Goodbye, Production (and Maybe Innovation)

The New York Times ^ | December 24, 2006 | Louis Uchitelle

[A. Pole]

AMERICAN manufacturers no longer make subway cars. They are imported now, and the skills required to make them are disappearing in the United States. Similarly, imports are an ever-bigger source of refrigerators, household furnishings, auto and aircraft parts, machine tools and a host of everyday consumer products much in demand in America, but increasingly not made here.

[...]

the experts shifted the emphasis from production to design and innovation. Let others produce what Americans think up.

[...]

But over the long run, can invention and design be separated from production? That question is rarely asked today. The debate instead centers on the loss of well-paying factory jobs and on the swelling trade deficit in manufactured goods. When the linkage does come up, the answer is surprisingly affirmative: Yes, invention and production are intertwined.

"Most innovation does not come from some disembodied laboratory," said Stephen S. Cohen, co-director of the Berkeley Roundtable on the International Economy at the University of California, Berkeley. "In order to innovate in what you make, you have to be pretty good at making it — and we are losing that ability."

[...]

Franklin J. Vargo, the association’s vice president for international economic affairs, sounds even more concerned than Mr. Cohen. "If manufacturing production declines in the United States," he said, "at some point we will go below critical mass and then the center of innovation will shift outside the country and that will really begin a decline in our living standards."

[...]

"It is hard to imagine," Mr. Tonelson said, "how an international economy can remain successful if it jettisons its most technologically advanced components."

[...]

[narby]

Sorry, but the facts don't support your arguements.

I've heard terror tales about trade deficits all my 50 years, and it looks to me like we're living pretty d@mn good.

[Toddsterpatriot]

You never answered. Maybe you don't know the answer? Maybe you don't know what inflation and deflation means? Maybe you don't understand the gold standard or history?

[Paul Ross]

...and it looks to me like we're living pretty d@mn good.

Said the lazy squirrel...with no stash of nuts (no savings)... to all and sundry as Winter approached....

[narby]

to all and sundry as Winter approached....

Winter's been 50 years coming now. Predictions of it's imminent arrival are getting more dubious every day.

In case you haven't figured it out yet, international finance and economic theory aren't as simple as balancing the family checkbook.

[Paul Ross]

Winter's been 50 years coming now. Predictions of it's imminent arrival are getting more dubious every day.

False. Your reply is dubious...and historically inaccurate. The Winter was often headed off by...those who heeded the warnings! Usually resulting in a significant boost in U.S. export production...most notably during the Reagan administration.

And those currently pirating U.S. industry...are only temporarily propping up the dollar.

They are just about done doing so...and will thence stop doing so altogether...presumably when the Cupboard is bare...and there is nothing left to filch.

And we will be without any domestic production capacity for the key elements of a military, etc., and such dependency can easily leave us at the mercy of foreign enemies. Which is precisely what George Washington and Alexander Hamilton struggled to prevent.

Don't blame us when the excrement hits the fan with China.

[Paul Ross]

In case you haven't figured it out yet, international finance and economic theory aren't as simple as balancing the family checkbook.

Of course its multivariant. But nothing in those other variables necessarily inherently will protect against sheer insanity...

[Toddsterpatriot]

Usually resulting in a significant boost in U.S. export production...most notably during the Reagan administration.

We exported more than $900 billion last year. More than we did during the Reagan administration.

And we will be without any domestic production capacity for the key elements of a military

Of course none of our $1.79 trillion in manufacturing could be military production. While all of China's $780 billion is military production. If you include all the toasters and cheap TVs they make as military goods.

[Toddsterpatriot]

We're doomed.

[trtwox]

Regarding your household wealth chart. Not enough info.

Do you have a chart showing a breakdown of the average household net worth increases of the middle class families-say those in $50-100k income bracket?

[narby]

we will be without any domestic production capacity for the key elements of a military, etc., and such dependency can easily leave us at the mercy of foreign enemies.

This is not 1940. Modern warfare will not revolve around who can out-produce who. It will happen with lightning speed, with the troops we have on duty at the time. There will not even be time to reconstitute boneyard equipment, and reactivate people like me that used to know how to run it.

I'll let others speak to the charts, but sufice it to say that there are lies, damn lies, and statistics. They can be spun any direction one likes.

For myself, I'll take my lifetime experience that doom mongers are never right.

Y2K comes to mind.

[RobRoy]

Who is John Galt?

[Toddsterpatriot]

No. Do you?

[Toddsterpatriot]

How about median household net worth?

[A. Pole]

Who is John Galt?

Visit Galt's Gulch here

[RobRoy]

Ha! the guy who wrote that did not even know that one of the enlightened of the group was actually a short order cook 11 months out of the year.

[lucysmom]

Well, the simple fact is, if we had the brains to go to a consumption-based retail tax, our products would be totally free of the tax burden, both domestically and internationally...while at the same time, foreign-made products, sold in our market, would finally be helping to carry the burden of taxation.

The consumption tax, as proposed at almost 30% on everything, will have a chilling effect on the economy but the black market should do well.

[EternalVigilance]

The rate is not an honest criticism of the consumption tax. All tax law changes must be "revenue neutral." The rate is simply an honest (visible) reflection of the true level of spending by government.

In other words, you're paying it now, it's just hidden.

[servantboy777]

I certainly do not want that for America, nor do I want run away deficits or a declining dollar nor recession.

Economic indicators are pointing to a further slowdown in the economy and a further decline in the dollar in 07.

China is now the second largest holder of American debt. This could be catastrophic for our economy, ecspecially if they begin to transfer these bonds into euro's and further manipulate their own currency to gain economic advantage.

What really bothers me about all the free trade global economy people, are there absolute blind march toward building a Chinese economy at the expense of ours.

Where is all the advantages to this free trade policy?
Did Nafta raise the standard of living for the average Mexican as touted? No, it did not.

Has Nafta, Cafta and or Gatt create a balance in trade for America? No, it has not. In fact, it has opened the door for corporate America to invest billions in capital in foriegn countries, one that still believes America to be it's enemy militarily.

[Toddsterpatriot]

Economic indicators are pointing to a further slowdown in the economy and a further decline in the dollar in 07.

Yes, after 5 years of growth, a slowdown is possible.

China is now the second largest holder of American debt.

Yes.

This could be catastrophic for our economy, ecspecially if they begin to transfer these bonds into euro's

Catastrophic how?

and further manipulate their own currency to gain economic advantage.

So a low Chinese currency is good for them and bad for us?

I certainly do not want that for America, nor do I want run away deficits or a declining dollar nor recession.

A declining dollar is bad for America? I'm noticing an inconsistency in your position.

What really bothers me about all the free trade global economy people, are there absolute blind march toward building a Chinese economy at the expense of ours.

Our economy is over $13 trillion, their's is about $2 trillion. Our's grew about 3% (about $400 billion) in 2006. How much did their economy grow?

Where is all the advantages to this free trade policy?

We exported over $900 billion last year. Our unemployment rate is 4.5%. Where are the disadvantages?

Did Nafta raise the standard of living for the average Mexican as touted? No, it did not.

Yes, there is a lot of corruption in Mexico.

Has Nafta, Cafta and or Gatt create a balance in trade for America?

Why does trade need to be balanced?

No, it has not. In fact, it has opened the door for corporate America to invest billions in capital in foriegn countries,

What do you think those foreigners do with all the dollars they earn? They invest them in America.

[trtwox]

"How about median household net worth?"


Median does not mean a thing. I would like to see average net worth increases across the pay scales.

If there are 2 people in a room making 50k per year and all of a sudden a person walks in making 500k what does that do to the median or average for that matter??