This article starts off with an image of an auto plant, circa 1919 or so.
The fact is that the US doesn’t make thing the way thing were made in 1919, or for that matter in 1990. Or the way the Chinese do things, which is to dump thousands of people on a problem. So there’s no way that you could make an IPhone the way Foxconn does.
My answer to that is, “why would you want to?”
I did a post about a shop that makes parts without shutting down at night last February.
This is the result of almost two centuries in manufacturing technology advancement.
Here’s John Ratzenberger on a visit to the Arthur G Russell Bodine plant in Bridgeport.
The IPhone is fairly simple and does anybody believe that the company that makes lines like this couldn’t make a line for them if that’s what Apple wanted.
I don’t see that the US has to play the game the same way the Chinese do.
The fact is that the US has been making stuff and improving manufacturing for a long time.
A 1950’s video about automation.
Of course the real problem isn’t technology or labor. It’s the ability to utilize capital. Foxconn can simply use capital more cheaply than Apple or anybody Apple wanted to subcontract can simply because between taxes and regulations financial and human capital has become prohibitively expensive across just about every industry. At this point it doesn’t matter how innovative American engineers are and how hard Americans work if the costs of the innovation and work are so high that nobody can afford to pay them.
It’s gotten to the point now that the amount of overhead created by taxation and regulation that an innovation created in this country has to carry makes it almost impossible to profitably manufacture as real new product in this country. And unless the policies that create the problems are changed this will hurt and destroy even existing industries and our country’s industrial capital.
Far too much has been destroyed already. Even in the last ten years or so the number of blast furnaces has declined from 23 to 11. The Aluminum industry is shutting smelter because of the high cost of electricity. For a variety reasons the industrial capital of the US has been thrown away and that is continuing.
The only thing that has kept things going as long as it has is the constant creativity of the American people. Heretofore the American people have been able to keep ahead of the stifling hands of bureaucracy and government.
The question is how much longer this can continue. I’m not sure that things can keep going much longer. Or that the new industrial and human capital are enough to replace what has been lost.
In order for the country to get back on the track to prosperity the country needs to start thinking about how we can start rebuilding our industrial capital. In order to do that the people in charge are going to have to admit that mistakes have been made and that changes have to be made. The biggest is that government is going to have to let go. Government is going to have to understand that if can’t, in the name of fairness, manage very single financial transaction. Government needs to understand that regulation only adds a huge cost for very little benefit. And government needs to attempting to get it’s hand everybody’s pockets and cut the taxes that keep capital static and out of the country.
Until that happens manufacturing is going to continue to die, industry by industry. With an impact on jobs and the country’s general prosperity that will start to look like a retreat to the economy of a third world nation. I would prefer for that to not be the legacy of my generation, thank you very much.
For more on the dysfunctional economy click Here or on the tag below.