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Comment by drak0n1c | Hacker News Reader

The reason why Middle America has so little spending power is because regulations and taxes have decimated their manufacturing and resource extraction industries and effectively moved them overseas. This of course led to a loss of specialized workers who can pass down their skills and loss of technical knowledge.

Flossing your teeth may be unpleasant in the short-term, but it has long-term benefits.

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And new tariffs will help that...how?

You can't turn back the clock. The factories are already closed, the companies are already bankrupt, the workers have already been laid off and in many cases been out of work for 10-15 years, the young people (those that can get out) have already left. If Middle America wants to rejuvenate itself they need to engage with the world as it exists now and plant new seeds, not try to freeze-frame the world of the 1960s.

You can turn the clock back. And this is how you start.

You have to create the economic incentives to have a manufacturing base. Without that foundation, nothing else works.

You (or politicians you support) are welcome to try. It probably won't turn out the way you hope.

Historically, tariffs and protectionism have benefitted emerging manufacturing powers much more than entrenched incumbents. U.S. manufacturing might was built off the back of tariffs; by keeping them high, the U.S. protected its nascent domestic industries until they could become efficient enough to compete globally. China has been following the exact same playbook, as did Japan before it.

But just because tariffs can build emerging industries doesn't mean that they can preserve those industries once they start going into decline. Usually the result isn't that the industries are suddenly revitalized, it's that the whole country goes into decline with them. (We've seen this play out historically with post-WW2 Britain and post-1990 Japan.)

I intend to try.

I don't see China playing fair re IP theft anytime soon. They undercut everyone by exploiting their poor in their factories. So, in order for the manufacturing to start happening here in a way we can afford, wages would have to be very very low, or else robots. So, probably robots. I don't see this creating any jobs here.

...or move up the value chain. The idea behind that is that if Chinese goods are unreasonably cheap, there are bound to be some things that you can manufacture using these cheap Chinese components that would previously have been economically infeasible. Go take advantage of this and stop wasting time trying to build things that can be built better elsewhere.

This was behind the whole hardware bubble of ~2014, along with the Kickstarter/Alibaba/Octopart/Flexport ecosystem and certain new consumer product categories (eg. fitness trackers, smartwatches, VR). The problem is that hardware startups (like any startups, really) are hard, and it's quite challenging to bring together cheap components in a way that actually adds value to a consumer. That, and primary capital markets are fairly inefficient, so oftentimes hardware startups run out of money before they can work out the kinks in their supply chains.

The US has a lot of high end manufacturing. Where do you think all the aerospace tech and advanced weapons systems are built? It's the low end manufacturing that has gone overseas.

The whole thing of turning the clock back is quixotic. Did the US benefit over all from this change and does it continue to do so? Yes. Are there winners and also losers? Yes, and crucially the gainers gained more than the losers lost. The problem then seems to be one of distribution of gains, and you can solve that by fairer redistribution. All that turning the clock back does is to make the country poorer on average, and it's a very roundabout way to achieve redistribution.

This question will inevitably come again with robots and there will be people who want to turn back the clock then too, but they will be called luddites.

American manufacturing is doing fine, thanks to automation [1]. The jobs, not so much. Tariffs aren't going to do anything about the automation trend.

[1] https://www.marketwatch.com/story/us-manufacturing-dead-outp...

From my personal perspective, the main potential impact of this trade war probably won't be my programming career, but the "Middle America" farm that's in our family.

One of our crops is soybeans. China loves US soybeans. (https://www.agweb.com/article/will-chinas-hunger-for-us-soyb...) US soybean exports are one of the obvious targets of any trade war with China. Artificially reduced demand (due to what is in effect a, um, regulation) doesn't seem like really good news if you grow soybeans, right?

The consensus in the media is that it is actually the manufacturing / resource / agriculture states (eg: the "red states") who will be hurt the most by tariffs (eg, articles like this: http://money.cnn.com/2018/03/05/news/economy/trade-war-red-s...). Professional opinion wise, I searched and actually couldn't find an economist who had anything positive to say about tariffs (if someone can find one, I'd love to read the link, but it's pretty telling that the overall sentiment is that negative). So right now, I'm not sure at the moment what long-term benefits you are thinking of. Political or strategic, maybe?

And the consequence of these groups having lower discretionary income shifts their buying habits to favor items that are cheaper to manufacture and likely don't fall within having an active Chinese patent covering them. Putting a tariff on the foreign good targets people who see equivalent value between the US and non-US good in order to sway their decision to the domestic choice.

This is a good point. Chinese govt is doing a lot of things to keep manufacturing cheap there - from keeping their currency artificially low by buying USD, to using those USD to subsidize manufacturing and then to export those products internationally to decimate local manufacturing. It is not as simple as some who have commented below would say.

The fact that the local manufacturing industry has been decimated is no reason to keep it like that. If profit is to be made, industry will come back - that is the beauty of capitalism.

> The reason why Middle America has so little spending power is because regulations and taxes have decimated their manufacturing and resource extraction industries and effectively moved them overseas. This of course led to a loss of specialized workers who can pass down their skills and loss of technical knowledge.

http://www.businessinsider.com/~~/f?id=4aa6761d17a383176e47e...

And yes, this graph is inflation-adjusted. The number of $$ of manufactured goods has risen for like 50 years straight in the USA.

Spoiler alert: The US manufactures more today than it did at any other time in history. Automation has killed jobs. It takes far fewer workers to make the same (or even 10x) the number of products.

https://www.brookings.edu/wp-content/uploads/2016/07/us-manu...

We in the US are making more product with fewer and fewer workers. That's the truth of the matter.

[citation needed] on every last bit of this. You've bundled a whole bunch of claims into a short space, and all of them are wrong.

> regulations and taxes

Measured in GDP, American manufacturing has increased since 2000. This suggests that the chief culprit is automation, especially when China's taxes aren't significantly less than ours.

> resource extraction industries

Need a citation here too. What percentage of the middle class derived its income from resource extraction even when that was at its peak in America? And don't forget to exclude coal from that percentage, because the decline of coal is mostly because it's now cost-uncompetitive with LNG and solar.

Nothing about America's current economic woes is going to be fixed by a Chinese tariff. This is firing blind and aiming in the wrong direction.

Manufacturing output may have increased along the curve of a plateau, but it is still much lower than what it would be in an unregulated environment.

https://www.mercatus.org/publication/cumulative-cost-regulat...

Why do you say they are aimed in the wrong direction? They are reciprocal and only in industrial sectors where China already has tariffs on our goods up to 10x larger than our rates.

"it is still much lower than what it would be in an unregulated environment."

Counterfactual. The article you link to is laughable on the face of it. "A new study for the Mercatus Center at George Mason University" carries about the same intellectual heft as "A new study for the Eat More Beef Center at Hamburger University."

You seem the sort of person able to recognize others' ideologies while incorrectly assuming your own beliefs are rational and well-founded. Are you generally tolerant of or convinced by counterfactuals when they don't support your ideology?

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