MasterPo says: This blog is about topics and issues that are of importance to me. I am not one of the countless blogging lemmings that are tripping over each other scurrying down the hill and off the cliff of blogging oblivion trying to write the greatest blog on the latest topic de'jour. Your comments are welcome.

September 29, 2010

Manufacturing is DEAD!

Get over it.

The American manufacturing industry, for all intents and purposes, is dead.

No matter what Washington says it’s going to do to help it won’t work. May was well try reviving King Tut.

Sure, there are still American manufacturing companies. Some are profitable and make a good product. But as a business segment – especially as a pillar of the American economy – manufacturing is dead and it’s not ever coming back!

MasterPo doesn’t blame President Obama, nor President Bush, nor President Clinton, etc. Nor was it in any way exclusively a Federal problem. States and localities too had a big hand in it.
This was a death by a thousand stabs. Like “Murder on the Orient Express” – they all did it! Doesn’t matter who was President, what party controlled Congress, who sat on the courts at the time. It all was, as the song says, just another brick in the wall.

A tax on this.
A regulation on that.
A requirement to do something.
A mandate to operate in a certain way.
Labor Board

And many more all have their finger prints on the murder weapon.

The death was a compounded effect over time. Any one or two of these taxs/regs/mandates would have been bad enough but in the longer run still manageable. But when more and more taxes/regs/mandates keep getting piled on year after year after year after year it adds up to disaster.

By contrast, a factory in China or India or the Philippians does not have to deal with any of this red tape. So they can respond quicker and cheaper to market demands and thereby produce a cheaper equivalent product. Under such conditions it’s the height of absurdity to think consumers are going to willfully spend 5-6-7-8+ times more for an American product than a foreign made product. Study the economic concept of “utility”.

It is not “greed” by corporations or CEOs for moving manufacturing jobs overseas. It’s reality: The global consumer (including the American consumer) simply is not going to pay the kind of price required for American manufactured products because of all the above reasons when they can buy the same or equivalent products cheaper manufactured elsewhere.

Eventually, 2 maybe 3 generations from now, those relatively cheaper foreign manufacturing areas will probably be nearly as expensive as American manufacturing now (maybe, the rest of the world has much more common sense about things that Americans do so MasterPo doesn’t expect all the same PC policies and taxes elsewhere, some but not all). But that doesn’t do us much good now.
Wishing for the glory days of American manufacturing just isn’t going to help. This is reality.


Apex said...

The USA is the number 1 manufacturing country in the world. It's share of world manufacturing output has been slowly declining from about 28% in 1990 to 24% in 2008 but it is still number 1 and the amount of manufacturing output coming out of the USA increases every single year.

MasterPo said...

And if you'll notice the rate of growth in the U.S. is much slower than in China.

But taking your thesis why then is there soooooo much crying about the loss of manufacturing business and jobs in the U.S. if we are #1 and still growing?

Can't have it both ways.

Apex said...

I am not having it any particular way. There is lots of crying about teachers too and that is indicative of nothing more than cry baby teacher unions. Lots of crying is not evidence of anything other than lots of people who want to cry. When everyone is crying about manufacturing people tend to think that our manufacturing sector has been decimated.

It's not true.

Yes it's in decline (although it has only lost 4% of world production in 18 years from 28% to 24%). Yes many manufacturing jobs have been lost (many have been created too, but we only talk about the ones that have been lost). Yes China is growing faster than us but their wages are much lower and their potential employment base is much higher. This should surprise no one.

We produce a lot of manufactured product in the USA. More than any country in the world.

But hardly anyone knows that.

Did you?

MasterPo said...

If that is the case then you might want to shout it from the highest peaks 'cause there are endless reports all day long on all news channels (including Fox) about how many tens of thousands plus of manufacturing jobs are gone and are not coming back. As well as thousands more being lost daily.

Surely if this wasn't true, if the picture was much more rosey, Washington would be touting it. But they don't.