The Critics Respond, Part Forty-Six

The Huffington Post just published what I can only describe as a “multi-media document” regarding the economic plight of Millennials. It combines graphics, animation, and a series of 8-bit-styled “adventures” to enhance (or detract from) a fairly conventional explanation regarding “structural disadvantage”. I can only imagine how much effort it took to assemble — the list of credits at the end would be enough for an indie film — and even at the poverty wages paid by HuffPo to its contributors it must have been quite expensive as well. Yet it’s mostly an example of what the proprietor at Chateau Heartiste calls a “pretty lie”.

I read the whole piece with attention, wondering if they would ever get around to the economic elephant in the room. You won’t be surprised to find out that they never do. If you scroll through all the animations, you’ll find some terrifying statistics. The author’s father bought a house in Seattle for slightly less than twice his annual income at the age of 29; the author would need more than a decade’s worth of income at the age of 35 for the same house. A four-year public-college degree costs about eight times as it did in 1980, compared to minimum wage. In the country’s 10 largest metros, residents earning more than $150,000 per year now outnumber those earning less than $30,000 per year. More Millennials live with their parents than with roommates.

There are plenty of reasons given for this mess, although most of them magically boil down to racism and none of them even dare to touch on the truth of the modern economic disaster in America, the actual reason for everything from urban housing shortages to the nationwide healthcare crisis. In a single phrase, it is this: Americans no longer make what they buy, and they no longer buy what they make. It’s that simple — and despite the dismissive tone taken by the Tweet at the top of this article, “Scary China” is at the heart of this disaster.


If you read the business press, you will hear over and over again that automation is responsible for lost jobs, not outsourcing:

It sounds convincing, and it’s being bleated from every rooftop. Yet a quick stroll through any prole-oriented store in the United States will refute it. Nearly everything you see will be made in another country, whether that country is China, Mexico, Nicaragua, Vietnam, or somewhere else. There’s nothing that says “Made By A Robot In The USA”. Just to drive the point home, here’s a Chinese clothing assembly line.

How many of those “job-killing robots” do you see? The answer is obviously zero. Instead, you’re looking at a line of jobs that could be held by Americans in the United States. I could fill this article with similar photographs from around the world. It’s plain on the face of it that these are jobs that were deliberately moved from the United States in order to increase profits.

“But Jack,” you’ll say, “these are miserable jobs that no American would be willing to do.” To which I can only respond that the majority of industrialized jobs throughout history have been unpleasant, repetitive, and sometimes dangerous. I’ve worked a variety of menial jobs in my life, from fry cook to construction site cleanup. I didn’t enjoy any of them. I don’t enjoy my current day job; in fact, satisfaction-wise I would say that my gig at the fry station was probably slightly better. That’s just the way life is. No amount of attempts to greasepaint the monotony of modern life with TEAM and ROCKSTAR and AWESOME and all that garbage will make much of a difference.

When the low-end manufacturing jobs left this country, we cut the legs out from under the lower class and lower middle class. They became welfare recipients instead of low-wage workers. That makes a big difference to the way people think and behave. Working at the textile mill may have been miserable but it kept people out of trouble and it gave them a sense that they had earned their daily bread.

The service industry jobs that were supposed to replace manufacturing jobs were harder to comprehend, more stressful to perform, and far more discriminatory regarding everything from race to height. They were also ephemeral by nature. There’s no comparison between putting thirty years in at the textile mill and bouncing from one McJob to another. The first one is hard but it’s reliable. The second one is just as miserable to perform but it has the further disadvantage of being inherently temporary.

Just how temporary is now plainly apparent as Amazon, Wal-Mart, and other online retailers eviscerate the retail environment in this country. We can now see the evolution of the lower-middle-class job very clearly. It started as a union factory gig in a manufacturing plant. Then it became a casual McJob at Starbucks or The Disney Store. Now it’s a minimum-wage tempfest where people are urinating in hand-held bottles so they don’t fall behind on their mandatory delivery numbers or sort counts.

Making jokes about “Scary China”, particularly with regards to automotive assembly, is essentially a Marie Antoinette approach to the real danger facing the working poor in this country. Automotive assembly and supplier work is one of the few decent hourly gigs left. When it’s gone, we will have another ten million people on government assistance and another forty million people facing reduced prospects because their jobs, or their towns, were dependent on the income generated by those assembly workers. HAHAHA SCARY CHINA MADE IT IMPOSSIBLE FOR YOU TO FEED YOUR HICK TRASH CHILDREN LOLLERCOASTERS AT SCARY CHINA HAHAHA HEY ERNESTO LET’S GET SOME MORE MARGARITAS OVER HERE! It makes you understand why the Morlocks ate the Eloi.

It is easy to see that the reintroduction of large-scale manufacturing in the United States would go a long way towards addressing the Millennial concerns brought up in the HuffPo article. To begin with, the availability of new jobs outside New York and San Francisco would ease the housing crisis in those areas. Instead of fighting tooth and nail to get a $50,000 job in the city so you can pay $1,200 a month for half of a studio apartment, you would have the option of earning $35,000 in the country and paying $800 a month to own a small home.

The possibility of careers and steady work outside the cities would also reduce the number of people who are financing college degrees via insane amounts of debt. Fewer students would inevitably mean lower tuition at all but the Ivy League institutions. With long-term jobs available, even low-paying ones, people could budget and save for emergencies, medical problems, and their eventual retirement. Having more people working would reduce the welfare load on the country, thus reducing the number of T-bills we have to sell to China in order to finance that welfare load. And it’s been proven to everyone’s satisfaction that employed people are less likely to commit crimes than the unemployed, particularly if they are men.

I’m not saying that the robots won’t eventually take all the jobs. But the robots aren’t here in force yet. And in the meantime we’ve sent thirty years’ worth of economic stability to China so we could pay Apple’s shareholders more profit. That is the true meaning of “structural disadvantage”, not a bunch of fairy tales about how secret racism kept housing densities low in areas that were all-white to begin with. Regarding this issue, as with many others, it’s amazing how living in reality makes it possible to see the real problems and to work on real solutions.

Here at Riverside Green, we are committed to the idea of American manufacturing. Which isn’t to say that we always buy American — see “ZX-14R, Kawasaki” and “Collection of Linen Coats, Kiton” — and it isn’t to say that we always understand what it means to buy American — is my Ohio Accord more American than my Mexican Silverado? But it does mean that we will continue to search out, publicize, and purchase American-made goods as often as possible. Even if it means paying more. The alternative is, unfortunately, laid out in that HuffPo article. I’m not talking about the actual content of the article, mind you. I’m talking about a world where talented people work day and night to produce something that is utterly transient, unprofitable, and meaningless. Even if it’s pretty. They say that kissin’ don’t last, but cookin’ does. To that, I would add: Clicking don’t last, but making does.

85 Replies to “The Critics Respond, Part Forty-Six”

  1. silentsod

    I should wait to post this with your weekly Roundup, but since I am impatient and just read your latest Avoidable Contact: Have you read Traffic by Tom Vanderbilt?

    Reply
      • silentsod

        I’m looking forward to the review.

        Funny thing – I’ve been reading back in your blog and just covered the Town Car accident. Naturally, on a trip I didn’t need to take today (I can remote into work) I made more than one boneheaded decision and became close friends with a guardrail this morning.

        I put Blizzaks on my wife’s car and then proceeded to play the odds with the vehicle I was driving. Boneheaded move.

        Reply
          • silentsod

            I’m fine, a little stiff and sore but it was a pretty soft hit (glancing, about 30MPH). I expect it will be worse tomorrow.

            I tapped the brakes to see if I had any ability to slow down on a slope with no traffic around for about half a mile. All four wheels proceeded to lock and I started sliding off toward the ditch to the right. I corrected and caught that, I caught the tail swinging back the other way. The third time (back to the right) I also corrected for, and the fourth time as I was hand over handing as fast as I could (thinking, gee, this takes a lot of turns in this truck) the bed started sliding past me and I was occupying both lanes. I relaxed knowing I was just along for the ride and rode the brakes and clutch in trying to scrub off as much energy as I could before impact.

            Guard rails are highly effective at dissipating energy because I stopped about 20-25ft from where I collided with it.

        • Jeff Zekas

          Living in the snow for two decades, we got rid of our Crown Vic early on… great car, but the first snow day came, and it was crazy-dangerous driving it! Traded the Crown Vic and the Dodge Aires wagon for a Subaru Outback and a Chevy Truck with four wheel drive, and have never looked back. Oh, and snow tires.

          Reply
          • silentsod

            The first in the series of boneheaded moves was postponing replacing the old M+S tires on this into January.

            Clearly it was the wrong call; I thought I could successfully play the odds as I am a generally cautious driver.

  2. Yamahog

    The sad truth is that Americans can’t even make what they want or they’re not allowed to want things they want.

    People want cheaper housing in NYC and the Bay Area. People want to build in NYC and the Bay Area. So why aren’t a fraction of the world’s cranes in those metro areas? Opportunity hoarders won’t allow new construction.

    I’ll cite this if anyone challenges me on it, but home owners in the bay area have something like 800 billion in positive equity on their houses. What an amazing wealth transfer, are the houses in the Bay Area even worth 800 billion? Only to the extent that you think that the perpetual motion machine of I.T / V.C gains can continue.

    The issue is multi-faceted but simple returning to a more permissive attitude of ‘let them spend their money how they want’ would be a boon for the American economy. People want new buildings and you can’t outsource construction (doubly so if we BUILD THE WALL and deport the 11MM illegals here today, and deportation is actually a centrist position. You know what a far right solution would be? It’s firing squads and box cars).

    But we can extend it to marijuana and probably the war on drugs writ large. I’d spend a decent chunk of change to buy legal weed and I can’t be alone, in fact, if I could buy more things that I want, I’d probably work harder and spend a bit more time on my side businesses. But the reality is that all the wealth in the world won’t make it okay for me to rip a bowl at home or drive a 2001 Toyota Century to work, and I more or less have everything else I want and I save ~60% of my post-tax pay check so why bother? I’d like to buy a fast bike, but I’d probably get smashed by some immigrant while stuck in traffic or get a speeding ticket if I celebrated the lack of traffic. No thanks.

    Just imagine if police had more time to solve crimes with victims and enforce traffic laws, things could be better.

    I’m not one to fall over myself for libertarianism but Cato published a book “the right to earn a living” and that’s a core right that’s under attack. Low value jobs are gone, if we want more, we’ll have to invent them and economic freedom is critical to ennobling people to find honest works and enrich themselves and their community.

    Reply
    • silentsod

      I grew up in a tiny house in the south SF bay area, it is currently valued somewhere north of $1.5 million.

      Trust me, it is not a $1.5 million dollar home anywhere else in the country; the real estate values are insane and they make living in a place like that very difficult to ever get ahead unless you’re already on top.

      Reply
    • Jeff Zekas

      As a former LOI, let me be perfectly clear: drugs are not a “victimless” crime. Drug dealers carry guns, and kill people. The gangs control the drugs, which fund other illegal activities. So, the old “legalize drugs so cops have more time to catch real crooks” is a straw man argument. Here is Oregon, pot is legal, and there is still lots of drug related crime. Because the same thugs who controlled pot BEFORE legalization are now controlling pot AFTER legalization.

      Reply
      • Yamahog

        Pot is quasi-legal. Banks are reluctant to touch drug money because the Feds have the authority to hassle them about their involvement in the drug business. Frankly it’s a miracle that marijuana legalization has worked as well as it has – the cash nature of the business and the barriers to entry for large corporations makes it attractive to unsavory people.

        It’s going to be even worse in California where the idiots running that state decided to quasi-legal, taxed marijuana more expensive than black market marijuana. To the extent that they make legal drug use less desirable than illegal drug use, we’ll see more illegal consumption.

        Why do the cartels sell heroin and not aspirin? It’s a serious question, if they could make more money off aspirin you bet your bottom dollar they would be involved in that line of business. But they’re not, cartels can’t compete with Bayer. Don’t pump your chest about law enforcement’s efficacy – you guys are losing against illiterate, violent people. If we took the chains off Wall St. and the chemical companies, cartels as we know it will be gone by 2020.

        If heroin were completely legal and available just like alcohol, most addicts would probably have an addiction that costs less than $10 day (when people have unlimited access to heroin, it’s unusual for them to consume more than ~3.5 grams/day and industrial processes could reduce the cost of heroin to about $2/gram). I don’t think heroin junkies are any more/less addicted than alcoholics – the difference is that alcoholics can maintain their addiction by panhandling, heroin addicts can’t – legal heroin could change that. I don’t buy the doomday scenarios presented with drug legalization.

        And this doesn’t bother me: “the same thugs who controlled pot BEFORE legalization are now controlling pot AFTER legalization.”

        If those thugs start paying their taxes and breaking other laws, good. We need more people to be productive. At some point, they might even set an alarm and set up a direct deposit. That’s a good outcome. If they put down the glocks and pick up financial calculators, I’ll be over the moon. But they’ll need their experience staying one step ahead of the devil because once it goes fully legal, MBAs will come gunning for them.

        violence isn’t intrinsic to recreational drugs, violence is intrinsic to the black market. Free the market, reduce violence.

        Reply
        • Ronnie Schreiber

          When I was in Nashville last summer, a friend asked me to bring him home five cartons of cigarettes. In some parts of the country there is as much tobacco smuggling going on as cannabis. NYC just raised the minimum price for a pack of cigarettes to $13.00. The average price of a pack of cigarettes in Kentucky is $4.52. My Honda Fit gets about 38 mpg on the highway. That’s about 20 gallons from Lexington to NYC, about $50. Do the math.

          Reply
          • Yamahog

            Weird, it’s almost as if lawmakers should be reluctant to make crime pay?

            Or more plainly – incentivizing illegal activity motivates people to break the law.

            In some regards, we have a system that’s akin to a parking meter the costs $100/hr but the parking ticket is $10.

          • Disinterested-Observer

            Briefly considered taking smokes up to NYC and selling them to people standing in line at the club. Frankly the only thing that stopped me is that doing so would probably step on some real bad boys toes.

        • Jeff Zekas

          “If those thugs start paying their taxes”– most don’t pay taxes after legalization. cos who wants to pay taxes? I know socially quite a few growers and users: most have HUGE stashes of drug money, cos they don’t have easy access to money laundering. “violence isn’t intrinsic to recreational drugs”– I beg to disagree, having grown up in the 60’s with drug fueled murders (Chas Manson), suicides (Art Linkletter’s son) and general craziness (ever been to a rave?). As for legalizing heroin: wow. Have you ever known a heroin addict? I have. It is an ugly drug that destroyed people’s live, which is why we have narcanon. Mostly, I hear a lot of rationalizations about drug use. As for Ronnie Schreiber’s comment “Chronic pot smokers are already flying your planes, taking out your gallbladder”… um… no… there is mandatory drug testing in the medical field, at airlines, even at St Vincent de Paul thrift stores. My feeling is this: drugs cloud the mind. I didn’t say this. The Dalai Lama and his followers, and those who have clear minds, have spoken this truth, for thousands of years. It takes more work to meditate and eat and live with compassion, but the results are longer lasting and more positive for society and for others.

          Reply
          • yamahog

            I take issue with the thugs who don’t pay their taxes. If you rat them out to the IRS, you might get a cut.

            I’ve known plenty of addicts, they would all be in a much better place if they didn’t go broke shooting up cartel $100/gram heroin.

      • phr3dly

        I live in Oregon too. I don’t use pot, but I have many friends who do.

        White collar people, with professional jobs. Smoking pot in their backyard on the weekends. Before legalization, all those people were criminals who bought pot illegally and smoked it illegally. Now they buy it from well-lit stores that operate more professionally than most stores.

        Pot is about as close to victimless as you can get. Anybody claiming otherwise has an agenda.

        Reply
        • hank chinaski

          Victimless in the classical hard drug sense (and assuming a crimeless state of legalization), but if there’s a chemical agent to hasten the descent into Idiocracy, it’s pot. As long as the chronic pot smokers aren’t flying my planes, taking out my gallbladder, or frankly, voting, it’s all good.

          Reply
          • Ronnie Schreiber

            “As long as the chronic pot smokers aren’t flying my planes, taking out my gallbladder, or frankly, voting, it’s all good”

            Chronic pot smokers are already flying your planes, taking out your gallbladder, and of course, voting, it’s all good.

            You just don’t know about it because they don’t flaunt it.

            We’re talking experienced cannabis users here, not novices that will freak out after their first joint of a serious sativa like Oaxacan.

            Do you have any idea how many physicians are addicted to opiates? It’s not uncommon to find anesthesiologists dead of overdoses in hospitals. Do you have any idea how many second chances the profession will give to a drug addicted doc?

            I have an unusual standard when it comes to people being impaired by mood & mind altering substances: are they actually impaired?

            I’d rather be treated by a doctor who smoked a joint on his/her way in to the office/hospital than by one at the end of a 36 hour shift.

          • yamahog

            I actually see it the other way. I would prefer a pilot / surgeon / voter on drugs. Ever tried a therapeutic dose of amphetamine? It’s gold. There’s a reason sports authorities consider it “performance enhancing”.

            I want my pilot / doctor to be as performance enhanced as possible and it’s arguable that it’s unethical for a surgeon/pilot to leave any performance on the table. To the extent we want them performing at their peak, they should only do their jobs under the influence of drugs.

  3. silentsod

    Also I’m currently reading the article and it is outright annoying that they’re interspersing all this infographic shit through the scrolling of the page.

    Reply
  4. Jeff Zekas

    Hey Jack: awesome piece! Keep telling the truth! I retired from a good paying, union job, and have worked minimum wage for 6 years now. All the jobs are ephemeral, no benefits, unskilled, and horrible. I worked at Walmart for 2 1/2 years: everything there is made overseas. This is not good, and most folks, most working folks, know this in their gut. But the elites are totally out of touch. Now Ford is moving production to China with their mid size Fusion: more good jobs lost. Are we going to have the Chinese built our aircraft carriers? And out jet fighters? Because once production from Boeing moves completely overseas, those local skills will be lost. How long can we fight a war, when the supply lines are cut off, and we have no spare parts? And if we have a country with eighty percent of the populace living as peasants, how will this affect standard of living and democracy? These questions are never answered by the media elite.

    Reply
    • Kevin Jaeger

      Ford isn’t moving their Fusion production to China. They will be making and selling a Fusion in China, and will be doing neither in the United States.

      Don’t worry. They are just cancelling the Fusion in the US, not importing it from China.

      Reply
  5. everybodyhatesscott

    I don’t enjoy my current day job; in fact, satisfaction-wise I would say that my gig at the fry station was probably slightly better.

    I enjoyed being a cashier at Micky D’s when I was 16 a lot more than I enjoy being a CPA. CPA does pay better.
    There also aren’t 16 year olds at the Micky D’s (by me) anymore. Export our manufacturing and import our labor. How does this seem like a good idea to anyone? It’s good for the rich, the Chinese and the immigrants and is terrible for Americans. 13 years ago, the democrats I was arguing with in college about outsourcing (I was on the wrong side) knew this. Granted, I was a college libertarian who thought the average person could gain 15 IQ points with the right education and effort.

    Reply
    • Rick T.

      I enjoy being what a CPA allows me to do – lots of consulting work where you have to understand accounting but not accounting work. The effects of the ACA has been absolutely gold here in the Nashville area for anybody who has the least bit of healthcare experience at the corporate level on their resume. I’ve been at three different entities the last two years doing some heavy lifting on post-merger issues.

      Reply
  6. Zykotec

    This is just a tiny snippet of a big picture of a massive downward spiral started by people who wanted to create the illusion that we could have economic growth forever. And that economic growth was an important thing that we even needed in the first place. To be honest it was kinda smart of them to make belive in crap like the ‘trickle down effect’ while simultaneously making sure that everything really trickled sideways and back around instead.
    (in short, money only trickles upwards. Always, all of them)

    The world needs dollars in the current system. If the US don’t spend dollars outside the US they aren’t worth anything, and since most(all?) other currencies are measured agaisnt dollars, they will not be worth anything either. It will be a rough crash, but hopefully someone will learn something from it that can be used to create a better system in the new world later.

    I don’t know enough about economy to bother my brain into studying this further, much less explain it properly, but even with half a brain just skimming it, there seems to be some short-sightedness in the current monetary system that rivals the creation of nukes.

    Reply
  7. Johnny

    Great points all around. As an older millenial I’ll add that a big part of the problem is a broken education system. Kids are told that they must go to college or be considered failures. There is a strong stigma associated with entering trades even though there is a severe shortage of tradesman and technicians. For profit schools like Devry used to somewhat fill this role, but at an exorbitant fee that often cost more than a 4 year degree from a state college. Working in information security I know it is extremely tough for us to fill lower level but steady, decent paying analyst positions simply becasue we can’t find even marginally qualified candidates.

    Reply
    • Ryan

      As someone currently looking for a similar position (well technically an internship), where do you see current graduates lacking?

      Are these people with a degree in Infosec or from a more generalized IT program?

      I’m graduating with my Bachelor’s in Infosec from Ferris in May (start Master’s in August), and feel as though the education I received was worth the cost. We’ve covered things such as compliance/risk management, data mining, pen testing, Python, SQL, Linux admin, etc. If there’s anything in particular that you feel I should educate myself on, I’d greatly appreciate the input.

      Reply
  8. Ronnie Schreiber

    I’m old enough to remember when Made In Japan meant cheap, not preferred. But Joseph, Irving, Nathan, and Fred Tushinsky, who had a brief flush of success marketing the Superscope wide screen process that competed with Cinemascope, were in Japan in 1957 looking for new business opportunities and ended up making a deal with a company called Sony, to exclusively distribute Sony products in the U.S, starting with stereo reel to reel tape recorders.

    What Chinese companies are tomorrow’s Sony?

    Reply
    • Eric L

      That’s interesting, Ronnie. I work across the street from Sony’s old Trinitron factories in San Diego [0]. Four or five ginormous, sprawling structures used to crank out TVs, picture tubes, etc, as well as housing a host of white-collar workers.

      Then they were all idled, after more than 40 years of making TVs in the outskirts of San Diego [1].

      Sony tore down some of their buildings to throw up a gleaming ~10 story HQ that houses the Playstation development team and everyone involved in hardware. One of the buildings was sold to General Atomics, the two directly across from my building lay idle for years. One was finally occupied by TUV SUD to make some kind of weapon, I assume, the other..? Ha, yeah, it’s become an Amazon dropoff point where my fellow millenials arrive in droves in their worn out 3-series and new Civics to stuff their cars full of brown boxes to drive all over the city.

      [0] https://goo.gl/maps/G1VobtVDB712
      [1] https://www.forbes.com/2004/02/20/0220sonypinnacor_ii.html#8413df3655c7

      Reply
      • tresmonos

        Man, that is f*cked up. I had a triniton monitor made there. It still works even after going through my windshield in 2002 during a car accident. My LCD’s made in China haven’t been as reliable. Sharp (now owned by Foxconn) will be making Aquos TV’s in japan, now. It’s a step.

        Reply
  9. Mopar4wd

    I have a feeling it’s not all offshoring or immigration killing us. I’m sure it’s part but I think there a lot of factors driving it. Part of it is the nature of the work that now makes money. That and a devaluation of human labor compared to capital. Even in manufacturing now many of the workers are temps with no benefits. No way to come back out of that rabbit hole without regulations or Unions.

    You also have a mess of an education and job placement system requiring all kinds of things without an actual need.

    At this point so much is screwed up Offshoring, Automation, Corporate Ethics, Unions, Accountability, Culture, Education, Training, Taxes, Benefits, And even basic empathy for employees. That I have little hope of us ever being a great country for the middle class again.

    Reply
    • mopar4wd

      To add detail to this you can also look at Health care and how that effects the rest of the economy. Until 1980 Healthcare was always less then 10% GDP. It currently sits at 18% and despite a leveling off after the Obamacare it is again rising again several points faster then general growth/inflation. Think about that, all that additional money used to be spent by business on other benefits like retirement or hiring and training more workers or R and D now it’s lost into an inefficient black hole that stopped making gains in mortality rates and life spans several years ago.

      Reply
    • mopar4wd

      I have to agree the people in the upper middle levels of the new world seem to be causing quite a bit of the issue. And being taught to do just that.

      Reply
      • Will

        Well when all you’re taught that it’s about the $$$, it’s just a race to the bottom. Our business schools only teach to go for the $$ rather than adding to society. I know silicon valley thinks they’re “making a better place” but they’re no different than the Andre Carnegie’s of the world. Destruction through profits.

        Reply
  10. Bigtruckseriesreview

    The Bottom line is FACTORY JOBS.

    FACTORY JOBS aren’t just factories. Factory jobs create entire communities: restaurants, housing, policing, firefighting, libraries, schools, etc.

    NOW take a look at the places the factories have left: walmarts and JAILS/prisons occupy those spaces.

    Americans work in corporate stores selling other Americans crap made in China – that breaks and demands replacement.

    If not China, southeast Asia or India.

    There are fewer than 323 million Americans, but there are over 1 Billion Indians and Chinese living in poverty – as well as over 2 billion other Asians. It’s EASY to find cheap labor there. It’s easy to exploit them.

    I have no problem outsourcing work, but why can’t we keep more than enough jobs HERE?

    These new tax cuts will do nothing but allow corporations to keep more money while driving UP the national debt.

    USD are inflation being traded for cheap manufactured Asian products.

    When those UD come back to us, you’ll see it as being outbid on homes and property by Asian speculators who will end up renting to you and your kids cause you can’t afford to buy.

    Reply
    • jz78817

      I have no problem outsourcing work, but why can’t we keep more than enough jobs HERE?

      because a few hundred kids in Southeast Asia work for less than it costs to have robots make stuff here.

      Reply
  11. Disinterested-Observer

    There is another problem with the trade imbalance. The last time I was in a Barnes & Noble literally every single childrens’ book was made in China. Printing has been more or less automated since Gutenberg. The problem is that we are also off-shoring pollution. I am not saying I want to bring back pollution, I am saying that we should not tolerate that crap anywhere. Not that I care about Chinese babies having birth defects (actually I do, but for the sake of argument let’s pretend I don’t), but effectively our regulatory regime has made it very difficult to open even the least labor intensive manufacturing facility here.

    Reply
  12. ScottS

    ” . . . I would add: Clicking don’t last, but making does.”

    Well said, Jack.

    “Its a tragedy of the first magnitude that millions of people have ceased to use their hands as hands. Nature has bestowed upon us this great gift which is our hands. If the craze for machinery methods continues, it is highly likely that a time will come when we shall be so incapacitated and weak that we shall begin to curse ourselves for having forgotten the use of the living machines given to us by God.”
    Mahatma Gandhi

    Reply
    • Ronnie Schreiber

      “While traveling by car during one of his many overseas travels, Professor Milton Friedman spotted scores of road builders moving earth with shovels instead of modern machinery. When he asked why powerful equipment wasn’t used instead of so many laborers, his host told him it was to keep employment high in the construction industry. If they used tractors or modern road building equipment, fewer people would have jobs was his host’s logic.

      “Then instead of shovels, why don’t you give them spoons and create even more jobs?” Friedman inquired.”

      Reply
  13. rwb

    It’s a tangent to the point that was being made, but I have a problem with the assumption that competence in even being able to work within a simple logic structure and crap out the kind of far-abstracted, marginally useful code what’s required these days, precludes competence at skilled trades.

    For example, stone splitting wedges and software are used differently, but the sensitivities used in one are probably applicable to the other; the difference being what one is drawn towards. I think the person who can only learn to use one of these is the exception, so I tend to assume the problem with our skilled labor pool is closed-mindedness.

    Reply
    • rwb

      Extending this a bit, I’d like to make clear that the sequential inverse is equally legitimate, trades should obviously and absolutely be held in equal regard to air-quotes “knowledge work,” and any stigma against creating a tangible product is just as useless and counter-productive as its opposite.

      Reply
  14. stingray65

    Anyone that compares the US today with the 1950s to 1980s is making an unfair comparison. Before WWII jobs were not stable (25% unemployment in 1932) unless you lived on a farm and were lucky with the weather, and virtually everyone was dirt poor.
    After WWII was a US golden period because all our competitors had destroyed economies and were therefore not very competitive, allowing “stable” union jobs to flourish here, but it could not last. By the 1980s, Japan and Germany were up to full speed, and China and S.Korea were starting to adopt free-market ideas that were growing their economies rapidly – suddenly the US had competitors were more modern factories, more educated workforces, fewer regulations, and less ornery unions. Why would you want to build a factory in the US and deal with the UAW and stoned UAW workers with IQs below 100, tough emission regulations, and high corporate taxes, when you could set up in China with high IQ/educated workers eager to have a factory job and have far easier regulatory environment? So what has the US done in response – more regulations, higher taxes, affirmative action, pushing unqualified people into colleges where they major in victim studies and become unemployable (except at Starbucks) social justice warriors with big student loans. Make it easy to make a profit in the US, and jobs will come back, and Trump is moving things in the right direction with deregulation and lower taxes, but the swamp is fighting back hard, because those gender study majors working for various government bureaucracies are smart enough to realize they will never find such cushy jobs in the private sector. Global trade benefits everyone, but you have to have a lean and mean economy to get your fair share.

    Reply
    • mopar4wd

      You do realize that our per capita GDP has been rising this whole time right? The US share of World GDP is not as high as it’s once was but it’s been recovering steadily since the recession and is almost at early 1990’s levels now.

      Profits aren’t the issue it’s how that money is spent and who earns it that’s the issue.

      Reply
      • stingray65

        Per capita GDP is rising because of better productivity, due in large part to the replacement of labor with automation. Profits are totally the issue when it comes to investment – capital goes where it earns the highest returns and many US policies during the past 40 years have made it more difficult to earn profits. Only investment in new products and manufacturing capacity can provide new jobs for those displaced by automation, and if this investment goes to China it is the Chinese that will have those jobs, although US consumers may still benefit from cheaper products. If US returns are higher due to better policies on taxes, regulations, etc., then more investment and jobs will return to the US. The Germans are already complaining that the new US tax bill will shift investment from Europe to the US.

        Reply
        • mopar4wd

          In economic theory that’s all correct. Unfortunately not all of it is playing out as it should. Companies are making more and more money without investing more in physical labor in this country. They can still make a huge profit in this country just not really by employing many people. Automation, and knowledge work as well as let’s face a questionable financial system drives those profits. (and yes offshoring as well) What no longer exists is any reason to keep the majority of employees happy.
          Basically (and we can see if this plays out in the next couple years thanks to the corp rate cut) my theory based on my slow witted high school educated brain and lots of staring at numbers for the economy over the last 10 years, is that wage growth even with slashes to regulation and taxes will still be incredibly tepid for the middle class and far under perform the new record profits we will see come in to the top 10% of the country.

          Reply
      • hank chinaski

        Agreed, and his conclusion “success comes through good luck, the right slogans, and monitoring your own—and others’—emotions” sounds like a CH commandment. This explains much.

        Reply
      • jz78817

        (this is the internet, I didn’t actually stop reading when I said I did)

        the most “depressing” thing in that piece is the author’s stunning lack of self awareness. When he says:

        “In the land of the American dream, I learned that success comes through good luck, the right slogans, and monitoring your own—and others’—emotions.”

        he seems utterly unaware that he is where he is precisely because of “good luck.” Him having a family with the means to send him to school in the West has nothing to do with his “hard work.”

        but it’s pretty well-known that the average person tends to greatly overestimate their own abilities.

        http://www.businessinsider.com/overconfidence-and-bad-reasoning-2015-5

        Reply
    • jz78817

      “came to the West to study at the world’s best universities and, later, to work at one of capitalism’s greatest companies, Goldman Sachs.

      I stopped reading right there. Fuck that person in particular.

      and of course, the Chinese who can send their kids to school here will pay any price, to the point that if I were entering university today I doubt I would be able to afford to go to the school I graduated from. It’s that bad.

      Reply
    • zzrer

      More anecdotes: I had dinner with a friend last year who was housing a Chinese university student for the extra money. We had a brief conversation with the young Chinese man who, to paraphrase, basically stated that he was there to help win China economic hegemony over the world. The world apparently is in conspiracy to keep China down (see the Opium Wars and every single other insult a Western nation committed, new or ancient), and their strategy is basically a long game with replacement of the US as the military and economic superpower. Everything said on this blog and others about the systematic Chinese theft of intellectual property, etc, is about gaining global domination, not just growth in the interests of her people. There is even some evidence that fentanyl production in China is just another part of their national strategy, in this case to undermine and corrupt Western society from within as revenge for opium.

      Reply
  15. George

    It would be great for America if more manufacturing was done by its citizens, but it’s unlikely to happen in large scale, and the impact wouldn’t be as great as some hope. Despite the message seemingly conveyed by jacks picture, manufacturing is greatly automated, with China having more robots than any other country. Labour intensive manufacturing is never coming back. The only hope is to bring back some high value added manufacturing, but again, don’t expect entire cities or states to be saved by this alone.

    The USA actually manufactures more than it ever has – in dollar terms – but to think that this alone will save the country is naive.

    I’m reluctant to bring up the topic of immigration (legal or otherwise), but it always amazed me to see “undocumented” workers being used to do service jobs. Any job will be filled by Americans for the right price – the only need to import labor should be for skills not available internally.

    Reply
    • safe as milk

      I’m take a robot factory over a bank branch any day of the week. If it was all robots then no one would go to the expense of manufacturing in Asia and then shipping here. They go to Asia to avoid our environmental laws and for cheaper labor.

      Reply
  16. Danny

    In my experience, domestic manufacturing jobs are available but no one is aware of it; for a short time during college and for about a year immediately following my graduation, I worked in local machine shops all owned by the same LLC.. the starting wage for an apprentice in 2012 was $9/hr, with experienced journeyman machinists maxing out at between $19-$21/hr. For reference, the average cost of a home in this city at that time was about $107,000. As an apprentice at $9 or $10/hr, my options were either to live at home with my parents or share rent with two roommates in a really lousy apartment, I chose the latter. The work itself was the most mentally demanding and often emotionally rewarding labor I’ve ever done, but with raises coming few and far between while responsibilities increased, I moved on to other things.

    Most of my friends from school didn’t know what a machinist was or even really understood the work I was doing even after explanation. In high school, counselors made sure we were all applying to four year colleges and wouldn’t dream of suggesting trades careers or apprenticeships. (This was a catholic school, and I think most of their appeal for parents was college placement rates). Now, I have way too many friends with graphic design degrees who are scraping along at $12/hr, often still living at home. I think a lot of them would’ve been happier and more stable as electricians or machinists, or even doing head gasket replacements on Cadillac Northstars. However, this type of work was shunned when we were in school.

    I agree that US-based manufacturing should be encouraged and supported, but that we should focus on markets where we are most competitive globally. If we can’t beat the price or quality of internationally-sourced clothing makers, then maybe clothing/textiles is not our business. (With that said, I’d love to see US companies buy back the looms needed to make quality selvedge jeans that I believe we sold long ago to Japan). My father always said “there are riches in niches,” American manufacturing should find its competitive niche, and that work should be encouraged instead of debased.

    Reply
  17. zzrer

    On a smaller scale, there are people reasoning that the motorcycle industry is dying because millennials don’t like to go outside and do stuff. This is complete bullshit. The simple fact is that young people don’t have the disposable income for toys that people of my generation had mostly as a result of youth employment opportunities. Smart, vibrant young people are forced to go through the dehumanizing process of applying *online* for a job cleaning toilets at a movie theater, only to find that they never had any hope of getting that job because a temporary foreign worker was always going to get it. The rich have doubled down on the pillaging; and the only thing free trade and open markets do is enable them to live as stateless beings, responsible to nobody, and paying no real taxes to no specific nation. But let’s keep blaming millennials for not buying bikes, whilst we worship the vampyric greedy billionebrities who have stolen our future.

    Reply
    • Jack BaruthJack Baruth Post author

      All of what you said is true, but it’s worth nothing that I recently had an hour-long call with the fellow who used to be the CycleWorld publisher and now runs AIMExpo… and their research is showing that Millennials are actively frightened of motorcycles and consistently tell surveys that their fear of being hurt overrides their desire for adventure. I don’t blame them for that. It’s a consequence of how they were raised.

      Reply
      • zzrer

        I wonder how much of that is actually fear of a short ambulance ride and a repaired collarbone throwing that individual into a lifetime of medical bill penury

        Reply
        • everybodyhatesscott

          Medical complications are one of the few reasons you can discharge student loan debt in bankruptcy. Falling off the bike might actually help their finances.

          Reply
        • Jack BaruthJack Baruth Post author

          Hard to say. I’ve worked with a lot of twenty-somethings in the past decade and almost to a man they’ve never broken a bone or had a serious injury. I can see why you wouldn’t want to break your first bone as an adult.

          Reply
      • malcolm from south carolina

        Anecdote from a Millennial:

        Even though I’ve wanted a motorcycle ever since I first rode my uncle’s magnificently smooth Gold Wing, it’s hard to justify the risk. I’ve been hit by a distracted driver before while on my bicycle (thus my reflexive hate for the w220). So, it’s possible that I’m not weighing the danger properly, but fear of other drivers is what keeps me from buying a bike. Those Indians are tempting, though.

        Reply
        • DougD

          The gist of the above is too macro economic for me, but I suspect you’re focusing on just one aspect of the problem.

          Now motorcycles I understand better. I’m early GenX, and in the late 80’s I scraped together $1500 and bought a used Honda, fixed it as I went and had a blast. Later I learned about fixing houses by saving up to buy an unglamorous 35 year old box. In my experience with millenials they don’t like to get their hands dirty. New car, new townhouse. No motorcycle because they don’t have the money for a new one. No tools, so they wouldn’t dream of owning a 10 year old used motorcycle, or fixing a leaky tap.

          As always our personal observations are anecdotal, but that’s mine..

          Reply
          • zzrer

            My anecdotal remarks are definitely skewed in that I live in a city far from other large population centers, and we have access to some of the most rugged and beautiful deserted landscapes on the continent. It’s also a rougher region than, say, BOSNYWASH; so to my mind the people young and old are maybe a bit hardier than elsewhere.

            To DougD: “No motorcycle because they don’t have the money for a new one. No tools, so they wouldn’t dream of owning a 10 year old used motorcycle, or fixing a leaky tap.” – Condos are also not very conducive to powersports toy ownership, and my own wrenching skills are atrophying because I simply have nowhere at the moment to work on my bike. My days of pulling the carbs are over just because I can’t do it in a dimly-lit single condo parking space.

  18. scotten

    America’s poor and lower classes were sold by the corporations that valued profit and shareholder gain over employment in the USA.

    I almost totally agree with what you’ve said, Jack, but I’m not sure what can (or could) be done. Tariffs? Pretty sure the politicians who could handle this are on the payroll of the PAC’s and companies that gain from offshoring manufacturing.

    Have you ever read the short and old sci-fi story “Crabs on the Island” (or “Crabs Take Over the Island”)? Reminds me of the way this world is headed.

    Reply
    • Kvndoom

      Heh the same corporations that just got their tax rate shaved by 40%. Don’t worry they’ll pass that money along to the middle class for sure… wink, wink, cough, cough…

      Why dont the fuckers in charge try “trickle up” economics for once, and give the middle class more spending power? Those of us who prop up the economy would LOVE to have a chunk left over after the bills are paid! We’re the ones who spend, and our spending creates demand. If we had more disposable income maybe we wouldn’t be scouring walmart for the absolute lowest price on every goddamn thing we buy. Maybe we could absorb the higher cost of American labor.

      Nah, fuck it. The mega corps that keep boasting record year over year profits, they’re the ones who need more. Clearly.

      Reply
      • everybodyhatesscott

        Heh the same corporations that just got their tax rate shaved by 40%. Don’t worry they’ll pass that money along to the middle class for sure… wink, wink, cough, cough…

        http://money.cnn.com/2017/12/20/news/companies/att-bonus-tax-cuts/index.html

        You know what else makes overseas manufacturing competitive? They can shelter the income from taxes.
        80% of Americans just got a tax break today (I live in illinois, I’m not one of the 80%)

        Those corporate profits go into every day Americans retirement accounts

        I don’t know if 21% is ideal but 35% was pretty much the highest rate in the world for 1st world countries. It was dumb.

        Reply
        • mopar4wd

          About 50% of American adults have no holdings in the market (no funds no 401 K no individual shares nothing) Of that 50% Less then half have more then 5K in the market. Or put another way 80% of the stock is owned by people in the top 10% of income. It’s not helping the average guy on the street much.

          Reply
    • Martin

      There’s a range of options that could be considered, between “eat the poor” and “full communism”. Most of these should be used very sparingly, but even a little might do a lot of good:

      Tariffs, as you mention. These should really only be used to balance unequal trade partners who don’t have anywhere near the regulatory climate for labor and environment we do, or currency manipulators.But freer trade should still be the ideal.

      Federal (not State, someone has to keep the local infrastructure and schools working) tax abatement for building manufacturing/industrial in targeted zones. I would also relax Federal OSHA and EPA regs for a limited time at these sites. This would be a massive pork politics orgy; but it might just revivify some of the hurting small towns and old industrial centers.

      Monopoly/monopsony anti-trust enforcement, particularly in smaller communities where companies like Walmart kill local entrepreneurship.

      Reduction in regulations overall, especially aimed at those regs that are designed to keep new competition out of a market.

      Federal purchasing requirements for high technology devices, like network devices, phones and computers. It’s insane that the Federal government is loaded up with Chinese electronics and Russian software.

      Any of these might be worthwhile to try.

      Reply
  19. Aoletsgo

    But Linkedin just sent me an email telling me about the more than 80,000 new jobs in my metro area!

    I skimmed the list and they are not just restaurant jobs, plenty of engineering, high-tech and medical jobs. However, if you have no skills or a good STEM education you are still SOL. What concerns me these days is that so many poor, younger men are in construction or driving trucks. What these guys will be doing when the housing market slows and we have automated trucks I haven’t a clue.

    Reply
    • safe as milk

      In my experience most of the jobs on linkedin are b.s. you will see the same ads running for months. Companies just ost them because somebody’s boss had an idea at a meeting. By the next meeting, they’ve changed their minds. Nobody bothers to take down the posting. Or they are bottom fishing and have no intention of offering a reasonable wage.

      Reply
  20. safe as milk

    I have a degree in economics and I agree 100% with Jack. Free trade is code for labor arbitrage. Yes, corporate profits would be lower and prices would be a lot higher, if we didn’t import everything but we would have decent jobs.

    Reply
  21. Orenwolf

    “it does mean that we will continue to search out, publicize, and purchase American-made goods as often as possible. Even if it means paying more.”

    I’d go so far as to suggest “especially if it costs more”. You are essentially advocating for a localized version of fair trade, ensuring you pay an equitable price for the materials, labour, and efforts of the workers an corporations producing goods locally, and It’s a philosophy I can wholly get behind.

    A lot of the North American manufacturing landscape would change for the better if *those who could afford it* stopped buying crap at walmart and instead made a *serious* effort to buy fair-priced, locally-made goods where those goods are comparable in quality.

    Reply
  22. wlitten

    Jack,
    I messaged you several months ago because I was leaving a corporate job on the East coast to go work as a plumber in San Francisco. How that has gone is a long story in and of itself.
    However, I was working for Smith & Wesson where a lot of people had good paying jobs that can’t ever really be outsourced because of gun import laws. I now work in a trade that pays well and can never be outsourced. At either of these companies i could stay for 20 years and raise a family. It is increasingly difficult to find a steady job/career that offers that kind of stability.

    Reply

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