But they call that part of the country the "Rust Belt" for a reason. There are many reasons why it has lost its importance as a manufacturing hub over the years, and a lot of these reasons have nothing to do with the economic forces that are driving our overall national decline.
I'll give three examples that have their own separate roots and consequences, but have also combined to completely transform the face of U.S. manufacturing from a geographic perspective:
1. The growth of containerized shipping and changes in the shipping industry. The economies of scale in container shipping have effectively made it cheaper to transport some things by ship from thousands of miles away than by truck from 250 miles away. The growing size of cargo ships also means that the Great Lakes and St. Lawrence Seaway aren't accessible by vessels that have become the industry standard in maritime shipping.
2. Consolidation in the U.S. railroad industry. Since the privatization of Conrail in the early 1980s, the railroad industry U.S. has undergone a major transformation in the last thirty years. There are now only a handful of Class I rail carriers in North America, which means freight can be transported by rail over long distances faster, and at lower costs, than ever before.
3. The elimination of steel as a primary manufacturing material. Things that used to be built primarily of steel are now being built out of plastic, fiberglass, and other composite materials. The supply chains and logistics patterns for these materials are very different than what a steel-based manufacturer would use. Most of this nation's "Rust Belt" manufacturing centers grew where they are now because they had good access (mostly by barge, small ship, and railroad) to the two major commodities used in steel coking: iron ore and coal.
When you combine these three items, you find that having a manufacturing plant located in a place that has good direct (nearby) or indirect (via a Class I railroad) access to a port for delivery of components and some raw materials is preferable to having it located in a place where raw materials are shipped by barge or truck. Also, proximity to refineries (for plastics manufactured out of an oil base) and reliable, inexpensive electrity is a big plus. This country has seen tremendous growth in manufacturing for autos and large airplanes in recent years, but these plants are now being built primarily in a swath across the South from Texas to North Carolina.
The "Rust Belt" will continue to rust away even if the U.S. maintains and improves upon its position as the world's largest manufacturer.
There’s still a lot of metal used in the US. I have to wonder if EPA regulations figure into the near total demise of the US steel industry. Steel is cheaper from other countries becasue they don’t have to add in the cost of EPA regulations.
And their energy is cheaper for the same reason. There’s no better way to kill an economy than by raising the cost of energy, 90% of the recent cost increase of electricity is directly attributable to government mandates - mandates that don’t exist in China for example.
The US economy is staggering because of the government shooting it in the feet way too many times.