Comment by jeromec | Hacker News Reader

Comment by jeromec | Hacker News Reader

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Great insights, but I think we have to do more than keep our eye on it. I think it's imperative that we transition significantly to non-oil based energy consumption (as the Obama administration is encouraging). The problem is we've allowed ourselves to become too dependent on spending, accounting for 70% of our economy. Americans have become accustomed to cheap products, and gas, while at the same time turning a nose up at menial jobs. If we truly want to keep ourselves safer, from needing to go to war in the Middle East, then maintaining reliance/placing value on oil means gas prices comfortably around $10 (or more) along with the corresponding inflation and further vanishment of any middle class. An unemployment rate of 10% would begin to look normal.

I think we need to do two major things: 1. increase the transition to high mpg/non-gas cars; 2. Begin to make things again and increase exports taking advantage of increased purchasing power abroad. (cheaper electricity would be third)

Well, I agree that we should transition to other energy sources, but that's not really topical to the article. It doesn't matter much whether we use oil or not domestically. It's whether or not major chunks of international trade will remain denominated in dollars. Oil just happens to be a major, internationally traded commodity, and oil markets are mostly denominated in dollars because the dollar is seen as the most stable/reliable currency (as opposed to the domestic currencies of oil-producing countries say).

The threat of oil-producing countries shifting their exchanges from dollar denomination to a non-dollar basket of currencies is that all of a sudden the demand for this vast amount of dollars in circulation outside of the United States will drop, and there's very little that the U.S. could do about that immediately. If the demand for dollars drops, its value relative to other currencies drops, and the United States will face massive inflation in imported manufactures, commodities, and raw materials.

Producing green technology at home may wean our dependence on oil, but doesn't do much to prevent our currency from collapsing due to a sudden drop in demand for it abroad.

Sorry for the late reply; I didn't see your response. The reason I say a transition away from oil is needed is precisely topical, and I disagree. It does matter whether or not we are dependent on oil domestically. Currently oil runs through our economy like woven thread. You raise oil prices and that causes immediate inflation because production and delivery of products depends on oil. With an economy that is 2/3 dependent on consumer spending you don't want steep price inflation. That's why it would be a benefit to not be as reliant on oil domestically. The value of the dollar could fall, yet domestic product prices wouldn't reflect it (as significantly) and as a consequence choke our economy.

> Americans have become accustomed to cheap product, and gas, while at the same time turning a nose up at menial jobs

I understand that cheap gas is bad for environment, but why are the other items in your list bad? Everyone who is doing a menial job wishes they could afford to turn a nose up it, and cheap products are great. Even cheap gas is good for Americans (apart from the environmental damage) because it means freedom of movement as transportation is so affordable.

In my post I was concerned with the health of the economy, not the environment. It's true that energy and the environment are linked, but that problem is not the focus here.

I wish we would make things again. I really do. There's so much tech that can be invested in to make a cleaner, more beautiful America - and yet all the factories for it are going overseas (Germany, Taiwan, and so forth). Why are we so far behind on the high-tech manufacturing curve? Did we just rest on our laurels for too long, or is something more nefarious afoot?

I think it's due to a combination of factors which all come down to a less favorable environment for factories (unions/higher wage expectations, regulations etc). However, a weaker dollar can mean more factories stay here for competing cheap labor. The trade-off is less spending power, which means our economy must shift away from being spending based. People will kick and scream when that realization hits but America simply won't continue to dominate the world economy.

It's a question that's easy enough to answer.

Pick a product. Then go do the research and work to determine how much it would take to make it here. Then repeat that process with somewhere else.

This is the same process that companies go through. There's nothing mysterious about it.

Why is it more expensive here than in, say, Germany? Is it just the unions? Can't be, 'cause Germany has trade unions too. If anything, they're bigger there - The German Confederate of Trade Unions claims 25% of the working populace as members. Is it the healthcare? Oh, wait. Is it the education? Hrm. Is it pork? Is it 'cause we've got a lot of tornados, or is it the hurricanes?

It just doesn't make much sense. What makes it cheaper to operate a chip or solar panel factory in Dresden than in, say, North Carolina?

I think you are presuming an answer (trade unions) and then arguing with yourself when the answer doesn't work.

Do the exercise. It's easy enough to pull reasons from the air and vet them, but that's just an advanced form of straw man arguments. You'll never get anywhere like that.

I know that if there is a factory making something in Germany and not one here that for some reason the economics work better in Germany. Lots of really smart people who add and subtract numbers are paid to make these decisions based on where the numbers work the best. That's their job. That's the only thing they're supposed to do well, and they're good at it. You can bet there's an economic reason somewhere.

I have to agree with DanielBMarkham, and say a factory movement conspiracy is less likely than real world circumstances. (I'm not saying other conspiracies are as unlikely) I was in a store years ago talking with a guy doing contract work there, changing lighting etc. As the owner he was doing it himself complaining that "no one wants to work."

The United States remains the #1 exporter in the world in terms of aggregate value of goods exported. We still do make plenty of things in the United States.

The manufacturing that gets exported is the stuff that requires low- to medium-skilled workers. All the high-skilled manufacturing stays in the developed countries (i.e. U.S., Germany, Japan, etc.).

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