Some good news in manufacturing in America

[coolhand]

Re: Some good news in manufacturing in America

Truth!

I am currently involved in the FIRE industry in a more consulting basis, but am also putting new capital to work in America, just with a slightly different tack as Jeff. I am about to close on a nice little chunk of Ohio farmland, and have an arrangement with a friend of mine who is a 4th generation farm kid in his mid-to-late 20's that WANTS to farm, but doesn't have the capital.

Our goal is to continue to build up our acreage, & then expand into other segments to bolster margins - whether that means building grain storage, find a rail spur, etc. It feels good to be involved in real productive capital allocation again with a small biz entrepreneur, while also gaining valuable exposure to agricultural hard assets.

The opportunities are out there...the US is the best positioned country in the world. In addition to the attributes EJ & Jeff laid out, the fact is that the US is the only nation in the world whose rivers run both north & south among population centers (all other nations have one or the other, but not both); & we are self sufficient in food, water, nat gas coal & 50% sufficient in oil. We have plenty of forests.

IMO, implied as part of the message of all of EJ's work, & Jeff's post above, is that in the next few decades, the world is going to remember what "real capital" is, & that it doesn't come from a printing press. My guess is anyone that invests their assets with that framework in mind will do just fine over the next 20 years or so.

[rtchoke]

Re: Some good news in manufacturing in America

Very Inspirational! Thank you for sharing!

Not sure where to put this, but here goes.

Based on input from Eric over the decades and my own proclivities, I’ve started an American manufacturing business, and things are going very well, thank you. The idea of “investing” any cash at all in one of the variety of vehicles pitched so hard at Joe Consumer makes me sick, (“no thanks” to mutual funds, annuities and other silliness) so other than what’s in gold and a few apartment complexes, I’m putting my money where my mouth is, and launching a US labor based distributed manufacturing business.

Results to date are excellent.

We came up with the starting product idea in October, hired an employee the same month, and using fast prototyping on American machinery, and avoiding fixed and tooling costs on purpose, produced a few hundred prototypes for sale (by hand), sold them, incorporated in November, sold way too much at our launch over the weekend of Black Friday/Cyber Monday, added our fifth employee last week, plan to open our second manufacturing location in Tulsa on January second, have our sixth hired planned for early January, and hope to make a splash at a trade show in January.

We have been “ramen profitable” from our first shipments (a great term I learned recently that refers to profitability while the founders are paid no salary) and by all indications should be doing well in the New Year. Obviously, it helps when the founders are fortunate enough to be able to fund their own gig, but there’s been way less than 6 figures invested, and we believed we’ve bottomed out on the need for cash, even with substantial investments in American made machinery.

Our products are targeted at the consumer, and we’re using a few basic concepts that I think will continue to let us thrive in a crowded market that never saw an outsourcing opportunity it didn’t like. If anyone is interested, I could go on at length, but the basic ideas are disintermediation and vertical integration to keep the money the end user spends for the manufacturer; paying middleclass wages and providing health insurance (paid for) generous vacation time (4 weeks paid) and enjoyable working conditions while treating employees like human beings; and providing products that can turn on a dime, be massively customizable and provide good value for the price.

None of this is rocket science, but I don’t exactly see a crowded field.

We are Insanely Great Products, Inc. at igproducts.us, and we hope to keep adding manufacturing locations and doing our part to gets Americans back to making actual stuff, even if it’s just a little part we play.

[gwynedd1]

Re: Some good news in manufacturing in America

The US is ripe for another Henry Ford. If I had enough money in my pocket I would take any decent manufacturing operation in the US and buy up the land around it first before I moved the factory. You could overpay the workers which would attract the best workers, but their pay would be recycled into your real estate valuations that you already purchased. If it was located properly you would begin to siphon off the best labor from some sick and dying communities which would begin to raise the real estate values even further.

Walmart operates on this principle, so why not loss lead the manufacturing as a disguised REIT? I think that is why Ford worked because he got back his own money in this way. Why not become Remus and Romulus who will own the center of the city you built? Thus I think local manufacturers should always have a real estate arm in their operations because that is where a lot of the money is. Government does the same thing when they build public works. They leave a lot of money on the table letting private people get rich off the improvements.

So why not avoid that mistake and pick up the land rent capture for yourself with the REIT arm?

[lektrode]

Re: Some good news in manufacturing in America

....My guess is anyone that invests their assets with that framework in mind will do just fine over the next 20 years or so.

+1
and its refreshing to hear that _someone_ in the FIRE brigade is actually working WITH us (vs gutting the economy and shipping it offshore) for a 'change we can really believe in' - so i will commend and thankyou sir.

esp after what "the germans did to pearl harbor"
(eye heard that jeff, all in fun and taken as such ;)

[gwynedd1]

Re: Some good news in manufacturing in America

http://www25.uua.org/uuhs/duub/artic...erpullman.html

To shield his sleeper-car manufacturing workers from exposure to the alcohol, vice, disease, and labor unrest of Chicago's crowded slums, Pullman decided to develop a model town where he could also centralize production. In 1880 he bought 4,000 acres of swamp land on Lake Calumet, 18 miles south of Chicago's city center. He spent five million dollars to build a railroad car works, iron works, wheel works, power plant, and housing for 10,000 workers. Every home had indoor plumbing and gas lighting. There were paved streets, parks, an ice house, kilns for converting dredged lake clay into bricks, a sewage system, and communal stables. Workers easily walked from their homes to work in the adjacent factories. Pullman, who named his town after himself, claimed he wasn't motivated by charity so much as by capitalist practicality. Employees, living in a beautiful neighborhood, would work harder and better. Residences rented to them would pay for themselves and return 6% per annum. The workers, having paid for these pleasant surroundings, would appreciate them more than if he simply provided them. He thus offered his employees, not a gift, but opportunity to buy into an aesthetic and utopian dream. "I have faith," Pullman told the press, "in the educational and refining influences of beauty, and beautiful and harmonious surroundings."





So did Pullman unwittingly capture his own land improvement rents? I think this solves the Henry Ford Paradox. Since all capital and labor in progressive nations is squeezed by its own land values, a major capital player may be able to circumvent this loss. Why let the real estate sharks take all the value. Seems like big American Capital is pretty clueless that the rain they create is soaked into the soil and they let the real estate industry and finance get all this gravy.

[c1ue]

Re: Some good news in manufacturing in America

The optimism would be a little more understandable if it wasn't for the fact that so much ingenuity and energy in the US is being spent on FIRE and social media.

[Eryximachus]

Re: Some good news in manufacturing in America

Because a strong united Europe is a mirage and a strong united China is a mirage but a strong United States, while in a fog, is not a mirage.

This is the problem when people are beholden to this neo-Puritan, neo-Calvinist religion of the US.

Europe was strongest and most creative when it was the least unified. Places like Germany and Italy weren't even unified countries until less than a century before you were even born. This alone should give you pause.

But worse, you fail to appreciate the danger of the dysgenic trend foisted upon us by the same bankster class that you condemn. We have imported tens of millions of low-IQ foreigners who simply cannot function in an advanced economy. The average intelligence of the US is declining, while positive eugenics activities in China are arguably causing their population to become smarter.

Every piece of evidence indicates China has a hundred million peasants who can be easily brought into an advanced economy, while in the US things look much more bleak. Do I even need to describe our pathetic attempts at dealing with our violent underclass? Our millions of prisons? Our hundreds of cities that are "no go" zones for anyone who values his life? The unspeakable barbarism that occurs almost daily in this country?

You have some interesting points from time to time EJ, but like most Western economists, your understanding of human nature is greatly skewed by Enlightenment philosophy. As such, your ability to predict the future behavior of complex human societies is greatly hindered.

In Europe and China, you can walk the streets at night in virtually any city without fear even if you are a beautiful woman. Streets are not covered with trash. Trains are clean and work on time. Violent crime is rare. The list goes on. Even your hedonistic and utilitarian standards are flawed, which I believe owes to the Calvinist origin of your ideology. Have you ever dated a European or Chinese woman? Have you observed the way people interact in these places? There is so much more joy. Europeans love to live life, not buy useless products they don't need. The Chinese are mixed, but they are learning to love life. It is a curious American phenomenon.

You are ignoring the very basis of human civilization. No civilization was built for any of the reasons you describe in your graph, and no one will maintain it for the same reasons. This is why chaos, barbarism, and incivility continues to increase. You wish to be a mainstream writer, but buying into the New York Times Yankee view of the world is not the way. Yankeeism is dead, and hopefully it won't take the whole country down with it.

[Thailandnotes]

Re: Some good news in manufacturing in America

The average intelligence of the US is declining, while positive eugenics activities in China are arguably causing their population to become smarter.

Eugenics aside, you can’t believe studies on immigration and collective I.Q. without believing the world is getting dumber and dumber and dumber. When the topic comes up, I’m always reminded of former NZ prime minister Robert Muldoon who quipped, “New Zealanders who go to Australia raise the IQ of both countries.”

[touchring]

Re: Some good news in manufacturing in America

Have you ever dated a European or Chinese woman? Have you observed the way people interact in these places? There is so much more joy. Europeans love to live life, not buy useless products they don't need. The Chinese are mixed, but they are learning to love life. It is a curious American phenomenon.

I think you've not been to China. If gun ownership is allowed in China, armed bandits will be roaming the countryside.

[EJ]

Re: Some good news in manufacturing in America

This is the problem when people are beholden to this neo-Puritan, neo-Calvinist religion of the US.

Europe was strongest and most creative when it was the least unified. Places like Germany and Italy weren't even unified countries until less than a century before you were even born. This alone should give you pause.

I'm fond of Europeans, not so much Europe's museum economies that cause the entrepreneurial class to flee to the U.S. where it's still legal to start a business.

But worse, you fail to appreciate the danger of the dysgenic trend foisted upon us by the same bankster class that you condemn. We have imported tens of millions of low-IQ foreigners who simply cannot function in an advanced economy. The average intelligence of the US is declining, while positive eugenics activities in China are arguably causing their population to become smarter.

Same was said of the Irish when they came to the U.S. in the early decades of the 1800s and every other wave of immigrants into this nation. The bigotry never goes away, only the targets change.

Every piece of evidence indicates China has a hundred million peasants who can be easily brought into an advanced economy, while in the US things look much more bleak. Do I even need to describe our pathetic attempts at dealing with our violent underclass? Our millions of prisons? Our hundreds of cities that are "no go" zones for anyone who values his life? The unspeakable barbarism that occurs almost daily in this country?

How much time have you spent in China, exactly? Such a peaceful place, of contented and well educated people.

You have some interesting points from time to time EJ, but like most Western economists, your understanding of human nature is greatly skewed by Enlightenment philosophy. As such, your ability to predict the future behavior of complex human societies is greatly hindered.

In Europe and China, you can walk the streets at night in virtually any city without fear even if you are a beautiful woman. Streets are not covered with trash. Trains are clean and work on time. Violent crime is rare. The list goes on. Even your hedonistic and utilitarian standards are flawed, which I believe owes to the Calvinist origin of your ideology. Have you ever dated a European or Chinese woman?

Funny you should ask. I'm married to a Chinese woman.

Have you observed the way people interact in these places? There is so much more joy. Europeans love to live life, not buy useless products they don't need. The Chinese are mixed, but they are learning to love life. It is a curious American phenomenon.

You are ignoring the very basis of human civilization. No civilization was built for any of the reasons you describe in your graph, and no one will maintain it for the same reasons. This is why chaos, barbarism, and incivility continues to increase. You wish to be a mainstream writer, but buying into the New York Times Yankee view of the world is not the way. Yankeeism is dead, and hopefully it won't take the whole country down with it.

Nice fantasy. Good luck with it

[touchring]

Re: Some good news in manufacturing in America

Funny you should ask. I'm married to a Chinese woman.

The problem in China right now is nothing Chinese. It is communism - a Western ideology. Although China is no longer the same totalitarian communist state during Mao's era, the core has not changed - a central planned economy where individuals are dispensable.

America need not fear China until China becomes a democracy. At the current state, China spends more time fighting its own people than pose a real threat externally.

[Shakespear]

Re: Some good news in manufacturing in America

Because a strong united Europe is a mirage

Here I think you are completely correct EJ.

I too hope that American spirit to innovate will bring the Phoenix out of the ashes, but something tells me that this time it will be a fight for the core values of what America once stood for. To decimate it took 50-60 years, so to bring it back will equally take time.

The Pullman idea was practiced a long time ago in Germany and some eastern European countries. This idea worked, how it died would be an equally interesting story. My signal that US was going in the wrong direction was HOOVER vacuum cleaners. A uniquely US home town business that the moment NAFTA came disappeared as an American business.

Like many manufacturing companies in the U.S., Hoover is facing pressures as consumers demand lower-priced goods. Hoover has operations in Mexico, where operating costs are lower than in the U.S.

How can you fight against a competitor like this,

http://ipsnews.net/news.asp?idnews=106268

[ST]

Re: Some good news in manufacturing in America

We have imported tens of millions of low-IQ foreigners who simply cannot function in an advanced economy.

lol, quite a broad brush there,... I wonder if, as an immigrant, I should be offended, or perhaps your talking about immigrants with little education - in that case I suppose I wonder if I should be offended on behalf of my parents-also immigrants, and also business owners, to a different advanced economy.

Every piece of evidence indicates China has a hundred million peasants who can be easily brought into an advanced economy,...

I suppose you are unaware that most of the Chinese population is not even allowed to permanently relocate to their own cities? (hukou or as Chinese academics like to call it - apartheid)

[ST]

Re: Some good news in manufacturing in America

I'm fond of Europeans, not so much Europe's museum economies that cause the entrepreneurial class to flee to the U.S. where it's still legal to start a business.

The IFC/World Bank's ease of doing business rankings is always an interesting read (click to sort by various categories including "starting a business")

[don]

Re: Some good news in manufacturing in America

"Was it over when the Germans bombed Pearl Harbor? Hell no!"

Love it! Without wit, where would entrepreneurship be?

A flowering of small enterprises, taking root and spreading under the belly of the beast.

Count me in.