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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.
Won’t the dollar’s strength vs the Euro and Yen mean that manufacturing is just more likely to move to Europe and Japan than to stay in the US?
In the long term, the problem in the US and the wider developed world is that people no longer move to where the economic growth is. The welfare state, large numbers of government jobs and state-supported jobs in education and healthcare mean that there’s just enough money to make life in hollowed-out places passable, and minimal real pressure to leave for the unambitious. Trump tells people they don’t have to leave, that he’ll deploy the full resources of the American state to ‘bring the jobs back’. He probably can’t, but if he could, would it be a good thing?
Thatcher could have been right about ‘managed decline’ of post-industrial areas being necessary. A lot of these places were barely populated before the brief 1860-1950 industrial boom, and they could easily go back to being barely populated today. Their existence is artificial, a contrivance because in a democracy they have enough representation to keep the situation from total collapse by demanding the rest of the country do whatever is necessary (like import tariffs, bailing out the big three, whatever) to prop them up.
Protectionism isn’t a bad word. It’s what turned South Korea into one of the world’s richest countries after all. But there are far more examples of it failing (see Brazil) than it succeeding. Forcing the population to buy $50,000 Detroit cars instead of $10,000 Chinese cars is unlikely to yield major new investment in technological advances or R&D that might sustainably increase long-term prosperity. It doesn’t seem like it will be worth it in the long haul.
Calling a 90-year period historically "brief" is a bit of a stretch. Also, I somehow doubt that those English regions were "barely populated" before 1860.
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But the entire population of the USA can't live in New York. I get fed-up of seeing this touted as the answer: just move to where the jobs are! We have that in my own country, which means that Dublin (though tiny by international standards) is bloated by Irish standards, attracting away all investment to the capital, and the concurrent vicious circle which means that the jobs are there because everything is there so when new businesses start they want to go where everything is so they go to Dublin which is where the jobs are.
There's rent crisis, housing crisis, etc. because there isn't enough housing for people and yes that is an entire problem of its own which the government would have been better off addressing rather than wasting time on "sexist language in the Constitution".
But people in my country are moving to where the jobs are, only to find when they get there that there's nowhere to live, or if there is, what the job pays them won't cover that. So they move to another country altogether.
"Jest move to where duh jerbs are" is not a solution.
The entire reason their great grandparents moved to Detroit is Detroit was where the growth was. I'm not really sure I understand the argument here.
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The number of people who currently live in NYC is more than double the entire population of the country at independence. I don't mean to be flippant, but every major city now was once tiny. The process of urbanization is centuries old. The US is lucky in that unlike Ireland (or the UK, or France) economic growth is pretty dispersed between several major urban areas, all of which could attract new internal migrants. Obviously there are big policy challenges (see the issues discussed in the infrastructure comment today elsewhere), but sure, I don't see the issue with NYC becoming as populous as, say, Tokyo.
Building more homes where the economic activity is tends to be more viable than trying to artificially disperse economic activity to where the homes are, which as far as I know has mostly been a huge failure historically.
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SK's protectionism worked because it was done with a spear pointed at the ass of the local companies who were always told it was going to be time limited and would be wound down gradually and so they had 15-20 years to become internationally competitive or they were going to die out anyways. Most crucially this threat was believable to the point that the local companies shaped up and actually became competitive on the world stage.
Unfortunately you can't replicate it in the modern day US because their culture of lagresse and gibs mean that tacitly the companies know that even if the current government says the tariffs/support will end in 15 years political considerations near expiry time will lead to it being probably extended because who wants headlines like "poor salt of the earth car factory workers left destitute after government pulls funding to cut the taxes of the wealthy"? As such the car companies have zero real incentive to modernize and can just coast off of government subsidies and having a captive market. The ultimate loser of all this is going to be the taxpayer who now gets his hard earned money given to these relicts and just to add insult to injury is forced to buy worse products at higher prices.
I'm not qualified to comment on that, but I can think of 3 other reasons as well.
Large-scale US federal capital loans after 1953 designed specifically to allow the build-up industrial capacity, so that the country can develop and prosper through exports to the US, in exchange for surrendering its sovereignty in a practical sense. Basically the same process as in Japan and Taiwan.
by the end of the Second World War the Japanese were already running for more than half a century a centralized, authoritarian, repressive, tried and tested elaborate governing apparatus to administer the entire Korean Peninsula, most of which survived the war intact. The Americans just needed to take it over and keep it running for their own ends.
Before Japanese rule, Korea already existed as a polity governed according to its own Konfucian traditions for centuries.
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In other words, only a dictatorship can turn a third world country into a first world one- see also Franco, Lee Kwan Yew.
Didn't Franco really cock up the Spanish economy for the first 30ish years? Yeah, they got their economic miracle, but it took a few decades of Franco screwing things up to get there.
Not that literal communists would have run a better economy.
I mean, the original South Korean dictatorship was also pretty bad at managing the economy. Right wing authoritarianism is high variance at economic growth- sometimes you get Lee Kwan Yew or Paul Kagame, sometimes you get Syngman Rhee or Ngo Dinh Diem, sometimes you get a Franco who goes back and forth, occasionally you get a mediocrity like Salazar or Pinochet(whose miracle of Chile was really returning it to a pre-socialism growth trajectory).
As far as I know, the story with Spain’s economy under Franco was that as the fascist ideologues started getting replaced with conservative Catholic technocrats the economy started improving until it turned into the Spanish economic miracle. This was a predictable long term process at the end of WWII, maybe not in specifics but at least generally- everyone in 1945 knew that fascism wasn’t expanding and everyone who watched Spain knew the conservative Catholics were going to replace them eventually, even if they might not have been betting on Opus Dei(which is still happy to provide technocrats and economists to developing countries), and while the catch up economic growth might have been a curve ball it didn’t surprise anyone that they were better at managing an economy and less obsessed with autarky than fascist ideologues.
Left wing authoritarianism seems predictably very bad at managing and economy, with the rare exceptions like Deng being exceptions because they backed away from the left wing nature of their rule. Democracies seem to do OK generally unexceptionally at delivering rising standards of living, although I’ll acknowledge that there’s a few countries which have experienced extraordinary economic growth while being democracies- Poland and Japan among them. I will, however, maintain that democracies cannot go from mud huts to skyscrapers- Poland and Japan were already decent middle income countries.
Except one clearly did. Or at least log cabins to skyscrapers.
Sure, but it was at the vanguard of that transition, very close (with the exception of some stagnation during the civil war) to England and Germany. Within 25 years of the civil war ending the US was arguably the richest country in the world, maybe except for Australia which had its first resource boom in the late 19th century. The odds were much tougher for countries that didn’t industrialize in the first wave.
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Plato ranked monarchy as the most powerful government for national improvement for a good reason.
RomansAmericans and their provincial allies don't like saying "king" for that reason, even though kings andCaesarsdictators aren't meaningfully distinct.More options
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