Posted on 01/18/2016 10:47:05 AM PST by Idaho_Cowboy
We were the prime manufacturers because our main competitors had suffered damage to some extent from WWII.
Trade may improve our standard of living by flooding our stores with cheap Red Chinese goods, but it is a double-edged sword - we will be looking at European-type unemployment levels for the foreseeable future, while we desperately traffick Third Worlders here to offset the steep drop in birthrate that accompanies such an economic malaise.
“We were the prime manufacturers because our main competitors had suffered damage to some extent from WWII.”
True, Germany, Japan, and others did suffer damage from WWII. But this flies in the face of the “cheap labor” argument that we hear so often. By that reasoning, our main competitor should have been Uganda, not Japan.
Japan, Germany and the US recovered quickly with a return to market activity. Fortunately there were no more New Deal type initiatives for a while. We can compete very well today if we remove shackles of over-taxation, over-regulation, and over-unionization. The existence of right-to-work states has increased jobs in those states.
We have lots of oil for ourselves and to sell abroad thanks to fracking, which Obama opposes. Unfortunately, energy-crisis era laws do not permit the export of US oil. Those laws kill jobs, income flows to the US, and even government revenues. One could go on and on about this death by a thousand cuts.
You have a point about declining birthrates. That is a another topic.
Just think where this country would be if we didn’t piss away our wealth by giving it to the government to buy votes and donations.
As those countries rebuilt after WWII, they ended up with a much more modern manufacturing infrastructure than our own; that had an impact.
Cheap labor was never a factor in industrial might before; Germany in particular had very expensive labor, yet they were a powerhouse. The colonies which might have provided cheap labor were instead used to provide only cheap resources.
So I’ve heard two arguments. The US led in manufacturing because other countries were bombed out; and other countries benefited from modern manufacturing because they were bombed out.
I think the key is private sector investing. Saving and investing are underappreciated. Marx considered returns to saving and investing evil. Keynes considered savings a waste because it took away from consumption.
Intelligent investing prepares a prosperous future. Intelligent investing is much more likely in the private sector than the public sector. With private sector investing, investors are risking their own money - a great tonic against superficial thinking, egotism, and political correctness.
There is more private sector investing when there is a stable political environment that favors saving and investing. This is generally lacking around the world. Sometimes it is lacking in the US as well.
Except for Japan, Asian countries were not industrial powers. We don’t have a major trade imbalance with most of the E7. The big imbalance is with third world countries that the USA purposely transplanted it’s industrial base to. Those Asian countries weren’t rebuilt after WWII, there were simply built up artificially. One of the most stupid things a country every did. Historically it will go done as one of biggest follies of all time.
It certainly seems like folly now (since we have to pay the unemployment piper); at the same time (and I’m not defending outsourcing, just explaining the rationale), I couldn’t imagine the cheap Red Chinese crap being so cheap if we were paying American workers to make it.
The two “arguments” aren’t mutually exclusive; after WWII we were the manufacturing center of the world because Japanese, German, British, and Soviet industries had been bombed and/or re-tooled for the war. After their recovery/rebuilding, they were making their share of goods (remember when Japanese cars first arrived here?). Each year we’ve lost more and more of our share of manufacturing (as more and more Third World countries followed suit); now it is impossible to find certain goods made here anymore.
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