The 1950's and Manufacturing Jobs

Following WW2, reconstruction using the Marshall Plan meant that the US factories were operating at full capacity, meaning there was full employment for the whole population. Wages were relatively high, housing was cheap as suburbs expanded outside the rotten city cores, the loan payments coming back from the Marshall Plan could fund construction projects and redevelopment at home. This period of time was the greatest wealth and happiness my country has ever seen. But eventually the payments ceased as the loans were paid off and by 1970 most of the money was gone, as was the oil. The nation had to start spending its money on oil to pay for the commutes from the suburbs to the city centers which still, tragically, held the jobs, of which there were now many fewer thanks to all the factories in Europe competing with us. Our economy tanked, and it has never recovered properly, merely shifted into a series of Bubbles. Bubble economies are temporary by nature and rely on popularity and self-delusion rather than firm financial foundations. Every bubble eventually bursts, and the victims of the bubble lose their shirts. If you ever wanted to know where rebels and crime families come from it is people who had wealth but lost it and are desperate to get it back and will do whatever it takes, and shed lots of other people's blood, to get it.

I have worked several manufacturing jobs. In the old days, manufacturing was about repetitive motion and being the machine. In modern manufacturing it is more about documentation, filling hoppers, and babysitting robots. Successful manufacturers try to get their costs down and their prices to all the market will bear, often by claiming higher quality than then can actually do, and paying the lowest wages they can get away with, using the most abusive management they can train. That's how things actually work in modern factories. Turnover rates don't matter much provided the equipment is relatively easy to operate. It is better to spend money on maintenance than pay high wages to the staff that can make it perform when its out of kilter. Of course, in the real world, the manager pockets half the maintenance budget and makes the staff do the maintenance, badly, and then blames them when the product is bad, since firing staff for your own mistakes is a time honored tradition. I have worked in that kind of manufacturing too. Any company which claims to have "high standards" or one of those greasy acronyms like 5S? Avoid them like the plague they actually are. They are miserable to work for.

The big problem with bringing manufacturing back to the USA from China is that most of the work will be done by robots and much of which can be made here isn't of particular demand in this country. You can only make so many spatulas before everybody has one. Then what? The US car industry shifted out of badly made economy cars, ignoring all the ways the Europeans made them faster, more efficient, cheaper to manufacture, better handling, and fun to drive, and instead we got SUVs, which are heavy and inefficient like a battle tank, but not actually safe. Most rifles shoot right through an SUV, even the structural steel barely slows down the bullets. All those housewives feeling empowered and vicious on the road with a big SUV? Its just a fantasy. People bought them after the Dot.com crash, and drove up the price of suburban homes while nesting with whatever they held onto from their Dot.com investment winnings, paying too much for a house with an Adjustable Rate Mortgage. And then time passed and the adjustment came through, often doubling or tripling the mortgage payment, causing the owner to foreclose or go bankrupt. They lost everything, including the SUV and the money to buy another one. So the auto industry in the USA collapsed, along with their parts makers. This caused Detroit to turn into a ghost town. The pictures of homes being overgrown by vines and streets abandoned and disappearing under grass and shrubs is pretty amazing, but a number of cities will lose various parts that way. The 1950's and the big car culture just don't hold up in the long term.

There's a fantasy that everybody will have a Tesla or equivalent electric car to keep the suburbs relevant but that's a lie too. It requires more lithium than actually exists, and the Tesla is $100K with all the toys. A Nissan Leaf is $45K to manufacture, the price of three hot hatchbacks or fifteen high end motor scooters with working fuel injection and replacement parts to keep them on the road. Electric cars are a fantasy by rich 1%er snobs. They also advertise the owner is someone worth kidnapping for ransom, which is something that will happen here if the next president can't get more jobs created for our countrymen.

I do think there are things we could make here better than the Chinese. China makes low-quality engines because they use cheap CNC and pay the lowest possible wages, up to and including the use of actual slaves operating them. Everybody knows this. To be fair, we pay a tiny wage to slaves in prisons making license plates, and ex-convicts get parole jobs making street signs. So we're not ethically perfect either. We don't expect convicts to make engine parts, however. And the Chinese do, which is why their engines lack power or won't run or break down. You need careful tolerances and heat treating and the correct alloys to make a good engine. You can contract for that in Chinese factories, but then you have to pay someone else to try and catch them cheating, and that person might be bribed or threatened by the factory owner, who can always bribe the local commissar to order the army or secret police to lean on your inspector. So you still get crappy engines from China. We could build them here, using all those auto parts workers, and sell things like good reliable gas or diesel generators to Africans and Central Americans for a price they can afford. We don't have to go there to sell them. We just make them and put them in a shipping container, sold to the ship or his company and off it goes. We're good at water pumps and public works, and most of the Americas could use those, right down to individual farms and neighborhoods. These are ideal locations for co-generation plants, wells, power, and cellphone towers. And possibly this would bootstrap them into stable economies that don't result in gunmen invaders or crooked police. Populations get sick of that, and even a 90 year old 8mm Mauser can kill a corrupt police captain or thug. We don't need that 1970's endless cycles of communist coups and military juntas anymore. Poor people want clean water, and Americans know how to do that. Why aren't we exporting that?

Right now there's efficient solar panel designs that use domestic materials that aren't being made anywhere. Not in China, not in the USA, not in Europe. Why is that? They're also cheaper, but do have one important requirement to run properly, which is cooling. You might get them to work with aluminum heat sinks on the back to spread the heat around, but the preferred system is liquid cooling pumped by some of the power generated by the panel, and then drawn off for cogeneration purposes (heating, power generation, whatever). The Cheap Chinese solar panels require rare earths, are expensive, and mostly get installed for looks rather than effective power generation to any real degree. They are like electric cars. They are for green snobs. The efficient panels nobody is making would actually power a building with those on the roof. Not just light a few low power bulbs, but the actual power needs. In the African boonies, or remote villages in Central and South America, where there's no hydroelectric power or long distance power lines like in the USA? That would enable all sorts of critical industry and infrastructure. We should be making these modular setups and selling them, at a profit. Not giving away junk but selling stuff that works. They will pay for things that work.

We should also take what has been learned in Europe with their cars and use that here. Buckboard leaf springs and straight axles on modern trucks? Really? Yes, that's stupid. Why do Subaru's and jeeps have cast iron transfer cases when aluminum will do the job for half the weight? We do we still use cast iron engine blocks when we know how to make the blocks in aluminum? Duh! The more weight you remove from a car, the smaller the engine can be for the same acceleration, resulting in better fuel economy. Duh! We also know that you can make a silica based fiber that is 4% the cost of carbon fiber to manufacture, uses the same kinds of resins, and is tougher in accidents, resisting shattering. Rather than invest millions in aluminum body panels, why not use this fiber for car body parts? Why not make a hot hatch body tub out of this, so you get a baby-MacLaren running a 1.0 L turbo that gets 70 mpg because it only weighs 1200 pounds and seats your kids in the back for the school run? This is a DUH! answer. Ford imported their 3-cylinder diesel, the one they've been using in Europe for several years, and if the weight of their hot hatch were reduced using silica fiber tub and body panels it would perform like the Honda it is meant to compete with but get double the corporate average fuel economy, actually meeting the requirement of the law and allowing them to sell more of those big work trucks. These are things American manufacturing can actually do with existing technology and would put us ahead of China and at least tie with Europe, while employing Americans. We should be doing this. Trump says he wants this sort of thing, but I think Trump is a blowhard. Hillary doesn't say anything positive about capitalism.

America needs jobs. Any jobs like hopper filler and robot operator isn't going to employ many people, and we need as many people employed as possible. Employed people buy houses and consumer goods, and if the houses are reasonably priced they can spend more of their wages on goods that employ more people. The Housing Bubble was a terrible tragedy, caused by ARM greed in the financial sector, and the people who did it avoided jail. They are still out there, waiting for the next financial con game. We should be wary of them. In the meantime, think hard about new technologies and ask yourself if your current career and skillset have value to a local manufacturer, or if you know of a product that would make a good business. Manufacturing may end up a bubble, but like Amazon, it may be a persistent one with a future even if the money is nearly translucent.