America Is Back in the Factory Business

[buster]

It's also true that our poor are better off than 85% of the rest of the world. Americans are used to a very high standard of living.

 

[GON]

Love this story. I wonder what shape China would be in if all manufacturing left in it's entirety.

Loan sharks make money regardless. We the USA granted other nations money, China loans at high interest rates, and with a lot of strings attached, other terms that allow China to build a colony in the foreign country. And many of the manufacturing occurring in other nations is being performed at the "silent ownership and control" of China.

And of course, China imports oil at a substantial discount to what the USA pays for imported oil.

China hands out at least twice as much development money as the US and other major powers, new evidence shows, with most of it coming in the form of risky high-interest loans from Chinese state banks.

The sheer amount of Chinese lending is startling. Not too long ago China received foreign aid, but now the tables have turned.
Over an 18-year period, China loaned money to 13,427 infrastructure projects worth $843bn across 165 countries, according to the AidData research lab at William & Mary, a university in the US state of Virginia.

 

[PimTac]

It's also true that our poor are better off than 85% of the rest of the world. Americans are used to a very high standard of living.

People are spoiled to put it simply. They are taught that they can enjoy a perfect life. Parents spoil their children and react to any negative situation no matter how small. Compare two generations. In the 50’s and 60’s you would crash your bicycle and skin your knee. Mom would be more worried about your pants than your knee. We were raised tougher. Now, kids just stumble on the ground and parents panic.

This continues on through the growing years and into adulthood. Children are taught that they can be whatever they want to be. Unfortunately the schools and parents don’t tell them that effort is required. The result is a lot of college graduates that never took the education seriously and instead went for the social experience. Then they come out with a degree and a huge loan and realize they are going to have to work what they feel is a menial job.

There is no initiative. They expected life to be handed to them.

 

[Vern_in_IL]

As we begin re-shoring our industry we need to insure we are preparing our kids with what they need to work in this world and I worry we aren't doing a very good job. We'll have to import workers for a good while until we catch up.

Not a problem! Southern boarder is WIDE open! .. a good work "ethos" is the first step. ...and then train them for a "career" not just a job.

 

[buster]

People are spoiled to put it simply. They are taught that they can enjoy a perfect life. Parents spoil their children and react to any negative situation no matter how small. Compare two generations. In the 50’s and 60’s you would crash your bicycle and skin your knee. Mom would be more worried about your pants than your knee. We were raised tougher. Now, kids just stumble on the ground and parents panic.

This continues on through the growing years and into adulthood. Children are taught that they can be whatever they want to be. Unfortunately the schools and parents don’t tell them that effort is required. The result is a lot of college graduates that never took the education seriously and instead went for the social experience. Then they come out with a degree and a huge loan and realize they are going to have to work what they feel is a menial job.

There is no initiative. They expected life to be handed to them.

1000%. I completely agree.

 

[Hillbilly Deluxe]

Part of my job entails investigating fires. The amount of fires caused from Chinese made products purchased online keeps me very busy. Doubly so for ANY of these products that have Lithium-Ion batteries in them. These products don’t have UL, ETL or ANY listing. If they do, many are fraudulent listings. Lawyers for insurance companies are beginning to sue the retailers who sell this junk because they’re sick of getting stuck with the bills to pay out for burned down homes. Some of these “companies” can never be found because they’ll pump them out of an unknown factory and slap 30 different names on them. Many times the products have no serial or mode numbers so they’re nearly impossible to trace. It’s the Wild West…

I try to not leave batteries on chargers in the garage (drill/power tools/etc).

I also try to keep stuff in the house off chargers unless we are there.

 

[GON]

@JeffKeryk, what are your thoughts on Thomas Sowell's book Basic Economics?

No book or degree needed. Building and/or losing wealth is simple for both an individual or a nation.

Earn more than you spend is how an individual builds wealth. For a nation, export more than you import is how a nation builds wealth. The opposite is true also. For the past few decades,, the USA has been importing more than it exports. The USA's largest adversary has been exporting more than it imports for the past few decades.

No degree needed to know how things are playing out.

 

[Leo99]

Not really. The Pharma companies could re-locate from the Philly/NYC/CT corridor, get rid of their high-paid dead weight and build plants and offices in flyover country and make the drugs for 1/2 the price and double their capacity...

It's not that easy but we have that on our radar. My company is trying to source outside of China. Unfortunately, our main ingredient starts its production in China. We are looking at options. One of our raw materials is made by 3 companies globally. One in USA, in EU, and in Japan. The USA source is the most expensive and a difficult company to work with. We don't buy from them.

Another issue is manufacturing philosophies. Some companies, especially in China, like a very manual process with lots of employees. Other companies like Merck like automated systems with as little human intervention as possible. Just a quick example, visual inspection of labels. We can do 200% inspection by people or use an automated visual inspection machine. There are lots of other things in manufacturing that can be automated. It always amazed me when I worked at large pharma how few people actually made the drugs. Even at my small company. We have 700 employees and only about 20 or 30 of us know how to manufacture the drugs that we make.

 

[wemay]

Great news!

 

[IndyFan]

We must think about why was the manufacturing allowed to off shore in the first place.

Simple. Lower cost. Significantly lower. And why is it coming back? My humble opinion is that it is a complex combination of factors, including automation, more control, less vulnerability to supply chain issues. The pandemic exposed the huge vulnerability of relying solely on overseas manufacturing, particularly in Asia.

My brother owns a small manufacturing firm here in Indiana. His parts supplies in parts of Asia, including China, completely dried up during the pandemic. He has since switched to others, including many that are in the US. He has some suppliers in Taiwan and he is now looking for alternatives. He'll keep buying from them, but if it gets silly over there, he is looking for domestic producers from which to buy. He said more and more US based suppliers are becoming available, so that reflects what we're seeing here. And for him, it has nothing to do with batteries or green tech. It's more like fasteners, pumps, actuators, and other mechanical, metal, and plastic parts.

 

[BMWTurboDzl]

Loan sharks make money regardless. We the USA granted other nations money, China loans at high interest rates, and with a lot of strings attached, other terms that allow China to build a colony in the foreign country. And many of the manufacturing occurring in other nations is being performed at the "silent ownership and control" of China.

And of course, China imports oil at a substantial discount to what the USA pays for imported oil.

China hands out at least twice as much development money as the US and other major powers, new evidence shows, with most of it coming in the form of risky high-interest loans from Chinese state banks.

The sheer amount of Chinese lending is startling. Not too long ago China received foreign aid, but now the tables have turned.
Over an 18-year period, China loaned money to 13,427 infrastructure projects worth $843bn across 165 countries, according to the AidData research lab at William & Mary, a university in the US state of Virginia.

They'll also bring in Chinese laborers.

 

[4WD]

And of course, China imports oil at a substantial discount to what the USA pays for imported oil.

China hands out at least twice as much development money as the US and other major powers.

Find a corrupt dictator and China is there … money under the table … oil for infrastructure utilizing their own cheap labor and materials … then no new cash is helping the needy …

 

[benjy]

our POOR governing body CAUSED the issues with unnecessary IMO shutdowns + now that the FAT CATS are gourged + people are buying less because of overpricing hopefully prices will recede BUT prolly not FULLY!!

 

[JeffKeryk]

@JeffKeryk, what are your thoughts on Thomas Sowell's book Basic Economics?

I don't know that book; my formal Econ education finished a long time back. Economics theory speaks to the distribution of scarce resources. Resources are defined as scarce because there is never enough for everyone.

Everyone repeats the supply demand curve, but that is an over simplistic view. Maybe I will check the book out. Thanks!

Basic Economics Summary

 

[JeffKeryk]

No book or degree needed. Building and/or losing wealth is simple for both an individual or a nation.

Earn more than you spend is how an individual builds wealth. For a nation, export more than you import is how a nation builds wealth. The opposite is true also. For the past few decades,, the USA has been importing more than it exports. The USA's largest adversary has been exporting more than it imports for the past few decades.

No degree needed to know how things are playing out.

Economics is not about building wealth. Economics speaks to distribution of scarce resources.

 

[GON]

Economics is not about building wealth. Economics speaks to distribution of scarce resources.

Is that like saying physical relations between a man and a women is for reproduction purposes, and not for pleasure and such?

 

[Pablo]

Is that like saying physical relations between a man and a women is for reproduction purposes, and not for pleasure and such?

That escalated rapidly.

 

[JeffKeryk]

Is that like saying physical relations between a man and a women is for reproduction purposes, and not for pleasure and such?

You are just being silly. Wealth, or lack of it, is a by product of Economic practices. Personally I am a capitalist because capitalism has raised more people out of poverty than any other economic system. However, left untouched, the goal of a producer (more profits) is to gain power over consumers via monopoly, collusion, etc.
The beauty of Capitalism, at its best, is better quality with sufficient output at a "reasonable" price. Speaking to your wealth point, what is reasonable? The depends on which side of the deal you are on. The lure of profit drives business innovation. High producer profit is the price consumers pay for business efficiency. Is that good or bad?

Capitalism teaches us prices will tend to rise until consumption is reduced to an unacceptable point. High profits will spur innovation and development of viable alternatives.

Adam Smith, in his at the time radical study "Wealth of Nations", argued that a nation’s wealth is really the stream of goods and services that it creates. Today we call that gross national product.

I love Economics!

 

[Hillbilly Deluxe]

It's not that easy but we have that on our radar. My company is trying to source outside of China. Unfortunately, our main ingredient starts its production in China. We are looking at options. One of our raw materials is made by 3 companies globally. One in USA, in EU, and in Japan. The USA source is the most expensive and a difficult company to work with. We don't buy from them.

Another issue is manufacturing philosophies. Some companies, especially in China, like a very manual process with lots of employees. Other companies like Merck like automated systems with as little human intervention as possible. Just a quick example, visual inspection of labels. We can do 200% inspection by people or use an automated visual inspection machine. There are lots of other things in manufacturing that can be automated. It always amazed me when I worked at large pharma how few people actually made the drugs. Even at my small company. We have 700 employees and only about 20 or 30 of us know how to manufacture the drugs that we make.

Thank you for the insight. Very educational. Sincerely.

I have to say that I know a few people in the Pharma industry, yes, all living in the corridor I mentioned.... I have zero respect for any of them. Mainly because our political views are 180 degrees. They claim to hate capitalism, but there they are - working in the wealthiest areas of the country, for one of the most lucrative industries, making 3-4x the average income.

 

[GON]

That escalated rapidly.

I understand, but that is what happens when a college professor who never worked a day in his/her life in private industry gets a top job at the Treasury or federal reserve. And many top positions are filled with the like.

They spout what they learned at university, from professors themselves that never had a private industry job.

I have yet to hear a treasury or federal reserve senior official tell it like it is. A country builds wealth by exporting more than it imports. And a country declines economically by importing more than it exports.

Simple and plain. And no, I don't have a degree in economics, or accounting to know that if I make more than I spend, my individual economics is good. And if I spend more than I make, my individual economics are bad.
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