Knowing Larry Summers’ gladiatorial intellect I found him surprisingly mild towards Oren Cass’ pseudo-economics babble. I am also afraid that such debates perpetuate the unfortunate pattern whereby a representative of the Newtonian view has to be paired with one of the Flat Earth Society ‘for the sake of balance’.
A quote mistakenly attributed to Euripides: "Those whom the gods destroy, they first make mad." That may apply to America today. Why else elect a lifelong cheat and scam artist, an associate of gangsters for decades, to be president for the second time, even after he incited an insurrection to stay on in power after losing an election? What would his motive be other than greed in everything he does? OK, vengeance. Why would the courts now restrain him or Congress when it's controlled by his cult (formerly the Republican Party)? Or his advisers who can also make money in their crypto funds and other investments as insiders in a regime focused on profit?
Incidentally, as to the relative importance or not of manufacturing, who can even dream today of American textile or footwear manufacturing being revived to compete with Vietnamese or Bangladeshi exports? What is wrong with these people, that they have to pretend to believe obvious nonsense? Just look at the world we're living in: It's not VW which makes far greater profits but Google. That's about data from people, not about factory labor which needs to be treated fairly and paid benefits. America is now heavily invested in services, and much of that is the result of deliberate investment and research by government, not simply the genius of individual entrepreneurs.
Apart from the digital world, look at biotech. And that's precisely the most dynamic, leading sector in America which is now being killed by the Trump administration's termination of the 80 year partnership in research between government and the academic research community. American scientists are now being driven into exile and brilliant foreign scientific researchers run the risk of being detained for absurd reasons like the Harvard Russian woman geneticist now being held. Promising research on a cure for cancer can't proceed.
Wasn't the old economic model to allow basic manufacturing to be done in foreign countries, while rich countries produced the high-tech, high-value-added tools for those countries? Sophisticated services are now also in the mix of rich country exports.
Even if we made robots to replace garment workers, the garment work would still take place elsewhere, and we would sell them the robots rather than try to inshore garment manufacture.
Absolutely. The idea is not to make everything possible in one country. In fact that goes back to the basic idea of comparative advantage, which has been called the only truly original and non-trivial finding in the social sciences. Stated simply, it only means not between countries, but in the same country: It makes more economic sense to focus on what that country is better at, even if it makes other products as well as or better than other countries.
America around 1900 had immigrant workers living in tenements working in the Garment District of New York. They were exploited, poorly paid, had no alternatives, and were exposed to risks such as fires in their work (like in Bangladesh today). America moved beyond that - the progression from agriculture to manufacturing to services is normal in economic development.
Cass was making similar misleading statements on TDS with Jon Stewart. I got the sense he was snowing Stewart.
Summers really took Cass's argument apart. Good.
Having said that, there is a case to be made that US businesses outsourced so much manufacturing (and software coding) offshore that we lost the skills needed to make many technology products. I think the expertise and skills to manufacture advanced products still exist in the US. Many new products are born in the US. But if we outsource the mass manufacture of such new products, we will lose the capability to develop new products. Britain is a prime example of that.
What is missing in Summers' analysis is how best to ensure skills and expertise to make products stay in the US and are not outsourced. Outsourcing is attractive to owners of capital and C-suite execs, but not to the long-term benefit of the nation. Again, Britain is a great example, especially as its financial services are a major part of its exports and taxable income. Manufacturing, not so much. The US really shouldn't be following that path. We may worry that TSMC has the most advanced chip-making facilities on the planet, but whose fault was it that resulted in this state of affairs. TSMC is perhaps the best leverage Taiwan has to stay independent. The Taiwan government is likely trying to slow walk any TSMC facilities being built in the US and Europe.
Well, I don’t know what to think about you and Larry Sommers!
But, having fervently watched that GPS program I think you diced the contents a bit.
At any rate I was most interested and impressed by your comments earlier in the piece about the state of manufacture today, and of some of the ideas which would accrue in an effective industrial policy, tariffs or not, and in a socially balanced way and with a minimum of corruptive influence. You could maybe pound those thoughts around in your head for us sometime.
Quite a put down. Reminds me of Marshall McLuhan’s appearance in Annie Hall.
One Cass error Summers let slip by is the notion that it’s meaningful that the number of manufacturing jobs remained steady from 1950 onwards. How much has the population increased over that time? More than doubled.
These people lack the intellectual chops to put together a cogent analysis or the managerial chops to organize a revolution in systems upon systems, so complicated that establishing “best practices” is a major accomplishment.
It’s the ideology of crony capitalism with hippie sophistication. At least Abbie Hoffman was funny and had no ambition to rule the world.
The people I know who have manufacturing jobs are not there because they flunked kindergarten.
Different jobs require different skills, and argument one should never be repeated.
Applying an across the board tariff would be a very bad thing.
After the dust settles, we all hope that bad manufacturing companies and workers are not there any more. That is the base of the country, and the most vulnerable.
If food production and processors, and food sellers are included there is a lot more manufacturing than what is considered.
I could live without the most advanced technology that other countries can sell us, and I am happy that we have plenty of agricultural products produced here.
We could probably feed the world with cornbread, is the feeling I have, from what you see growing in Iowa, if it is not used for alcohol production.
But tariffs _over_ value currencies. Sure you can run big fiscal surplusses (high consumption taxes) to undervalue, but still why not subsidize rather than tariff?
Also, here is one time you did not want Summers on your side, in a debate with Paul Krugman. In fairness, given the nature of his arguments, I am not persuaded that Summers wanted to be on his side either: https://www.youtube.com/watch?v=texhAmr4FC4.
I’ve never understood the manufacturing fetishism. This idea that we need to make stuff is just outdated and silly. Yes, a half century or so ago, factory jobs for workers without college degrees could be a ticket to the middle class. But those jobs were filled, at the time, by median workers, because very few people went to college. So comparing today’s high school grads to those is misleading. And, more importantly, those were decent jobs because they were unionized, not because making stuff in a factory is magically super great, as Cass seems to imagine.
It also doesn’t help that Cass lives on his own planet. A couple of weeks ago, he was declaring that American workers’ productivity growth has lagged the rest of the world. Which is perfectly wrong.
Knowing Larry Summers’ gladiatorial intellect I found him surprisingly mild towards Oren Cass’ pseudo-economics babble. I am also afraid that such debates perpetuate the unfortunate pattern whereby a representative of the Newtonian view has to be paired with one of the Flat Earth Society ‘for the sake of balance’.
A quote mistakenly attributed to Euripides: "Those whom the gods destroy, they first make mad." That may apply to America today. Why else elect a lifelong cheat and scam artist, an associate of gangsters for decades, to be president for the second time, even after he incited an insurrection to stay on in power after losing an election? What would his motive be other than greed in everything he does? OK, vengeance. Why would the courts now restrain him or Congress when it's controlled by his cult (formerly the Republican Party)? Or his advisers who can also make money in their crypto funds and other investments as insiders in a regime focused on profit?
Incidentally, as to the relative importance or not of manufacturing, who can even dream today of American textile or footwear manufacturing being revived to compete with Vietnamese or Bangladeshi exports? What is wrong with these people, that they have to pretend to believe obvious nonsense? Just look at the world we're living in: It's not VW which makes far greater profits but Google. That's about data from people, not about factory labor which needs to be treated fairly and paid benefits. America is now heavily invested in services, and much of that is the result of deliberate investment and research by government, not simply the genius of individual entrepreneurs.
Apart from the digital world, look at biotech. And that's precisely the most dynamic, leading sector in America which is now being killed by the Trump administration's termination of the 80 year partnership in research between government and the academic research community. American scientists are now being driven into exile and brilliant foreign scientific researchers run the risk of being detained for absurd reasons like the Harvard Russian woman geneticist now being held. Promising research on a cure for cancer can't proceed.
Wasn't the old economic model to allow basic manufacturing to be done in foreign countries, while rich countries produced the high-tech, high-value-added tools for those countries? Sophisticated services are now also in the mix of rich country exports.
Even if we made robots to replace garment workers, the garment work would still take place elsewhere, and we would sell them the robots rather than try to inshore garment manufacture.
Absolutely. The idea is not to make everything possible in one country. In fact that goes back to the basic idea of comparative advantage, which has been called the only truly original and non-trivial finding in the social sciences. Stated simply, it only means not between countries, but in the same country: It makes more economic sense to focus on what that country is better at, even if it makes other products as well as or better than other countries.
America around 1900 had immigrant workers living in tenements working in the Garment District of New York. They were exploited, poorly paid, had no alternatives, and were exposed to risks such as fires in their work (like in Bangladesh today). America moved beyond that - the progression from agriculture to manufacturing to services is normal in economic development.
Cass was making similar misleading statements on TDS with Jon Stewart. I got the sense he was snowing Stewart.
Summers really took Cass's argument apart. Good.
Having said that, there is a case to be made that US businesses outsourced so much manufacturing (and software coding) offshore that we lost the skills needed to make many technology products. I think the expertise and skills to manufacture advanced products still exist in the US. Many new products are born in the US. But if we outsource the mass manufacture of such new products, we will lose the capability to develop new products. Britain is a prime example of that.
What is missing in Summers' analysis is how best to ensure skills and expertise to make products stay in the US and are not outsourced. Outsourcing is attractive to owners of capital and C-suite execs, but not to the long-term benefit of the nation. Again, Britain is a great example, especially as its financial services are a major part of its exports and taxable income. Manufacturing, not so much. The US really shouldn't be following that path. We may worry that TSMC has the most advanced chip-making facilities on the planet, but whose fault was it that resulted in this state of affairs. TSMC is perhaps the best leverage Taiwan has to stay independent. The Taiwan government is likely trying to slow walk any TSMC facilities being built in the US and Europe.
Well, I don’t know what to think about you and Larry Sommers!
But, having fervently watched that GPS program I think you diced the contents a bit.
At any rate I was most interested and impressed by your comments earlier in the piece about the state of manufacture today, and of some of the ideas which would accrue in an effective industrial policy, tariffs or not, and in a socially balanced way and with a minimum of corruptive influence. You could maybe pound those thoughts around in your head for us sometime.
You’re right Brad, not even close.
Quite a put down. Reminds me of Marshall McLuhan’s appearance in Annie Hall.
One Cass error Summers let slip by is the notion that it’s meaningful that the number of manufacturing jobs remained steady from 1950 onwards. How much has the population increased over that time? More than doubled.
These people lack the intellectual chops to put together a cogent analysis or the managerial chops to organize a revolution in systems upon systems, so complicated that establishing “best practices” is a major accomplishment.
It’s the ideology of crony capitalism with hippie sophistication. At least Abbie Hoffman was funny and had no ambition to rule the world.
The people I know who have manufacturing jobs are not there because they flunked kindergarten.
Different jobs require different skills, and argument one should never be repeated.
Applying an across the board tariff would be a very bad thing.
After the dust settles, we all hope that bad manufacturing companies and workers are not there any more. That is the base of the country, and the most vulnerable.
If food production and processors, and food sellers are included there is a lot more manufacturing than what is considered.
I could live without the most advanced technology that other countries can sell us, and I am happy that we have plenty of agricultural products produced here.
We could probably feed the world with cornbread, is the feeling I have, from what you see growing in Iowa, if it is not used for alcohol production.
But tariffs _over_ value currencies. Sure you can run big fiscal surplusses (high consumption taxes) to undervalue, but still why not subsidize rather than tariff?
Here is a 4th reason you might want a strong industrial sector: national security. America's military is unbeatable in a 3-day war, but one lesson we can draw from Ukraine is that it is very very foolish to count on a 3-day war. In that connection, I do recommend reading one of the stories covering Germany's sobering evaluation of the performance of its weapons systems in Ukraine: https://en.defence-ua.com/analysis/germans_draw_surprising_conclusions_from_ukraines_experiences_using_patriot_leopard_and_pzh_2000-14144.html.
Also, here is one time you did not want Summers on your side, in a debate with Paul Krugman. In fairness, given the nature of his arguments, I am not persuaded that Summers wanted to be on his side either: https://www.youtube.com/watch?v=texhAmr4FC4.
I’ve never understood the manufacturing fetishism. This idea that we need to make stuff is just outdated and silly. Yes, a half century or so ago, factory jobs for workers without college degrees could be a ticket to the middle class. But those jobs were filled, at the time, by median workers, because very few people went to college. So comparing today’s high school grads to those is misleading. And, more importantly, those were decent jobs because they were unionized, not because making stuff in a factory is magically super great, as Cass seems to imagine.
It also doesn’t help that Cass lives on his own planet. A couple of weeks ago, he was declaring that American workers’ productivity growth has lagged the rest of the world. Which is perfectly wrong.