Can Any of These Countries Replace China as the Factory of the World?

To be honest, I am perplexed by your recent posts to me. We share a lot of common ground (tariffs and the need for American industry to return, for example).

But evidently we disagree on a few things. If I’m wrong somewhere, I always appreciate a good counter-argument. That way I have a chance to learn something new.

Your recent replies to me are, however, nothing but personal insults. Maybe you’re just having a bad day. Or maybe I’m just too wrong. Well, okay. JimRob has made it clear that insults are against site policy. And they do me no good. So perhaps it’s best if we just ignore each other in the future.

And I say that with some regret as we do have common ground.

Several important factors have not yet been considered at this post.

1) We are already in a proxy war with Putin/Russia which is creating a lot of business for our MIC. Are these the workers earning $60 an hour? We also may soon be in conflict with China if they try to invade Taiwan which produces important amounts of high quality chips.

2) If Mexico becomes a much larger producer economy, where does their terribly vicious drug ecoomy fit in all that?

3) In the 1960s the CEO pay ratio to workers pay was about 40 to 1. Now this pay ratio ranges from 200 to 1, to 1000 to 1. Many companies that left USA did so to get away with obscene wages, while exploiting low wages elsewhere, and paying enough dividends so stockholders did not fire them. 2008 was the year some of this came to a head. Stockholders that year revolted against Goldman Sachs whose top 3 executives were earning more than $65 million each. Are the bosses willing to cut back to the 40 to 1 difference that was working well in the 1960s?

4) While STEM workers in the US might make $60 an hour, what are other industries like furniture, clothing, food, paying workers per hour? Drug company CEOs are making $10, $15, $20 million a year; is that why China produces many of our important drugs? One way to wake up stockholders to this kind of inequity in pay scales would be to limit the amount of pay deductable for business taxes to around 40 time the suggested minimum wage of $15 per hour. That would be about $1,248,000 per year. Anything higher would have to come out of potential profits. Forty hours a week times $15, times 52 weeks equals $31,200 a year. This is nowehere near $60 an hour. Working 35 hours a week = $27,300 a year, times 40 for the CEO is only $1,092,000. Oh, the humanity!

5) Puerto Rico once had a thriving drug manufacturing industry. There is now a 5 mile square industrial complex that has been mothballed or abandoned because of some law change that made it no longer profitable. I think a lot of that industry went to our potential enemy, China. Change the law and encourage people to move back. They do have hurricanes, but so do Texas and Florida.

6) We have millions of roofs in southern areas where solar energy can be produced. Sun is free. China is producing many of our cheap solar panels because of a problem involving high quality quartz. Industry in the US using cadmium telluride is growing, using this mineral recovered from US mine tailings. Our oil companies already have plenty of places they already have the right to use for production. They don’t want to start producing if the oil price is going to drop again as it did a few years ago. I was surprised to learn there were a few days when producers were actually paying $30 a barrel to get rid of the excess because wells were still flowing, until they could be shut down. I think we need to preserve our oil for our grandchildren. In the long run a lot of transport can be converted to other energy sources. Oil has many other important uses, like plastic, chemicals, etc. Solar and wind can produce as many or more jobs in the long run as are now in oil and gas. Note, I say “in the long run”, which is needed for orderly transition.

Thanks glee'.

The nature of electronics (e.g. Moore's Law) led inexorably to margins similar to those of bananas. I watched some vid about AMD yesterday and how it sprang from Fairchild Semiconductors (I'd either forgotten that in my impending old age or never knew it). The ups and downs were detailed. AMD became a giant via becoming a high quality alternative supplier (ahem) of Intel knockoffs.

Oddly missing was the 1990s-early 2000s trainwreck when AMD was going to build a huge new fab in, if memory serves, Maryland (somewhere on the East Coast anyway), the financials fell apart, and the company abandoned the project and got reorganized as a design house (analogous to what Apple has done), while dedicated fab moved to Asian OEM. Taiwan's TSMC was started by a guy who couldn't qualify for the doctoral program at MIT, which is amusing. TSMC does nothing but pull rabbits out of its hat to fab the cutting edge designs of others, without doing its own chip design.

Probably the remaining company that does both and is good at it, in Asia, is Samsung.

Intel does both, and under crony capitalism is putting $28 billion into US fab, but Intel's fallen behind in successful fabrication of the ever-smaller miniaturized features of semiconductors.

Puerto Rico's problem is illegal dope, same as in Mexico and Central America. There's a renewed drive on to move US jobs to the allegedly skilled labor force of Mexico, but that would be industrial suicide on a mass level. Building out US pharmaceutical production in hurricane central doesn't seem like a great idea anyway.

Methane is crazy plentiful, and liquid automotive fuel made from it is probably in the future of the internal combustion engine vehicles for the US market. Years ago the infamous lawyer F. Lee Bailey helped start a company called Americlear (if memory serves) which aimed to produce and market such a fuel. It didn't work out, probably due to undercapitalization right when methane supplies weren't exactly rising. Worldwide crude oil supplies have risen a great deal since the OPEC embargo in 1973-4. For both those reasons, Putin's pushed Russia into the abattoir with his "we'll shut off your supplies" tactics. He's now faced with selling what they can still produce to countries like India, but for less money, and with a transportation and delivery problem or two. Meanwhile he's forced Russia into becoming (at best) a secondary supplier (and not a very reliable one) in the world market.

I just read that Apple (well, Apple's OEM) produces the new iPhone 14 in India, and that high tech and other industries are shifting production out of China and into Vietnam. Elon Musk's Giga Shanghai will continue to supply the Chinese market, but it's obvious that the Chinese economy has been tanking for two years, with no prospect of recovering, so it'll become an export biz. I don't think the previously stated plan to expand Tesla production in China is going to work out, or even get done. The Germans helpfully ****ed him over so badly he'll probably never build another Tesla plant in the EU. We'll likely see the next Tesla plant in the US and/or India.

Compensation for execs in stale industries (like retailing) are not as high, but the money piledriving into pharm (in large part due to just two things -- the Plannedemic, and Obamacare) has led to high exec compensation. Any exec that leads a company to great success -- for whatever reason -- gets higher compensation, and that isn't a problem or the problem. The US needs income tax reform, including a shift to flat tax, but the most overpaid and most corrupt critters are US politicians. As happened in the 1970s, our economy suffers from the cost of energy, and most energy comes from hydrocarbon fuels. The deliberate undermining of our fuel supply should result in public hangings, not public grandstanding by jackasses like Gavin Newsom.

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