I was reading this morning about how U.S. Treasury Secretary Janet Yellen is in China trying to get Chinese manufacturers to stop making so much damn stuff. I get it. The ‘China Shock’ that occurred at the beginning of this century was corrosive and damaging and made a few people very rich and most of us worse off, so the fear of it happening again is real.
But what if we take the lessons we learned from the last explosion of Chinese manufacturing and use them to our advantage? China’s government, for various historical and political reasons, is ready to potentially trash its economy in an effort to drive the prices of battery-powered vehicles, solar panels, lithium-ion batteries, and all sorts of other green stuff much, much cheaper. I say… let them.
I will be honest that I’m not even sure how sincere I am with this proposal, but if you’ll forgive my Swiftian turn (Jonathan, not Taylor) I think it’s worth exploring the idea if only because some version of this might happen anyway.
This proposal is unique in that it is simultaneously anathema to almost everyone, from extremely liberal pro-union households to deeply anti-China/anti-union voters with right-wing views to Elon Musk.
Today’s Morning Dump is going to get weird and maybe even a little uncomfortable, so stick with me and I’ll reward you with a couple of short bits about Canoo’s CEO’s and his private jet habit, an update on Fisker, and what’s going on with Volvo.
Here we go.
A Slightly Less Modest Proposal
Let’s start with what’s happening today and I’ll work us backward into my proposal because this requires some context to enjoy. Additionally, I’d like to demonstrate I have at least a moderate understanding of the potential consequences of this proposal.
Treasury Secretary Janet Yellen is in China, she’s talking to Chinese officials, and she’s got a message: Slow down.
Here’s the report from Reuters:
U.S. Treasury Secretary Janet Yellen arrives in China’s southern factory hub of Guangzhou on Thursday with a tough message to Chinese officials: you’re producing too much of everything, especially clean energy goods, and the world can’t absorb it.
China is unleashing a flood of electric vehicles (EVs), batteries, solar panels, semiconductors and other manufactured goods onto global markets, the result of years of massive government subsidies and weak demand at home. Global prices for many goods are tanking, pressuring producers in other countries.
“We see a growing threat of money losing firms that are going to have to sell off their production somewhere,” a senior U.S. Treasury official said of overproduction in key Chinese sectors.
This is a strange set of paragraphs to parse with no historical or economic context. The person in charge of making sure our economy stays strong is going to China and asking companies that are probably losing money to stop dumping cheap goods on the world. Specifically, she’s asking China to stop producing all of these cheap goods that are, net, probably good for the environment.
The current American government, which believes global warming is a threat, is simultaneously trying to make green stuff cheaper for American consumers and stop China from helping make green stuff cheaper.
More from Reuters:
Including EVs and combustion-engine cars, China by the end of 2022 had the capacity to produce 43 million vehicles annually, but its plant utilisation rate – a measure closely linked to profitability – was just under 55%, according to data from the China Passenger Car Association.
[…]
The situation in China’s solar panel sector may be worse, where overproduction pushed prices down 42% last year to levels 60% below the cost of comparable U.S.-made products. China now accounts for 80% of global production capacity, and major solar producers are continuing to build factories, backed by provincial and local subsidies.
Wild stuff. China has made a bet that it can be the leader of the rest of this century, in the way that the United States was after WWII, and it can do it by helping supply the developing world with affordable manufactured goods and loans/expertise to build up local infrastructure. This is the “New Silk Road” or “Belt and Road” initiative. China has subsidized a huge green manufacturing base and is willing to continually drive down the prices so that it can use these factories, which it needs to do because China’s economy is shaky and the population is rapidly aging.
Generally speaking, Western governments aren’t jazzed about this. They are fearful of the spread of China’s influence and the replacement of the dollar as the de facto global currency, which is something China wants to happen.
Plus, the United States suffered greatly from ‘China Shock’ when Western governments allowed China to make a bunch of stuff so cheaply and sell that stuff in the West in the hopes that it would drive down prices enough to offset manufacturing job losses. This was not good. Here’s what happened, according to Stanford’s Center on China’s Economy and Institutions:
The evidence indicates that the U.S. witnessed a 2.68% drop in manufacturing employment-to-population ratio* between 2001 and 2019. The scholars find that import penetration from China, which increased at an average rate of 0.89% between 2000 and 2012, accounted for 59.3% of all manufacturing job losses in the U.S. between 2001 and 2019. Furthermore, the research findings show that the regions experiencing larger trade-induced reductions in manufacturing employment did not experience a corresponding drop in local population due to out–migration nor increased absorption of laid-off workers into non-manufacturing sectors. Manufacturing job losses caused by the China trade shock converted nearly one for one into long-term unemployment.
I also have a personal belief that a lot of our political strife of the present came out of the Democratic Party abandoning labor and manufacturing on behalf of some neo-liberal economic belief that free trade will solve all of our problems. Life in Rust Belt states got massively bad and the negative externalities of this (opioid addiction, obesity, extremist tendencies) far outweighed the positive benefits (low inflation, cheap plastic crap).
Yellen and others are against letting this happen. European lawmakers, for instance, are attempting to put retroactive tariffs on Chinese electric vehicles. For a good view of why, there’s this piece in Business Insider titled “The world is scarred from China shock 1.0. They’re not about to let 2.0 happen so easily.”
From the piece:
The world isn’t going to be caught flat-footed by China’s emerging dominance in hot new industries this time.
“It is likely that strategic competition between the US, EU, and China will continue in the long-term in areas of advanced manufacturing technologies,” said Biswas.
Many companies are already diversifying supply chains away from China for a range of products.
There’s also this great bit from Janet Yellen in The Wall Street Journal:
“People like me grew up with the view: If people send you cheap goods, you should send a thank-you note. That’s what standard economics basically says,” she said. “I would never ever again say, ‘Send a thank-you note.’ ”
I’m sure Yellen is way smarter than I am and has an extremely difficult job. She seems to recognize the importance of China to the global economy and also the risks that exist by letting it run away with its manufacturing base and destroy the capabilities to build batteries and green technology in the United States, Europe, Japan, and other countries.
At the same time, I believe global warming is a real thing. I believe that the biggest barrier to dramatically lowering our carbon footprint in the long term is the short-term price of all of these things.
So, here’s my proposal: Take down trade barriers and lower tariffs so China can make a ton of cheap BEVs, batteries, and solar panels. Buy them. Buy a ton of them. Put cheap Chinese batteries in American-built cars. Rapidly electrify the car market in the West and ‘green’ the grid with cheap solar everywhere. A not-small component of inflation is the prices of transportation and the price of energy and we can lower both pretty rapidly.
Use this sudden windfall to our advantage and, to take a page from Adam Posen, welcome in engineers, students, and investment from China in the United States:
The United States should welcome those savings, along with Chinese businesses, investors, students, and workers who leave in search of greener pastures. But current policies, enacted by both the Trump and the Biden administrations, do the opposite. They seek to close off American universities and companies to Chinese students and workers. They restrict inward foreign investment and capital inflows, and they discourage Chinese companies from moving into the U.S. and allied economies, whether for production or for research and development. They reduce downward pressure on the yuan and diminish, in the eyes of ordinary Chinese people, the contrast between their government’s conduct and that of the United States. These policies should be reversed.
The last ‘China Shock’ was good for China and, I believe, bad for the West. I think we can do the opposite here.
Via the Inflation Reduction Act and CHIPS Act, we’re already making huge investments in ensuring America has a pipeline of key goods like semiconductors and batteries. Let’s do more of that. Also, Chinese battery companies are ahead of us in battery production, let’s learn from them and copy them. We can simultaneously make EVs cheaper here and build an EV industry.
While the net impact of electric vehicles on the global environment is positive, the production of these batteries can have negative environmental impacts on the local level. That local level is often China, and not here.
Someone on the planet is going to have to subsidize the production of cheaper batteries and solar panels and all the green things we want. If we’re putting up trade barriers and putting tax credits on the hood of every EV then we’re the ones doing it and we’re the ones paying for it. Why not let China pay for it?
My theory here is that China cannot continue to subsidize this stuff forever and that, actually, bringing their plants up to full utilization and continuing to lower prices would end up being bad for China as it’s not sustainable and the end result would be further imperiling the Chinese economy. If we use the cost savings to build up our own industry and offset the potential job loss, we’re essentially letting China subsidize the creation of our own green economy.
If we did it like last time this would mean completely destroying American manufacturing and losing a ton of jobs. I’m not arguing we do that. I’m arguing we use this one-time savings from cheap cars and batteries, subsidized by China, and use those savings to temporarily subsidize the employment of all of the people and companies impacted. Eventually, China buckles and the West will have both the capacity and expertise to fill the void.
Assuming the elite of China are rational and smart, which I generally do, then at some level I think at least a little of the bluster from Chinese Communist Party officials is just kayfabe and they hope, or should hope, that the West find some middle ground balancing act that saves China from itself while also helping the country increase goods production and prices so it can keep its population employed.
But I don’t think China is just going to decide to close its factories and I don’t think Western governments can resist cheap Chinese goods forever. Rather than this long process of trade mediation, which is what we’re probably in for if President Biden wins this November, I think we just rip off the bandaid and make ‘China Shock 2.0: Electric Boondagle’ China’s problem. Obviously, if Donald Trump wins in November, we’re probably in for more extreme tariffs, which just kicks the can down the road.
So, this is my crazy proposal, and I’ll give you a chance at the bottom of the post to tell me why I’m wrong.
EV Startup Canoo Spent 2x Its Annual Revenue On CEO’s Jet: Report
Our pal Kirsten Korosec over at Tech Crunch is a great reporter and went through EV Startup Canoo’s 2023 earnings reports and found this tucked in there:
The company generated $886,000 in revenue in 2023 compared to zero dollars in 2022, as the company delivered 22 vehicles to entities like NASA and the state of Oklahoma. And it did reduce its loss from operations by nearly half, from $506 million in 2022 to $267 million in 2023. The revenue-to-losses gap is still considerable though: The company reported total net losses of $302.6 million in 2023.
Still, one only needs to look at what Canoo is paying to rent the CEO’s private jet to put those “wins” into perspective. Under a deal reached in November 2020, Canoo reimburses Aquila Family Ventures, an entity owned by the CEO, for use of an aircraft. In 2023, Canoo spent $1.7 million on this reimbursement — that’s double the amount of revenue it generated. Canoo paid Aquila Family Ventures $1.3 million in 2022 and $1.8 million in 2021 for use of the aircraft.
You gotta spend money to make money, I guess.
Fisker Withdraws All Financial Guidance For 2024
How is Fisker going to do this year? As discussed many times, it’s not going well, and according to the company’s latest filing it’s getting worse:
As previously disclosed, the Company continues to evaluate strategic alternatives. Such alternatives may include in or out of court restructurings, capital markets transactions (subject to market conditions), repurchases, redemptions, exchanges or other refinancings of the Company’s existing debt, the potential issuance of equity securities, the potential sale of assets and businesses and/or other strategic transactions and/or other measures. These alternatives involve significant uncertainties, potential significant delays, costs and other risks, and there can be no assurance that any of these alternatives will be available on acceptable terms, or at all, in the current market environment or in the foreseeable future.The Company has determined to withdraw all financial and operational guidance for the year 2024 that was previously disclosed by the Company on February 29, 2024, and will forego providing any updated guidance while it continues to evaluate strategic alternatives.
Volvo Is Having A Good Quarter
Volvo sales are up globally as the car shifts towards electrification with the small Volvo EX30 and, at the same time, has a decent number of plug-in hybrids for sale.
It’s indicative of the consumer difference between Europe and the U.S. in the split between EV and PHEV sales. In Europe, Volvo’s fully electric sales rose 48% in Q1 2024 compared to Q1 2023. Over the same period, PHEV sales fell by about 2%.
In the United States, it’s exactly the opposite. Through the first three months of 2024, BEV sales dropped by 65% while sales of Volvo’s PHEV models increased by 44%. This will probably stabilize as the EX30 arrives in the United States, but it’s an interesting stat to consider.
What I’m Listening To While Writing TMD
I did indeed watch a little of “Good Will Hunting” on a plane last week so, yeah, Elliott Smith is stuck in my head.
The Big Question
Tell me why my proposal is insane. I’ll wait.
This is the biggest crux of what’s happened in the last 30-40 in the US. No labor party to favor the lower and middle classes, all manufacturing starts creeping overseas because there’s no penalty from our government. We have the billionaires party and the millionaires party and wonder why everyone else is complaining
One of the reasons that the CCP is pushing for ever-cheaper exports is because their economy is in VERY bad shape. What little data the CCP has allowed to get released paints a pretty bad picture. And what has been leaked past them is wayyyyyy worse. The CCP is a brutal, authoritarian regime that treats its people like prisoners. But if not for their total control of the economy the world would be in a depression. Because China’s real estate bubble makes the one we had here in 2008 look like a tiny blip on the radar.
Chinese citizens don’t trust Chinese banks or the stock market ( they aren’t stupid, they know its all manipulated by the CCP) So they poured it all into real estate, which is now in many cases worthless. The collective savings of the entire nation has evaporated. So domestic spending is non-existent.
What the CCP is doing now is pretty desperate: Dump cheap products in every country that will allow it, take over whatever market share any foreign competition had, then I would assume start raising prices. This is risky. And given that the EU, the US and other regions are placing tariffs on what they import means it could just as easily backfire.
China as an economic power is as much communist as the US. In a way the unions in the US are closer to socialism than China is.
For some reason everyone thinks the CCP controls all companies. In reality they just react to what companies are doing. Once a company does odd things then they will react. Just like the DoJ can act after something has happened. The CCP didn’t order to ‘dump Chinese cars are a lower price’ – the companies are just lowering their prices just like Tesla did (in the US and in China) – everyone is responding to each other.
The prices of Chinese cars were pretty high in China, often closer to $50k USD or more. Chinese bought a ton of expensive Tesla models S and X and Y besides tons of expensive Euro vehicles. The result of all those sales is that the manufacturers actually were able to scale and are now seemingly able to produce decent mid-level cars for a decent price, just like the rest of the world WAS able to produce decent cars for a decent price before 2008.
All car manufacturers around the world receive subsidies, tax breaks and what not. Every single one of them. And now it is also happening with the whole Chips Act. Intel gets bags of money, Samsung, TSMC, as long as they build a fab in the US. No problem with that, we should have reduced our dependency on Taiwan at least a decade ago instead of now.
But all that money, all those subsidies are no better or worse than what Europe or Japan or China has been doing ; providing financial help to their own factories.
This also hurts companies outside the US eventually ; how can they start a new fab on their own and do R&D without any subsidies like the US is giving to Intel & co? So TL;DR; we can say goodbye to a free open global market and say hello to isolationism.
On top of that every country is aging. Europe, Japan, the US as well. China has one more or less ace in their sleeve ; there is a massive amount of people still working in agriculture and doing a pretty lousy job at that as well, a lot are literally ploughing the land by hand. They will automate that once robots and machinery becomes cheaper. Electrification would help with that ; a tractor using $50 or just $10 a day for gas or electricity can be a huge difference when the population using it is just poor. Don’t forget the GDP per capita in China is just 20% of the US.
So freeing up those people will instantly solve any shortage of labor. On top of that there IS already a surplus of workers, even university educated people ; every year over 5-7 million kids with a bachelor degree enter the job market in China and it is straining that market at this moment.
What we already are seeing are Chinese investments in Africa, in Vietnam, in India, in Pakistan, in Malaysia, in Indonesia and even the west pacific islands (e.g. Papua New Guinea ) ; those countries have even lower GDP so a factory there can operate at lower costs, with Chinese supervisors and management to make sure the quality of the products is still in par. Chinese have set up mobile phone factories in Africa and are producing a ‘domestic’ product in Africa for mind-boggling low prices.
Eventually those products will follow a path like the Chinese electric cars ; first they suck and fall apart. Then they become fairly useful but still ugly as heck, then they hire US and European designers and use higher level components and suddenly you have a ton of very very competitive Chinese cars which can compete with European, US and Japanese (EV) cars on every metric (reliability, performance, quality, features and price).
If things continue the way they are going now then I see the car industry collapse, world-wide. The US and Europe and Japan needs to sell cars in China. If China retaliates with high import duties on those cars then these cars become unreachable for the Chinese middle class. The elite will still pay double, triple or even ten-fold the price to drive their Porsches, McLarens and Bentleys, just like they’re doing right now (import duties on luxury cars are extreme in China).
But that means perhaps 25 to even 50% of car exports will vaporize overnight. Ford and Buick (largest brands in China at the moment) would cease to exist without the profits coming in from China. A bail out like 2008 would be necessary, but with a grim outlook because the potential lucrative Chinese market would be gone.
Not every country would impose high duties on Chinese cars ; especially countries which have no large domestic car industry e.g. a large part of the world. South America. Africa. Asia minus South-Korea. Even Russia. Those would still “need” affordable modern cars and then they will want to have “a car” versus “no car”.
I think you have a very skewed look of the world and China in particular and you don’t see the impact of the current short-term political decisions being made by 4-year term politicians which all seem to have close connections to large corporations and billionaires. Those people really have a different agenda than the common people. While China can be accused of being run by a 1 party government ; the US is basically also being governed by an elite club of Very Wealth Individuals and companies.
And the irony of it all is if you look at it from a very far perspective ; imagine some civilized alien race looking at earth and seeing all these tiny specs of land and people fighting against each other while working together would be so much more beneficial to each other. The propaganda, the misinformation, the lies, the blatant atrocious acts done by oblivious foot soldiers in the name of a handful political leaders… it’s a sad thing to witness.
Meanwhile we’re more worried if the daughter of the neighbor is allowed to have an abortion of an unwanted child or that a country on the other side of the world doesn’t believe in our obviously flawed 2 party system…
Yes, let’s roll back time to 1940 and become a totally self-relying country. Are you going to be a steel worker? A coal miner? An assembly line worker? To produce the necessary stuff which is now being imported from China (and other countries)? Are we going to allow tons and tons of immigrants into the country for those jobs?
I feel the US is wrecking itself with its own policies.
The problem with assuming that some “savings” we get from buying cheap Chinese goods of this time would actually be used in a way that is rational and benefits the economy and the country. Or would these “savings” be used for stock buybacks, dividends and lining executive pockets. What I’ve seen in three decades of business is that markets that “ought to be” rational, are not. US companies generally don’t act in the interest of anyone but themselves, and and generally act with only the short term in mind. The Chinese are not any more rational than we are, but often will act with a longer time horizon in mind. However, none of this changes the fact that within the next decade China faces a population crisis where the number of older people continues to increase while the number of people working to replace them declines. The “dependency ratio” (the % of people over 65 vs under) is about 21% now and will be over 35% (same ratio as the US) by the middle of the next decade, and it (Chinas’s ratio) climbs from there. Their population is declining, they are experiencing out migration and no in-migration. Not too much you can do about a demographic problem. So the central government is likely looking at the next 10 years as their last opportunity to reap the benefit of their dominant position before they don’t have enough workers to make cheap stuff anymore. India, despite its issues, is positioned to be the next manufacturer of cheap stuff on the back of demographics alone. So I would say that there’s no reason to cede any advantage to China just to get more cheap stuff unless we can figure out how to act in our own self interest over the long term.
I suppose my primary question would be that if the CCP is fully aware of a major economic and population problem on the horizon, why is Winnie The Pooh tightening his grip on power?
Seems like the “logical” thing to do would be to follow the original term limit and let the next guy take the fall.
Because there’s a tendency to execute predecessors for mismanagement?
How many former Chinese Premiers have been?
However, none of this changes the fact that within the next decade China faces a population crisis where the number of older people continues to increase while the number of people working to replace them declines.
Pish! I think that “crisis” is greatly overblown. Automation will replace many of the retired workers and retired folks don’t need much in the way of resources. Worse comes to worse the global population is still increasing so those folks will need jobs. Those jobs can be taking care of Chinese old folks that need care.
Two words: National. Security.
Remember when WWII hit and we converted all our manufacturing facilities to produce weapons? Let’s not forget that history doesn’t repeat but it often rhymes.
It’s not imminent yet, but we are on a long term collision course with China, and after decades of subsidizing their manufacturing capacity with our dollars, if we find ourselves in direct conflict with them and they have significantly more manufacturing capacity than we do, we will very quickly understand the magnitude of our mistake.
I doubt a next global war will have any benefits from regular companies changing to factories of war machinery. You don’t build F-22s, F-35s, even AH-64Ds in a regular car plant anymore.
Perhaps drones, missiles, shells, but I have this feeling that the next global war is going to be fought online. IMHO if you disable the internet of the other country then it goes down the drain in a matter of months since so much is relying on internet/network communications nowadays…
I expect satellites to be shot from the sky, fiber cables to be cut (a la the Nord Stream gas pipeline) and tons of UAVs and more simple drones to overwhelm and distract defenses or cause them to waste their expensive missiles and what not.
We hardly can make enough super low-tech 155mm shells for Ukraine, let alone producing more sophisticated weapons at massive scale in a short time.
Totally worth trying. Let me introduce you to Canada. There is a dairy cartel in place that sucks money from the general population (at roughly double the world market price) when consuming milk or related products (other cartels feature eggs, chicken). The counter argument to opening the market (i.e. the US dairy producers) is that they get (unfairly) subsidized by the US government (taxpayer). Are you telling me that I can have another country’s population pay (partially) for my milk? Sure, bring it on.
Investigate how these regimes/tariffs work out (Chicken tax comes to mind, but also the steel tariffs are a good example). A small group, the manufacturers/workers, benefits, but the entire population looses, with the steel it may actually make some other manufacturer’s products uncompetitive on the world markets (exporting white goods…how many US manufactured vs. Samsung, LG and so on?). Come to think of it, who buys the Ford F150 outside the US, I recall seeing mostly Toyotas.
It is tough in the free market economy, it is initially easier in shielded system (Brazil is a case to study). If you enjoy history, read about Britain complaining about IP theft, unfair subsidies and overall a general disrespect towards their superiority, at the eve of WW1;
and then you can recycle those, just replace with US and China.
I don’t think your proposal is insane, but I don’t think it gives enough consideration to the real national security concerns to be reckoned with here.
Or the factor of unintended consequences, which always throws a monkey wrench into most economic equations.
The whole private jet thing is a very bad look for Canoo.
Although we don’t know the full story. It could have been money poorly spent or it could have saved money if Tony Tequila really needed to travel that much and wasn’t well served by commercial flights.
My company defends it’s executive private jet, successfully, by saving enough time to offset the costs. If the CEO make a round trip from the North American headquarters to my facility, it’s six hours tops. Plus, time spent in the air can be used to discuss confidential corporate things so it isn’t all wasted.
If I make the same trip, I need to budget at least another four hours if I’m lucky and get a direct commercial flight. Plus, I can’t do much work while traveling due to information security policies. My travel time is almost all lost time. What does idling a CEO for 10 hours cost? A hell of a lot more than idling an engineer.
Canoo isn’t exactly a global OEM, I seriously doubt the math works out on that one. They’ve barely managed to get a plant scraped together, and are depending an awful lot on incentive payments from the State of Oklahoma just to get series production started.
Spending over a million dollars for air transportation per year comes down to $2,700 per day, for 365 days a year.
Not sure which CEO of a struggling startup needs to travel that much around the world, for several years in a row.
Also it seems to be a very inefficient way to deal with things ; 1) there is such a thing as a webcam 2) for such money you can hire quite a few people who can be 24/7 on the ground at the destination to do even more work.
Then again, it’s probably totally worth it.
If American auto manufacturers are willing to make cheap – actually cheap – small EVs that comply with all American safety standards that’s one thing. If however they wring their hands and claim its not possible because *reasons* yet China and others can offer those why not just let them? Americans don’t like small, efficient cars anyway right?
RIGHT??
Don’t even bother to impose a tariff, Americans will turn up their nose at those cheap efficient Chinese EVs no matter how cheap or good they are. Just deny China the market to large, pedestrian smashing ICE pickups and SUVs.
Problem solved.
You’ve just pointed out the inconsistency in the official narrative on Chinese cheap/small EVs and Americans not wanting small cars in the U.S. in general.
The fact is, the major automakers in the USA don’t want to SUV/CUV/truck zeitgeist to be upended, because it WILL narrow profit margins severely. They want everyone in debt paying interest on expensive vehicles, because they make more money financing these vehicles than actually selling them. If someone can buy a 5-seater electric hatchback with a 150+ mile range from China for half the cost of a Mitsubishi Mirage with cash, the finance companies of the U.S. automakers get ZERO dollars paid to them as interest.
Lots of sacred cows need to be gored. The inexpensive Chinese offerings are the obsidian blade sharpened for the job. If the major automakers refuse to build inexpensive small EVs with long range, something well within their capabilities, then absolutely the Chinese offerings should be allowed into the USA. If the USA automakers want to be that greedy, they deserve to go under, and not get any bailouts. Bailout the workers instead by giving them a massive 6-figure severance package for less than half the cost to bail out the automakers, if the topic is broached. The overpaid C-suite assholes need to be thrown under the bus, and good riddance.
Take it a step further – insist China reciprocate by allowing us to sell our large, pedestrian smashing ICE pickups and SUVs over there without tarrifs.
Worst case: We don’t sell any and we’re no worse off for it.
Best case: We sell lots and lots of them.
I think we are overestimating how good Chinese manufacture is for the environment, even when it’s “green tech.” Much of it will end up in landfill before soon, most of it is manufactured in wholly unsustainable ways.
But undermining the Chinese economy by letting them dump themselves into oblivion is not a bad idea, as long as we can somehow keep manufacturing ability here to start back up later. That’s the hard part.
I don’t know how accurate this is, as it’s from the Cato institute, but they’re pulling numbers from the government regarding how much U.S. Autos contribute to overall carbon emersions.
” Remember that the U.S. accounts for only 15% of global greenhouse gas emissions (compared with 30% for China). That means U.S. passenger vehicles contribute only 16.4% to the country’s 15% share of global greenhouse gas emissions – less than 2.5%” (Note: I don’t think that includes passenger trucks but I could be wrong)
SO, yes I am 100% behind reducing our carbon footprint. As a species we’re really shooting ourselves in both feet (I feel sorry for my grandkids who are getting stuck with the mess we’ve made) – but we have to do a LOT more globally than just going after autos. I’d like to see diesel bunker oil ocean shipping exhausts reigned in for example, but it’s electricity and heat generation using fossil fuels is the #1 source of green house gas emissions globally.
Also worth noting that electric cars are NOT net zero emissions, and with current technologies a 50% reduction in carbon emissions at best is possible.
So going off of your numbers, if we threw away every single car in America and replaced it with a comparable electric car, the long term global emissions reduction would be in the range of 1%.
I love to see someone preaching my usual points before I even get here. We’re in deep climate shit, but personal transportation didn’t get us here and electrification of personal transportation won’t get us out. What it WILL do is extract all the money we could have spent on tech and infrastructure that might have solved the problem, and saved us all some money too, after a few years.
It is worth saying, however, that exporting our model of personal transportation to the billions of people worldwide who are currently in the process of or about to be in the process of climbing out of poverty isn’t going to do anyone any favors.
Yep, though for what it’s worth we’re a 2 ev family here ( for local trips 23 Bolts get about 120 + miles on $3 of electricity and instant torque ( not as much fun as my Miata’s but still they’re a steal with the tax rebates!
You pay $0.09/kWh? Lucky you!
FWIW I pay PG&E ~$0.50/kWh so I’d end up spending $16.80 for the same 120ish miles which is more than I’d spend to do the same in a used Prius, even at California gas prices. OTOH if one is lucky to have an employer with free workplace charging the math goes totally the other way. So definitely a case of YMMV.
As much of a steal as those Bolts are I doubt they’re cheaper than a good used Prius well past its depreciation inflection point. A Prius may be not as much fun to drive though.
Do you really have to ask “how biased is a ‘study’ from a libertarian think tank?”
The numbers are accurate though.
The US is below 15% of global emissions.
https://ourworldindata.org/co2-emissions
“Transportation” makes up 28% of US emissions, and light duty vehicles are 58% of that, or about 16% of the country’s total.
https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions
Preach, brother. More reading of pragmatically-minded analysis below, for those interested:
This climate problem is bigger than cars and much harder to solveExcellent article published on Vox a few years back that should serve as a reality check, while driving home how turbo-fucked we are.
US Energy Information Administration’s 2023 Annual Energy Outlook
Everyone should read this. The US EIA is bound by law to provide its analysis independent of any other officer of the US government, and is one of the best tools we have for cutting through the mountains of disinformation out there. A TON of work went into this, and they did a spectacular job of cooking it down to a digestible by a technically-minded person, but not oversimplified.
I wish I could embed some of the figures from this paper. They’re just so good. If you go to the EIA website, they have loads of excel-based data you can download and use as you wish, not just for their projected most-likely future course of events (which they call the Reference case), but also for “side cases” such as higher/lower oil prices, higher/lower zero-carbon tech costs, etc. It’s incredible, and also sobering when you realize how you realize just how many stars have to align just for us to fall slightly less wildly short of our stated goals.
There normally would have been a 2024 update last month, but they are skipping it to update their methodology instead. I hope it’s worth it.
Excellent article published on Vox a few years back that should serve as a reality check, while driving home how turbo-fucked we are.
The chart shows SMR nuclear heat within the cost range of NG while also being low carbon. H2 (and presumably arc electricity) generated by SMR also makes for the cheapest steel. So that’s solvable, at least if the feasibility can be fixed. Which I think is a lot easier to fix than the issues facing the other options. Since most of that is NIMBYism I expect China and counties with less NIMBYs will be the first to the table.
Something from the article:
Some years ago there was a terrible series on one of the cable channels trying various solutions for such problems. One of the few ideas that showed promise was a floating pump that used wave action to draw nutrients from deeper water to the surface to promote algae growth. That sequestered atmospheric carbon and what didn’t die and fall to the bottom of the ocean provided food for the local food chain helping fishing stocks. This would be especially useful in what is now an oceanic desert.
The pump was just a buoy holding up a long plastic tube with a flap valve at the bottom. Very simple, very cheap, very reliable and something China could turn out by the bazillions. Make it from biodegradable plastic so it disintegrates shortly after its expected MTF and make it buoyancy negative so once the float pops it sinks to the bottom of the deep ocean to finish disintegrating there.
Just a thought.
US Energy Information Administration’s 2023 Annual Energy Outlook
Everyone should read this.
Will do, thanks!
Possible maybe, but how are you going to make plant operators do it, and how are you going to stop them from just going to some other country that would love to have a domestic steel industry more than they would like to lower carbon footprint? Is congress going to act? Most of the reason we’re having electric cars shoved down our throats is that it’s a highly visible consumer-facing tech promoting yet more spending and allowing people to feel like they’re “not part of the problem” because they’ve mitigated 30-50% of their share of the 58% of the 28% of the 15% of the carbon pie. The rest is because congress passed the Clean Air Act during the Nixon administration, before it was fully lobotomized, and it can now be tweaked via executive action without breaking a filibuster.
Interesting thing about that algae idea it that that’s more-or-less how all the oil we have on this planet (and by extension, all the oxygen we have in the atmosphere) was formed. Algae growing on the surface and sinking down to an anaerobic environment before it could decay. Would it work? Maybe. A big problem is that everything we do in the scale of human lifetimes happens in the scale of human lifetimes because we use a lot of energy to do it. How far in the hole do we start from making all that plastic? We’re sort-of talking about terraforming our own planet while we’re on it, and the ocean’s ecosystems are kind of important. Unintended consequences are virtually guaranteed.
Would the algae thing work? I dunno but it’s cheap and I expect quite easy to try.
Worst case: We end up with slightly more plastic sequestered at the ocean bottom for a couple of years till it falls apart. Who knows, maybe there’s something down there that will find it yummy.
Best case: A LOT more sequestered carbon and big game fish where now there is none. Bring on the 300lb bluefin!
Hell the technical “expert” on the show was a graduate student so really, how hard can it be?
Wonderful stuff that algae. I just wish it tasted less like a dirty fish tank.
To be fair here, China does have 1.4 billion people. So with 4x’s the population, they *only* produce twice as much greenhouse gases. So the average carbon footprint of a Chinese person is half of American. This isn’t to take blame off China, as they absolutely love coal powered power plants and other things. But it is a little more complex then raw output.
China only finished bringing electricity to it’s rural regions in 2010. There’s a large difference between the way people in different regions of China live. Those living at a Western standard of wealth will have a western carbon footprint. After you peel back enough layers, it’s all about economics.
I think the biggest issues on a larger geo-political scale boil down to a few key issues:
1: China and it’s allies (primarily Russia at the moment, but all of BRICS) only stand to gain with US deregulation, which zero American Politicians desire.
2: IP theft by Chinese companies is still rampant, and China is actively pushing extremely hard to push all American Tech companies out, while trying to surpass them, allowing any serious inroads to the US and its hub of talent an knowledge will certainly be beamed straight back to China and used for their gain.
3: This will potentially have short term benefits, but long term pain for the US. As mentioned below, the moment US consumers have normalized cheap Chinese goods, regardless of drawbacks, there is almost no coming back for US production of those goods, or those currently on sale. TVs, Hard Drives, and consumer electronics are overwhelmingly Chinese made due to the insane price discrepancy, and US manufacturing of these just doesn’t exist anymore. Opened doors and lax import restrictions have led to the necessity of things like the CHIPS act being necessary to put the US back into contention.
Yes its a slippery slope type argument, but I think its borne by recent historical precedent.
So, I think the problem with this idea is can China actually go bankrupt in traditional sense of the word, and ultimately does that matter? Realistically, its country with the second largest land area, and largest standing army on earth. If this was Moldova, or some other backwater, sure. China however, has inherent value via size and strength that makes it relatively impervious to standard market demand and consequences. Who is going to foreclose on Chinese State? HSBC can’t exactly muster a couple of battalions to march into Shanghi. What is a realistic penalty that could be imposed. China’s participation in global capitalists’ markets has and always will be conditional on Chinese demands. They’ve been allowed to play with their own rules because they have what the market wants, cheap stuff and labor. China has exploited the markets weakness greed, basically. Now, the markets looking at a power it built thinking “Maybe, this wasn’t such a good idea.” You could try to close the market, but China does have it’s block. The whole premise of Silk Road is to strength it’s block and not need the Western Market. Any significant market pressure to reign in China likely ends up a Warsaw Pact 2.0 situation with whatever BRICS block ends up being. Expect this time NATO is far more deindustrialized block. And with the nation spread out though the global, BRICS is likely significantly less prone to consumer goods shortages then the Warsaw Pact.
I’m not sure helping tank the economy of a large, often belligerent, country is the wisest of ideas. Economic ruin is often where world wars begin.
When a country is dependent upon trade and sales – they tend to be not so belligerent.
Life in Rust Belt states got massively bad and the negative externalities of this (opioid addiction, obesity, extremist tendencies) far outweighed the positive benefits (low inflation, cheap plastic crap).
China had its own bad experience with opioid addiction thanks to free market capitalism.
“China had its own bad experience with opioid addiction thanks to free market capitalism.”
Which is why China will never be all that enthusiastic about helping the US on our Fentanyl problem. Did we tell the Brits to knock it off when they started Opium Wars 1.0 and 2.0? Of course not.
The Brits controlled 90% of the opium trade prior to the first Opium War, but Boston-based companies had a 10% share. After the second Opium War, the US received concessions as part of the unequal treaties. Chinese people refer to this period as the Century of Humiliation.
Yeahhhhhh, I’m not totally game for the “let China go ahead and do whatever they want” model. They’ve been outwitting us and playing an unfair game for decades now. This concept assumes that they’d be too stupid to realize that we might pull the rug out from under them like they once did to us. Unfortunately for us, we’re a) too moronic to commit to any one economic strategy and b) we’re already sort of out of things for Americans to do other than service jobs already. Tech companies are contracting after a decade-plus of free borrowing. And we’re already two decades into Americans buying piles of cheap crap while watching our wages struggle to keep up with domestic costs. How is “your guys continue to flood the market with cheap shit, and we’ll just sit back and relax” going to help fix that exactly?
Thanks, you said it better than I could. “Fool me once.”
The reason that China is subsidizing these industries is the same reason that we are subsidizing clean energy and semiconductor manufacturing is that they are the future. If China develops all the technologies for clean energy they will own the technologies and eventually will reap the rewards in the future. When there are no other significant manufacturers in the west the Chinese battery and solar manufacturers will be able to raise prices and make a lot of money. The west will not be able to quickly or easily build battery and solar manufacturing industries if they disappear. I’m all for global trade but as has been seen recently, autocratic countries like China and Russia are not playing by the same rules as western democracies.
Yeah I guess I just have a weird aversion to the idea that the US should sit on its ass and invite a mostly hostile foreign power to completely dominate multiple industries.
American manufacturing companies actively sent their factories to China in the 1990’s; it’s their greed that got the ball rolling for China to become the “world’s factory”.
There was probably also a misplaced belief that “westernizing” China would get rid of the Communists. Blame Nixon for all of this.
Nixon continuing to drive the wedge between China and the Soviet Union likely accelerated the end of the (first) Cold War though. Imagine the USSR with access to cheap Chinese manufacturing. However bad the situation is today, that would be far worse.
Nixon’s importance in the Sino- Soviet split is overstated. Really it was Mao and his desire to be top dog over Stalin, plus a disagreement over how to spread global communism in the 50’s that soured ties. Kissenger’s visit didn’t exactly help ’68 border conflict. But by then Sino-Soviet relations hadn’t been normalized for over 10 years, and they weren’t exactly going down the road of restarting anytime soon.
US foreign policy and needless aggression is one of the factors that are working to unite Russia and China in the present day. The Bulletin of Atomic Scientists’ doomsday clock is 90 seconds until midnight.
Don’t mean to imply that Nixon was the only or even the primary reason.
But it seems plausible to me that China could have chosen rapprochement with the USSR after Mao’s death, and closer ties with the US were part of why that didn’t happen.
Even after the death of the Cultural Revolution/Mao and the Deng’s reopening in 1978, China and the USSR gaining closer ties was unlikely. Really outside of Mao and Stalin absolute hate for each other. China had been subjected to traditional Western Powers and Japan for a few hundred years. And they weren’t too excited to go back colonization. Be it US, or USSR. So, the powers that be under what would be called Pragmatism realized their possible economic output by forming a collation of nations in the global south by forming governments though a series of guerilla agricultural conflicts. I.E The Angolan Civil War. This directly worked against USSR’s goals of a primarily industrial driven conflicts and extracting resources for the Warsaw Pact. Which didn’t workout well for them; i.e Afghanistan. American history seems to overplay Nixon’s role because this was all very complicated and requires significant backstory.
100% agree. And as a result, for now (and a number of years to come) we are dependent on China for a lot of components. We put ourselves here and we should have a little more foresight this time around.
China is going to bankrupt itself even if it doesn’t subsidize its EVs. And without subsidy, its EVs could still be cheap because EVs themselves are actually cheaper than ICEVs to make once you have all of the logistics and component supply chains figured out. BYD figured it out with its own vertical integration of components/production and that is the biggest reason why the Seagull is so cheap.
It’s a little rich to say China will bankrupt itself when we are sitting on over 30 trillion dollars in debt. We’re in an election year but no one will touch that, even bring it up. We can’t even have a conversation about reducing the amount we borrow, much less touch the principle in the debt.
I often wonder about our economy and “The Tipping Point.” There should be a point in time where paying the interest on the debt becomes the overwhelming largest budget item in the federal budget. I assume the world looks to a new currency as the de facto dollar once we hit a certain percentage. I just don’t know what that percent is. I went to art school and am <checks notes> not an economist it turns out.
It’s somewhat crazy to me that at the time George W Bush left office, after all the wars and building Homeland Security and everything the debt sat at about 8 trillion dollars. It took from (basically) the Great Depression to 2008 to build up to those numbers. And it’s taken us 16 years to almost triple it. (Clinton claimed a balanced budget but basically he had all the baby boomers still working and there was a massive collection of Social Security funds that didn’t take into account they were all about to retire which didn’t help).
I could ramble on but would start to sound like I’m in the basement wearing a tin foil hat. Point is, I wouldn’t worry about China going bankrupt in our lifetime.
Editing to add, when I say “we” I’m assuming you’re in the US. I could be mistaken on that front.
“It’s a little rich to say China will bankrupt itself when we are sitting on over 30 trillion dollars in debt. We’re in an election year but no one will touch that, even bring it up. We can’t even have a conversation about reducing the amount we borrow, much less touch the principle in the debt.”
I think it’s clear we are both fucked.
insert Why_Not_Both.JPG
Oh sure, that’s entirely possible!
Although, in China’s system it sure is easier for them to alter course and make the necessary changes when you don’t have to worry about people voting for you to be reelected and keep your cushy job.
I just think that China is way, waaaay behind the level we are and certainly not past the point of no return as we are.
I didn’t say the U.S. wasn’t on the same trajectory, because it is also at risk of collapse too. Its debt-spending spree arguably started in WWII, but really took off during the Reagan administration never to meaningfully subside. The U.S. dollar as the world’s reserve currency is arguably the main thing that kept it afloat, especially with the end of Bretton Woods, but the BRICS are dumping the dollar as we speak, and that is a part of why inflation is as bad as it is. Hyperinflation may be in the U.S.’s future.
I think things have potential to get extremely ugly in both countries.
I’ve read a lot of your comments about the general state of affairs when it comes to the wealth and income gaps so I’ll indulge myself a little with a conspiracy theory for you:
During the very beginning of the pandemic, I was working at one of the largest, global food/beverage manufacturers and we were getting reports of how our leadership, along with leaders from all of the biggest companies in the country, were meeting with government authorities (no mention of who exactly) and basically being told that the country was going to have to shut down soon and they all needed to get their houses in order for work from home and other ways to keep things going so we didn’t all starve to death from lack of food.
I started wondering, what else does the government meet with various companies on?
My theory is that everyone involved realizes we are screwed if there is not a constant state of growth in the economy, the population and every area of our lives. This explains (other than financial incentive which I don’t discount) why it strangely, nearly overnight, became the talking point of every publicly traded company stating they needed to be a growth company. Sure, it can easily be attributed to the CEO wanting an ever–larger bonus for the quarter or whatever but I just don’t buy it as the sole reason.
It’s also the reason the government keeps giving away more and more tax incentives for us to have kids and on and on.
Ok, I told myself I would not show everyone my crazy today. And yet here we are…
Infinite growth on a planet of finite resources is unfortunately not possible. Our current economic system relies upon constant growth to thrive. We don’t have economical space travel worked out, and probably won’t for hundreds of years into the future, if it is ever going to be possible at all, nor are humans meant to live in space, so the final frontier is not probably not going to save us either.
There is a problem with distribution to access to resources. You can have a small aristocracy consuming the planet, or a vibrant, growing, and healthy middle class doing the same, but you cannot have both, because you run into resource limitations. Pick one. Guess which one is currently on the chopping block?
The current planned obsolescence paradigm that has existed for a century and has used the middle class as a wealth pump to further enrich the rich, a paradigm which is ruining the viability of the middle class into the future as resources dwindle, is still very much in place, if that gives a good indication to where things are going. Planned obsolescence maximizes short term growth, and building EVs into this paradigm to maximize resource footprint(massive 200+ kWh trucks/SUVs designed to fail and go to a landfill once the warrantee is up), when the technology allows for greatly increased longevity of vehicles and reduced resource consumption(we could have electric cars lasting for entire human lifetimes), is the height of this wasteful stupidity.
The TPP would’ve helped a lot with the China problem
I mean…
I think the danger with letting China go down this route is that revenue from those sales (even if they’re not profitable) help contribute to their growing expertise in these fields. Meanwhile subsidized prices will keep US companies on the sidelines. These high-tech/high-value types of things are exactly where the US could hang their hat in terms of building/keeping manufacturing. The labor cost on something that is more about yields than man-hours does not doom the US to be uncompetitive, but being behind the game from an experience standpoint certainly will.
Your strategy seems to assume some things I’m not comfortable assuming.
1) The West will have the political fortitude to ride out China’s economic fortunes and not abandon the plan halfway through.
2) China can’t keep up their subsidies long enough to drive Western companies out of business.
3) The US is capable of overcoming what would amount to a huge first-mover advantage.
4) China will peacefully acquiesce to us letting them destroy their own economy.
5) Allowing Chinese investment and espionage on our soil is a net gain for *us* not them.
Ultimately I would play the long game, understanding China’s population situation is not favorable, open more legal immigration for skilled and educated people (strongly vetted for Chinese immigrants of course), and trust in the free market system to win out in the end as it always does.
Oh, totally. These are just some of the reasons why this wouldn’t work. I was going to write something along these lines to explain it, but sometimes it’s more fun to make the opposite point to illuminate the many, many contradictions and choices of post-modern existence.
I think the post will generate some good discussion as it has already begun to.
Ultimately my stance on the matter is that preserving both our global position vis a vis China and our domestic manufacturing is a more pressing and urgent problem than climate change. And I would therefore sacrifice some decarbonization speed in order to ensure that America is the one leading the effort.
Others are free to disagree with that opinion, but it informs a lot of my comments on this website.
For sure, and I actually think we can do both simultaneously if we’re willing to understand expenditures on future/clean manufacturing as an investment and not a cost.
100%.
The degrowth environmentalism mindset of the 1970s needs to be defeated root and branch. Environmentalism in the 2020s requires a lot of building, a lot of growth, and results in clean energy abundance.
In theory, it should be a bipartisan effort that’s a win-win for everyone.
We solved it!
Congrats, your Nobel is in the mail already!
It is a great point that there are concerns more pressing than climate change.
In the last few years, I have become concerned that people perceive climate change as a far more urgent problem that it really is. I have read several opinion pieces from individuals (some of whom are politicians) who appear to believe climate change will make the planet uninhabitable in their lifetimes if we don’t stop using fossil fuels immediately. That view is not supported by science. The potential outcomes of climate change are bad, but the severity and timeframe of climate change is often greatly exaggerated. My concern is that we will lose sight of other pressing issues or make reckless decisions to fix a problem that is best addressed gradually over the coming decades.
Our media has done us a great disservice in the way it has covered climate change the last decade or so, and it really went off the rails in 2017 as it did on so many other topics.
How many liberals and leftists know that the worst-case scenarios are already off the table? That the US emits less carbon than it did in 1990, despite an economy 500% larger and a population 33% higher?
20 years ago, you could argue that alarmism was appropriate. A significant portion of the population were still skeptics, emissions were still rising, and some truly alarming scenarios were possible. Today, strong and continued effort is definitely appropriate, but not panic.
Very well said and completely true. The alarmism has influenced some folks to go off the rails. Like protesters attempting to destroy valuable paintings. Some media will side with these inappropriate actions – huh??!
It started earlier than that when the schools took away algebra and replaced it with “environmental math.”
I know that’s not universal across the country but I know people that learned about that in the 90s. The media just started being populated with those that went to school being taught these very principles.
That the US emits less carbon than it did in 1990, despite an economy 500% larger and a population 33% higher?
We emit about the same amount today as in 1990 but were 20% higher in in the mid 2000s. That carbon will be with us for a long time yet. Which is the problem, those emissions are cumulative. Aside from planting a gazillion, bazillion trees nobody’s come up with a viable way to lock up that carbon.
(Personally I’d prefer making mountain sized diamonds using renewable energy but so far that’s not viable.)
some truly alarming scenarios were possible.
Oh they still are. Even if the US were to go carbon negative tomorrow Africa and/or India could suddenly decide they want in on the good life and fire up more dirty power plants (as China did) to completely negate any gains. We still are expecting 2-3B people to join us in those areas – are they all to be condemned to energy poverty?
Japan and Australia could decide to make even more gray hydrogen from filthy brown coal with a solemn pinkie promise to fix the emissions “someday”. Not a hypothetical either. The question is how much further will they take it.
Unrelated to the question, but on my way to lunch yesterday, I actually saw a Canoo van on the road! I was rather surprised, although the factory is only a few miles down the freeway from my office. The DTR graphic is incredibly distinctive, and it’s a smaller vehicle in person than the pictures make it look.
While I hope they succeed, because I like the looks of their jellybean truck and van, I am pretty sure they’re not going to make it through the next year.
Genuinely curious whether it was on MFR plates? I know they have an EPA certificate but last I’d heard (which was a while ago) they were still waiting for NHTSA approval of their steer-by-wire system. A business associate with access to Polk registration data told me he’d seen no evidence of any Canoo registrations yet, but then this was two months ago.
Unfortunately, I wasn’t close enough to see what kind of plate it had on it. It was solid black, and the “lifestyle vehicle” configuration, not the panel van or truck config, so I don’t think it was one of the 4 that they delivered to OMES (IIRC, those were white panel vans) so I would hazard a guess that it was some kind of test mule. But take that with a big grain of salt.
In one of the marketing videos, they claimed they had NHTSA approval. I was honestly surprised they didn’t make a big deal of it to kick off a round of fund raising.
Trying to pull the same sneaky tactics as China would be a terrible idea. Allowing them to pour a ton of investments into the US would give them authority to claim large tracts of land and control over certain groups of people. We could potentially do the same thing they did and say “Nope, all these shiny new toys are ours now.” But that would probably severely anger the Chinese govt. That could lead to a shooting war on our own soil to try and re-claim our own stuff from them.
Jury’s out on how they would fare in that situation, but I think it’s best we don’t entertain the possibility.
My opinion, China’s economy is going to go tits up regardless.
China only has to subsidize their industries until the West closes theirs down, and then they can set prices anywhere they want. Letting them dump goods in the US is a death sentence to our manufacturing.
That is exactly what people were saying when American TV manufacturing finally dissapeared in the late 90’s after decades of bleeding out yet I can go out and buy an amazing 65″ 4K LED TV today for $400. We also don’t make hard drives or much in the way of other electronics yet I can buy a (used) battery powered, hand held supercomputer for $10.
China can charge whatver it wants but other countries compete with them. Vietnam, Korea, Thailand, Taiwan, Cambodia all still make TVs and electronics. They make cars too.
And that just proves my point – none of those competitors you mentioned were the US. Still a death sentence for US manufacturing and its workers.
Yet America is still here, stronger than ever. That’s my point.
But are we? Many of my Aunts/Uncles made an OK living working in mfg all of their lives, in the South. Our region used to be filled with lots of small manufacturing plants. Most all have disappeared in last couple of decades. Basically, now everything is now low wage service jobs…and lots of meth/opioid problems.
Agree. I don’t think we’re okay at all, for a variety of reasons.
Even the existing mfg jobs are not nearly as lucrative as they once were. Working a mfg job used to be a solid way into the middle class, for the most part that’s no longer true. In regard to the south, the Governor of MS recently said that unions are killing their business model (of attracting employers with low wages and worker protections).
In an interview with an autoworker in MI during the trikes, he stated “My dad was UAW, he supported our whole family, retired with a pension, and has a lake house. I do the same job as he did, and I can barely make rent”.
The service industry is the fastest growing industry, and like you said, those are typically low wage jobs, a lot of people view them as “jobs for kids” that should not pay higher wages.
IMO, fast food is becoming the new MFG, and assembling a Big Mac is no different than standing on an assembly line assembling widgets.
In an interview with an autoworker in MI during the trikes, he stated “My dad was UAW, he supported our whole family, retired with a pension, and has a lake house. I do the same job as he did, and I can barely make rent”.
The followup questions then are:
FWIW my uncle lived in Michigan as a HS shop teacher and driving instructor. He also supported a whole family of 6, retired with a pension and had a lake house. So it’s not just auto workers.
That’s the point, back in the day you didn’t need to be a big earner to do that. My grandfather didn’t make it past 10th grade and worked for Hamilton Standard in Massachusetts making aircraft propellers in the 50s/60’s and supported a family of 5 on that. My grandmother stayed home with the 3 kids, they bought a brand-new house in the mid 60’s, and he always had relatively new cars.
Even in the 1980’s BOTH my parents had to work to afford the same lifestyle in the same area, and my mom was in the medical field making more money than my grandfather ever did. People love to hate on “Boomers” but my parents and all my friends’ parents were in that group, and they all worked. The only friend I had with a stay-at-home mom was because the family owned a fairly successful local business.
So we as AMERICANS (except for the top 1% and more) are not doing great.
We as AMERICA though are stronger than ever.
That’s the difference.
‘Murica! Fuck Yeah!
I hope you’re right, personally I can’t help feeling that the United States has peaked and is on a slow decline on the world stage.
If it is at least try to enjoy the ride.
Overall yes we are.
Seems the British Empire thought the same thing, until they weren’t.
It was/is the best of times, it was/is the worst of times.