Tradewar Watch 21: Stabenow, Brown And King Suggest Suicide, Seriously

U Zume
by U Zume

American carmakers cast worried glances on Senators and union groups that want to create a level playing field with China. Senators Debbie Stabenow and Sherrod Brown, alongside union representatives and the labor-backed Economic Policy Institute try to push “the administration to bring a possible case at the World Trade Organization or begin a U.S. Commerce Department investigation that could lead to duties on Chinese-made auto parts,” as Reuters reports.

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  • Bikegoesbaa Bikegoesbaa on Feb 01, 2012

    Regardless of what happens in China, Mexico, or anywhere else; manufacturing as a primary employer of large numbers of people is finished. Why? Efficiency and automation. We no longer need huge pools of people in order to make huge quantities of stuff. Just like the crop yield per unit farmer has increased dramatically, so has the stuff yield per unit manufacturing worker. I was recently in a steel plant that 30 years ago employed 7,000 people. Today it has less than 500 employees, but produces more finished products than ever before. Those 6,500+ jobs didn't disappear overseas, it's not China's fault that they're gone. They disappeared because they're no longer needed. This will only happen faster as technology gets better. Outlaw *all* imports and you still won't see 1950's levels of manufacturing employment unless you also mandate the use of 1950's technology and methods. No matter what happens, the sort of labor-intensive old-school manufacturing that provided high paying jobs for thousands upon thousands of people and supported entire communities is O-V-E-R. Done. Gone. It is not coming back, ever. Plan accordingly.

    • Toad Toad on Feb 01, 2012

      +1. Direct and to the point. Wish I had written it.

  • Lokki Lokki on Feb 01, 2012

    +2 and I wish I'd written it as well. The automated genie is never going back in the box. There was a recent article in the Atlantic magazine regarding this. There is an replacement parts manufacturer who still makes some parts in the US. However most of the production is automated and the "level II " workers must be skilled in computer programming. There's no way for an unskilled worker to advance through the ranks to the "level II" of the skilled workers based on experience (as they never learn programming on the work site) and it's not worth the expense of gambling on a floor worker succeeding at college. Cheaper to hire the skill. In fact, the only place for unskilled/semi-skilled workers is for jobs that require better quality work than is cheaply obtained in China but aren't big enough to justify the cost of automating manufacture. In a related note, a friend of mine is a consultant working on setting up a manufacturing line for medical products. The line is being set up in a (former) rust-belt manufacturing city using (formerly) unionized workers. However the company has decided that the line won't stay here, after it's up and debugged. That wasn't the original plan but the workers are difficult and agitating for a return to union wages and union work rules. Finally, the idea that the car manufacturers -caused- the success of the economy in the 50's, 60's, and early 70's is mistaking symptoms for causes. European manufacturing was pretty well destroyed between WWI, the recession, and WWII. Asia started later, and was slowed by WWII. Thus American manufacturing in many ways for many years had the field to itself. THAT period was the abberation, not the period that followed or thecurrent situation. During that glory period American companies didn't spend on improving their steel mills and other manufacturing plants . They instead vave the money that they should have used for that purpose to investors, executives, and workers. Everybody cashed in, even though by the 70's it was clear that the game was over. American car makers lost all sympathy from me when the Japanese makers "willingly" limited their imports, causing their prices to go up. However the Americans didn't use their price advantage or use their breathing room to improve their (very bad at the time) quality. They just raised prices to the level of the Japanese.

  • Terc Terc on Feb 02, 2012

    If it’s true that imposing tariffs on people in one political jurisdiction in order to prevent them from trading freely with people in other political jurisdictions actually generates higher-paying jobs and more widespread prosperity for those people, then why stop at the US border? We should allow each of the 50 states to impose tariffs not only on goods from jurisdictions such as China and Mexico, but also on goods from jurisdictions such as California and Michigan. New Yorkers like myself would no longer ship dollars out of state in return for cars imported from Detroit. We'd keep those dollars at home and also end the large trade deficit in motor vehicles that we have with them. And what’s true for cars will also be true for other goods and services—banking that New Yorkers import from North Carolina, chicken that's imported from Arkansas, oranges that are imported from Florida, pharmaceuticals that are imported from New Jersey, coffee that's imported from Hawaii, and wine that's imported from California. The jobs necessary to produce these, and countless other, products could then be held by New Yorkers.

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    • Terc Terc on Feb 02, 2012

      @CriticalMass I am very skeptical of anyone (politician, bureaucrat or me) who claims to be interested in solving societal problems and wields the kind of power that can affect other people's lives. I don't think, just because we have identified a problem, that we should use government coercion to solve it. I think there should always be a presumption against using force against peaceful people. In principle, government's core responsibility is to prevent Jones from benefiting by his imposing costs on Smith without Smith's consent. In practice, sadly, government acts as Jones's agent in securing benefits for Jones by imposing costs on Smith. As H.L. Mencken put it: "Is government, then, useful and necessary? So is a doctor. But suppose the dear fellow claimed the right, every time he was called in to prescribe for a bellyache or a ringing in the ears, to raid the family silver, use the family toothbrushes, and execute the droit de seigneur upon the housemaid?"

  • CriticalMass CriticalMass on Feb 02, 2012

    More ivory tower Terc. It's not easy to be the policy maker who we've charged to "do something" is it? Remember the ending question from the last post - no more ivory tower, how are you gonna fix it? So, I need to hear your solutions to the problem rather than what "shouldn't" be done. How do you put millions of people back to work or, alternatively, find some way to fund them to not work (i.e. unemployment, welfare, etc.)? Talking in circles won't get it done so unless there are better "good" solutions on offer, you go with the most-likely-to-have-some-positive-impact "bad" solution. What's your better idea to solve the near to mid-term problem sir?

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