.
Do you think it is?
I personally am willing to pay slightly more for a US-made product since I value a living wage for workers, a safe workplace, and clean air. But maybe that's just me.
Half the time nativists are complaining China is getting rich off us, half the time they're complaining that the Chinese are impoverished slave labor.
This is absolutely ridiculous. Typical socialist drivel about how poor people shouldn't have jobs they clearly need unless conditions are perfect, adopted for nativist ends. I might as well say the Midwest shouldn't have factory jobs if they can't have the amenities of the Google campus.
As for whether the Chinese system is unethical - it is, but sadly, that’s now moot. That proverbial train left the station a long time ago. The time to stop it was during the beginning of the neo-liberal era. Now it’s too late.
Even if some progress is made (which for the record, I’m for), it’ll never return to the glory days of the mid twentieth century post-war boom period. So while some manufacturing CAN return, it ain’t enough to save the rust belt to the extent that populists want.
And good luck convincing Americans en masse to pay more for American quality when too few jobs return and wages are kept stagnant.
Richard, It's weird how much your subjective aesthetics about the lack of beauty and desirability of places like the Midwest and Appalachia you use as a justification for what are arguably sound non subjective arguments for not helping people in areas that have lost in the realm of creative destruction. It degrades and distracts from your argument. You go from solid ground into what feels like personal attacks, the way one might dis someone because of the sports team they like or the way they like their chili.
Personally I'd much rather live in the Midwest or Appalachia than anywhere in the deep south. Give me the change of seasons with glorious fall color, pristine white blankets of snow and the rebirth of spring instead of oppressive 100% humidity, fatiguing heat, annoying bugs and deadly hurricanes. Give me the gorgeous mountains, hills and forests of Appalachia over the flat swamps of Florida.
I've lived in San Diego most of my adult life. 40 years now. We have the best climate in the world, But I still miss the change of seasons I grew up with in Toledo... except for the humid summers and the mosquitos.
Yes, agree. It comes off like a kind of adolescent dunk rather than a reasoned argument.
It's also missing some key factors. The Midwest is populous. Ohio is a major swing state. Michigan is big. If your economic "losers" are all concentrated in those places, they can and will express their anger in substantive ways that affect the whole country, as we've seen with Trump. If the distressed regions are able to control the political discourse, all the libertarian arguments in the world won't get anywhere. So Richard's argument seems to abstract away the feedback inputs from economically and culturally distressed areas into the democratic system. That is to say, it's pretty much anti-democratic — the positive vision actually seems to be something more like Chinese authoritarian corporatist capitalism, where you have free markets but no real avenue for democratic feedback.
Of course the argument about the intrinsic undesirability of the Midwest is also just ignorant — the Midwest has gorgeous scenery, especially the Great Lakes shorelines, the Apostle Islands, the Driftless hill zones of Wisconsin, Minnesota, and Iowa, the river bluffs along the Mississippi, the rolling farmland in northern Illinois. Yeah, the flat stretch along I-90 is boring, but that's the only part roadtripping coastal dwellers ever see (that and O'Hare), and there's just a lot more to it than that. And of course Appalachia is one of the most beautiful parts of the country. Beats flatland Georgia or Texas any day.
Unless you count Western Pennsylvania and Southern Ohio as Appalachia, I don't really think job outsourcing has been nearly as relevant to the problems in the region in comparison to the Rust Belt. Appalachia has been most harmed by government failures like the opioid epidemic, the overregulation of coal, and state governments in Raleigh, Richmond, Atlanta, Frankfurt, and Nashville neglecting to develop infrastructure in the peripheral Appalachian regions of their states. Long-standing, ignorant cultural stereotypes about Appalachian people, who are some of the friendliest, hardest-working, and community-driven people in the country, don't help either.
The only unavoidable economic advantage coastal cities in the South and Northeast have over Appalachia and the Midwest (which are two very different regions despite overlapping FWIW) is their easier access to global trade through maritime shipping, which people like Peter Zeihan constantly stress the importance of. However, given how extensive America's highway infrastructure, domestic air freight, and railway networks are (or were), I don't think that is a fully sufficient explanation for why these regions fell behind coastal cities. There is a cultural desirability element to this problem that defies economic explanation. Luckily, I think many people and businesses are waking up to the fact that most of Appalachia is beautiful, affordable, and ripe for development, and that is why there is a large in-migration to southern Appalachia.
https://www.movebuddha.com/blog/moving-trends/
Largely agree that an actual strategic trade policy should focus on protecting key industries vs the worst-of-all-worlds strategery that has been imposed upon us, but one overlooked dynamic in the downsides of trade with the PRC is that it does not hesitate to use its leverage to change the behavior of American companies, even in America itself (the NBA self-censored after the GM of the Houston Rockets tweeted support of the Hong Kong protestors, Hollywood modifies scripts in US movies to please Beijing, and Elon of course will defy the will of every government except that of the PRC).
It’s ironic because we used to fantasize trade with the PRC would be a force to increase freedom in China, but instead it became a lever for the PRC to decrease freedom in America.
The almost Greek tragedy in all this is that Trump would be the first president to identify this asymmetry, proclaim it unacceptable, and fuse American state and commercial power to similar ends - yet the man is so comically subject to manipulation by flattery and corruption that Beijing has nothing to fear.
"ADH support targeted assistance to those left behind."
They always say that, but it is has never happened. If it is politically impossible, then it isn't a useful suggestion.
"this would only justify narrow restrictions*
You are really understating the national security considerations. It takes a strong industrial base to fight a war. Already, among other things, we can't make anywhere near the amount of munitions we need.
"It made the US better off overall "
It's widely agreed that nearly all of the income and wealth gains of recent decades have gone to the very wealthiest Americans. So that "overall" is doing a lot of work.
https://chatgpt.com/share/68f62cb7-3538-8009-aeb8-885f5ba683a1
So my assertion is broadly true, with some hedging about what "nearly all" means.
Your assertion is a piece of socialist propaganda meant to inspire self-pity in the masses to hide the fact that they’re much better off due to freedom and to try to get them to adopt a form of nativism that would make them worse off.
The fact--not propaganda, fact--that nearly all of the income and wealth gains of recent decades have gone to the very wealthiest Americans is a serious problem with very broad implications. Telling people nevermind, you're better off because freedom is a ridiculous refusal to even engage the issue.
You can tell people that they should base their judgment on relative gains rather than absolute gains, and that they should be upset their lives got better because some people gained even more. I think it’s evil and will make everyone worse off. But some people do have preferences I consider evil.
The point is the absolute gains are negligible. So for most people telling them "the country as a whole is better off" is insulting.
Kind of seems like protectionism is just trade Ludditism. Same instinct as smashing machines, just aimed at imports instead of tech.
Another tour de force. I guess Trump et al. probably believe in tariffs and saving manufacturing jobs. But probably they’re also trying to. Maintain a winning political coalition.
Most manufacturing jobs in America are done by women. Manufacturing has also become high tech in America with most requiring a college degree. It was rhetoric all along. The Economist had a header on it titled manufacturing delusion.
That is false. Women are 30% of manufacturing jobs and men are 70%.
"...sticks to the principles of the Anglo-American tradition, based in liberty, limited government, and a faith in market processes rather than bureaucratic planning to order society."
The Chinese have outcompeted the US by doing none of the things above. Should we view this as another innovation we should embrace? Why limit "creative destruction" to hollowing out the Midwest? Should we apply "creative destruction" to our political system as well?
It’s hard to make contributions to discussion of an article when you only read the last paragraph.
I'm riffing your Friedman spoons quote from the middle of your article, good sir.
Option 1: high tariffs + low rent + low housing cost
Option 2: low tarrifs + low rent +low housing costs
Option 3: low tarrifs + high rent + high housing costs
Option 2 is the best, but which is better option 1 or option 3? , you touched on this in your essay but you did not argue for either one. Personally I don't know which is better overall.
I think the issue is that the ~30% of Americans who do end up worse off because of these policy moves become BIG mad. If your hometown is destroyed by deindustrialization, you really don't care if the rest of the nation is better off, in fact, you are likely to grow resentful. This resentment along with social media algorithms are like jet fuel for the radical populist movements that we are seeing today.
The arguments against creation and protection of jobs as a policy make some sense for innovation but are deeply flawed from a human perspective.
Flipping the example of renewables (creating more jobs) versus fossil fuels (being more labor-efficient) illustrates this point when taken to the other extreme. If an energy technology becomes so efficient that it supplies all our needs while requiring NO labor except for the owners/managers, you have an industry that enriches the richest beyond comprehension at the expense of the rest of society. Unemployed or underemployed former workers not only depend on safety nets at taxpayer expense but also have less disposable income. Their own standard of living is reduced at least temporarily, and the standard of living for people supplying goods and services to the displaced workers also takes a tiny hit for each widget or service no longer sold.
It is true that great migrations and societal changes have managed to keep unemployment relatively steady despite the current efficiencies in such sectors as farming, heavy industry and retail sales. But this has taken place because of policies that promote both investment in innovation AND jobs.
Focusing policy only on innovation and investment is not the answer because it erodes the working middle class to benefit mainly broligarchs and other billionaires. The government investments and incentives in renewables were touted by the Biden administration as creating good jobs, and they did. But those government investments and incentives also benefitted big energy and cutting edge technologies, and led the way for the future economy until being kneecapped by the current administration. Everybody wins when policies are directed to both jobs and innovation investments.
Ignoring job creation and preservation as a policy is a modern form of trickle down economics, substituting new tech for the coal baron as the trickler. I'd suggest that's not good policy for the whole of society.
Politicians fetishize 'manufacturing jobs' a stand-in for the more general 'well-paying jobs that can that vault families into a middle-class lifestyle', which is what the 'late capitalist' global economy has really decimated in the US. And we're talking about people,Richard, not just statistics. Creative destruction that shunts masses of people into more abundant but shittier jobs, is that your idea of fertilizing the growth of human capital?
In the case of the midwest and Appalachia, the only way those places will ever grow is by having immigrants move there. I think it would be good to give preferential treatment to high-skilled immigrants if they're willing to move to places that have seen better days. The problem is many of those places don't like immigrants and won't want them there. That's their choice, they shouldn't have to take them, but if they want to grow and prosper again they'll have to.
The Midwest has been declining since before I was born in 1980. When the hell does it stop?
You, and the economists, are making the case that the fact our trading partner is China is irrelevant. That is wrong. China being our trading partner is relevant. China is our adversary. The world will be worse off if China is the global superpower.
If a company (China) were to engage in predatory pricing to eliminate the competition, consumers would benefit from lower prices. However, long term it would be bad from consumers as the lack of competition would result in higher prices.
You are understating the national defense component. Manufacturing capacity...is...national defense capacity.
China is already a global superpower. And it is already more future-focused than the US is.
I meant if China is the only global superpower. China is CCP focused, not future focused. Those have been aligned, but they may not in the future.
Well sure, and the US could become an autocracy 'in the future'. Predictions are a dime a dozen. Many thought introducing capitalism to Russia and China would bring them around to 'our side', remember?
I am not making a prediction. China is CCP focused. They have harmed their future prospects because they thought it would strengthen the CCP.
Yes, the same people who thought free trade would lead to democratization are the same people who think changing our trading policies with China is wrong. I am disagreeing with them.
Well, again, I hope you're right. I hope the CCP's 'prospects' dim. You seem certain of things that aren't certain.
The only thing I am certain of is out lack of industrial base is military liability. If I was certain China's prospects were dimming or they weren't going to try to rule the world, then I would be fine with continuing as is. After all, as Richard points out trade with China makes us richer. I am not certain of that so we need to act accordingly.
If we eliminated our defense spending and spent it on R&D or some other more economically beneficial way it make us richer. If you believe an industrial base is necessary for war, then that is essentially what Richard is arguing for.