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The Glory of Globalism
If there’s anything the globalist “free traders” loved more than importing cheap foreign labor to undercut American workers’ wages, it was offshoring those jobs entirely by relocating American manufacturing to communist China. According to the GFTs, there was absolutely no downside to this. True, American manufacturing workers would lose their livelihoods by the millions, but all the cheap Chinese-made crap they could buy at Walmart (once they learned to code and got new high-tech jobs {unless East Indian coders imported by the millions on H-visas undercut those jobs, too}) would raise their overall consumer satisfaction. Also, the GFTs told us… try not to laugh… increasing trade with the Chinese would make them more liberal and democratic.
The former thing is working out about as well as the latter thing; which is why you may have noticed a lot of empty shelves (or, more likely “ITEM OUT OF STOCK” labels on Amazon.) This is reported at multiple sources, but we’ll use the Daily Mail:
Dozens of cargo ships anchored off the coasts of Los Angeles and New York face shocking wait times of up to four weeks and railyards and trucking routes are hopelessly clogged due to the lack of manpower to unload goods – with an expert warning that the government needs to intervene or face spiraling inflation and unemployment.
The backlog of billions of dollars of toys, clothing, electronics, vehicles, and furniture comes as the demand for consumer goods hit its highest point in history as consumers stay home instead of spending money on travel and entertainment.
Supply chains have lagged far behind consumer demand due to a lack of manpower at American ports and the restrictions that came with the COVID-19 outbreak early last year. These constraints, which include social distancing and mandatory quarantines, have severely limited the number and ability of port workers to do their jobs.
I can’t help thinking a lot of this could have been avoided if, you know, we still manufactured stuff in America. Also, if we hadn’t treated an upper respiratory infection with a 99.8% survival rate like it was the second coming of the Black Plague. I vaguely remember a guy who warned us that depending on communist China for our manufacturing was a bad idea. I think he got impeached or something.
Published in Economics
In the case of people I know, they have long roots in the area, family ties, and they often own a house that can’t be sold for much if they leave. They are not lazy or fools, they have a complex problem to solve.
Probably one more reason why the elites think the “regular people” shouldn’t own anything: it makes it harder to move them around.
This is true and that’s why you have to have a deflationary monetary policy and a libertarian economy. It’s a bit late to do this.
Everything should be going down in price because of all the globalized labor and automation. It’s complicated, but this would actually protect jobs.
Nothing should be going up in price ever since the Soviet union broke up. Yet they force inflation.
If they didn’t use owners equivalent rent in the CPI it would be 11% right now.
We don’t have the right comprehensive policies for free trade.
I don’t think the problem of unloading the shipping crates on the east coast is because of Globalism. It is because the U.S. has the largest number of job openings that we’ve ever had in our history, and hardly anybody is showing up to fill them. It’s not just the stevedores on the docks. In Cleveland most of the restaurants, including fast food restaurants cannot find enough staff and are closing early in the day and cutting back their open hours. Retail stores, despite offering unusually high wages, still can’t find enough help. There is a huge shortage of truck drivers.
The Washington Post says that the Manufacturing of non-durable goods has the biggest shortage of workers compared to all the other reeling industries. I can’t explain it, but millions of people do not want to go back to work.
People are already complaining about an inflation rate of 5 or 6%. If we cut-off all foreign supplies and had to manufacture all our own goods, think about inflation of 50 to 100% or even greater. I think it would wake people up pretty fast.
They’re paranoid of covid, and/or they’re getting enough from NOT working – unemployment, etc – that working doesn’t offer enough more to be “worth it.”
Keep in mind that you don’t lose all the time. Any farmer in the world thinks long and hard about America’s farm products before he starts a crop. You crush not only in the products themselves but in fertilizers, pesticides, added value seeds, machinery. From the day one, from the first American colony you operated in a global market. America has a big presence in several industrial products. Think the planes up in the air or the aeroespacial industry.
One area where the American tax payer gets screwed is in “corporate welfare” that money could make a difference elsewhere.
I do think a lot of blame is placed on globalism when the reasons were more complex. Buffalo was once a thriving city but with the advent of highways it ceased to have the same strategic importance. Unions screwed up many of the manufacturing jobs in the north of your country and those jobs migrated south. With time, and this happened all over the world some activities lost importance, like the steel industry or coal mining. Keep also in mind that some of the cheap stuff coming from Asia is then transformed in added valued products that are exported with bigger profits. I agree that it was a gigantic mistake made by the US and Europe to depend on one supplier only, but this can be fixed. In my humble opinion if Biden screws around with fracking it will be the end of him. Nothing like a big energy bill to gauge how green is your neighbor.
As for the deep rooted communities, at some point you have to decide if your individual welfare is worth the sacrifice, sometimes it is but not always
It will take centuries. And right now we need to burn coal to produce hydrogen that we need to pressurize spending energy and making it less efficient.
I moved constantly when I was a kid and I bitched about it. I felt sorry for myself not having “childhood friends”. However with time I realized that very few of my friends that never moved kept childhood friends, it was rare. I don’t know, at the time it pissed me off but now I think I got lots of growing experiences
If? He’s been doing it literally since the day he took office! And including stopping construction on the Keystone pipeline, and lots more.
Gee, what is going on here? Is it maybe that Mises.org is right about everything?
The reason you got Trump and that socialism and populism are an issue is because you have to have a government and monetary policy that matches the deflation from globalized labor and automation.
I want to like this post 10 times. :-)
They *are* resilient, but just like you say, much, much better to have what I call a stable launch platform in which to grow up. Same schools, same friends, same cohort – all of that builds the community around them, something they know and can rely upon.
I try to do the same things at home – doing the same things, making sure the girls know and have the expectations of how things work, that they can rely on us (the adults) to be extremely consistent in what we say we will do, and then do it. Surprises tend to undermine the core beliefs, and set up quetions like “If Adult X didn’t follow through on their promise, what can I rely on them for?”
Or words close to that. Meaning no sort of expectations, rules, a path forward to adulthood will exist if the stable launching pad is wobbly, or ceases to exist.
For some of us, it was foresight. But its ok to dismiss those who were right as quacks while excusing the people who insisted it would be the exact opposite for simply being human. Hindsight is 20-20 for the people who were wrong in this. And it was entirely predictable. People predicted it.
I can 100% vouch for this because I was under the opposite with a parent that had narcissistic personality disorder. lol
I was born in 1972, when all these things were decided I had very little foresigh. Brazil is a country with all kinds of protections for their industry…. And their industry is crap. Protected from competition at home they are incapable of being competitive abroad. Don’t forget thar protectionism cuts both ways
David Halberstam’s book The Reckoning (1986) was a detailed and fascinating parallel history of Nissan and Ford. MacArthur as de facto shogun of Japan nominally supported the right to unionize but looked the other way when a major beatdown of those attempting to unionize Japanese industry was applied. Nissan hustled and struggled while their American counterparts bureaucratized and fossilized.
The myth of MITI, that some geniuses in a central planning agency were the key to Japanese success was promoted by American academics but the founders of Honda and Sony found them to be an obstacle. They told Honda not to try to make cars—they could not possibly compete with America and Europe and it would just embarrass Japan.
The keiretsu system of vertical, monopolistic channels conferred advantages but also created insulation from fiscal reality and was the proximate cause of their great crash and long recession. Funny that the planning geniuses did not see that coming.
Halberstam’s portrayal of the complacent brain-dead entitlement mentality of the leaders of the US auto industry was accurate and consistent with my experience as a lobbyist with clients allied to the automakers on some issues—the car company execs seemed largely impervious to both political and market realities and their reps were apparently discouraged from sending bad news up communication channels.
The presumed right to a secure, large income with no inconvenient changes is at the core of US failures to adapt and compete as rapidly as we can and should. It is much broader than any particular sector.
German industrial management likes unionization as a way to maximize communication and accountability. When VW was deeply in the red and thinking about moving manufacturing out of Germany to its cheaper-labor foreign operations (e.g., Mexico) the union agreed to 10-20,000 layoffs and the opening of the most automated, robot-intensive auto plant in the world. VW gave the union a majority on the management council in return so they can veto any future changes. The company recovered.
In contrast , the UAW is a destructive force. For several decades, GM slowly reduced the number of vehicle platforms as it lost market share but could not lay off anybody. Redundant workers became a “reserve” labor force who clocked in and played pinochle all day. That lasted until the company threatened bankruptcy and ended the “reserve”. Native Detroit area folk of my acquaintance spoke of resentment at the UAW guys on the golf course—early retirement, higher pension than previous salary—who were killing the town’s key industry. When GM finally declared bankruptcy, the UAW called in chits from the corrupt Obama administration: bond holders (lots of retirement funds of firemen, teachers and other innocents) lost 90 cents on the dollar which is the reverse of their priority under law; US taxpayers bought GM stock priced at exactly double what it was worth; a large interest-free federal loan; and, because the company holds the retirement funds, the UAW was given stock and controlling interest. The union was cushioned. The execs got their bonuses and the country got hosed.
Great book and great comment!
No? I do. Call it the hometown premium. I am more than willing to pay more for something made locally. It’s better quality and I don’t have to pay for my neighbor’s unemployment and welfare after my overseas purchases cause him to lose his job. And it makes me happy that I can support other American workers.
When talking to Democrats, I make sure to remind them that we have very strict environmental laws, labor laws and other regulations that cost American businesses money.
In moving operations to China, they can offshore pollution, slavery and recklessness, and create even more pollution in the thousands of miles needed for transport.
Its not just cheaper labor. It’s labor that has no power, it’s the ability to pollute ( a huge savings) the ability to build without inspections and more.
The whole post is very interesting and particularly the end here.
If the government suppresses interest rates and pays all of the interest with printed money, at that point corporations with real assets are frequently going to be better credits than the government.
We are like a snake eating itself.
Why this assumption that everything made locally is going to automatically be of better quality than something made overseas? Just look at the automobile and television manufacturing industries. Besides, overseas jobs are not why Americans are not working now. There is literally something like seven or eight million jobs just waiting to be filled and nobody wants them.
I think it is because you are already paying for your neighbor’s welfare and unemployment that he doesn’t have a job. Not the reverse. Take away all the massive welfare given out and unemployment would disappear overnight.
Start by not importing millions of uneducated and unskilled people every few years.
My old jeans would have to be in tatters before I would put on spandex. SPANDEX! Really? Come on, you’re kidding, right?
You absolutely cannot do this unless you have an extremely libertarian economy which isn’t found anywhere on the planet right now.
It is the sum of regulatory burdens, not just environmental. Regulation can be useful and balance competing interests.
The auto emissions standards in the 1975-7 Clean Air Act did not impose large costs and mandated doable tech (many Japanese cars were already about that clean) and had a large positive impact on air quality and public health. In contrast, the ‘92 amendments mandated tiny improvements at comparatively great cost. If Congress had instead funded regular tuneups on older cars owned by people with modest incomes (hence the older cars) the impact on air quality would have been vastly better.
A lot of (but not all) really stupid legislation and regulation gets blocked by information and actions organized by industry groups which never makes headlines.
Have you thanked a lobbyist today?
Everybody would be better off if they would have backed off on all kinds of regulation of automobiles decades ago. They have totally overdone the fleet mileage thing.
Agreed in part. CAFE standards are just an attack on the kinds of vehicles rural red state people need. The real problem is the increasing loss of the grown-up mindset a la Thomas Sowell that the goal is to select the most beneficial, fairest set of tradeoffs. Instead it is increasingly a rearguard action by defenders of actual manufacturing and commerce versus purists who seek their elimination.
3D printing is going to have a significant impact once it becomes practical. When you can make durable complex metal parts and assemblies to design tolerances.