We can't go back to a manufacturing economy

[blazespinnaker]

I have been reading http://www.thomaspalley.com/ lately, and I have a lot of respect for him .. especially his analysis of what's going on in the world.

However, his solutions, I think are weak. I get the sense that he feels greater trade barriers, and a return to a manufacturing base is the solution for generating real wealth in the US.

I think this is fear of the unknown talking. The new economic model will be a pure information based economy where we mostly trade in ideas rather than goods. With things like virtual reality, telepresence, and better patent laws
the restrictions of time, labor, and physical space will become a minor variable in the majority of economic trade.

However, to develop that economy, is complex and risky and very very hard. We basically need to forget everything else we're doing (ie, manufacturing) and get very very innovative. By handing over all the keys of manufacturing to china, we certainly have done the first part.

The question is, will america have the character to do the next part? Will we simply enjoy their wealth (the dollar tribute of the world has paid us a massive retainer to lead) and forget to innovate, or will we get down to business and make the 21st century happen?

This is a very interesting question. I think Mark Warner (co founder of Nextel) could have made that happen. I believe Powell was trying to at the FCC.

However, presidents like George Bush most definitely belong in another era and are very unsuitable to lead the world into the future. McCain and Clinton, I suspect, are the right leaders and therefore it is appropiate that they are by the far the two most likely candidates for the US presidency in 2008.

[Finster]

Re: We can't go back to a manufacturing economy

We can't go back to a manufacturing economy.

We had darn well better find something that other nations value and that we can export, because paper IOUs are not going to do the trick forever!

[BK]

Re: Trading ideas requires CASH

Blazespinnaker,

I respectively disagree with you.

Trading ideas is VERY capital (LOTs AND LOTs of CASH) intensive. Its difficult to stay in business without a steady supply of cash and it takes a lot longer to get momentum selling Intellectual property.

The best ideas or concepts are counter to what the masses often believe. I would love to see a well researched article that demonstrates how a country can thrive without a solid Manufacturing base or being a supplier of KEY raw materials to countries that manufacture goods.

Your concept goes counter to everything I've read or experienced.

[jk]

Re: We can't go back to a manufacturing economy

you are ignoring the cost of transport in your analysis. as the price of oil, and thus shipment, continues to rise [in the long run], and as the labor input into goods drops with increases of productivity, we might see some manufacturing return to the u.s., especially as the value of the u.s. dollar drops.

[DemonD]

Re: We can't go back to a manufacturing economy

you are ignoring the cost of transport in your analysis. as the price of oil, and thus shipment, continues to rise [in the long run], and as the labor input into goods drops with increases of productivity, we might see some manufacturing return to the u.s., especially as the value of the u.s. dollar drops.

We already do see that, although not in the way you'd expect.

My Toyota Corolla was made in New York state. There is a huge Toyota factory in California, and all sorts of German and Asian automakers have been opening plants all around the US for years.

US automaking has been the subject of "recession" talks because of GM, Ford, Daimler/Chrysler. But I wonder if there are stats out there that show how many jobs have been created by Honda, Toyota, Hyundai, and BMW in the past 10 years versus those lost by the Big 3 in Detroit.

(Anyway who the hell wants to live in, or even in any kind of proximity to Detroit?)

[BK]

Re: Pink Falmingos and other manufactured goods

Our attention always gets drawn to big and obvious industries.

But, I think the sadder untold story are the small manufacturer who quietly shut down. These employers have a bigger local impact because the owner often lives in the local community and spends his profits in his local community.

Did anyone else catch the story about the Company that manufacturers Pink Flamingos - a Massachusetts employer closing its doors. Inflation and cheap overseas competitors killed this old company.

"Union Products Inc. stopped producing flamingos and other lawn ornaments at its Leominster factory in June, and is going out of business Nov. 1 — a victim of rising expenses for plastic resin and electricity, as well financing problems.

The small privately held firm has been in talks with a pair of rival lawn ornament makers interested in buying the molds and resuming production of the flamingos, designed in 1957 by local son Don Featherstone.

"We think the flamingo will go on," Keith Marshall, Union Products' chief financial officer, said at the company's aging brick factory, where just a few years ago more than 100 employees churned out flamingos by the millions"
http://news.yahoo.com/s/ap/20061029/...go_s_swan_song

Again, our attention is always drawn to the big elephant manufacturers and meanwhile the huge numbers of small American Manufacturers close their doors.

[jk]

Re: We can't go back to a manufacturing economy

it's nice to know that the flamingo will live on.