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Monday, April 20, 2020

Make them do it

As usual, the big US corporations have learned absolutely nothing from the disruption of the production and supply chains as a result of the coronavirus.
Large US companies operating in China don’t want to move production and supply chains from the country in the near future, even though the coronavirus may force them to adjust their business strategies, a recent survey found.

Around 70 percent of 25 firms with global revenue of over half a billion dollars have no relocation plans, despite the effect the coronavirus outbreak has had on their business, according to a joint poll conducted by the American Chamber of Commerce in China and the American Chamber of Commerce in Shanghai. The results of the March survey, published on Friday, also show that around 40 percent of the respondents would rather keep their long-term supply chain strategy for China unchanged.

While more than half of the firms polled say it’s too early to make any decisions on relocation, only four percent of the companies are planning to shift all production outside China, while 12 percent of the respondents intend to move part of their facilities.
It's time for President Trump to start imposing massive penalties on US firms manufacturing anything outside the USA, and for Congress to do the same. And any firm that lobbies against the penalties or opposes them in any way should be deemed ineligible for any bailout money or federal funding for its employees.

David Ricardo is dead. Free trade is the most expensive and destructive kind of trade. There is no comparative advantage. And this is why no nation that plans to survive can afford it.
Prestige Ameritech.  The North Richland Hills company is America’s No. 1 maker of hospital surgical masks.

During this crisis, you’d think the company would be pushing forward on all cylinders, working 24/7 to manufacture the one commodity that Americans and the rest of the world want so badly.

Nope.

When there's an outbreak -- like last time, with Swine Flu -- he gets orders.  He ramps up to fill them.

Then the outbreak passes, and guess where the hospitals go?  Back to China.

This leaves him with capital equipment leases and people. If he doesn't lay them off he goes out of business.  If he does lay them off he get's hammered with much higher unemployment insurance premiums, the leases on the equipment he has no use for, and he goes out of business.

The last time he nearly did.

This time, he's demanding long-term contracts. Good for him.

Guess how many he's gotten?

I'll bet you can figure that out.
Corporatism not only isn't capitalism, it is pure and unadulterated short-term-preferenced evil.

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85 Comments:

Blogger Ingemar April 20, 2020 11:22 AM  

We can live without the twentieth iteration of iProduct, a bloated budget Hollywood blockbuster flick designed to pander to Zhongren audiences, a surveillance apparatus designed to funnel data to the CCP, and crappy tools that fall apart after their first use.

We can't live with multigenerational unemployment and the "despair deaths" that come with them.

To hell with penalties (though do impose them still). Every corporate juggernaut that has compromised American sovereignty should have their entire executive boards stripped of American citizenship and declared outlaw.

Blogger pyrrhus April 20, 2020 11:32 AM  

Meanwhile, the obstruction and coverup efforts of the CDC and its leftist sponsors gets more and more sinister....https://www.captainsjournal.com/2020/04/19/concerning-covid-19-all-of-your-models-are-wrong/

Blogger basementhomebrewer April 20, 2020 11:37 AM  

Short time preferences is the name of the game in corporate America. Even with the low level war drum against China starting to beat in several countries they aren't bothering to come up with contingency plans and are assuming everything will just go back to "normal".

Blogger rikjames.313 April 20, 2020 11:45 AM  

20 years ago I was drinking at an old fashioned gentleman's club (like a London club, not a strip joint), and an old time corporate exec said the major problem with publicly traded companies is that the execs' options are too fast. He suggested changing the tax code so they became effective 6-10 years after they were granted.

I completely agree with him.

Blogger Rek. April 20, 2020 11:56 AM  

Denmark is doing the right thing (from Bloomberg): "The government also said that companies which pay out dividends, buy back own shares or are registered in tax havens won’t be eligible for any of the aid programs, which now amount to a total of 400 billion kroner, when including loans and guarantees."

Blogger JamesB.BKK April 20, 2020 12:01 PM  

There's a need in the US and productive or (or formerly productive) Europe for SJW and green weenie free (or perhaps already handled) zones for manufacturers to build facilities within. Like a free trade zone, each area of several or tens of thousands of acres collected by large investors getting tax benefits would have one EIA for the entire area with ambient air quality requirements and water treatment requirements that allow its managers to establish projects without individual review and litigation for each project. Employee housing and entertainment could be created there. Manufacturers would be much more likely to sell or abandon facilities in China if they could be confident they could do away with Chinese ministers and grifting government-mandated local partners and not on homecoming face the gnashing teeth of what is the US litigation machine.

Blogger JamesB.BKK April 20, 2020 12:05 PM  

This is not a tax problem. It is a problem of managers transferring immense value to themselves from balance sheets and stockholders. What's wrong with the stockholders? Likely complacency created by the false impression of protection from incompetent or worse government securities agencies' lawyers and accountants and political appointees. Also that many stockholders are financed in their purchases.

Blogger JamesB.BKK April 20, 2020 12:07 PM  

"Tax haven" = code for confiscatory taxers disliking competition. Denmark is now run by groovy chicks. What could go wrong?

Blogger Stilicho April 20, 2020 12:16 PM  

punishing dividends even more? That is incredibly stupid. Punish an actual return of profit to the shareholders as if that is equivalent to debt financed stock buybacks.

Blogger Stilicho April 20, 2020 12:20 PM  

>It's time for President Trump to start imposing massive penalties on US firms manufacturing anything outside the USA, and for Congress to do the same.<

500% tariff sounds like a good starting point. Japanese style carrot may help as well. Boycott of any offending company/products will help as well.

"Made in China" delenda est... and it is only the beginning.

Blogger KPKinSunnyPhiladelphia April 20, 2020 12:20 PM  

VD wrote:

It's time for President Trump to start imposing massive penalties on US firms manufacturing anything outside the USA, and for Congress to do the same. And any firm that lobbies against the penalties or opposes them in any way should be deemed ineligible for any bailout money or federal funding for its employees.

A good idea.

It will never happen.

Incentives matter, and they can be negative or positive. Positive ones are always better. That's why tariffs, paradoxically, are the way to go. You might think they are negative, but you actually get rewarded if you make stuff here.

For our mask manufacturer, instead of him having to negotiate with hospital systems, give the hospitals a benefit for buying here -- for example a slightly better reimbursement rate on procedures requiring protective equipment.

Weaning businesses off of a "pure price" incentive will be very very hard. Draconian policies sound good, but that's how black markets start..and thrive.

Blogger Grooveware April 20, 2020 12:26 PM  

Japan is leading the way setting aside money for companies to relocate back home hopefully USA and Britan take a leaf out there book.

Blogger VD April 20, 2020 12:26 PM  

Draconian policies sound good, but that's how black markets start..and thrive.

Black markets are better than what the USA presently has.

Blogger Dr. J April 20, 2020 12:39 PM  

Guess how many he's gotten? I'll bet you can figure that out.

Infuriating - but not surprising. The corpocracy that has infected large hospital systems is worsening daily. Mayo Clinic is a stage 3 converged organization, which is why the world's most famous hospital system managed to collapse all of southern Minnesota's community hospitals. The supply chain issues in the operating room alone are unbelievable.

Tariffs to infinity until they have no choice but to return stateside.

Blogger CS April 20, 2020 12:46 PM  

"It's time for President Trump to start imposing massive penalties on US firms manufacturing anything outside the USA"

A tariff wall is a better solution. It will generate revenue while strengthening the dollar, which latter effect will serve as a further disincentive to off-shore production.

Exemptions from the tariff could be extended to high-wage trade partners, Japan, the Euro states, etc.

Blogger Dan in Georgia April 20, 2020 12:48 PM  

Sounds like we need some more tariffs on imports from our fellow "American" companies, and maybe start calling these companies "treasonous".

Blogger Uncle John's Band April 20, 2020 12:52 PM  

It's interesting to look at this post next to the debt/deflation post comments in the context of nationalism. At some point solipsistic profiteering became a more compelling ethos than nation.

It takes a special kind of retarded to bleat about the unfairness of a necessary debt jubilee or justify hollowing out the national economy for a quick buck then wonder where America went. The modern "consumer" and a nation - a national identity in the literal sense - are mutually exclusive.

Our entire beast system is aimed at producing the former. It's past time that anyone who values real communities stops repeating its talking points.

Blogger Geir Balderson April 20, 2020 12:59 PM  

Lefties constantly harangue us all about the need to reduce our carbon 'footprints'. Producing products in our own Country would eliminate that elaborate supply chain snaking across the Pacific.

Yes! We need to penalize those companies that refuse to relocate back home. Europe as well.

Blogger Sheila4g April 20, 2020 1:00 PM  

While it's almost impossible to avoid "made in China" crap, and while almost all public companies are fully converged, I make what choices I can. A recent one - Land O Lakes butter just virtue signaled that they're removing the Indian from their packaging after decades, because reasons. So don't buy their butter anymore.

Blogger Azimus April 20, 2020 1:00 PM  

Buy it for a penny, move it ten miles, sell it for a buck!

There's a reason that the ancient Confucian Chinese considered the merchant to be one step above a criminal...

Blogger Shane Bradman April 20, 2020 1:01 PM  

There are a lot of corporations in the medical world that are getting money from the government, and a significant number of these corporations are very, very, very clearly money-laundering and tax-evasion schemes. They do not generate revenue. They do not have assets of significant value. They are business vampires that do nothing except extract the money that was supposed to go towards stopping the virus. Corporatism is the evolution of capitalism. Capitalism has failed us and will never work.

Blogger JG April 20, 2020 1:05 PM  

Make Tariffs Great Again. Keep raising them until manufacturing returns to the USA.

Blogger Better Left Unsaid April 20, 2020 1:10 PM  

We must the factories out of China and most of them need to be re-established here. Unfortunately, it's going to be harder to bring those factories back then it was to move them over there. China has already threatened to prevent the critical production line equipment from being shipped out. Even if they don't officially carry that out, I'm sure they'll use delaying tactics.

In many cases we'll have to create the factory over here from scratch. We'll have schematics and specifications but who do we have that can make then in the US? Our machine tool industry was targeted by Japan, then Korea and then the Chinese. It's not near what it was and we probably need to build that capability first before we can start on the rest. Also, we have limited engineering ability to create production lines compared to what we used to. A family member worked for GM and they purchased assembly lines from Korea for the US factories. The local engineers just managed the maintenance and small improvements.

Trump and his team are aware of the challenges and they've been gradually creating the incentives and the penalties to get the process started. Covid19 will hopefully give them political cover to accelerate.

Blogger CS April 20, 2020 1:11 PM  

"A tariff wall is a better solution. It will generate revenue while strengthening the dollar, which latter effect will serve as a further disincentive to off-shore production."

Oops! That's nonsense. A strong dollar will incentivise offshore production, but not enough to counter the effect of a tariff.

And if after the introduction of a tariff there remains a problem with offshore production, then raise the tariff.

At the same time as providing home manufacturers a protective tariff wall, measures are needed to promote fierce internal competition: meaning time to to bust up monopolies and cartels, and those too-big-to-fail.

Blogger RonG April 20, 2020 1:18 PM  

In the late '80s when NAFTA was being debated, I recall listening to a debate on the national radio CBC. The pro speaker was talking about how wonderful it was going to be for Canada, and how Canadian companies were going to benefit because Canadians would still buy Canadian and the companies would be able to market to Mexico and the US. The anti speaker said that Canadians would buy whichever was cheapest, and even cross the border for deals. He also said that the Canadian companies would relocate jobs the same way, and this would be harmful in the long run to Canadian worker/consumers. My city used to produce everything - tires, truck frames, auto parts, TVs, furniture, computer parts, appliances, clothing, shoes, robots. Now we have Google and Walmart amidst rising house prices and record homeless. The jobs are either shit or degreed out of reach.

Blogger Jose Miguel April 20, 2020 1:25 PM  

I know that company, the fact that they can't get long term contracts is strong indicator #157 that America's elite care not for Americans. As our host pointed out many times, they are not even American. Even if they were, changing the entire ruling class is a must for the nation's survival.

Blogger Doktor Jeep April 20, 2020 1:29 PM  

I can hear the bowties:"But you can't force corporations to do business certain ways in a free market!"

Blogger freddie_mac April 20, 2020 1:31 PM  

@10 Stilicho

"Made in China" delenda est... and it is only the beginning.

Just started doing that last week at the grocery store.

Blogger bramley April 20, 2020 1:46 PM  

Just sickening isn't it. I was going to try and come up with a witty quip but can't be bothered. Might as well just be honest. Did the bailouts just make it unnecessary for them to change their practises? It's not possible to be so corrupt unless there's more behind it.

Blogger Zeroh Tollrants April 20, 2020 1:47 PM  

The biggest concern is Trump cozying up to Modi, knowing that he can get much more from him than dealing with China and companies will be fine with a different set of brown 3rd worlders sweat shopping their goods.
It would have to be extremely high tariffs and no backing down.

Blogger Ominous Cowherd April 20, 2020 1:59 PM  

Doktor Jeep wrote:I can hear the bowties:"But you can't force corporations to do business certain ways in a free market!"
Because the bow tie brigade is correct, we don't want a free market system.
Our current system isn't a free market system, so it's a moot point.

Blogger Joeplanet April 20, 2020 2:13 PM  

My completely apolitical wife is on a war path on never buying from China again. I never said a word to her. I wonder how many other households are coming to similar conclusions.

Blogger :^) April 20, 2020 2:17 PM  

Gates objective revealed...

https://www.armstrongeconomics.com/world-news/climate/at-last-gates-objective-is-reveal-destroy-economy-relaunch-without-co2/

Blogger Sillon April 20, 2020 2:27 PM  

Vox are you suggesting I have to earn less shekels moving the production back home, manufacture for $50 then selling for $200, as opposed as manufacturing for $0.5, then comply for real with the strict environment regulations my product claims to do in the packaging?

This means I can't shift the blame to someone else when things go wrong, and most importantly...

This means that I will (gulp) make less shekels, or worse, someone else that is not me will make those shekels!

Are you absolutely crazy!?

(Insert meme image: happy merchant profusely sweating)

Blogger Skillet April 20, 2020 2:33 PM  

I flew some execs from a company in St Louis that makes the frames and chassis for rail cars down to Mexico where their plant is. I asked one why don't they manufacture in Missouri. He said just the cost of the permits and grading the site in the US would be more that the cost of the entire plant in Mexico.

Blogger Keith April 20, 2020 2:43 PM  

>poll conducted by the American Chamber of Commerce in China and the American Chamber of Commerce in Shanghai

I bet there is a bit of prisoner's dilemma here, and a bit of "I don't think the respondents were entirely honest with the poll taker" here too.

Blogger kurt9 April 20, 2020 2:44 PM  

I think what you are seeing here is nothing more than institutional laziness. Companies need to be motivated to move their manufacturing out of China.

Blogger Brian Dean April 20, 2020 2:52 PM  

Hey Vox, see any Italians eating pasta lately? (Tomatoes are indigenous to America, so pasta would be impossible if international free trade didn't occur at some point)

Blogger God Emperor Memes April 20, 2020 2:54 PM  

Mine is going through the same thing. She is absolutely furious with China and also disgusted that no Chinese national living in any Western country seemed to make any effort to warn their host country about what was happening in China.
Our child goes to the same school as the daughters of the Prime Minister, and Mandarin is a compulsory language subject there. A lot of parents are quite angry about that.

Blogger Azimus April 20, 2020 3:06 PM  

I think its totally appropriate to do SOME business with China. But that business should be beer cozies and tv trays and buttons. Having them operate and supply complex manufactured goods in China is tantamount to giving them your business 10yrs in the future.

I'd love to see a stamp on the side of the box that says, instead of "Made in the USA", it says "15 Americans Hands Made This Product" or "118 Americans Made This Product", or "47 Chinese, 8 Mexicans, and 2 Americans Made This Product", and only count value-add steps.

Blogger KPKinSunnyPhiladelphia April 20, 2020 3:12 PM  

VD wrote:Draconian policies sound good, but that's how black markets start..and thrive.

Black markets are better than what the USA presently has.


Somewhere Carlo Gambino is smiling.

Blogger dc.sunsets April 20, 2020 3:15 PM  

Aaaand in other news, crude oil futures are (at 2:13PM CT) a MINUS (!!) $28.

How on Earth....? We live in unusual times, to say the least.

Blogger Unknown April 20, 2020 3:24 PM  

That does seem to be the problem behind (((their))) thinking, that someone else will make A shekel, period.

Blogger Cash April 20, 2020 3:43 PM  

It's amazing how few people where a product was made. The only way to change this is through law.

No one is spending $30,000,000 on a factory so they can sell something at a higher price.

Blogger map April 20, 2020 3:54 PM  

For Prestige Ameritech, the problem is worse.

They don't just make N95 masks. They also make P100 cartridge filters for industrial use. These are the kind of masks designed for full blown industrial chemical and biohazard environments. They make these under the Gerson brand name.

So...if production has to shift to making N95 without increasing capacity, then you end up with shortages in filters across entire product lines, not just the obvious product line.

Blogger Sillon April 20, 2020 4:09 PM  

Brian Dean wrote:Hey Vox, see any Italians eating pasta lately? (Tomatoes are indigenous to America, so pasta would be impossible if international free trade didn't occur at some point)

"Free trade" is not bringing new plants from abroad, nor buying garlic from your neighbour in exchange for cheese mutton or wine, that is commerce.

"Free trade" is globohomo newspeak for the unrestricted free as in "no cost" movement of capital from one country to another country, just to benefit a small elite clique of "citizens of the world" at the expense of the western society that benefited them so much but which they so profoundly despise. After all they're rich and thus in their heads smarter than you.

Blogger Crush Limbraw April 20, 2020 4:11 PM  

.......so that government of DaOligarchs, by DaOligarchs and for DaOligarchs shall not perish ftom DaEarth!

Blogger eclecticmn April 20, 2020 4:14 PM  

44. CashApril 20, 2020 3:43 PM
It's amazing how few people [care] where a product was made. The only way to change this is through law.

The US signed away some rights to international tribunals in trade agreements. I recall the US had a law requiring country of origin labelling for beef. The meatpackers said this was too cumbersome to know where the cattle came from and a restraint of international trade or some such. They sued and won. The tribunal agreed with them.

Blogger eclecticmn April 20, 2020 4:18 PM  

35. SkilletApril 20, 2020 2:33 PM
I flew some execs from a company in St Louis that makes the frames and chassis for rail cars down to Mexico where their plant is. I asked one why don't they manufacture in Missouri. He said just the cost of the permits and grading the site in the US would be more that the cost of the entire plant in Mexico.


Steve Jobs used his one meeting with Obama to volunteer to help with the next campaign, and to tell him Apple located the new glass plants in China because of US regulatory delays and added costs; NOT labor costs.

Blogger B April 20, 2020 4:29 PM  

Vox saith: "It's time for President Trump to start imposing massive penalties on US firms manufacturing anything outside the USA, and for Congress to do the same."
I agree. But unless everyone consents to give up their "cheap" iPhones in the future, I don't see that happening. And let's not forget our US oligarchs & congresspersons & senators (including Biden, Clintons, Bill Gates, Bloomberg etc. etc.) who have massive financial interests in red China. They just won't let it happen.

Blogger eclecticmn April 20, 2020 5:09 PM  

The role of govt employees in all this should not be underestimated.
In the short term their jobs are not at risk in this financial meltdown. They get paid even if not working. A shut down does not harm them right now. They benefit from cheap imported goods and cheap imported labor. Their jobs are protected through civil service and/or govt certifications. They assume their pensions will be paid. They are major campaign contributors. Most of the talking heads making shut down decisions are govt employees. Fauci et al. lose little in this shut down.


Blogger Ransom Smith April 20, 2020 5:55 PM  

Hey Vox, see any Italians eating pasta lately? (Tomatoes are indigenous to America, so pasta would be impossible if international free trade didn't occur at some point)
You're gonna get beaten for being so stupid.
And I'm gonna laugh.
The Conquistadors brought back tomatoes.
What about that is free trade?

Blogger RedJack April 20, 2020 6:11 PM  

The stocks are controlled by a smaller group of people than you think. All those 401k "stockholders " can't vote.

So no one managing the stocks wants to upset the gravy train. However, i am open to education on this

Blogger RedJack April 20, 2020 6:25 PM  

It is amazing what you can force people to do with the correct incentives

Blogger Shield up sword swinging pipes blasting April 20, 2020 6:33 PM  

Having your manufacturing base in China is now bad business. People don't really want to buy made in China. US corporations are dumb.

Blogger Brett baker April 20, 2020 8:00 PM  

Corona-chan proves Gary Raffman right:" The 2 worst things invented in the last century are the quarterly report and 24 hour news".
Perhaps require Buy American for Medicare and Medicaid?

Blogger Nihil Dicit April 20, 2020 8:04 PM  

that's how black markets start

A trans-Pacific black market? The logistics seem improbable.

Blogger Joe April 20, 2020 8:06 PM  

I was unmoved by their whining when China seized their products. I guess sweat shops do have their drawbacks.

Blogger SirHamster April 20, 2020 8:06 PM  

B wrote:But unless everyone consents to give up their "cheap" iPhones in the future, I don't see ...

You don't have to see it. Start using the rhetorical weapons you have.

"You still want to support China after they gave us the China flu and killed thousands of Americans?"

Blogger eclecticmn April 20, 2020 8:24 PM  

Let's say for the sake of argument, that company managers only owe a duty to shareholders. Even if true it is the job of govt to look out for people other than shareholders. This includes workers unemployed or underemploed thanks to imported goods or imported workers. Govt should pay attention to harmful externalities.

One problem is that the donor class gains from cheap imported goods and workers. Another is that govt employees, govt credentialed employees, and long term welfare recipients (the Dem base) are not directly harmed by cheap imported goods and labor.

Blogger Jack Amok April 20, 2020 8:41 PM  

Manufacturers would be much more likely to sell or abandon facilities in China if they could be confident they could do away with Chinese ministers and grifting government-mandated local partners and not on homecoming face the gnashing teeth of what is the US litigation machine.
...
I flew some execs from a company in St Louis that makes the frames and chassis for rail cars down to Mexico where their plant is. I asked one why don't they manufacture in Missouri. He said just the cost of the permits and grading the site in the US would be more that the cost of the entire plant in Mexico.
...
Steve Jobs used his one meeting with Obama to volunteer to help with the next campaign, and to tell him Apple located the new glass plants in China because of US regulatory delays and added costs; NOT labor costs.


Yes, there are a set of fundamental problems that have to be solved if we want to re-shore our manufacturing. Offshoring manufacturing to third-world countries was a relief valve for all the overzealous eco-nuts, labor agitators, SJWs, and lawsuit-lotto courts.

But a forced-onshoring might also force us to deal with the anti-business progs.

Blogger Damelon Brinn April 20, 2020 9:08 PM  

You don't have to see it. Start using the rhetorical weapons you have.


Right. This isn't the time to be black-pilling ourselves with talk about what will never happen. It's time to be thinking and talking about what *could* happen if enough people get behind it.

Blogger Azure Amaranthine April 20, 2020 9:29 PM  

""Free trade" is globohomo newspeak for the unrestricted free as in "no cost" movement of capital from one country to another country, just to benefit a small elite clique of "citizens of the world" at the expense of the western society that benefited them so much but which they so profoundly despise."

I'll show you one step further. There ain't no such thing as a free anything. If you think some system is free it's because you don't know how it's controlled and regulated. Thus people pushing "free X" are really just pushing for themselves and/or their allies to have greater power and less responsibility in that sector.

Then the logical step beyond that, there isn't any such thing as a free anyone. Everyone has to choose which master to serve. Everyone.

Blogger Ransom Smith April 20, 2020 9:52 PM  

But unless everyone consents to give up their "cheap" iPhones in the future, I don't see that happening.
It will.
Apple is sitting on over a hundred billion in debt. Which while supposedly less than their cash, that money would be subject to huge taxes if actually brought back.
So it's pretty likely that Apple is in the red on a proper balance sheet.

Blogger Darren April 20, 2020 11:09 PM  

ENVY: The Original Sin. Eve bought into a lie stemming from angry jealousy.
Still the main problem today, even the cultural scolds who want to control dissidents and name-shame Meme Warriors and other entertaining social media creators -- essentially screaming with their actions "Somebody somewhere is having fun that I don't understand? They must be stopped! Permanently!"

Blogger Sillon April 21, 2020 8:09 AM  

@61,

You're right but it never ceases to amaze me how all those lobby groups can never seem to lobby to remove those impossible obstacles yet they always succeed in passing all sort of legislation that benefits them importing more 3rd World foreign labour, relaxing labour laws, obtaining all sort of tax exemptions and operating from tax heavens.

They are all lying, they do it for two reasons, one is cultural (convinced they are being smart), the other (the one that counts) is the shekels never be convinced otherwise.

Blogger Akulkis April 21, 2020 8:22 AM  

This comment has been removed by the author.

Blogger Akulkis April 21, 2020 8:30 AM  

"We must the factories out of China and most of them need to be re-established here. Unfortunately, it's going to be harder to bring those factories back then it was to move them over there. China has already threatened to prevent the critical production line equipment from being shipped out. Even if they don't officially carry that out, I'm sure they'll use delaying tactics."

It's going to come down to either US Army or US Marines escorting those recovering the US-bought-and-paid-for equipment, or B-2 bombers destroying it.

"Our machine tool industry was targeted by Japan, then Korea and then the Chinese. It's not near what it was and we probably need to build that capability first before we can start on the rest."

As I noted months ago, the first order of business is for the tool and die shops to create more tools to create more tool and die shops.

In 1970, Detroit had over 2000 tool and die shops. Now Detroit has less than 50.

Before Detroit became the "Motor City" what was it known for (worldwide)?

Cast iron stoves. To this day, the former Michigan State Fair grounds in Detroit displays a huge (2-story high) cast iron stove on a platform. Before WW2, you could find Detroit-made cast-iron stoves in commercial and household kitchens around the planet.

Why did the U.S. auto industry converge on Detroit? Because the cast iron stove companies depends on a large base of tool and die shops. In the 1900-1920 era the only place with enough toold & die-making capacity to start DOZENS of auto companies was Detroit. Most other cities could only start one auto-manufacturer without completely exhausting the excess tool-and-die-making capacity in the local area.

Blogger Akulkis April 21, 2020 8:42 AM  

"I think what you are seeing here is nothing more than institutional laziness. Companies need to be motivated to move their manufacturing out of China."

Bull-fucking-shit.

They had all sorts of energy to pick up their factories out of the Midwest and move every single piece of equipment TO China. Their motivation, frankly, was Walmart threatening to not buy their products to put on store shelves if they didn't move to China in 12 months. (This comes from a former Walmart exec who was recruited into K-mart circa 1999, as related by K-mart's president(some English guy whose previous job was CEO of Harrods department stores in the UK) at that time.

Blogger Akulkis April 21, 2020 8:43 AM  

""Hey Vox, see any Italians eating pasta lately? (Tomatoes are indigenous to America, so pasta would be impossible if international free trade didn't occur at some point)"

1) Pasta is the noodles, which the Italians have been making since Marco Polo's return from China.

2) You think that a land that can grow grapes year-round can't grow tomatoes?

Dude, what drugs are you taking?

Blogger Akulkis April 21, 2020 8:49 AM  

"A trans-Pacific black market? The logistics seem improbable."

Yeah, just like the trans-oceanic black-markets in all sorts of drugs and weapons.

You're still a foot too short for this ride.

Blogger Ominous Cowherd April 21, 2020 8:57 AM  

Akulkis wrote:It's going to come down to either US Army or US Marines escorting those recovering the US-bought-and-paid-for equipment, or B-2 bombers destroying it.
Or nukes, despite the air travel involved. Either way, we're better off.

Blogger JamesB.BKK April 21, 2020 9:04 AM  

Those factories were driven out of the USA Massachusetts dominated states not part of the war machinery sector such as in California. Driven out. The solution is zones that allow them to establish, operate, and expand without constant harassment. Low natural gas and oil prices make for a short term incentive until the next Democratic administration engages in sequestration of resources. Calls for - or predictions of - invasions or aerial bombings of China should be more measured, shouldn't they?

Blogger Ominous Cowherd April 21, 2020 10:28 AM  

JamesB.BKK wrote:The solution is zones that allow them to establish, operate, and expand without constant harassment.
We could establish one of those zones between the Bering Sea and the Atlantic. We could call that zone America.

Blogger Ominous Cowherd April 21, 2020 10:28 AM  

This comment has been removed by the author.

Blogger Akulkis April 21, 2020 10:43 AM  

"Or nukes, despite the air travel involved. Either way, we're better off."

What do you think is the primary weapon system that the B-2 was designed to deliver?

Blogger Akulkis April 21, 2020 10:45 AM  

"Calls for - or predictions of - invasions or aerial bombings of China should be more measured, shouldn't they?"

Not at all.

If the GM thinks their Chinese factories are going to be bombed into dust, they'll start thinking a little bit more seriously about moving those plants OUT of China.

Blogger Ominous Cowherd April 21, 2020 1:27 PM  

@76, remember we were calling for no more air travel to or from China? I'd make an exception for nukes, maybe.

Blogger liberranter April 21, 2020 1:47 PM  

But unless everyone consents to give up their "cheap" iPhones in the future,

What exactly is "cheap" about an iPhone? Have you priced one of those things lately?

Blogger SirHamster April 21, 2020 2:06 PM  

liberranter wrote:But unless everyone consents to give up their "cheap" iPhones in the future,

What exactly is "cheap" about an iPhone? Have you priced one of those things lately?


Muh Satanically symboled luxury goods need the China-made taint of CoronaChan to properly convey status.

Blogger Cinco April 21, 2020 8:53 PM  

Step 1: debt forgiveness for individuals AND corporations
Step 2: All products sold in America MUST be made in America
Step 3: Removal of all minimum wage laws
Step 4: Unionization is illegal/or protections are removed
Step 5: Tribunals for you know who.
Step 6: see step 5.

Blogger JamesB.BKK April 22, 2020 1:40 AM  

Re step 2 anticipate annexation of some coffee and cocaine properties.

Blogger SciVo April 22, 2020 5:31 AM  

@ Brian Dean:

(Tomatoes are indigenous to America, so pasta would be impossible if international free trade didn't occur at some point)

Are you crazy, stupid, or a liar? You're even using simple terms like "pasta" and "free trade" incorrectly.

Blogger Akulkis April 22, 2020 10:23 AM  

"
What exactly is "cheap" about an iPhone? Have you priced one of those things lately?"

The manufacturing cost.

Blogger Akulkis April 22, 2020 10:26 AM  

"Step 4: Unionization is illegal/or protections are removed
"

1: Any jobs where workplace offers the chance to lose life or limb, or even a finger or two, due to lack of enforcement of safety protocols should be eligible for unionization.

2: The unions called out the outsourcing to China threat back in the 1990's.

3: On a similar note, I noted to myself back in the 1970's that the unions were holding companies hostage such that being underbid by foreign goods was a foregone conclusion.

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