←back to thread

320 points goldenskye | 6 comments | | HN request time: 0s | source | bottom
Show context
JSR_FDED ◴[] No.45941785[source]
Tariffs are great. They protect the struggling domestic IT industry and gives it time to ramp up its production of vintage computer parts.
replies(14): >>45941811 #>>45941825 #>>45941938 #>>45941960 #>>45942044 #>>45942248 #>>45942306 #>>45942380 #>>45942639 #>>45943114 #>>45943213 #>>45944932 #>>45945406 #>>45948994 #
like_any_other ◴[] No.45942306[source]
Too bad all the competent politicians were dead set against preventing the "free market" from hollowing out American manufacturing.
replies(1): >>45942695 #
bruce511 ◴[] No.45942695[source]
I understand your sentiment, but I feel like your position is somewhat simplistic, and the actual situation is more complicated.

First, overall, the US has increased manufacturing output over the last couple decades. 2019 was the highest year ever, covid interupted a bit, but levels are back there again.

However the number of people involved has dropped a lot. US manufacturing prefers automation and prefers to manufacture things which are high-volume, low labor.

A good parallel is agriculture. Foods produced in the US (and the US produces a lot of food) tend towards low-labor. Think fields of wheat or corn, not vegetables. Most fresh produce comes from cheap-labor regions like Mexico (or is grown locally with foreign labor.)

So really your point is not about American manufacturing, but rather American labor.

Secondly, this free market you refer to is the American consumer. They are very price sensitive, and deeply favor cheap over good. This contrasts to a lot of the rest of the developed world which strikes more of a balance in this regard.

Since labor is cheaper elsewhere, it follows that cheap imports are favored (by the consumer) over the locally produced items. Unfortunately the imported good is often of a higher quality now (because foreign manufacturers can afford quality and still be cheap.)

So, the politicians you speak of (regardless of party) are reluctant to medel, partly because of unintended consequences, and mostly because the only real lever they have is to increase the cost of imported goods (ie tarrif them) which in turn gets consumers upset. (Witness the fury of the voter in 2020 because of more expensive goods.)

Thus while it's helpful to blame politicians, politicians are elected by consumers. Consumers who could by local, but choose not to. Consumers who vote against politicians that cause price hikes. (Even when those same politicians incentivise local production with things like CHIPS act.)

You can blame politicians, and indeed corporations all day long, but the consumers are voting with their wallets, and "cheap" is the only metric they care about.

replies(6): >>45942872 #>>45943909 #>>45944001 #>>45945482 #>>45945491 #>>45958922 #
1. mindslight ◴[] No.45942872[source]
... "cheap" is the main metric consumers care about because whenever anything can be supplied for less, the Federal Reserve calls that "deflationary" and creates enough new money to make sure prices go up to erase those gains. So the cost of buying anything isn't bottom of the barrel keeps going up in real terms. Most people can afford to swim against the current in one product category, and some people [the affluent] can afford to swim against the current in many product categories, but most people cannot afford to swim against the current in most product categories.
replies(1): >>45943059 #
2. intended ◴[] No.45943059[source]
Dang it no! That isn’t remotely how deflationary works.

There’s always things being supplied for at lower prices. That is what product or service improvements do.

Your car is vastly safer than a Ford Model T. Air bags, better brakes, power steering, AC - all of which make it a vastly superior vehicle. If inflation worked the way you implied, the price of it would have constantly gone up, and never would it have managed to be affordable.

Firms reduce the cost of production and get to sell more to larger numbers of consumers. Total revenue = $ value * N customers.

You expand further on your position in the second part of your para, but that is fundamentally about how wages have not gone up over time. Which has nothing to do with inflation. It has MUCH more to do with the labor markets, and the pay people are getting for their labor.

https://www.investopedia.com/terms/d/deflation.asp

replies(2): >>45943109 #>>45943937 #
3. mindslight ◴[] No.45943109[source]
> Air bags, better brakes, power steering, AC - all of which make it a vastly superior vehicle. If inflation worked the way you implied, the price of it would have constantly gone up, and never would it have managed to be affordable.

You're talking about something different than what I was - improvements that make a product better without the price going up (because the cost is small enough to become the new baseline, either by market stickiness or regulation). Those don't affect CPI, and therefore make life better at the same price. So I agree with where you're coming from there.

My point is about the manufacturing/product innovations that make prices go down (regardless of whether quality gets better or worse). Take for example offshoring, which was sold as maybe your local factory will have to lay off some people but we will have less expensive items at the store so we will all win on average. But it's a trick because the Fed creates a feedback loop that makes it so prices cannot go down on average.

Wages haven't risen as fast as consumer price inflation because that new money is injected into the financial industry (the fake "fiscal responsibility" of the Republican party). And when too much newly created money finally leads to too much demand for labor and wages start rising, the Fed then tamps down on the monetary creation.

replies(1): >>45943638 #
4. bruce511 ◴[] No.45943638{3}[source]
Clearly monetary policy is a big subject, and yes the Fed has specific targets etc in mind.

But I was talking more about a mindset. And of course speaking generally- lots of people (everywhere) have budget constraints.

Having traveled in the US and Europe I'd suggest that in the US "volume" is rewarded as "good". For the same amount of money, "more" is preferred to "good". In contrast in Europe it's less "look how big the plate is" and more about "better quality."

So, to rather over-simply things, I'd describe US food as "bland, loaded with sugar, lots of it", whereas Europe is more "smaller quantities, less processing, more farmer's market".

Not just food. But across the board. Cheap = good.

And yes, I'm talking generally big-picture here - it's a culture thing - there are lots of counter examples if you look hard.

replies(1): >>45945707 #
5. AnthonyMouse ◴[] No.45943937[source]
> If inflation worked the way you implied, the price of it would have constantly gone up, and never would it have managed to be affordable.

In 1924 a Ford Model T cost $260. Adjusted for inflation to 2025 this is <$5000. The average new car price in 2025 is ~$50,000.

6. mindslight ◴[] No.45945707{4}[source]
I definitely agree with this point. I'd say food is a special case though, where the US really did have much more than Europe after WWII. Why do most Americans seem allergic to spices and flavor? I wish I knew. And this applies even to food that is supposed to be flavorful like burritos when scaled to national chains - eg Chipotle/Qdoba/Fresh City.

But economics shapes culture, too. There are certainly no shortage of subcultures trying to swim against the grain - buy American, local/organic food, German tool enthusiasts, even the tech community's libre software and anti-cloud. It feels like they remain subcultures because they're fundamentally fighting an uphill battle against top-down prices/advertising/etc set by large market makers. Which is why I initially took issue with your comment, framing it solely in terms of individual choice.

But the dynamic extends other places too, say the housing market with everything "move in ready" being beige, spec grade fixtures, and "fancy" appliances bought from a market for lemons. Trying to chew on that it still feels like not exactly what people prefer, but rather what people don't disprefer - the least offensive option to enable economies of scale (which once again comes down to monetary policy supporting the housing bubble, but I'm certainly not trying to ram the whole topic back into that)