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Apple plans to spend $1B to support advanced manufacturing jobs in the U.S (washingtonpost.com)
240 points by happy-go-lucky on May 4, 2017 | hide | past | web | favorite | 271 comments



> Cook told "60 Minutes” in 2015. “I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.”

In that interview he also said that the jobs weren't coming back.

This is one of the most powerful statements uttered on American labor and employment trends in recent memory.

I have shared this quote with every middle/lower-middle class person I know who voted for Trump and their responses have all been the same, horror.

Financial interests convinced liberals and conservatives alike that globalism was a good thing (for altruistic or selfish reasons respectively). Instead it just gave Capital access to cheap labor and totally fucked the American worker.


What's the answer? Protectionism?

That's the thing I don't get, so many people will advocate "fewer regulations", yet are perfectly content with prohibitive tariffs from the place that allows people living in section 8 to afford iPhones.

You're 100% right, but i just don't see a good answer other than coming to terms with the fact that cheap labour overseas and automation WILL back us into UBI in the very near future. It's the cost of doing business. No different than the argument that it's more economical to work an extra 30 minutes and pay someone else to cook for you.

Why such a large percentage of the middle class thinks that THEIR livelihoods are threatened by having the rich pay up, I don't know.


But it's not completely a labor play. Some of it is to skirt environmental protections. I'm not going to assume, but if you consider yourself both a globalist and an environmentalist, how do you personally resolve those two beliefs? Anyone reading this who does, how do you resolve those beliefs?

I can vote for all the environmental protections that I want, but what good does that do if it just forces companies to manufacture goods in places that have worse environmental protections than we do?

I ask this as someone who believes in both movements, and don't have a great answer to resolve this internal conflict.


The answer is not very hard. People like to attribute everything to regulation but the reality is that most parts of living standards improve when incomes grows.

As China becomes richer they will go threw the same stuff that Britain and later the US did.

Maybe I don't fit the bill as 'envoirmentalist' but I like to live in a place and country with a clean envoirment.

China will have to fix its own problems, and Im sure they eventually will.


Polution and slave labour in China.

Unemployment in the US.

Globalism sounds great.


Globalism is, and will continue to, happen no matter what the US does. The US needs to figure out how to make it work for the long term. Protectionism won't work. You might as well be a cooper or haberdasher trying to pass laws to keep people using barrels and hats.

People keep trying to either spin globalism as evil or good, but it's neither. It's just something that was going to happen no matter what. The US does not have a say in whether it happens. If the US doesn't figure out a way to make it work for them, then they'll be replaced by whichever country does.

The answer is not passing laws for tariffs or thinking the US can race to the bottom with low wages and manufacturing. The world desperately needs advanced technology and medicine, and the US should be focused on that, not stupidly trying to compete with literally every other single country on Earth on things any country can produce.


Protectionism has proven to work well in some cases in history.

You are also misunderstanding by conflating globalism with free trade. The two are related, but not the same. You can be for free trade of goods and services, but not for unelected central powers (i.e. an EU, a central bank).

Mainstream academic economists are typically free trade, but we have no science to test this theory so just br careful about drinking too much of the kool aid. LarGe corps, banks, and US gov generally want globalism. Keep in mind why they want that (profit and power). We still have a lot of people suffering in 2017 and no longer a good excuse for it (i.e. resources scarcity cant explain malnutrition anymore).


The EU is unelected? Member countries send their own representatives to the EU Parliament; they send council members to the European Council.

The ECB is nominated by the EC.

The U.S. Federal Reserve commissioners and chairman are appointed by the President and confirmed by the Senate.


Many would consider that unelected. I'm sure you draw the line somewhere too: I doubt you consider every government employee elected just because you can draw a chain of responsibility back to some elected official.


Please don't backpedal by going into the definition of the word. The rhetorical value of "unelected" was to paint the EU and Federal Reserve as unrepresentative.

Hell, by your logic, the U.S. Senate before the 20th Century wasn't elected because they were elected by state legislatures instead of popular elections.


You are simply and flatly factually wrong about this, sorry. I encourage you to check out the textbook definition of the Fed as well as technocracy. You can also Google 'differences b/w a technocracy and democracy.' The Fed is widely accepted by every piece of academic literature Ive ever come across to be a technocracy, and that is the word we use to describe it. Also, the EU can and should be thought of at least being largely technocratic as well.


You're the only person in this thread to talk about "democracy vs technocracy," debating a point I never made.


When you were arguing about how the EU and Fed are, in your opinion, elected, I thought you would be able to make the connection. They aren't considered elected officials in the standard sense we think about it--in a democratic sense--and no one thinks that. They are unelected by any plain interpretation of democracy. That's the reason the word technocracy is used to describe them.


> Protectionism has proven to work well in some cases in history.

It's worked pretty well here for doctors and pharma.


Globalism != Globalisation


You're grossly simplifying. According to the World Bank [1], since 1990, nearly 1.1 billion people have escaped extreme poverty.

[1] http://www.worldbank.org/en/publication/poverty-and-shared-p...


I hope that you're right, but it's definitely a big assumption on your part that China (and, of course, Chinese culture in general) will naturally head down the path of caring about the environment in the same sense that Western countries and cultures have started to.

There are different levels of scale at play that make very different tactics work in Shanghai vs Vancouver; in the former there's enough difficulty ensuring that all the logistics work to ensure the populace is not starving that other considerations will necessarily have to go by the wayside.

We also have to consider history and cultural forces, which have inertia, whenever we consider social change over time. The western world is becoming cleaner largely by virtue of each succeeding generation encouraging its children to take stewardship of the environment seriously. Even with this tendency, we still pollute terribly.

I'm not convinced that there is much of an environmental shift in Mainland Chinese culture presently, at the very least in the city cores; and if there is, I suspect it will be generations before it's taken as seriously as it is here, which is still insufficient to actually stop bad things - and still undereducated as to what risks are reasonable vs. simply protesting whatever has the right virtue-signalling associations in the current year.

When you say:

> As China becomes richer

...there's an implicit assumption that "becoming richer" is just a natural, unavoidable, guaranteed outcome of the modern world. This is another assumption, and one I fear would be even harder to justify than Chinese culture becoming environmentally focused in a short enough time to matter.

There's no guarantee that resource extraction at the current rate needed for wealth to outgrow population growth is a guarantee. This means there's no reason to assume that the per-capita average GDP or standard of living is going to rise forever, to the point where environmentalism (in the sense that it's often more expensive) is going to become not only feasible, but fashionable. Frugality may overcome the natural human desire to display wealthiness, if the threshold is too high for the average person.

Lastly -

While your solution may very well become the case in the long term, and again, I hope you're right because it's truly the best outcome, we still have to deal with environmental ramifications today, both of past decisions and of decision being made right now. It's probably better to stem the tide earlier rather than waiting for it to just naturally stem itself.

This might mean "environmental protectionism", in the form of heavy tariffs against goods from countries with lower environmental standards and/or poor enforcement.


What? As if west is taking environmental protectionism seriously. Look what Trump is doing and other climate change deniers. An idiot in Australian parliament walks around with a lump of coal. Canada is raping the country digging up those tar sands which is more polluting than previously thought according to last studies. China needs to catch up at any cost, but once they do their government system will allow them to take drastic measures to clean up faster than the west. Our political systems are in bed with polluters and we're still emmitting the highest levels of CO2 per capita.


Poor, starving, and desperate people don't have the luxury to worry about environmental protections.

Their governments are going to work to improve their standards of living one way or another. If they do it with our cooperation, with our more efficient technology, and with our more efficient production practices they will be able to grow in a way that is less environmentally damaging than the Industrial revolution was.

Enriching them and giving them access to education and giving women reproductive choice is also the only way we are going to foster the necessary reduction in birth-rates we will need to live on Earth sustainably.


Pollution related annual deaths in China have gotten bad enough the government does not have much of a choice.

Much like how London dealt with 'Killer Fogs' hundreds of years ago when not enough wind was clearing the air; China can't completely ignore the environment because the costs are simply getting to high. However, it's going to be a long time before they embrace western style pollution controls, because there is a big gap between killing people today and killing them in 40 years.


China hasn't been ignoring the environment though and have had Western style pollution controls for years. Unfortunately it's a complicated issue:

http://fortune.com/2017/01/10/china-red-alert-pollution-pm2-...

Anyone who thinks the environment is even remotely a reason for China's success in manufacturing is frankly ignorant.


The worst days are always going to be weather related everywhere, but clam days are really just magnifying the average impact not some weather pattern unique to china.

Perhaps I could give them more credit for real progress, but the root cause is still a disconnect from what's on the books being a long way from what's enforced.

Their smog problems largely relate to cars that would not pass US annual emissions standards from 20 years ago. Similarly coal is never 'clean' but it's not that expensive to dramatically reduce particulate emissions.

And yes, cheap labor etc plays a huge role in some types of manufacturing. But, by subsidizing the inputs and lax enforcement of regulations you see dramatic shifts in many types of production well past their less harmful competitive advantages.


Stop trying to handle env at the domestic level; measures only work at an international level (UN regulations or tariffs/sanctions or whatever).

But that's for later society (ones with people with stable livelihoods) to figure out, not currently on the table. If you allow yourself to be paralyzed by one issue tapping into the next, you'll deadlock yourself. One issue at a time. The environment is the least of the american worker's immediate concerns anyways, you might as well save your breath in that context.

(Yes, the environment is fucked, "sooner the better" etc - but that's idealism, not pragmatism, and guess which by which one the world actually turns. Bringing up noise just impairs yourself to communicating with the public.)


> "sooner the better" etc - but that's idealism, not pragmatism

I don't get this mentality at all. The more we put off curbing environmental change, the more expensive it becomes to fix.

I feel like it's analogous to credit card debt – what you're saying is, don't worry about that mountain of credit debt, with it's 14% interest rate; pay the minimum and contribute to a mutual fund instead. But the credit interest overruns the fund interest, so you lose money. Similarly, I think the costs of climate change are going to overrun any other economic issue we decide to focus on.


In Apple's case it is mostly a labor play.

They have a number of initiatives related to the environment [1]. They are trying to reduce their carbon footprint, and are close to get 100% of their power from renewable sources. They also announced their intention of a closed-loop supply chain (no new mining).

Of course, they are not perfect. The Washington Post documented the horrifying exploitation of cobalt miners in Congo [2]. Some of that cobalt ended up in Apple batteries. Apple said it was addressing the issue [3].

The biggest contribution you yourself can make at this moment is to simply consume less.

[1] https://images.apple.com/lae/environment/pdf/Apple_Environme...

[2] https://www.washingtonpost.com/graphics/business/batteries/c...

[3] https://www.washingtonpost.com/news/the-switch/wp/2017/03/03...


> protectionism

Why not? It works for so many other countries. Is it not a fundamental characteristic of government to prioritize its citizens over others? Without that, we've got a de facto world government with dissolved borders but that only benefits the rich and powerful. If we truly want to give equal rights and privileges to everyone on Earth we should make global governance explicit to make sure the poor and disenfranchised get fair representation.


Protectionism only works when two things are true: - Other countries can't produce the product better than your country can - Other countries can't sell the product to markets besides yours

If we were to enact a tariff on foreign-made smartphones that was so high that they couldn't compete with domestically-made smartphones, the smartphone manufacturers in China and the rest of the far east would just sell their phones across the rest of the world, where they would out-compete our phones on price (initially). Our domestic manufacturers would have a smaller market and less access to materials and technical advancements, causing our phones to become inferior in quality as well as overpriced. And that would eventually hurt our people and our entire economy as well, because we won't be able to enjoy the technological advancements and lower-cost goods that the rest of the world is benefiting from.

The Soviet Union used to have a pretty self-contained, very protectionist economy, and the low-quality of their goods was a standing joke in the US for decades. That's what protectionism gets you if you're not the sole manufacturer or sole market for a product.


Manufacture IPhones in US to sell in the US.

Manufacture IPhones in China to sell to the rest of the world.

I bet that whats Apple is going to do.


That didn't work too well with blackberry in Argentina. It's kind of an extreme case, but there are parallels that can be drawn.


Here's a good podcast on how terrible it was:

http://www.npr.org/sections/money/2017/02/17/515850029/episo...

Even with the tariff incentives, the demand within the country wasn't enough to cover the economies of scale to keep manufacturing costs effective.


> It works for so many other countries

It even worked for the United States. Protectionism was a major component of our policy approach toward industrialization.

Protectionism as a mechanism for supporting the development of domestic capabilities is, historically, a well-justified policy position.

And if you look to highly protectionist economies today, you'll find mostly developing economies.

> Why not?

1. Most importantly, protectionism as a mechanism for inflating wages and/or spurring job growth in an already developed economy isn't nearly as well-tested an approach as examples of protectionism in America's past. Historic examples of US protectionism had the end goal of boosting domestic labor productivity. Modern protectionism risks doing exactly the opposite.

2. The diffuse benefits of free trade must be weighed against the more localized costs of free trade. It's a difficult calculus, but it shouldn't be ignored. Cheap stuff at Walmart and Amazon benefits a whole ton of people. Perhaps more importantly, access to foreign markets and capital creates a lot of jobs and wealth domstically. A lot of Americans are employed doing high-paying, high-quality work that is exported globally. (Including a lot of software engineers.)

3. The benefits to labor may be short lived if automation wipes out a lot of manufacturing jobs. In which case we've traded access to foreign markets and capital for maybe 10 years of jobs and a false sense of non-urgency in job re-training.


In history everytime a high wages became a problem it was solved through tecnology (mecanization/automation) or by adding more workers (slavery/immigration/outsourcing).

I don't see any reason todays America would be any different.


Protectionism is just wealth redistribution from the consumers to the suppliers. Most importantly it's wealth redistribution proportional to consumer spending.

So you take less (percentage-wise) from the mega rich than you do from the middle class because large capital doesn't spend a large percent of its capital on consumer goods. That's regressive.

Why don't you go take the money from the rich instead of coming after the middle class? You want the guy who's making $50k a year to pay $200 more for his iPhone and you want the guy making a million a year to do the same. Both of them are only going to own the one iPhone. Straight up regressive.


The cost of things will go as it will be more expensive to make things nationally.

Your big export industries will be hit, especially those that run at huge economies of scale and are able to dump the produce on other countries devastating their local industry (think big corp farms).

The answer is never as simple as it seems


There is this false notion that the rich will throw in the towel or that the pot is barely sweet as is and asking to take out a bit of sugar would make it unpalatable. The reality of the situation is they're rich precisely because they're extremely good at leveraging things in their favor. Muting that a bit isn't going to change that base quality in them. I know I'm speaking broadly but it applies broadly.


> What's the answer? Protectionism?

If you have the means, invest with the wealth makers. I'd buy into SPY or FANG and let these CEOs do the work for me while I relocate to a low CoL location.

Does it scale? Probably not. I honestly can't think of any other way to make ends meet one my skills become moot.


What skills of yours do you think could become moot?


Given some oversight and runway, any programming skills I have can be done by someone else in a low cost location. Nothing I do or invent is exceptionally hard. That is probably best reserved for the pure sciences. This makes my creativity/skills moot.

My only truly innate talent is my ability to cogently communicate with my local peers better than someone who lives elsewhere. Even that is becoming irrelevant because global companies are homogenizing business communication styles.


any programming skills I have can be done by someone else in a low cost location

How do you figure that 30+ years of outsourcing has not yet proven your point?


>What's the answer? Protectionism?

Fairness. If some major corporation can go somewhere where they pay people $.80 a day for their labor, let me hire people for that amount to do what ever I want. Or we enforce our current laws onto the entire supply chain. Every single person whose labor went to making some product had to be treated a certain legal bare minimum standard.

At least with automation it does largely become available to more people (granted we have to ensure the legal system isn't used to shut it down, such as with the DMCA or the patent system).


Well because they were brainwashed through propaganda into thinking that a free lunch is threatening to the economy. And there may be some justification for that. The old rules no longer apply. It will take some time for the masses to catch up. However going forward I do see trouble in that business is ritual warfare. If you can settle distribution of resources problems with business based competition then it breaks out into real warfare. Why should American nonworkers get a bigger paycheck than Chinese nonworkers? Why should they be allowed to consume more?


The money is flowing to where labor is cheap, but that is causing middle classes to rise in those places. And that means in the medium term, labor is going to stop being so cheap there. Eventually things will look a lot more even across markets that are connected. I propose taxing companies that are moving to use global labor, based on the difference between "local" and "overseas" wages. The money would go to financially buffer displaced local workers until things become more equal.


>> That's the thing I don't get, so many people will advocate "fewer regulations", yet are perfectly content with prohibitive tariffs...

anything that is completely unregulated or loosely regulated is prone to abuse. tariffs/additional taxation levels the playing field. also - reciprocity. try importing a US-made vehicle in Japan for example...



Not sure if it qualifies as protectionism. But I'd love to see us enforce our own safety and environmental regulations for all imports.

Something like all manufacturers would be required to be certified and routinely inspected by 3rd party companies that have been approved by the government to do said certifying and inspecting. Would need to have unscheduled inspections and heavy fines against the involved companies to work but we could do it if we wanted.


I'm sorry, but why is that such a terrible future? What is the goal that is threatened by the alternatives you propose as negatives?


> What's the answer? Protectionism?

That's literally what China does, and it seems to be working for them. YMMV.


Here's something else that should shake US and UK highly skilled workers. Our time will soon come as well.

In China, they are racing to match and surpass western standards. I would say, they have already matched in some cases. But unlike the west where companies export out to save costs. Companies in China do everything in-house.

There will be a time where these 6 figure jobs that some HN users have, will go down by 50%. Why? Better coders outside of the US, UK, EUR, etc.

Of course, there will be a portion saying that we must keep our skills up to date. But not everyone can do heavy math, statistics, and ML. Just think of the developers who work on drupal, wordpress, javascript. What percentage do you think they can develop AI systems on tensorflow and neural nets?

A major shift is coming. As developers, we need to prepare.

Cue the cries for UBI.


> There will be a time where these 6 figure jobs that some HN users have, will go down by 50%. Why? Better coders outside of the US, UK, EUR, etc.

One of my clients is one of the largest multinational corp. in the world. They're excellent at getting things done, above average at remote work, and obviously have offices around the world. Their primary industry has a drastically changing demographic in the US which is prompting a hiring wave of younger people. They would love nothing more than to hire most of them outside of the US. The schools in several countries in Asia outperform the US in the necessary areas of study and they speak fine English. I'm not talking about India. My client is working very hard to make this a reality. They will eventually pull it off. These jobs are all very good paying white collar jobs. I'm telling you the middle class in the US hasn't seen the beginning of the devastation they are about to endure.

This is a trend that will continue until all labor is (as) equal (as an imperfect market will allow) no matter the geography. I see no trends (other than nationalism) that will make this stop.


And who will buy all the neat gadgets that they're producing? It won't be the US; no middle class means no disposable income. It won't be the Chinese; they make everything in house. It probably won't be anyone else in Asia because they'll just buy it from China instead.

Devastation of the middle class is about equivalent to devastation of the entire US economy. After we've willingly and successfully transferred all our manufacturing and engineering knowledge and processes to other countries... The only playing chip the US will have left is food exports.


What about Hollywood? And reputation via ivy league education? Also a legal landscape conducive to doing business?


> What about Hollywood?

https://www.bls.gov/emp/ep_table_201.htm

Movie and music industry is in the "Information" labor category, which accounts for a whopping 1.8% of total employment... Oh, and Bollywood is already bigger than Hollywood. I don't see such trends reversing as we continue outsourcing CGI and other movie-making magic. There's nothing special about Hollywood that isn't able to be duplicated somewhere else.

> And reputation via ivy league education? Also a legal landscape conducive to doing business?

These both almost solely benefit upper-class, and no one is arguing that they'll be just fine -- at least, for a longer period of time than everyone else.


Legal landscape in the US is just bad. Sue-happy country with convoluted taxes, horribly slow customs with crazy policies ("General Order warehouse", fml), 50 different states with different laws, taxes and regulations.


It might be that workers on a dictatorship will never have better conditions. The only way to reach an equilibrium is for the rest to lower their wages. Having no regulation is an illusion because dictatorships are heavily regulated and it is this regulation the one that takes effect.


Just doing the numbers from a stat standpoint, assuming you need to be in the top 2 percent of intelligence to code, there is a latent pool of 42 million developers in China/India waiting for their "go" signal. Best thing to do imo is hoard and deploy money to investments, because capital is set up to clean labors clock in the coming decades.


Personally, I'm hedging my bets by living lean and investing every spare dollar while I'm making hay at potentially unsustainably high wages. I'm also continuing to develop myself professionally, and preparing to move to a lower-CoL country in the future if that ends up making sense. If everything goes well, I'll have the option to retire young and rich. If the world goes pear-shaped, hopefully at least one of those measures will turn out to have been a good investment!


This is pretty well-trodden personal finance advice.

When money is generally cheap and easy to come by, save instead of spend. When money is tight and hard to come by, spend. It's "buy low, sell high" applied to personal savings.


> capital is set up to clean labors clock in the coming decades

I don't think people realize how extremely true this is and how drastically different it will make the west look.


This is something to happen in latin america too. Here in Colombia (where I live) exist several attemps to build a solid tech scene, but failed by burocracy and lack of competent investors.

The smart people with money that come here can hoard all the good talent easy.


> capital is set up to clean labors clock in the coming decades.

I think this is true, and I think it will result in massive civil unrest. Economic landscape is not the only thing that will change.


It has already begun. I am eternally amused by the "shock" of self-proclaimed intelligent people at recent political developments. It is all quite rational, and quite predictable.

The true outrage comes from the super-rich, who are beginning to sense that their racket is about to be...disrupted. This is the roaring 20s all over again, except multiplied a thousandfold by technology.

Interesting times, indeed.


>Best thing to do imo is hoard and deploy money to investments

Can you elaborate on this? What sorts of investments are referring to?


I'd follow the advice that kcorbitt gives in this thread. Index funds and if you have knowledge of a sector, save 10-20 percent of your investment budget for a specific stock you think will outpace normal growth. Finally, given the coming societal dislocations, I'd brush up on survival skills and stock some firearms.


I think this is overestimating how qualified the coders are in the east compared to their western peers. Everyone I've known from Hong Kong decried the education of mainland China. They said the education comes down to repeating book knowledge, so just memorization, and the inability to handle scenarios not covered by that.

I'll be more concerned once leading technologies that are used by the rest of the world come out of China and not from the US.


Leading technologies are already coming out of China. I'm not a coder, I'm an EE, but China has GaN and nm process Si fabs, millimeter wave components, 4G radio technology. They have/had the fastest supercomputer, largest radio telescope, manned spaceflight, and some advanced military hardware.


"Finally, I said that I couldn’t see how anyone could be educated by this self-propagating system in which people pass exams, and teach others to pass exams, but nobody knows anything."[1]

Sounds a lot like Feynman decrying the Brazilian education system in Surely You're Joking Mr. Feynman.

[1] http://v.cx/2010/04/feynman-brazil-education


> Everyone I've known from Hong Kong decried the education of mainland China.

I'm not surprised such comment came out from someone in Hong Kong but the truth is the education system in Hong Kong is even more "comes down to repeating book knowledge, so just memorization".

Actually, most East Asian education systems have a heavy focus on "book knowledge, so just memorization". Lack of innovation? Just look at Japan.

Disclaimer: I'm from Mainland.


What the GP mentioned is much closer to regional bias/stereotype. In my opinion, it's all about how much alignment a group of people can have while gearing towards making/producing something better. Japan has way more alignment, while everybody else in the crowded Asia is busy with taking a slightly better position and showing off to neighbours. People truly enjoy this kind of feelings.

I don't think most of readers on HN can get and care about mainlanders' feeling of being somewhat offended in this case. So I just chuckled originally. But I hope my comment can supply some context.


Having been educated in America, I'm not so certain this doesn't describe my own experience as well, for the majority of my classes.


Aren't the top 1% chinese students/teachers aware of the problem and can do something about it ?


The top 1% send their kids to the West, and often move themselves as well.


Leading technologies are already coming out of China. I'm not a coder, I'm an EE, but China has GaN and nm Si fabs, millimeter wave components, 4G radio technology. They have/had the fastest supercomputer, largest radio telescope, manned spaceflight, and some advanced military hardware.


what exactly is the problem with this? a 50% pay cut is still a fantastic wage (globally relative). what exactly is wrong with the standard of living going up in other places while ours gets a little worse? also if the tech sector really loses half of it earning power the markets that cater to those people will simply deflate. globalization /is/ good in the long run because it brings supply/demand markets to an equilibrium. the problem is waiting for the equilibration.


If expenses fell at roughly the rate of wages things would be roughly-ok. But the costs of housing, healthcare, and higher education keep going up. Globalization has pushed down the cost of many manufactured goods for Americans but it's not an even trade if nice TVs go from $3000 to $800 while a year of college goes from $8000 to $16000. The cheap-ish stuff getting a lot cheaper can't quantitatively offset big middle class expenses getting even modestly bigger.

To be clear, I'm not saying that globalization is the cause of big-ticket items like healthcare getting more expensive. I am saying that globalization has not depressed big-ticket expenses along with the prices of manufactured goods and middle-class American wages. Many middle-class Americans are experiencing a real decline in material standard of living concomitant with globalization. If equilibration toward a happy new equilibrium takes decades, I don't think that political realities will permit the equilibration to take its own sweet time. Something will rupture first. Maybe it already has ruptured with the election of Trump.


It's not good that comments like this against the group think are voted down. I certainly do not want my wages to go down, and I am not sure yet that globalization is good in the long run. When equilibrium is reached, in a world with infinite resources and space we would all benefit this is true. But in our current situation there will be more demand for limited natural resources if everyone is living at the same standard which will in turn lower my standard as a US citizen.

The greater effect on non ultra wealthy people now is the distribution of the wealth at the top for what is currently the outsourcing class, but is quickly becoming the machine/AI owner class.


Wages rarely go down, they just replace you. I'm mixed about wages going down. It generally points to cost of computing and developing going down, so it may discourage holding traditional jobs down and encourage people to do more creative things because computing is cheaper.


"so it may discourage holding traditional jobs down and encourage people to do more creative things because computing is cheaper."

It's hard to do creative things when you have to work the gig economy all day to barely afford a cardboard box to sleep in at night.


This is quite objectively true. Take a 50% paycut but along with that also cut down the cost of living. Something like Germany today, wages are smaller than in US but the costs of living make their citizens happy(er).

Then there will be less wage discrepancy compared to China and co and jobs start coming back.


That's a lot easier said than done. I really have no influence on the cost of housing or food. So if I have a 50% pay cut, I'm probably not going to be able to live where I do.


I know, but it can start with bigger taxes on properties (and better zoning laws). People and investors should be stripped of the idea that buying a house provides a good return. Lowering the leverage when buying a house would also help push prices down. Foreign buyers should be taxed more to avoid speculators.

I don't think food is a problem though, western EU food prices are not smaller.


Add in our need to reduce carbon output, locally produced products will have some advantage.


The problem with this is people don't like to take a loss, they will never be OK with taking one. Whether it's right or wrong is irrelevant, they wont' like it(the cause) and will rant and rave and possibly "do something about it"(the effect).

tldr; people don't like pay cuts, whether it benefits someone else or not.


"a 50% pay cut is still a fantastic wage (globally relative)."

I'm not interested in relative to global. I'm interested in relative to where I live. Cause, you know, that's where I have to pay rent and buy food.


I think it's actually going to be a trough. You have the creative frontend devs that are a mix of engineers and artists that make intuitive UIs. and the highly skilled ML/AI/PHD/Masters western educated engineers that will probably still be highly competitive. The ones hit the hardest will be your standard line engineer, the "Java Spring API" maintainers devs who just take tables from a DB and expose them as json blobs, write data feeds etc. This can easily be outsourced for much cheaper, and requires almost zero cultural knowledge, and is the bread and butter of any business.


>Cue the cries for UBI.

$12k is the cited number that you see a lot in basic income discussions. That's just over the poverty level. That's not enough to live on and it's practically a bonus for some members of this site. It's not enough to do anything with. Even with that, people would still work massive hours to obtain the best house on the block.

But just to do that in the US you are talking about 3 trillion dollars (300 million x $10k for easy math) that you have to find in the budget. Now basic income advocates will say you can make up some if not most of that by cutting welfare programs, but given the nature of welfare programs - good luck. That stipend is also not enough to pay for healthcare, so you can't cut that.

How exactly do you convince a nation which already isn't willing to pay for healthcare to pay for basic income, too?

I'd love to be wrong, but I've never seen any numbers that are workable, especially in a political climate anything like today. There could be a complete paradigm shift in the future, where machines literally take care of all needs in an automated way, but that's such a strange reality that welfare is honestly about the last problem we'd need to discuss.


This is the same alarmist outcry that happened in the 90s... "India has a billion people who are educated and cheaper! Outsourcing will kill all the tech jobs!"

I think the thing that folks keep missing is that technology isn't a zero sum game. So what if there are a shitload of people in the east doing programming cheaper? 9/10 of the 'type' of programming they're doing is grunt work that no one really wants to do anyway.

Will some people feel the 'crunch' from this? probably, in the short term. But technical acumen doesn't sit still. We're not all languishing on our laurels with technology from the 90s while the Chinese are gearing up for total war.

A much BIGGER problem, IMO, is our social policies tending towards overt xenophobia. THAT is what will kill the US and the Western European countries if we don't get off of this nationalist bandwagon that we find ourselves on.


china is the most racist and nationalist country in the world and they are doing just fine.

Why is the US and Europe the only places that have to sacrifice themselves for the greater good of globalism?

Why do China and Japan get free passes while anything done in the west to protect citizens interests is decried as xenophobic?


>This is the same alarmist outcry that happened in the 90s... "India has a billion people who are educated and cheaper! Outsourcing will kill all the tech jobs!"

And it will -- as it already ate lots of service and call center jobs. But these things take time, and India's schools are not exactly best of class.


I think it's not xenophobia, the biggest problem is actually wage inequality. It s quite suprising that the US, with all its prosperity (gdp per capita) doesn't have a huge safety net, on the contrary. Meanwhile US corporations and individuals, same ones that outsourced the jobs, have more cash at hand than you can pronounce.

I sometimes believe it lacks a bit of socialism.


Yes an intelligent JavaScript developer. Who could imagine.

I would wager the front end developer will continue to be a high paying job longer than the backend developer. You can outsource API creation but any product company can't risk not having a UX friendly and well designed front end.


The last 3 jobs I've had is to rearchitect a badly written non scaleable, brittle system, with no unit tests to one that was better architected with automated testing. They tried to get away with cheap (domestic) coders and people who were at the company for 20 years.


Design != Implementation. Outsourcing the code-monkey work of converting a complete design into a pile of JS is easy and already being done.


Sure, if you're looking for a 'pile of JS' at the end of it.


Yes. All this doom and gloom is confusing to me.

If a job is as easy to outsource as so many on here are saying, it is already being done or has been done.

It's been done in my industry. The low level grunt work and basic administration is all outsourced. Has been for decades.


Trade has certainly fucked _some_ workers. But it helped others; it's just a lot harder to see the ways in which the average American worker is better off, because the benefits of trade are spread across the economy, and the costs are concentrated among a smaller number of individuals.

Here's a libertarian making this point: http://econlog.econlib.org/archives/2017/04/does_trade_with....

"Using novel data on firms from the US Census Bureau, I show that the data support this view: US firms expanded manufacturing employment as reorganization toward less exposed industries in response to increased Chinese imports in US output and input markets allowed them to reduce the cost of production."

Or Paul Krugman talking about the same, if you prefer that angle: https://krugman.blogs.nytimes.com/2016/07/03/trade-and-jobs-...

Sure, there are arguments on each side. But it's not as cut and dried as your last paragraph suggests.


That's exactly the right frame. Globalism "totally fucked" the american worker in the sense that the western working class broadly hasn't seen any net improvement in quality of life over the last two decades or so. Certainly nothing to compare with the gains seen in the western professional classes.

Globalism also quite literally lifted hundreds of millions of non-western (mostly, not exclusively chinese) workers out of destitution and into the middle class.

Let's keep some perspective on this, please. We can certainly do better with equality of opportunity here in the US, but let's check that privilege a little before demanding to unwind all the gains made elsewhere. To the rest of the world, the 1960's were a nightmare, not a golden age.


Every country has it's own citizens as a first priority. If a working-class American is harmed to make an already wealthy american wealthier and to make the 5 Indonesians/Chinese/Africans/etc. that wealthy american hires better off then our country should rise up to reject that.


Hm. I've always thought that improving the economies of other nations is in our own ultimate self-interest.


Sure and in the cases where it is in our self-interest then go ahead, but the whole reason we've got this "populist uprising" is because people are looking around and seeing a lot things being done that aren't in their interest.


A change can be very bad for a group within a country, but better for the long-term self-interest of the country as a whole, though.

If a globalization measure pushes a large number of Americans out of jobs temporarily, it could be the basis of such a "populist uprise", but couldn't it be better for the country as a whole if it opens up new areas for economic growth, even on a purely self-interested level?

And couldn't part of the gain for America be in building up a prosperous nation with trading ties? Not to mention the lower risk of conflict with another nation with whom America has such ties?


You know it's strange because I can only ever find people arguing this when they know they won't be the ones to be out of a job. Aka this forum is pretty open to the idea of people being displaced but go check out some of the threads here about H1Bs, there's a lot of vehement opposition there. Or for a hypothetical, imagine we were able to import or outsource our politicians to cheaper politicians in India. How quickly do you think that market would be closed off? Yet we abstract ourselves away from the problem and declare that maybe if all these people suffer we'll be better off for it in the end. In society we make those tradeoffs, that's reality but once we start sacrificing more and larger groups surely we come to a point where we realize maybe it's not actually worth it?


> You know it's strange because I can only ever find people arguing this when they know they won't be the ones to be out of a job.

True. You've pretty much identified the nature of special interest groups and why they have so much power.


Rational self interest? Heresy!

We must ride the train of pathological altruism to the very end!

Ironically, this religion of globalism is a crude form of Christianity, with none of the pretty prose. The original sin of success must be paid for by eternal self-flagellation.

Even more interestingly, this new religion has only taken root in the west, which has mostly abandoned traditional religious dogma. Perhaps pathological altruism is inherent in those of western genetic origin? The non-western world appears to have none of these hangups regarding their past successes. I don't see Japanese and Chinese leaders flooding their nation with immigrant labor to atone for their recent economic gains while demonizing their own people for past sins.

Fascinating indeed.


>Globalism also quite literally lifted hundreds of millions of non-western (mostly, not exclusively chinese) workers out of destitution and into the middle class. Do you know how the "lifted" the poor to middle class in Brazil? By redefining what is middle class. This is all left wing bs my friend!


> But it's not as cut and dried as your last paragraph suggests.

It was the libertarians and liberal economic establishment who claimed it was cut and dried that unrestricted free trade was better for all Americans. Anyone who objected (Buchanan, Perot, now Trump) was obviously stupid, and probably racist.


No economist makes the argument that free trade is better for all americans. Thats simply not what economic theory says.

Economist have studid the problem for a long time and the wastly overwhelming majority still support it. They have actually fought about the problem quite a bit.

You would do well to actually understand the argument instead of mischaracterising it.


While agree with you - it was always noted in the fine print that there would be losers in the globalization game - it just wasn't stated that 95% of us would lose, while .1% would win bigly.


American labor was fucked anyways, Globalism only accelerated trends that would have happened anyhow. From a long term perspective, its absolutely amazing that the US has managed to export all the factory level jobs to other countries and yet managed to keep the better paying jobs back here in the states. The current lack of (low skilled) jobs in manufacturing has made it clear to those Americans willing to listen: they (or their children) need to acquire those skills that make them employable in the 21st century, and those do not include low-skilled factory jobs. The next generation will be better prepared and I predict the US will continue as a global technological powerhouse (unless it gets fucked by Trumpism and populism of course).


> continue as a global technological powerhouse (unless it gets fucked by Trumpism and populism of course).

Capitalism breathes credit, credit is a function of belief in the future. I'm curious how much protectionism is necessary at home to maintain necessary levels of belief in the future.

> they (or their children) need to acquire those skills that make them employable in the 21st century

How? What skills are necessary and where do they get them? As far as I can tell the education ecosystem in the US is wholly unsuited for this task.


Gaining skills is just a matter of effort nowadays as everything anyone needs to learn to do pretty much anything is of course just clicks away.

I think that's the real change that needs to be addressed...self directed learning should be the future, and the need for formal education is dying


Except that while you do that, you still need to provide for your family.


I mean... nobody is saying its easy, but its easier and more possible to do it today than what it used to be.


>I'm curious how much protectionism is necessary at home to maintain necessary levels of belief in the future.

For the people who are actually issuing credit I would say very little is necessary.


Programming, obviously.


Sure, but what kind of programming? Web and Java developers are a dime-a-dozen. Sure there are different levels of skill within those specific fields, but you're never short for developers who know those things.

Now Machine Learning or AI or even potentially low-level programming. Those are some areas where knowledge could be _extremely_ lucrative in the near (10-15 years) future.


Short answer: "scripting"

Longer answer: programming isn't necessarily a job where you build things. I'd argue it's more generally about communicating with and controlling computers. And computers are increasingly where our lives are spent and/or tracked.

I learned to program when I was relatively young, and I've spent my whole life witnessing people doing mundane tasks that a script could have easily automated away. It's everywhere: doctors' secretaries copying forms, grocery clerks scanning through shelves, office workers manually editing excel documents, etc. The reason these tasks remain un-automated is because programmers don't do these jobs; programming is considered a profession rather than a basic skill. I showed my friend's secretary how to easily automate a task she spent hours a week on, but she felt like the solution was foreign and rejected it. That one script could have made freed up 100s of hours a year to do other things, but she didn't get it.

In a world where business people are looking to "disrupt" a lot of jobs through automation and consolidation, I think there's room for people to help automate away parts of their own jobs and share in the wealth (with more free or recreational time). I believe this is how a lot of people will keep jobs in the next 20+ years.


> American labor was fucked anyways, Globalism only accelerated trends that would have happened anyhow

This is an important and underrated idea that so often gets lost thanks to politics. Much like the drug war, people think that market trends and phenomenons can be controlled somehow, that they are simply choices that people make, and those choices can be controlled - people can simply just choose not to make that choice or face consequences from the state. Rather than a whole new paradigm, something that generates real value that taps into a raw supply/demand, even if it means taking big risks, and that will exist whether or not we ignore it. This is how many ineffective government policies get made.

America needs to embrace globalism as an unhappy reality. The problem is that they have been operating for two decades as if it didn't come with a big downside - that globalism is this great new thing that will make everyone richer. Trump and Bernie have been feeding off this ignored reality without addressing the real consequence. Rather globalism being sold as something that is all good, it should have been sold as a tough new evolution of the marketplace, much like a recession correcting an imbalanced investment bubble. It doesn't need to be rejected by an outsider strongman politician but embraced by an outsider who is willing to face the reality that the consequences extend well beyond the influential class in Washington and they aren't all good.

You can't force your way back to the old reality as if the market phenomenon didn't exist, but you can minimize the downside as you transition to the new reality and do what you can to stay on top of it.

Sadly, hard medicine and politics don't go together. Even if it's the best (and only) medicine.

To continue the drug war analogy, the goal should be minimizing the harms of peoples addictions rather than trying to pretend the addictions won't happen. Likewise the economy needs to either a) compete with the globe in manufacturing and/or b) develop new industries.

I'm not as convinced as many people are that a) is not possible, Apple clearly thinks there's plenty of potential there and so do I. But I'm quite confident that that US is failing to do b) properly. In my business class they called it a new "service-based economy" but clearly that has been insufficient to keep employment and wages high. To develop new industries in place of manufacturing they need to rekindle entrepreneurship and small businesses to give life to new industries. I get the impression the US government is obsessed with appeasing existing BigCos (just look at TPP or Obama's policies during the financial crisis) rather than developing the next generation of industry that functions well in a global marketplace. Silicon Valley is a big piece of the puzzle, but even then it's treated as a sideshow in Washington (even more so now, which is a big fault of Trump) but in the same vein it can't be the only one moving forward.

I really hope Trump's liberal tax and regulatory policy helps boost b). The risk of course is that the usual Washington backroom dealings by legacy BigCos and special interests will guide policy even further towards tired old ideas (like making Wall St even more money) over helping develop new business. At a minimum we know that Trump is motivated to help with a)... so that's something.

(I purposefully ignored social policy consequences here as this comment is getting long enough)


> market trends and phenomenons can be controlled somehow, that they are simply choices that people make, and those choices can be controlled

This double standard galls me. If a trend is detrimental to American workers, it's market trends, like the hand of God, irresistible. If it's beneficial, it's a historical fluke (post-WWII boom).

I might buy this if the U.S. government had been a neutral bystander in this process of globalization and the hollowing out of the middle class. In that case, we could say that it was just economics. But, in reality, the government:

- Incentivizes and fails to do anything about offshore tax havens

- Doesn't bust trusts

- Has low tax rates on capital

- Sets immigration and trade laws favorable to corporations

- Spends tons of money on pork, including the porkiest pork of them all, the military

and so on, ad infinitum. Would this process have happened anyway? Maybe. But our government, and the companies running it, actively accelerated it in every way they could. If these trends can't be controlled to some extent, why have so many lobbying dollars been spent to accelerate them?


So basically you think the US government has been highly influential in developing 'globalism' and it's not entirely a natural phenomenon as a result of air travel, telecommunications, mature financial markets, lack of global war/conflict, the opening of the east to global markets, etc?

Most of the things you mention, poor enforcement of tax havens, immigration policy, low taxes on capital, massive military spending, coincided with the development of globalism or were a reaction to it.

But regardless I disagree with your thesis, as I hardly see globalism as something that's detrimental to America as a whole. That may be the mainstream narrative but it's largely inaccurate. The thing about capitalism is that it goes throw booms/busts and it evolves. This is just another phase and we've all been pretending we're in control but the reality of the situation has become apparent recently.

So the dichotomy between historical fluke and market trends doesn't really exist. Historical flukes are market trends.


> So the dichotomy between historical fluke and market trends doesn't really exist. Historical flukes are market trends.

On further thought, you're right about this. I was rather inarticulately trying to remark on the fact that the supposed "inevitability" of market trends is always used as an excuse to avoid pro-labor legislation, but never pro-business legislation.

> I hardly see globalism as something that's detrimental to America as a whole

Well, we're increasingly seeing that there's no such thing as America "as a whole". There's capital, who it's good for, and labor, who it may be good and bad for in various ways, but a net bad, I'd say. Good for your 401K and the cost of your iPhone, not so much for your salary or employment prospects.

If you take "good for GDP" to mean "good for America as a whole", then yeah, it's probably good. Problem is where that GDP growth is going.

> you think the US government has been highly influential in developing 'globalism'

Yes and no. I think the gov't has been highly influential in ensuring the gains from it go to capital and that its negative effects on labor are not reined in. Globalization would have happened anyway but the govt's approach to it has resulted in more inequality and dislocation than was necessary.

As for whether the government could have slowed or did hasten the process, hard to say, but I think so.


> Yes and no. I think the gov't has been highly influential in ensuring the gains from it go to capital and that its negative effects on labor are not reined in. Globalization would have happened anyway but the govt's approach to it has resulted in more inequality and dislocation than was necessary.

This is most certainly true. And I think dmix hit on a very important point when he mentioned that its hard for politicians to sell a future thats not all rosy and prosperous for everyone.

Off the bat, one of the things the US Govt. could most certainly have done is provide Universal Healthcare and some kind of funding for expanding basic education. I think about all that money earned by US corporations lying abroad...if you think about it, if we had a better taxation system, the strength of US corporations, their ability to generate such profits from around the globe could have been deployed to make all (or most) Americans have better healthcare and education.


> I think dmix hit on a very important point when he mentioned that its hard for politicians to sell a future thats not all rosy and prosperous for everyone.

I couldn't find where he made that exact point, if he did, I would reply to it by saying that what politicians sell and what they actually do are two completely different things. Both sides of the aisle have been selling rosy futures and working towards the exact opposite for decades. I'd say that Bernie & Trump were evidence that the message "your future isn't all that rosy unless we change substantially" resonated this election.

dmix and I agree globalization is here to stay. I was just a little irritated by his implication that the way we need to respond is by "developing new industries" and "adapting to the global marketplace" and all that jargon. I'd say the S&P has adapted just fine to the global marketplace. The problem is that the median American is worse off anyway. Your second paragraph is apt about some potential solutions.


Seems like the OP was saying that globalization may have been inevitable, but it's current extant structure and nature have been shaped by US governmental policy to directly benefit a limited segment of society, those who benefit from the policies they listed.


[flagged]


If you really believe in what you are saying, at least have the courage to debate it under your original username and not a fake one.


"they (or their children) need to acquire those skills that make them employable in the 21st century"

Who's going to pay for that? Who's going to pay the mortgage while they go back to school? This is, of course, not even getting into the rampant agism in a lot of industries, and that many of these people are over 40.


> American labor was fucked anyways, Globalism only accelerated trends that would have happened anyhow.

Globalism didn't "accelerate" trends that would have happened anyhow, it created those trends. American labor is fucked because of globalism.

You might argue the standard of living might have ended up the same under protectionist policies (e.g. poor because of high prices rather than low wages), but I doubt we'd see the same level of inequality under protectionism.


> You might argue the standard of living might have ended up the same under protectionist policies (e.g. poor because of high prices rather than low wages), but I doubt we'd see the same level of inequality under protectionism.

The inequality that you see today wasn't caused by globalism, but by tax cuts on the very rich, which incentivized and legitimized overblown executive pay. All that wealth was then funneled into influencing the govt. to fuck American labor (i.e. ridiculously low minimum wage, further tax cuts for rich, less benefits for the needy etc.).

Globalism is an easy straw man to blame for inequality, but its actually allowed people with stagnant incomes to maintain a certain standard of living (or not let it deteriorate too fast) via cheaper goods and services.


> The inequality that you see today wasn't caused by globalism, but by tax cuts on the very rich

Source?

Only a minority of companies in the US even have executives that get the much maligned high pay and bonuses in the last decade or so. What about the massive percentage of wealth that didn't fall into this category? They may have gain significantly from globalism but that was hardly the result of US tax policy alone.

Lets not forget that democrats were in power for the last 8yrs and the state has only grown exponentially since the 1990s under both republican and democrat governments. Just because tax rates weren't the extremes of pre-1980/1970s doesn't make them low. They've been relatively consistent while the middle class income dropped.

The complexity of the tax code and lack of competitiveness with international countries may have heavily influenced inequality. But it was hardly the result of explicit tax reduction for the rich...

The idea that tax havens are something that were merely a matter of weak policy is naive. Even worse than the drug war hawks.

Just because the middle class didn't keep pace with the wealthy doesn't mean only the wealthy were at fault. The fact the middle class lost wealth is hardly singularly the fault of the wealthy. I know this narrative sells well in politics but it's very short sighted.

Even if the US adjusted tax policy to redistribute a larger chunk of taxes towards the middle class it would hardly make a dent in the new reality in the fact there is hardly a middle class economy like there used to be. So you must either develop a new middle class economy or you get temporary perks of taking it from the wealthy. This is the big whale in the room that the Bernie bro guys are ignoring. The likely scenario is that the wealthy would become continually less competitive over the years, shift way more money over seas, and the middle class would be in the same situation with a little bit more money for a short period.

Gov spending under any administration that enacts those policies would largely offset most of the gains going directly to the people regardless (which is good if it results in universal health care, but little else if it's not sustainable).


I actually have a couple of sources for this :). Apologies for the late reply, I also have a day job ;)

I would recommend Krugman's Conscience of a Liberal for an entertaining read. He referenced another book, aptly called Inequality[1], which I'm currently going through. Its a little more academic prose so its not something I can finish quickly (in short, its not an entertaining read...not that all books have to be of course).

Both of these books examine historical precedents for income inequality and attempt to analyze the current situation as well. I think they did a fair job, although I am open to change my mind if there is a better explanation. But these and other books, such as Dark Money[2], and just general news about the scummy activities of people like the Koch brothers have made me more convinced of this viewpoint.

Now to address your comment...

> Only a minority of companies in the US even have executives that get the much maligned high pay and bonuses in the last decade or so. What about the massive percentage of wealth that didn't fall into this category? They may have gain significantly from globalism but that was hardly the result of US tax policy alone.

This is most certainly not true [0]. From [0] and from Krugman's book, you can see just how much the changes in tax policy has incentivized ballooning executive pay and created a new class of executives, who may not be as rich as the landed/inherited, but are certainly "rich". And this class has grown and become more enriched due to globalism, the opening of foreign markets and plummeting of labor costs, both due to automation and cheap foreign labor. I almost think of it as a weird form of trickle down effect, where most of the wealth goes to the very rich but a little (relatively insignificant but in absolute terms very much so) trickles down to the executive class.

> Lets not forget that democrats were in power for the last 8yrs and the state has only grown exponentially since the 1990s under both republican and democrat governments. Just because tax rates weren't the extremes of pre-1980/1970s doesn't make them low. They've been relatively consistent while the middle class income dropped.

Yes Democrats were in power for 8 years but how many of their policies could not be enacted due to obstructionism? But lets not get into that area here: 8 years is a relatively small time to create/destroy inequality. And I don't see any Democrats pushing for tax cuts on the rich, especially cutting estate taxes, which affect only the very rich.

> The complexity of the tax code and lack of competitiveness with international countries may have heavily influenced inequality. But it was hardly the result of explicit tax reduction for the rich...

Its not the complexity of the tax code but its very nature. The top tax rate for personal income is around 35% in the US whereas it is much higher in other developed economies. And the sources that I've listed point to historical trends that prove the same point: once you have a class of super wealthy, they will inevitably influence the Government to reduce their tax burden no matter how that is achieved.

> The idea that tax havens are something that were merely a matter of weak policy is naive. Even worse than the drug war hawks.

I don't think that comparison achieves anything but hyperbole so I'm not going to comment on it.

> Just because the middle class didn't keep pace with the wealthy doesn't mean only the wealthy were at fault. The fact the middle class lost wealth is hardly singularly the fault of the wealthy. I know this narrative sells well in politics but it's very short sighted.

I think you're conflating wealth with income. The middle class, by their definition, is not wealthy (at least in the same country; middle class in US is most certainly more wealthy than in India, say). The US middle class hasn't lost wealth, its their incomes that have not been growing as fast as the incomes of the wealthy. Its unfortunately not just politics: investments in people reap great benefits for society. If a country fails to invest in the health and education of its citizenry because its unable to raise the revenue to do so by the wealthy, then its most certainly the fault of the rich.

> Even if the US adjusted tax policy to redistribute a larger chunk of taxes towards the middle class it would hardly make a dent in the new reality in the fact there is hardly a middle class economy like there used to be. So you must either develop a new middle class economy or you get temporary perks of taking it from the wealthy. This is the big whale in the room that the Bernie bro guys are ignoring. The likely scenario is that the wealthy would become continually less competitive over the years, shift way more money over seas, and the middle class would be in the same situation with a little bit more money for a short period.

I don't think that is likely. Sure its a changed reality now, and I certainly don't see what other future markets will open up, but this new reality demands a healthy, educated workforce to operate it. Income redistribution is less about taking from wealthy and giving it to the poor as much as taking from the wealthy and investing in institutions/programs that can assist the most vulnerable in society. More taxation by itself won't make the wealthy less competitive... I mean, how does that even happen? On the contrary: educating a kid from Inner City Detroit might give us the next Steve Jobs.

> Gov spending under any administration that enacts those policies would largely offset most of the gains going directly to the people regardless (which is good if it results in universal health care, but little else if it's not sustainable).

You seem to imply that all Govt. spending is wasteful which is most certainly not true. Surely its not perfect, but that's another problem that needs fixing.

Also, you asked for a source but failed to provide a single one for any of the many many assertions that you have made.

[0]: https://www.amazon.com/Pay-without-Performance-Unfulfilled-C...

[1]: https://www.amazon.com/Inequality-What-Can-Be-Done/dp/067450...

[2]: https://www.amazon.com/Dark-Money-History-Billionaires-Radic...


Thanks for the extended reply. I'll read this during the weekend and get back to you.


Even without globalism, automation will still give them a hard time. Hence globalism accelerated trends.


>> Cook told "60 Minutes” in 2015. “I mean, you can take every tool and die maker in the United States and probably put them in a room that we’re currently sitting in. In China, you would have to have multiple football fields.”

The BLS seems to think there are 72,000 tool and die makers in the U.S..

https://www.bls.gov/oes/current/oes514111.htm#(1)

>I have shared this quote with every middle/lower-middle class person I know who voted for Trump and their responses have all been the same, horror.

...which quote, the tool-and-die-maker quote, or the jobs-aren't-coming-back quote?


I think Cook was more talking about representatives from each company - not everyone employed by them.

There are an order of magnitude more people employed as tool and die makers in China anyhow so, even if you do use that as a metric, the broader point still stands.


>There are an order of magnitude more people employed as tool and die makers in China

Do you have a recommendation for a source for employment statistics like that for China? In English? A quick search hasn't turned up much, but there must be something out there like that.


Numbers are sparce it's true. I based the order of magnitude comment on a line saying there were "over 100k companies" doing similar work in China on a Business Insider article.

It's probably reasonable to assume a decent company size so... seemed ballpark accurate


This is basically what happens when capitalism is allowed to run wild. Massive industries consolidate into a few major players who have immense power over their workers. In this case, manufacturers realized that it's more economical to manufacture in China than in the US so that's what they've been doing. Simple economics. They owe nothing to the workers, only the shareholders. The manufacturing centers of the American rustbelt lost, and when you lose in a purely capitalist system, it's pretty shitty. It'll be interesting to see what happens. Trump certainly won't bring back their jobs in any meaningful way. The only way that will happen is if it becomes economical for companies to manufacture here again vs. China. But good luck with that.

I am not anti-capitalism by any means, but I think strong protections against monopolies and protection for workers are probably a good thing for everyone.


> In this case, manufacturers realized that it's more economical to manufacture in China than in the US so that's what they've been doing. Simple economics.

This is absolutely a good thing.

Why would you encourage inefficient trade?

Are Americans somehow more deserving of jobs than Chinese ones?


No of course not. I don't want to encourage inefficient trade. But what should we do about entire swaths of people completely out of work?


China has used more concrete in the last two year than what the US has used in the last hundred. That was from a Nial Fergusun, Samantha Powers talk recently. Bottom line there is global power rebalancing occurring that is going to take a decade or two.

The US middle class had it good for a while now, but it's time they loose some weight, stop buying all the unnecessary garbage they think they need and live a little like the middle class of the rest of the world. In a globalized world you can't have different definitions of middle class depending on where a border gets drawn. The rest of the world is also learning as they mindlessly try to emulate the American middle class, that there is no free lunch. They need their source of exploitable cheap labour too and it's creating all kinds of internal social upheaval across many different country.


The people who make argument like yours simple sound like "ignore problem, everything will be fine".

A company that does not move to cheaper labour will go bankroupt and a new all China company will simply take over. So you have unemployed anyway.

The typical solution to this is that you start walling of these industries with tarrifs or to subsides.

What you eventually have is a huge sector of the US economy that lives of the higher prices and/or taxes of the rest of the population while everybody has lower standards of living.

Once China started institutional reforms there were only two possibilites, these jobs were payed for by other americans or they go away.

Also, most americans only had these jobs because the US was able to export lots of these manufactures.


Not really.

Germany and Switzerland have managed to maintain high wages and high standards of living in a globally competitive manufacturing sector.

The idea that all this change is inevitable or impossible to avoid and we can't pay workers properly is just bullshit, it's the messaging of a multi-decade well financed public relations effort by people in the U.S. with a vested interest in making the public believe it.


German megacorps do just as much manufacturing in developing economies as American megacorps.

The Mittelstand doesn't do the sort of manufacturing that the rust belt did 40 years ago. These smaller firms existing today only because of big disparities in quality between their products and cheaper competitors. They benefit enormously from the German government's investment in applied research.

https://www.asme.org/engineering-topics/articles/manufacturi...


Germany has the largest low wage sector in Europe. Switzerland doesn't have competitive manufacturing.


Worse, they say this while giving them selves multi-million dollar salaries and stock bonuses worth billions. It's outrageous. We're told we're replacable, that theirs third worlders that can do what we do for less but somehow the executive is a unique snowflake worth billions of dollars.

I watch VP's get million dollar bonuses while laying off workers. I watch execs outsource whole departments, watch quality tank, and they get millions.

The center can not hold. It will come crashing down.


>> Financial interests convinced liberals and conservatives alike that globalism was a good thing (for altruistic or selfish reasons respectively). Instead it just gave Capital access to cheap labor and totally fucked the American worker.

This doesn't make sense to me. That one bad aspect of it does not negate all of the good that has also come from it. I would argue that the people affected by this (a lot of the people Trump appealed to - for example coal workers) weren't let down by globalization but by their government. They should have been retrained, for free, by the government. Instead, they were forgotten about.


It's not just the financial interests. It's also the public as a whole - the pushing of a college education (seemingly regardless of quality) for everyone, and the general social devaluing of any sort of trade-like work. I don't really know where that sentiment originates from though.


To be fair, the theory of globalism includes that by exposing developing nations to the global economy and working towards treaties and agreements that require their work environments to meet certain standards, the worker populations in those countries would eventually be more wealthy and have wages more comparable to that of a fully developed nation.

Clearly it's not that simple, but globalism does attempt to accommodate for this problem at least in theory.


>I have shared this quote with every middle/lower-middle class person I know who voted for Trump and their responses have all been the same, horror.

Maybe I'm missing some context here. Why would their reaction be horror? That quote sounds like something that Trump would have quoted in a commercial or on a debate stage.

That is exactly why middle class people voted for him.


They will either come back when enough of the world reaches US middle class status (and thus it becomes cheaper to produce here than abroad) or disappear entirely when automated out of existence. Either way, it makes no sense to pretend that they're likely to come back. It's like spending every paycheck on lottery tickets.


But Cook is wrong in saying "the jobs aren't coming back".

The situation has been rapidly changing because of automation.

Imagine if a clothing company could have new product responding to trends available in a week. Nintendo is currently having difficulty keeping up with the demand for Nintendo Switches, imagine if they could rapidly produce more near their intended markets. Automated small batch production could even make things like ordering the exact same shirt you bought 10 years ago affordable.

Doesn't mean the economics work all the way through. But my point is things change and the advantages of manufacturing overseas in the past are not the same as the advantages today. And that will keep changing.

The future is hard to predict. Anyone that says something will never change is wrong because on a long enough timespan literally everything changes.


> Automated small batch production could even make things like ordering the exact same shirt you bought 10 years ago affordable.

Automated production does not imply that setting up the production line is automated. You can't just reconfigure a production line because you don't have machinery on standby (these would be dead assets in the 10 MM range). High precision molds used for Lego, for example, are in the 250000 EUR range. You don't have these laying around and cannot order special tools with a lead time of less that a quarter year.


I didn't see the show so I don't know how big the room was. But I think it is an exaggeration to say you can fit all the tool & due makers in the US into one room. If you live in a major city, try googling how many companies around you advertise their machining operations as Tool & Die. This is not including all the engineers and artists who have most of the skills required, if not the experience. That's not saying they want to work in your factory, which is another part of the problem. People who have those skills in the US probably don't want the job. People who want the job don't have the skills, partly because the job that would have trained them wasn't available.


I voted for Trump. Cheap labor is what has reached a tipping point and what building the wall represents in some aspects. I don't know a single Trump supporter who would have been surprised by that statement. But, anecdotes being what they are.


I wonder if there was some subtle context to that assertion about fitting all die makers into some (presumably small) room?

Intel make most if its dies in US: https://en.wikipedia.org/wiki/List_of_Intel_manufacturing_si...


It's not like it wouldn't have happened anyway. That aside, globalism _is_ a good thing (the flipside is that some items are just cheaper), but it's not been as good for everyone. Specific jobs appear and disappear all the time. It's just the natural flow of things in a developing society.


Indeed, and with the right perspective this all comes as no surprise. The period during which American laborers made a good wage from a job right out of high school and retired on pensions was not the norm, it was the aberration. Sadly.


You rather bolster inefficient manufacturing processes and have Chinese workers/whole populace fucked so some more Americans can have better living standards?


So what _can_ the US do about getting more hi-tech manufacturing here? I realized that won't employ a ton of people, but it will keep a lot more money in the US.


> In that interview [Cook] also said that the jobs weren't coming back.

Wasn't "the jobs aren't coming back" a Steve Jobs quote, not a Cook quote?

http://www.nytimes.com/2012/01/22/business/apple-america-and...


> Financial interests convinced liberals and conservatives alike that globalism was a good thing (for altruistic or selfish reasons respectively). Instead it just gave Capital access to cheap labor and totally fucked the American worker.

Lump of Labour fallacy.

The way both Liberals and Conservatives speak as if USA is marred with some wide scale unemployment. It is as if Americans would love to have sweatshops where pregnant women will be working 14 hours a day.

USA continues to enjoy very good employment, better than most developed countries with comparable scale and diversity. People all across the world are flocking to take those US jobs and you have to close the gates to prevent them from coming.

I find the constant self loathing pretty disgusting on part of a country that is home to such exceptional economy.

All those jobs are not coming back and it is a good thing.


Since NAFTA and the opening up of China we in the USA have become far richer, in total GDP and per capita. The problem is that the gains have gone disproportionately to the 1%.

I remember clearly during the 80s and 90s that the pro free trade argument from economists was that there would be winners and losers but since we would be richer overall we could use taxes to help out the losers via unemployment, retraining, relocation help, etc.

But what the economists ignored but is so obvious in hindsight is that this country has a strong anti-tax anti-government strain and we refuse to have any social safety net or government assistance. So what we've ended up with are super-winners and millions of permanent losers. And the super-winners are using their wealth to become more politically powerful, increase their propaganda spending and destabilize democracy.


You always pick between alternatives. Are lower income Americans better off with free trade compared to a closed economy? I think the answer is absolutely yes. An average American saves lot more money today buying cheap stuff from Walmart. Lot more than what he/she would have saved with protectionist regime.

More importantly a lot of services that were unaffordable 20 years ago are not trivial. This includes smartphones, flat screen TVs, better quality and safer cars etc. In closed economy you would have struggled for all these things. Just like my home country India.


Sure TV's and chinese electronics are cheaper. Houses, healthcare, and education are not. Instead of making 55k a year at the GM plant, they're making 22k as a cashier at Dollar General.

The flood of cheap goods destroyed communities that depended on manufacturing work


> The flood of cheap goods destroyed communities that depended on manufacturing work

There is no evidence to that. Cheap goods helped poor people live a better life and build better communities. American houses today are better than they were 30 years ago. American healthcare is more accessible than it was 30 years ago. More Americans are getting better education than 30 years ago.


I have one word for you: Detroit.

They are in such deep doo doo, a charity was started to pay overdue water bills. They have the most $1 properties on auctions sites of any location. They are experiencing horrifying levels of blight.

etc ad nauseum.

There's your evidence.


> They are in such deep doo doo, a charity was started to pay overdue water bills.

That is barely any evidence. It is like pointing to a failed Bakery and claiming Bakery industry has sunk. It is a bit like Trump's logic that because Disney replaced some of their staff with H1Bs all programmers are losing their jobs to H1Bs.

Detroit had peak population in 19050s of 1.8M. Today it is half at around 700K. Most of the people have already left Detroit for better future and more will leave.

But guess what? From California to Texas from Washington to Florida not only cities have grown rapidly they have seen unprecedented increase in quality of life of bottom 20% of people. Any protectionist measure aimed at "fixing" Detroit in the Trump's "Make America Great Again" style would have brought a lot of misery to all those people.


I was not advocating for protectionist measures.

People who had well paid manufacturing jobs were not in the bottom 20%. Increases in quality of life of the bottom 20% is irrelevant to the point that manufacturing jobs have seriously declined and this has hurt a large segment of the population.

I don't know nor care what your agenda is, but putting on blinders to obvious and undeniable facts in no way helps your case. People used to be able to get well paid factory jobs in the US without any special education. It isn't the end of the world -- average education needed for entry level work has been trending up for more than a hundred years -- but it absolutely is a hardship for a certain segment of the population.


I have no agenda and I am genuine in my efforts to understand the counter viewpoint. It is just that I am unable to see the evidence anywhere and I can not understand the love of low end worthless manufacturing jobs.

You are right only if you see things in isolation but society can not be seen that way.

For example my grandpa grew his own organic food and died at the age of 45 by choking on Asthma (no medical care). My father is still alive at 70 despite drinking and eating genetically modified stuff all the time. While in isolation GMO food (might) be horrible, the fact is the lower prices of food have increased human productivity and has ensured my father could afford better health care. I feel things are very interconnected.


Historically, manufacturing jobs paid quite well while generally not requiring expensive education and training beforehand to get hired. I do not understand why you perceive them to be low end and worthless.

Further, you dismissing Detroit as evidence of a large scale trend and comparing it to me saying a single bakery failed while then citing your father and grandfather as evidence for your point of view goes well beyond ironic.

I also see things as interconnected and complicated, yet I am finding you incredibly difficult to engage. Your tactics look an awful lot like bad faith arguments. Maybe you just don't see the conflict inherent in your own maneuvering. Lots of people don't. But you are being incredibly contradictory here.

Best.


I think a lot of us thought that economic indicators would make it hard for the republicans to make the case that things were bad and they could make things good but we forgot unfortunately that perception is all and the actual numbers don't mean anything. Under 5% unemployment doesn't mean anything if you can find enough salt-of-the-earth middle class white people who are struggling, because that is enough to convince people to toss the whole system and start over even if unemployment is low and wages are increasing.

It is truly staggering to have the right now taking on the mantle of income inequality after decades of obstructing any efforts to tackle it, so they can bring back the kinds of jobs that unions helped to define the middle class with after being instrumental in destroying unions all while blaming the left. I know its not quite that cut and dried but I think the left feels like that globalism is OK as long as you are distributing the wealth made from it. It seems like the republicans right now are willing to make us less wealthy and less well off in many ways, as long as the white middle class can benefit (even if the country suffers in general).


But the policies of this administration and the Republican Capitol Hill have been the opposite of what you describe. They've stayed away from a strong protectionist turn so far. And they're definitely not enacting policies to address income inequality... the healthcare bill passed in the House today is quite the opposite.

edit - I agree with your point that voter perception matters a lot. But I think the Republicans just lied to exploit that perception. They're not actually changing their ideology and agenda to do any of it though.


I might not have made my point very clear, I agree with you, its all a big smokescreen and at the end of the day they do what they've always done - cut taxes on the wealthy. The people who felt Trump was a protest vote was really just a vote for the same party and the same results that haven't helped them in decades. Its sad for me because my family (who usually fall for the gun-control fears part of the platform) keep doing the same thing and expecting different results but don't bother to blame the people they've been voting for year after year and instead blame the people that the people they voted for work against year after year.


"All those jobs are not coming back and it is a good thing."

Not if you used one of those jobs to feed your family.

Seriously, I am absolutely sick and tired of people saying that not having these jobs is a good thing, and completely ignoring the large amounts of people who did depend on those jobs to provide for their families. In order for it to really be a good thing for those jobs to not be here, there have to be feasible alternatives for those people. Right now, there aren't. That's why Trump's cry of bringing the jobs back was so successful.


Perhaps you ought to take note of consumer debt, cost of education relative to income, cost of housing relative to income, cost of child care, cost of healthcare?

Yea, the country can chug along while population gets ever impoverished and averages can continue looking just peachy as the income gap grows.

I'll just throw in an anecdotal email from the local school district about how they will no longer permit elementary students to purchase lunch if their lunchroom balance is negative. Think about that next time you strut out the "exceptional country" argument.


Easy for you to say. You sound like you have no idea what life is like for the people affected by this. This is their economy too. If you write them off as collateral damage and provide no alternative, don't be surprised when people like Trump get voted in.


> The way both Liberals and Conservatives speak as if USA is marred with some wide scale unemployment.

Are you unaware of the steadily declining Labor-force Participation Rate? [1] [2]

1. https://fred.stlouisfed.org/graph/fredgraph.png?g=dBkS

2. http://www.pewresearch.org/fact-tank/2013/09/03/the-disappea...


I think you're correct to highlight the labor force participation rate but there doesn't appear to be an upper age cutoff on these stats, which is going to skew things.

"16 years and older employed or looking for work..."

Shouldn't it be something like 16 years to 66 years old? The boomers are getting older. Or even better, 20 to 70. I'm not really worried if people are delaying entry to work because they're still full time students or stopping work after they become eligible for full Social Security benefits.


Interestingly enough, it's incidental to prime-age men (25-54) and more correlated with marital status than race or age: https://www.theatlantic.com/business/archive/2016/06/the-mis...


People seem to want people to have jobs that are easy to visualize... people seem worried about the number of factory workers in a way in which they do not worry about number of architects.


>people seem worried about the number of factory workers in a way in which they do not worry about number of architects.

That's because millions of people were factory workers living a cozy life back until a few decades ago and now they (and their kids and communities) are struggling to make ends meet.

Millions of people weren't architects.

Not much "glamorizing of factory jobs" is needed to explain their complains. Plain desperation will do.


Is that really true though? Is the unemployment rate higher now than it was in some golden age in cultural memory?

http://cdn.tradingeconomics.com/charts/united-states-unemplo...


You can have a job making 55k and a job making 20k, you're employed but your material condition declined


Is that actually what has happened? Evidence please?


Because there's not enough real world evidence on the matter that one can empirically observe, and we need stats and research?

manufacturing jobs [which] comprise just 10% of all employment in America (in percentage terms, there has been a virtually uninterrupted decline since 1970's 26%) (The economist)

Or: http://money.cnn.com/2016/03/29/news/economy/us-manufacturin...

And even those statistics can be and are manipulated in lots of ways from pundits to make a point that "it has never been better" and that everybody migrated happily to services jobs etc. That people used to be able to buy a house and send kids to college (and put some money aside) in the 50-60s with a manufacturing job, and they don't now is rarely mentioned. Or that tons of tricks are used to reduce the unemployment numbers.


Why, again, are manufacturing jobs the one type of job we're always supposed to be maximize, even relative to the pool of all other jobs? Is there more or less total employment, and does that matter less than manufacturing employment alone?

re: housing and college costs, I don't think that has much to do with manufacturing jobs in particular.


>Why, again, are manufacturing jobs the one type of job we're always supposed to be maximize, even relative to the pool of all other jobs?

Because the other major alternatives are

(a) service jobs that are a zero sum game of people inside the same country of circle-servicing one another,

(b) jobs like scientist, software developer, etc, that by their nature require few people so wont be increasing anytime soon either (and eliminate other jobs)

(c) UBI -- good luck with that.


I am not thoroughly convinced that non-physical labor jobs are zero sum, necessarily shrinking and/or reduce other employment. Why should I believe that? Can you cite any evidence to this effect?

Furthermore, if white collar jobs are "shrinking" means they should be irrelevant, manufacturing jobs are shrinking means they should be lamented?

Lastly, what if increasing automation means that manufacturing jobs will inevitably go away regardless of how anyone feels about it or complains about it? What do you propose to stop that? Manufacturing output of the US has consistently increased despite any variance in the amount of people it employs or the state of the rest of the economy.


>Lastly, what if increasing automation means that manufacturing jobs will inevitably go away regardless of how anyone feels about it or complains about it? What do you propose to stop that?

I propose a society where mankind DECIDES about what kind of jobs it wants to have (or none if they please so), and they are not dictated to it about the mere availability of some technology.


It's because American's romanticize manufacturing for some reason. They love the idea of someone doing back-breaking labor on a factory floor line, but hate the idea of someone working retail in air conditioning.


Those romanticized factory jobs were by and large protected by unions and offered better pay and pensions than any other blue collar occupation.


Which is ironic, considering the party claiming to want to bring back manufacturing jobs is also the party that busted the unions.


People are not coming from around the world for middle class jobs like auto-manufacturer or steel worker. Jobs like these used to be the heart of the middle class, and they certainly weren't under sweatshop conditions (unions made sure of that).


"USA continues to enjoy very good employment..."

Measured how? Labor participation rate? Average household income? GDP per capita?

"better than most developed countries..."

Better than the 2000s? Better than the 80s? The 60s?


What developed countries have comparable scale and diversity as the US?


The answer is of course deregulation.

Not only is labour cheaper in China, everything is. The USA is uncompetitive not because we don't have technological prowress, or enough land, or enough resources; it's because our laws have made US manufacturing too expensive. There is no other answer.


There is also geopolitical reasons for this. There is a high chance that east asia will be embroiled with some war coming soon, which will disrupt both manufacturing (either in china or Taiwan), or transports of goods.

Even if the North Korea problem gets solved, the China problem is still there and it wont be solved anytime soon.

If you have some streamlined manufacturing here, it is easier to fork it in case the main area of supplies goes offline due to regional wars/embargoes/troubles.

Right now relying only on east asian manufacturing is a single point of failure for apple.


I don't understand why this is being so heavily down voted. It's a major risk theme amongst asset managers: what happens if a major war in the South China Sea disrupts ASEAN and Chinese supply chains and/or trade relations.


Seems like a wild bet to make when the region has been embroiled in conflict far worse. People were still manufacturing in China during the American (Vietnam) war.


I believe that in the 60s, Japan was the source of many of the kinds of imports that we're now getting from China.


Yeah I think just a bit more stuff is being manufactured in China today versus 50ish years ago.


Not many. China in the 60s and 70s had a very poor manufacturing base compared to today.


Sorry, I guess I haven't been following the news that closely.

Apart from NK, what's the China problem?


South China Sea.


Debt. Look at the financials in China and you'll see a huge bubble that's just beginning to burst. Going to take a year to fully materialize but it will be ugly.


I've been hearing people say that there are signs that the bubble is bursting in China for the last several years now. This time it's for real, though, right?

edit: I had a hunch you'd be the kind of person who would cite a zerohedge article as a source on this. They have been gleefully predicting the collapse of China's economy since the site's inception. No doubt, they will gleefully take credit for "predicting" its collapse, too (should it actually happen), despite all of the failed predictions year after year.


Not to support zerohedge citations but isn't it totally expected that people who see a collapse coming wouldn't be able to time it exactly? You know the common refrain, the markets can stay irrational longer than you stay solvent, doesn't that go both ways? That if I see the markets are being irrational, it may take quite a long time for the bust to actually happen? But that doesn't mean they weren't irrational and it doesn't mean I didn't see it.


Market economies go through boom-bust cycles. Predicting timing for the next bust is much more impressive than predicting that there will be a bust, eventually.

If you predict in 2016 that an apparently healthy economy will suffer a severe downturn, and it happens in 2017, that's impressive.

If you predict a severe downturn in 2009 and it only happens in 2017, that's significantly less impressive.

If you predict a severe downturn every year since 2009, that's zerohedge.

It reminds me of the peak oil prophets who went from predicting collapse by 2012 to predicting collapse, uh... eventually. Remaining pessimistic in the face of contrary data doesn't make them any smarter than being irrationally optimistic.


People have been making that same claim for a couple of decades already [0], and it still hasn't happened.

I mean, I'm sure it will happen eventually and then all the naysayers will be 'right', but not really (broken clock, twice a day, yadda, yadda, yadda).

0: https://en.wikipedia.org/wiki/The_Coming_Collapse_of_China


Just remember people said the housing crisis would never happen in the US.

'"Someone Is Blowing Up": RBC Warns China-Induced Unwinds Are Escalating'

http://www.zerohedge.com/news/2017-05-04/someone-blowing-rbc...

Just realize it's not all sunshine and rainbows in China.


They may have a recession at some point but just as recessions in the rest of the world, they usually end and the country goes back to some trendline.


In that case, the market demand would sink. Everything needs recalculated.


> Apple says that it intends to bolster the U.S. manufacturing sector by creating a $1 billion “advanced manufacturing fund” — with some of that initial money going toward a company the tech giant is prepared to partner with, chief executive Tim Cook said.

Amazing what passes for news these days. This sounds no different from what they normally do with their supply chain. Anyone remember GT Advanced Technologies? Apple wanted their sapphire glass for the iPhone 6 and fronted $439m for a factory in Arizona. The deal went south and Apple ended up owning everything and 700+ people were laid off. Apple turned it into a data center.


> The deal went south

It wasn't that the deal went south, it was that the company was unable to produce & deliver the product that they said they could, at the price they agreed to. GT bet the company on being able to fulfill their contract with Apple, and failed.


> it was that the company was unable to produce & deliver the product that they said they could, at the price they agreed to

How is that not the deal going south?


Maybe it's not, but I think of "the deal went south" more as "negotiations broke down", instead of "it cost more to make the things than one party agreed to pay for them."


So something counts as business-as-usual now because it was attempted precisely once before, unsuccessfully, in the company's 40 year history?


I'd counter that it would be huge news if this was the first deal of its kind. GT's deal only became public because of a nasty bankruptcy case and Apple fought to keep it under wraps [1]. If GT had been able to produce the screens there wouldn't have been any public knowledge that Apple fronted them the money for the furnaces.

Apple is a very secretive company and even with this announcement they conveniently left out where the money is going.

This is business as usual, but there is now an incentive to brag about domestic investment because a simpleton is in the Whitehouse.

[1] https://www.recode.net/2014/10/14/11631890/apple-asks-courts...


I read the headline and thought:

+ Advanced manufacturing jobs are done by robots.

+ $1 billion builds one moderately sized manufacturing plant (Tesla's Gigafactory is $5 billion [1])

+ There's a scene Austin Powers: International Man of Mystery I wish the press would review before reporting so breathlessly.

[1]: https://en.wikipedia.org/wiki/Gigafactory_1


Setting up a fund to create jobs is a pretty telling indicator that those jobs don't exist, and aren't expected to.


I think "Advanced Manufacturing Jobs" are going to be roboticist, machine learning and mechanical engineer related. Foxconn is moving this direction and I'm betting Apple thinks they can do it as well as them. Plus possible tax breaks based on Trump's comments.


Apple isn't probably thinking about doing this themselves. Note that Cook is going to "support," not actually build themselves.

They are most likely to invest in Foxconn to help them open up shops in the US.


Definitely possible, Apple uses vendors in a way that would be difficult to do themselves. However, if I'm right about the types of jobs this will create it does fall in line with Apple's expertise more than a human built process. Just as they are building their own silicon they may want to own pieces of build process.


This is the way to bring jobs back to the US. Start with investing "small" sums of money to create an enterprise that will require manufacturing expertise in some area. The ecosystem will then expand. Other companies can then take advantage of the same expertise. Also, the radius of expertise will grow as supporting jobs crop up.


Or, to put this into perspective, that 1/250th of their cash on hand. http://money.cnn.com/2017/05/02/investing/apple-cash-quarter...


To be fair, while they are "richer than god" most of their money is either in some non-us bank to avoid taxes or invested...


I guess it's part of a plan to pay lower taxes on their oversea cash when they will bring it into the US. Create jobs, get tax breaks. Apple has stashed about $250 billion overseas and paying a billion to reduce the tax burden is most likely the cheaper option.


Anyone else find it odd that all these headlines states only how much these companies are going to spend on manufacturing, but none of them say what they're actually going to be making?


Is it really that odd? Its a way for companies to prevent getting hit by a Trump tweet that deplores them for not hiring enough Americans. So now, everyone wants to portray any US investment they make, any US workers they hire, loudly and with big but vague/unspecific numbers.


Exactly this, which is also why every single automaker now publicly announces their retooling costs and shift changes for new model years. "We're spending $4B to improve manufacturing and hiring 10,000 workers" is a politically friendly headline even if you've done the same thing every year for the past few decades.


If that is true why was that message not popular under Obama as well?


Well, Obama didn't do a lot of shitposting on Twitter. Trump shaming companies on a daily basis is probably part of the reason.


Maybe obama should have too instead of planning to take 400,000 dollar wall street speeches.


Even elizabeth warren and bernie sanders are upset with obama taking 400k from wall street and not prosecuting them in 2008.

http://www.businessinsider.com/obama-400-000-speech-wall-str...


This isn't just out of Apple's good heart:

https://theintercept.com/2017/05/04/theres-nothing-apples-ce...


So.. 0.3% of their cash pile?


I had the same thought. It's outlandish that a $1B investment in anything could be viewed as insignificant.


It's enough to impress Trump and keep Apple off his radar for the time being. In terms of Apple's balance sheets, it's found sofa change with a huge ROI.


It makes me wonder.. how much Apple invest in China currently?


Apple's latest 10-K has them with 7.807 billion of long-lived assets in China; the majority of that is going to be manufacturing equipment.

They anticipate $16B of capital expenditure in 2017, where the breakdown there is between US Data Centers, the new campus, and manufacturing equipment requires someone who actually does analysis.


Viewing the investment as insignificant because the investor has more money is a seriously foolish perspective that ought to be fought against instead of expressed


It is a valid point of view. Although perspective and proportionality are equally valid as well.. Apple invest in anyone else but themselves.


It is a point of view that can only be held by people who feel like their opinions on how Apple should spend its money are valid, which is utterly ridiculous in every way that isn't imaginary.


It's probably a decent idea to start "small" (if a billion dollars can be called that) and evaluate how well it works.

Apple's got enough money to experiment with multiple approaches and pour lots into the ones that work down the line.


$1 billion. I wonder what % of their marketing PR a billion is. Because that's all this is. PR to buy a few good mentions and to enable Apple to say, "Yeah we're doing something..."


So what'll that be?... 5 new jobs created? Look at the Tesla Gigafactory, they brag on how dense it is and how automated it is... that means less jobs.

I'm not saying it's a good thing or a bad thing, I'm just saying bringing manufacturing back to the US doesn't mean jobs, it couldn't and still be profitable. Any new factory in the US will have to be so heavily automated it couldn't possibly provide any jobs


Robots will assemble iphones in the US.


So, engineers for the robots?


[flagged]


We detached this subthread from https://news.ycombinator.com/item?id=14266501 and marked it off-topic.


What, being rational and objective instead of acting on purely egotistical considerations?


I would make the exact opposite argument in fact.

I would argue it is entirely irrational to perpetuate this bizarre notion that living in a prosperous nation is some sort of original sin that must be atoned for by self-flagellation.

Prosperity is not a finite resource. I believe equilibrium doesn't necessarily have to come at cost to anyone.


>sort of original sin that must be atoned for by self-flagellation.

whether it's original sin aside (though i do believe it is) where do you see self-flagellation? i'm simply saying i'm okay with china becoming more competitive and market forces taking their natural course.


You're okay with a communist state one-party dictatorship that creates massive pollution and has poor human rights standards becoming the world superpower?


lol wut. talk about strawman

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