I would add that if you only focus on finished products (airplanes, chips, cars) you're leaving important things out. These industries will need new materials to keep improving the efficiency and durability, etc., of their products. As we keep offshoring steel (and other metals) production, as well as other material inputs, we will not be able to innovate the new materials that will be needed. The world isn't done innovating stainless steel for instance. Like chips or planes or cars, if you don't make it, you'll lose your ability to engineer new forms of it. It's not just about finished products.
When explained this way it just seems so obvious. Why then are all our practicing economists almost universally opposed to tariffs? Of course they will raise prices, that’s the cost of bringing manufacturing back home.
Yes, tariffs will lead to some reshoring but how much employment they will generate is another story. The reshored firms will likely employ far more capital (robots) than labor relative to the industries that existed in the pre-offshoring era.
Growing up in Rochester NY and witnessing the demise of Kodak and Xerox from dominant US companies to essentially nothing reminds me very much of the current Intel and Boeing stories. Then it was the Japanese who were either better or unfairly government supported (Remember MITI?). It devastated the city for 20 years, but hardly a blip of an impact on America. In retrospect we can point to poor management, hubris and bad decisions (maybe pressure to show profits at the expense of R&D) as a major reason for the downfall. Is that any different with Boeing and Intel but with a different bogeyman this time?
Not a blip to the United States which was financializing like mad but to America which is places like Rochester, this and similar events were devastating.
As I read this I couldn’t help wonder which department of Don & JD’s feared deep state would be entrusted with implementing these policies? Maybe they will move that department to Springfield, OH as a boost since it’s been decimated by pet eating brown people. Or, maybe North Carolina since the deep state has them offered no hurricane assistance, having spent all their money elsewhere on, you guessed it, brown people… I suggest we remember there is another thing that once lost is hard to recover-our republic. If Don & JD are successful in tearing down our electoral institutions, these esoteric policy debates cease to matter. Believe John Kelly, believe the legions of other former Don appointees. Believe what Don and JD are openly saying. Good luck America.
"once that ecosystem moves offshore, it is almost impossible to bring back”
Are there any examples of countries that did bring it back and how did they do it? Japan and Germany were turned into rubble during WW2 but the human capital was still there. Britain is a great negative example. France has always been a puzzle. They were great innovators in many fields but somehow always lost out to Brits, Germans or Americans. The Roman Empire outsourced agriculture from Italy to North Africa and when they lost North Africa, the Western Empire collapsed even though the land was still there.
I would add that if you only focus on finished products (airplanes, chips, cars) you're leaving important things out. These industries will need new materials to keep improving the efficiency and durability, etc., of their products. As we keep offshoring steel (and other metals) production, as well as other material inputs, we will not be able to innovate the new materials that will be needed. The world isn't done innovating stainless steel for instance. Like chips or planes or cars, if you don't make it, you'll lose your ability to engineer new forms of it. It's not just about finished products.
When explained this way it just seems so obvious. Why then are all our practicing economists almost universally opposed to tariffs? Of course they will raise prices, that’s the cost of bringing manufacturing back home.
Yes, tariffs will lead to some reshoring but how much employment they will generate is another story. The reshored firms will likely employ far more capital (robots) than labor relative to the industries that existed in the pre-offshoring era.
Excellent point.
Growing up in Rochester NY and witnessing the demise of Kodak and Xerox from dominant US companies to essentially nothing reminds me very much of the current Intel and Boeing stories. Then it was the Japanese who were either better or unfairly government supported (Remember MITI?). It devastated the city for 20 years, but hardly a blip of an impact on America. In retrospect we can point to poor management, hubris and bad decisions (maybe pressure to show profits at the expense of R&D) as a major reason for the downfall. Is that any different with Boeing and Intel but with a different bogeyman this time?
Not a blip to the United States which was financializing like mad but to America which is places like Rochester, this and similar events were devastating.
As I read this I couldn’t help wonder which department of Don & JD’s feared deep state would be entrusted with implementing these policies? Maybe they will move that department to Springfield, OH as a boost since it’s been decimated by pet eating brown people. Or, maybe North Carolina since the deep state has them offered no hurricane assistance, having spent all their money elsewhere on, you guessed it, brown people… I suggest we remember there is another thing that once lost is hard to recover-our republic. If Don & JD are successful in tearing down our electoral institutions, these esoteric policy debates cease to matter. Believe John Kelly, believe the legions of other former Don appointees. Believe what Don and JD are openly saying. Good luck America.
"once that ecosystem moves offshore, it is almost impossible to bring back”
Are there any examples of countries that did bring it back and how did they do it? Japan and Germany were turned into rubble during WW2 but the human capital was still there. Britain is a great negative example. France has always been a puzzle. They were great innovators in many fields but somehow always lost out to Brits, Germans or Americans. The Roman Empire outsourced agriculture from Italy to North Africa and when they lost North Africa, the Western Empire collapsed even though the land was still there.