>The whole "US Made!" tagline of old stopped becoming possible because we couldn't charge wages low enough to compete with foreign dollars or foreign slave wages.

Not exactly. For starters being able to buy products for cheap is generally good for consumers. They have more money left over to buy other things...

Secondly, the U.S. have actively fought to keep wages low in developing nations. For example: https://www.thenation.com/article/wikileaks-haiti-let-them-l... It's easy to cry about low wages though and how that "hurts" American manufacturers. So here's the thought experiment, all workers on the planet now make at least U.S. federal minimum wage. We can now compete with Haitians for underwear manufacturing. Underwear now costs a lot more than it used to. That's not a win for consumers. And all those minimum wage underwear manufacturing jobs aren't exactly a boon to the U.S. economy, go figure.

Thirdly, no nation is going to be able to produce every sort of product itself efficiently and cheaply. Trade is and always has been important. Other nations can do some things better and cheaper and it's not always labor costs that are the linchpin of being out-competed.

Fourth, people imagine peak manufacturing as some sort of ideal that we should be tripping over ourselves to get back to. It's a fools errand. No matter what a lot of manufacturing jobs are never coming back, ever. It's never going to be like it used to be, automation will have seen to that.

A lot of people don't understand the economy, but they have an idea how the economy should be. It's more terrifying than my mom offering to fix my computer, because moms know best.

You are right the economy is very complicated, but it seems that the only factor anyone discusses is what's good for the "consumer".

I think the "consumer" is a really bad success criteria. I don't really care about what's good for the "consumer", I care about what's good for "the employee", highly skilled jobs, higher wages, and more jobs. These things can't be driven by lowering the cost to consumers, we'll get what we have now, more money flowing to the 1%, and the middle class being eliminated.

(This isn't directed at you, just thought I'd put it here....)

I care about what is good for everyone - employers, employees, the overall country, and the overall world (all these same people in other countries), on a long term sustainable basis.

Whenever one reads these threads, rarely does one encounter someone who's doing anything other than talking their book, or supporting their personal ideology of "how it should be", usually based on reading articles written by others that support their ideology.

I think all of us would be better off if after finishing writing a narrative or explanation that supports our personal ideology, we then turned around and tried to poke holes in it. It's child's play to rationalize why it's a win-win situation to outsource menial labor to 3rd world countries, but what happens when one of those third world countries happens to be a giant, populated by incredibly hard working and historically accomplished people, and a very smart government who remembers mistakes that were made in the past? What happens when this country isn't content being a dumb, low-margin manufacturer, and decides it wants to take over the entirety of the process including the design? Sure, the West currently still holds a lead in much of technology, but where does this bizarre idea come from that it will last forever? Because we're more "creative"? Is there strong evidence for this? And do you also happen to simultaneously hold the belief that the peoples of all nations and cultures are essentially the same (a paradox one commonly sees in liberal leaning technical communities)?

Part B of this rant would be the folly of optimizing for GDP, which is another complicated and potentially very dangerous mistake for what should be fairly obvious reasons. Or the recently popular notion that humanity's highest priority and morally imperative goal should be to normalize GDP and standard of living across all members of humanity on the planet. Different cultures optimize for different things, some things require more work to achieve, but that often means less time for family and leisure. That said, I'm also strongly opposed to certain countries messing things up for entire regions of the world for decades on end with no end in sight.

Life is a hell of a lot more complicated than you'd think it is, if all you had to go on was most people's personal perception of it.

i'm not sure i agree with everything you wrote, but i do share this sense that US policy has tried to optimize for some over-simplified, short-term, dollar-maximizing measurement.

it's not clear that we've been optimizing for something that's actually connected to what makes people happy and satisfied with life.

some people absolutely need to be able to say "We're number one! We're number one!"

but other people would be happier to live in country number 17 if it meant they had a steady job with decent working conditions, reasonable health care, more predictability and a lower crime neighborhood.

> but other people would be happier to live in country number 17 if it meant they had a steady job with decent working conditions, reasonable health care, more predictability and a lower crime neighborhood.

This is pretty much the essence of what I'm getting at, and to me is what post-secondary educated people on both the left and right seem to be very strongly opposed to on an ideological basis (but for completely different reasons I suspect), as seen in comments like: https://news.ycombinator.com/item?id=17346684

It worries me that almost no one seems to be thinking about the range of possibilities that might lie at the end of this outsource & optimize for GDP/efficiency/profit, rinse and repeat ad infinitum approach to the economy, and that some of the possible outcomes might actually be negative. It's almost like there's this religious belief in the West that negative consequences aren't even possible. Are people's memories really this short?

Or maybe I'm the one that's wrong. I'm more than willing to listen to anyone explain to me at length how success for everyone is inevitable as long as we have unrestricted free trade, but all anyone seems to have to offer is their own personal take on what "a" path to success would look like, which is typically not much more than a vague theory resting on the assumption that recent history is all that's worth paying attention to.

> It worries me that almost no one seems to be thinking about the range of possibilities that might lie at the end of this outsource & optimize for GDP/efficiency/profit, rinse and repeat ad infinitum approach

good point. and even when they do think about lost jobs the best solutions they come up with are feeble.

too often it's poorly funded government worker training wherein middle-aged washing machine plant workers who live in upstate Michigan are supposed to learn to code (or something equally likely to fail for the majority of retrained workers.)

another dubious aspect of this policy is that government officials are somehow supposed to both accurately predict the industries where the economic growth will be and what sort of training these industries will actually require from job hunters. that's really really hard. wall street investment firms are constantly trying to that sort of thing, and it's very difficult to get right.

this is where the globalization story unravels. the replacement careers don't materialize for the displaced workers. so the defense of the policy becomes a loud repetition of "it's great for consumers!"

but, somehow, it's "absurd and irrational" to ask if Walmart/Target/Amazon's massive quantities of cheap imported throw-away garbage (aka "consumer goods") are actually useful at all.

It will bring jobs back if there are enough people who can afford the local made product. And I wouldn't be sure about it, since in the last few years we have witnessed a thinning of the middle class, and the lower parts of the population might not afford to pay a premium because it's locally made.

It's hard to go back from a race to the bottom

> if there are enough people who can afford the local made product

Eventually, it will keep more money in the country, meaning people will also be able to afford more (after all, they'll be being paid the higher, local wages now).

Compare with e.g. Switzerland, where most people have really high salary (by EU standards), and pretty much everything is really expensive, but because of the high salaries people can afford it.

This works only as long as people having these high salaries do work with high added value and you are not relying much on international trade. Otherwise they can be effectively undercut by people who can do the same thing cheaper.

hence tariffs.

The argument that Switzerland provides a model for high tariffs creating wealth is... especially ironic. Switzerland is one of the least tariff-encumbered economies in the world, reguarly topping out various free trade indicies [1]. And in Switzerland's case, that's almost certainly causual. Average salaries in Switzerland are so high because of the disproprtionate role Switzerland plays in EU and global banking -- a role that wouldn't be possible if Switzerland didn't embrace free trade.

So, if we're going to follow Switzerland's lead, we would roll back tariffs.

Switzerland is more akin to the EU's version of Massachusetts or New York, and Zurich is the EU's version of Manhattan or SF. It's the sort of economic zone that will always exist in a large economy like the US or the EU. The population is disproportionately made up of citizens from one or two cities/metro areas, and those cities have a high concentration of highly educated and highly paid individuals typically focused on one of a few industries. Consequently, even those employed outside of these high-paying industries make more than average compared to the rest of the country/bloc.

Situating ourselves similarly to Switzerland requires placing the US very high in the global value chain while maintaining a global order of very low trade barriers. Which has always been the neoliberal agenda, at least ostisibly.

In other words, if we want to emulate Switzerland, we have to do exactly the opposite of the Trump plan -- continue offshoring anything lower in the value chain, continue insisting on low trade barriers, continue dominating everything higher in the value chain. Obviously, even if this strategy works for the country in aggregate, it's going ot have definite losers in a country as large as the US.

On a (very!) related note, the US and Switzerland currently have basically the same PPP.

[1] https://www.heritage.org/index/country/switzerland

You didn't explicitly say it was, but you didn't make it clear that Switzerland isn't in the EU.

It depends on what you mean by "EU" - I do understand that EU member state has a specific definition that Switzerland does not meet. What most people think of as "EU" is actually an overlapping patchwork of agreements many of which Switzerland does participate in.

True, they're not part of the Euro zone. They're part of the Schengen area (common immigration zone), the EFTA (free trade area), signed the EEA, and adopted by themselves most EU regulations. [1] While not an ECJ member, they are softening their stance on that also [2].

[1] https://theconversation.com/what-is-the-swiss-model-of-co-op...

[2] https://www.ft.com/content/17d840b6-209b-11e8-a895-1ba1f72c2...

I would really like to see a source for your claim that "most people" think of the "EU" as something other than the European Union.

Seriously, what's with all the weasel words? Switzerland is not an EU member. End of.

What does EU mean to you?

Does it mean you can move freely from country to country? (You can, it's Schengen)

How about goods? (They can, they're in the single market)

How about animals? Pets? (Switzerland accepts EU pet passports)

How about laws? Switzerland has many of the same EU laws.

How about judiciary? They're moving to accept the ECJ.

At what point does it matter if they're EU or not if all the other rules apply? If you didn't know, you'd probably wander around Switzerland thinking it was EU. That's my point. I'm not claiming they're a member state. I specifically said that, in the first line. What I am saying is that they're hardly independent of the EU, and that makes a big difference.

They’re actually not in the single market for goods, you pay customs at the border if you import stuff.

(OP) Switzerland is not a member of the EU. Do you see any claim in my post that Switzerland is a member of the EU?

Nonetheless, Switzerland has a relationship with the rest of the EU that is analogous to the relationship between a small, dense US state and the rest of the USA.

Nonetheless, Zurich has a relationship with the rest of the EU that is analogous to the relationship between NYC and the rest of the USA.

This issue of whether Switzerland is properly considered "part of" the EU regardless of its membership status seems like quite the diversion from my actual point and is not at all relevant to the parallel I was drawing.

It doesn't make a lot of sense that Switzerland is the EU's version of MA or NY or that Zurich is the EU version of NYC or SF given that Switzerland is not in the EU and quite happy that way, too.

Switzerland has a big complex web of treaties and agreements with the EU that make it almost, but not quite, a member. Neither the EU nor Switzerland are entirely happy with the situation; the EU doesn't like all the tradeoffs that need to be balanced just for Switzerland rather than in the standard EU bundle, while Switzerland doesn't like things like freedom of moment being made a condition of market access.

See e.g. https://www.theguardian.com/world/2016/sep/22/switzerland-vo...

More than 120 treaties as of that writing, with guillotine clause - break one, break them all.

The analogy makes perfect sense.

They're both instances of a relatively small area with very tight historical ties to a much larger region. The relationship between the local economies and the regional economies bears enlightening similarities.

US states are not sovereign nations. but the analogy b/w EU member states and US states still makes perfect sense in some economic discussions.

The analogy is useful. A more apt criticism of the analogy might be "Switzerland's economy is not tightly integrated and dependent on the EU's economy" or "Switzerland has lots of tariffs", but neither of those things is true.

Hence relying much on international trade part. Tariffs can influence only internal prices. Your exports, more costly because of wages, will still need to prove their value.

In practice your tariffs will also reduce your exports since you can generally expect reciprocal tariffs from your trading partners amply demonstrated right now.

That only works out if those higher salaries get paid to the people who need them, and that the majority of those profits don't get sucked up by those at the top. Given the last 30 years or so, I really do not believe that those at the bottom will have any benefit. They'll still get the same crappy wages, and now everything is more expensive for them.

This can also hurt US production. This makes US goods more expensive, not only for Americans but for everyone. Now US goods look even worse to any would be importer.

Maybe this policy forces Americans to buy American but unless we make up every lost export with a domestic purchase it only hurts.

And this is before we even consider retaliatory tariffs.

They will raise prices regardless of their cost structure.

The millions of unfilled manufacturing "jobs" are ~$14 an hour jobs that have significant upfront training requirements, so I doubt that onshoring lower skilled manufacturing is going to lead to much of a renaissance.

Even better, they will re-open the factory but because of better tech, instead of the 5000 employees from 20-30 years ago, they'll have just 100, many of which will be either remote or specialists who move in for this exact position. Not the 5000 local blue collar workers :)

Advances in manufacturing automation is actually the strongest argument in favor of rebuilding a domestic manufacturing base.

Yeah, but are tariffs the best way to achieve this?

Well, in the case of these specific tariffs that the US is imposing, they're on components of things, not on finished goods. So it's actually going to be cheaper to manufacture the entire thing in China, rather than import the components and assemble in the US.