Hacker News Reader

> The USA lost almost 2 million manufacturing jobs in the 1980s.

That's misleading. Via FRED, manufacturing employment in the USA had a long peak lasting from roughly 1970 to about 1990. The largest peak-to-trough drop was in fact about 3 million, from mid-1979 to early 1983, but that had more to do with the Volker recession than any change in corporate culture. Manufacturing employment rebounded (partially) from the post-recession low, remaining steady until about 2000.

The sea change in employment came after 2000, plausibly due to opening trade relations with China. However, at the same time manufacturing production did not decrease much if any. For example, production of durable consumer goods (https://fred.stlouisfed.org/series/IPDCONGD) increased from 1982 to 2005 or so.

That being said, "steady manufacturing employment" does mean that manufacturing employment as a share of all employment fell, thanks to growth in the labour force. That by itself can explain some of the qualitative observations re: the rust belt and such.

It’s not misleading. If you’re not growing, you’re dying.

A lot of things happened in that era, including massive productivity improvements. But at the end of the day, fiscal policy and tax policy drove even state of the art manufacturing to first push to the South, then to Mexico and then to China.

So we exported wealth for cheap goods. As predicted in the 80s, the result is a country that is poorer and facing increasing social unrest.

> If you’re not growing, you’re dying.

Isn't this exactly the same Welchian attitude implicitly criticized by the grandparent commenter?

It’s related. The US had 200M people in 1970. 330M in 2020. If the number of jobs is about the same, you’re shrinking.

You can explain some of that through productivity improvements, but imo the bill was just outsourced away. The fact that we cannot build iPhones anywhere but in a specific region of China tells the story.

It’s an incredible achievement - globally the industrialization of China dramatically improved the lot of a billion plus people. But that wasn’t free.

You are either getting better or getting worse. Nothing stays the same. --nature

Capitalism requires constant growth to function. There's no way around that.

> As predicted in the 80s, the result is a country that is poorer and facing increasing social unrest.

There might be greater wealth inequality. And some things might be getting measured better than they ever were, more accurately and truthfully. But today's America is not poorer.

> But today's America is not poorer.

Take a look at (say) 30th-percentile incomes vs. the costs of food/housing/medical care now. Vs. in the mid 80's. Computer goodies might be a whole lot cheaper now, but the basic costs of living for the less-well-off are sure as hell not.

You should factor in national and states debt. Vast majority of richness comes from turning debt (-ve) to positive via shifting it to national debt. For example? Let say, you owe 10K USD, government give you 10K USD and then cancel the debt a few mpnths or years later, you're now "wealthier" by 10K even if you do nothibg at all to get those 10K sent to you by IRA check. Americans now are poorer in real terms but get the facade of wealthy with borrowed money. Even if they dont ever need to pay off, their surrounding prices will i flates and catch up with their wealth and this is what is happening. When OPEC starts to shift half of petroldollar away, you will then understabd how we are now poorer.

Having cheap goods is not in any way the same as having wealth. Personal savings for Americans today are at the same level as during The Great Depression. Any significant financial crisis right now could be devastating.

You skip the rise of leveraged buyouts, the end of lifetime employment, the end of defined-benefit pensions, layoffs from profitable corporations, rising competition from newly competitive Japan (and then Korea), and the whole 80s vibe. There really was a sea change in American employment culture from the 70s into the 80s. Just imagine that GM used to issue 35 year bonds!

Yeah but you're on HN. Everyone here has healthcare payed for by their corporate sponsor and nice stock options. Life has become worse for the poor but it is easy to ignore that.

Reply to self: I realize I forgot to link the FRED series on manufacturing employment. It's located at https://fred.stlouisfed.org/series/MANEMP.

I apologize for the omission.

Deindustrialization was mostly done in the 1970s, with factory employment as a share of the labor force peaking in the 1950s. Moreover a strong dollar lowers the cost of imported inputs, say iron ore, so it isn’t all bad news for manufacturing. Exports also aren’t the only markets for finished goods.

I’d also point out that the US manufacturers more cars than ever, and makes basically as much steel as it ever has. Sure, no one sees t-shirts anymore.

Back then it was plain to see in real-time that upon GE's acquisition of Cooper Tools, Welch immediately set about destroying what made Cooper uniquely outstanding.

And that was just one company.

Other victim companies had been given the same treatment by then, the de-industrialization was well underway and picking up steam as upcoming American executives "across-the-board" tried to emulate the famous Welch by extracting long-term hard-earned intangibles and posting it as short-term profits in place of the real sustainable thing.

Whether the reserve currency is strong or weak makes no difference -- having one's currency be the world's reserve currency necessarily leads to large trade deficits (e.g., otherwise there is no way to supply that currency to the rest of the world), and therefore deindustrialization.

> the end of the era when big USA corporations were making long-term bets in speculative technologies

Please pick up the phone. Meta is calling.

And look what it is doing to their stock price.

I'd argue the breakup of AT&T was the coup de grace for mega-corp investment in pie in the sky tech, but even AT&T only invested in such things due to legal mandates.

AT&T only invested in tech because of a legal mandate? Can you provide more information about that claim?

Good blog article. I think if you combine Reagan's strong dollar policy and political deregulation of banking, you get both deindustrialization and consolidation of the banking/investment banking/insurance, and some of the extreme wealth concentration correlated with it.

That concentrated wealth is then used to influence (and potentially capture) the political process from cradle-to-grave - from campaign finance, to lobbying, to cushy board seats and the like upon leaving office. Making it politically difficult or impossible to fix or mitigate various problems like Too Big To Fail, deindustrialization, etc.

It seems the only way out is either via technological innovation like additive manufacturing, or via another big banking crisis that doesn't get bailed out, but rather resolved like the S&L crisis.

And the invention of mass layoffs via stacked ranking.

FYI: Not sure if you know, but that article works to block you from reading it and asks you to sign up for something. I don't know, I just back out of any user hostile BS like that point. Maybe you have a better article from a source that isn't clearly hostile to visitors?

Substack does have all these sketchy patterns but there is a 'Let me read it first' text link on the popup that lets you continue, seemingly without tracking how many times you've done that.

BUT I made the mistake of actually signing up for one blog I liked and got smacked by a barrage of more 'sign up for this!!!' immediately after. So I agree that it's user-hostile but... it seems like most of the web is moving that way, outside of our digital gardens.

> ...'Let me read it first' text link

Yep, I didn't notice that until someone commented that. Seems purposely hidden.

> it seems like most of the web is moving that way,

Yeah, I really don't care at this point. I'm not going to jump through hoops anymore. If someone wants to block me from reading something using trickery, than clearly it's worthless and neither the site nor the author respect me. Why should I respect them?

What’s really weird about Substack is that you seemingly can’t subscribe to a newsletter and read it in the app without getting every post emailed too. I just want to read in the app.

fwiw, part of their schtick was newsletters and that you, effectively, never had to open their app. Seems like they designed for one and not the other. That said, during launch day they took a lot of feedback from here so they might hear you if you reach out.

There’s a “let me read it first” option that grants you unmolested access to the article

Why bother? If they don't want me to read it i won't read it.

There should be a way to mark this crap on the front page so I don't waste my time clicking on it...

Oh, I didn't see it. It's hidden.

"Unmolested' would be me not needing to interact with that.

This is literally what they sell though. It’s like going to a restaurant and complaining that they ask you to pay for your meal.

I know when I got to a restaurant what I'm getting myself into.

I guess I just need to equate substack URLs with deceit, hostile reading patterns, and substandard content. Though, someone sharing out substack links that apparently they wrote should be seen as advertising and treated as such.

Or, alternatively, we need to stop constantly expecting content for free. (I'm saying as a society, not you personally)

For the last century we have glorified greed and individuality and now we get upset about it when it overrides nationalism and sense of community? Capitalism and globalisation has freed the elites and charged us headlong into a cyberpunk world.

The Chinese actually noticed this and they are trying to get the genie back into the bottle. They'll probably fail.

This assertion is the Chinese(is this referring to the government?) are trying to stop globalisation and fight greed.

With which techniques are those improvements being attempted?

Literally jailing billionaires that get out of line instead of giving them a platform. Social unrest is the only thing that keeps Xi awake at night.

So, the country is better off with 1) a weak president, 2) a weak dollar and 3) poor shareholder value?

I think you could make strong arguments for all of those:

- fairly sure the Federalist society wrote a lot of words on why strong king-like presidents were bad; a strong individual post is a license for arbitrary whims of power

- weak currency improves exports; the Chinese strategy for decades was a weak RMB to the extent that the US complained about it endlessly

- "shareholder value" tends to be a horribly short termist metric that encourages hollowing out the business, reducing investment, and pinching the employees until they start leaving

The country is better off when we improve it directly, rather than optimizing for weak proxies like shareholder value.

It’s also best to discharge any gut feelings you might have about a “weak” versus “strong” dollar. They’re economic qualities, not moral ones.

I know you’re being snarky, but a dictatorship with limited export opportunities and extreme inequality isn’t exactly the paradise you think it is.