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Okay, I'll go.
The big news this weekend was that Trump had a rally and said that, should he not be elected, the U.S. auto industry would be overrun with cheap Chinese imports. He used the word "bloodbath".
The mainstream media, which we're assured rarely tells outright lies, decided to find the exact dividing line between an outright lie and "still technically the truth". You can be the judge of whether they succeeded. For just one of many examples, Joe Scarborough ran a segment where the words "Trump warns of a bloodbath for America if he loses" were emblazoned on the bottom of the screen.
Of course, if any of this surprises you in the slightest, you haven't been paying attention. It's slightly boring at this point and would be funny except so many boomers still watch that dross.
What I want to focus on is the actual substance of Trump's claim. I think that, this time, Trump is on to something. The Detroit auto industry is about to have a head-on collision with China and get absolutely wrecked.
Already, Detroit is not in good shape. The Big 3's share of U.S. auto sales has fallen from 90% in 1965 to just 44% by 2018. (I'm sure it's much lower now). It gets worse. The only reason that Detroit has done this well is a 25% tariff on foreign light trucks that was passed by LBJ in retaliation for European tariffs against U.S. chicken.
In terms of small cars, Japanese automakers have been beating Detroit for decades. For luxury vehicles, Germany has worldwide dominance. That leaves only light trucks and SUV's, where Detroit still performs well only due to tarriffs. We've sort of forgotten about Detroit since 2008. The perception is that things were bad for awhile, but then the automakers got bailed out and they're okay now, especially #girlboss CEO Mary Barra.
This isn't true. The stock prices of the Big 3 have limped along. GM, once the 2nd most valuable U.S. company, now has a market cap only 2% the size of NVIDIA. And, if the Big 3 haven't gone bankrupt again, it's only by jettisoning high-paid union labor. Michigan, once a well-off state, now ranks 39 out of 50 in household income, falling well behind former hick states like Texas and North Carolina.
Enter China.
China is already, by far, the world's largest producer of automobiles, producing about 3x as many as the U.S. Also, China can sell an EV for $10,000. While I'm sure there would need to be changes for the U.S. market, it would not be too expensive at scale. Get ready for hordes of these "shitty but good enough" cars to enter the market.
"No one will ever buy a Chinese car" you laugh, nearly dropping your monocle into your glass of cognac. I don't think this opinion can withstand serious scrutiny. Japanese cars once had a similar reputation. Nowadays, choosing to buy an American car over a Japanese one is seen as either extremely patriotic or moronic. Even if quality never improves, people still buy plenty of Kias and Hyundais. How many more would they buy if the price was reduced by 30-50%?
So let's say all of this is true. A wave of Chinese imports are coming which will cripple the U.S. auto industry. How will voting for Trump help? My gut feeling is that Trump can't save Detroit but that, unlike Biden, he'll at least try.
For most of the period of the 1980s-present, the world has been a huge beneficiary of free trade. The rich in the U.S. have grown much richer, obscenely so. But the biggest gains have been won by the working class in developing nations, especially China. Despite all that there have been losers. The biggest losers are the working class in rich nations, especially in areas that compete with China.
The traditional government solution to manufacturing being outsourced has been to offer job retraining and lots of government benefits to the affected class. But this just doesn't work. The places that have been affected by blue collar job loss are now hollowed-out shells of their former selves.
Trump will probably at least try to ban or tax Chinese cars. Is this the right thing to do? Maybe, maybe not. It will cost American consumers a lot of money, and it will depress wages in China. In aggregate, the tariffs will probably make the world a worse place. But they will help the group that has lost so much and which has been ignored and scorned for decades. The group Biden pretends to care about but which Trump actually does.
Edit: Just saw this retweeted by Crémieux:
America's most affluent metro areas in 1949: https://twitter.com/DKThomp/status/1769891112095740274/photo/1
You'll never guess who's #1.
I vaguely remember a period in the 80s and 90s when cars were a culture war. "Assholes drive imports" was a slogan for a certain sort, who were patriotic enough to buy American cars even when the foreign imports were clearly superior. It was mostly working classs rightwing types doing that.
If we get a big wave of cheap, good-enough, electric cars made in China... how do the culture war lines break down? The right is more pro-American, but these days the left is more foreign-interventionist and might care more about opposing China. The left likes electric cars, but the right has more broke people who just want to save money. And Elon Musk doesn't fit clearly on either side.
On the other hand, does this even matter? Once upon a time the auto industry was a huge deal, both to create jobs and for the military-industrial complex. Nowadays, like you said, the big car companies are tiny compared to... gaming graphics card manufacturer. And as I understand it, there's almost nothing in common between a car factory and a modern weapons manufacturer. So maybe it's OK to just let China take over the car industry, just like we let them take over every other kind of manufacturing.
Despite being 2% the market cap of NVDA, GM has 5 times as many employees.
Let's say that we always spam "let China have the crappy businesses" without limit. Solve for equilibrium as X (time) approaches infinity. Eventually, China will have every business except one. A single American person will have a net worth of $100 trillion making memecoins or something. His tax dollars will support what's left of the American economy. All other Americans will work crappy retail jobs. China will control the rest of the value chain. Mercantilism is not great for the victims.
I think this book is relevant: https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
So, do we go back to 19th century mercantilism? Use the government to subsidize our own, inferior industries, while the navy tries to forcibly stop them from shipping cars to us?
The alternative is to specialize in what we're best at: Pizza Delivery and MicroCode
Why not? All "specialization" seems to have brought is cheap consumer gadgets to fudge inflation statistics with, and cost disease everywhere that's important to people.
Plus cheaper food, cheaper clothes, cheaper flights, cheaper cars and longer lives.
Housing is getting more expensive due to regulation & immigration rather than cost disease, and healthcare spending is going up because the developed world has a larger proportion of older people who are living longer (partly due to better healthcare). In countries with good housing regulation and immigration control, house prices go down over time.
Free trade and specialisation are the forces pushing prices down. If you abandon them for mercantilism, you get expensive essentials and expensive consumer goods.
Nope, and nope. This is a "do you believe me or your lying eyes" situation. Clothes used to be much better quality than they are now, and food used to be better quality and cheaper (if seasonally unavailable). I can concede the rest, but of the things you listed cars might be the only things worth the squeeze, and even then I'm not sure.
Then we have a whole bunch of second order effects on employment, but I'll also grant they're hard to disentangle, and you might think they have different causes.
I'm not an autarchist, there's obviously a balance to be struck, but I also see no reason to believe why maximum free trade would make any more sense than maximum immigration.
If you buy quality clothes today for the inflation-adjusted amount they cost in 1950 you can certainly still get high quality, possibly even made-in-America clothes. They’re just a niche market since 98% of the population prefers the cheap stuff made in Bangladesh.
The same goes for food. In 1950, Americans spent 24% of their disposable income on food, in 2010 they spent 9.5% of it on food. If they increased their spending on food by 250%, even the average American could afford the premium organic local farmers market stuff that still has a lot of flavor.
Testing the hypothesis would be somewhat hard and require a lot of time. I'm not even talking about the 1950's, my opinion is based on the 80's. Our family in America would send us packages with clothes and whatever else might be useful that they could grab on a sale. These clothes would then make the following rounds: my oldest cousin -> my older brother -> my younger cousin -> me -> my youngest cousin -> my mother, for some of the clothes that looked ok on her -> rag for cleaning floors, where they would serve faithfully for many years, and survive in a state that, if push came to shove, you could still throw into a washing machine and wear them.
If something approaching this quality is still available, please send me a link.
For food, I'm not talking about America, I'm talking about eastern Europe. "Premium organic" food does not approach the quality of what was available back when I was a kid, and the fact that I'd have to go and find a goddamn farmer's market to get what was right there in the local grocery store is itself a drop in quality of life. Again - hard to disentangle - maybe it's all the BS European regulations that are slowly killing farmers throughout the continent, and not free trade, but don't tell me there was nothing lost.
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