Horseshoe Nails.

For the last forty years or so, the trend in American politics, culture and the intellectual elites of the country has been to ignore the deindustrialization of the country. In fact the elites have been enablers of the process through polices and behaviors that strangled the industrial companies and their business.

After decades of beating the industrial sector to death, the chickens, as they say, are coming home to roost. Of course it takes a Russian article to explain what has happened.

The essence of the problem, according to the retelling of the columnist of the Reuters agency Andy Home, who obtained a copy of the September report of the US Department of Defence on the situation concerning key deliveries necessary for the American army, is reduced to one important figure. More than 300 (!) key elements necessary for the normal functioning of the US Armed Forces and defensive industry are under threat: American producers are either on the verge of bankruptcy or were already replaced by suppliers from China or other countries because of the deindustrialisation of national economy and the relocation of production to the countries of Southeast Asia.

Mr. Home gives as a striking and clear example the amusing (of course, if you are not a US military man) fact from the report: it turns out that the last American producer of the synthetic threads necessary for the production of army tents “died” quite recently. This means that in the event that the US will fall under such a “textile embargo”, for some American soldiers they will seriously face the prospect of sleeping in the open-air. It is difficult not to notice that such a prospect looks slightly humiliating for an army that claims to be the most hi-tech on the planet.

The situation could be considered as funny if it didn’t affect such a wide range of requirements of the American army and military-industrial complex. In the declassified part of the research of the American Department of Defence it is mentioned that in the US there are difficulties with future deliveries of the power switches that nearly all American missiles are equipped with. As officials of the Pentagon report, the producer of these switches was closed down, but the highest military ranks learned about it only after it became clear that the power switches ended. And there is nowhere to take new ones from, because the producer disappeared into thin air a whole 2 years ago. One more striking example: the country’s only producer of solid rocket motors for “air-to-air” missiles, as the American officials write, “encountered technical production issues”, the reasons for which couldn’t be found even after government and military experts were involved. Attempts to restart production failed, and the Pentagon was obliged to employ a Norwegian company to ensure uninterrupted deliveries. Obviously, this indicates a certain technical degradation of the entire American system, because only the loss of some key competencies can explain a situation in which production cannot be restored and the problem cannot even be determined.

Whilst becoming acquainted with the complaints of the leadership of the American army it is difficult to rid oneself of the impression that it isn’t a document of the US Department of Defence dated September, 2018 that is in front of your eyes, but a description of the problems of the Russian army from the era of the dashing 90’s. Literally there is no direction in which there would be no serious or very serious problems, and often they even can’t be solved at the expense of the bottomless military budget.

In the section on nuclear weapon problems the Pentagon complains that in the US there isn’t the necessary number of engineers and technicians who would have the corresponding education, training, and US citizenship that are necessary for working with army nuclear objects. The mention of nationality is of importance, because American higher education institutions produce enough engineers, physicists, and representatives of other technical specialties and exact sciences, however a disproportionately large number of these graduates are foreigners, most often from the People’s Republic of China.

Americans can’t find not only the necessary engineers, but also the necessary microelectronics for nuclear weapons. And they complain that they no longer have the right to trust suppliers of electronic components – after all, “the supply chain is globalised”. In translation from American bureaucratese into colloquial Russian it means: “the microelectronics for our nuclear missiles are made in China, and we don’t know what the Chinese have stuffed in it”. There are serious difficulties even concerning issues that should be solved very easily in the conditions of hi-tech American economy. For example, the Pentagon complains about a lack of tools for the development of software, as well as the management of data and production, that could be trusted. The situation is exacerbated by “poor cybersecurity practices by many key software vendors”. This, when translated from American bureaucratese into colloquial Russian, means: “concerning cybersecurity, our vendors are so bad that we don’t know what the Chinese and Russian hackers cram into the software that our military use”.

It’s all to easy to blame the Chinese for what has happened. That would be wrong. The United States did this to ourselves. Perhaps as a product of where I live, what has happened is fairly obvious. When  I started engineering school in 1982, just about everybody with a degree could get a good job. By the time I was ready to graduate, jobs were thin on the ground.  At first I thought that that was mostly as a consequence of the defense drawdown of the late 1980’s but I have come to realize as time goes on that the problems are deeper than that.

The problems started with the policies and taxes that were enacted in the 1960’s to pay for the ‘Great Society,’ specifically the high taxes on business income and income in general. These taxes have created a distortion in the way businesses raised capital and the thinking on how long it takes before the investment must have a return. Instead of making capital available for a large investment that has a relatively low return over a long period of time, a steel mill, for instance, the taxes incentivized the ever quicker buck. That has been combined with decades of business schools emphasizing the same thing and a cultural drive toward a more socialistic and organized society and global rather than local thinking. All has combined to make it harder to do serious business here in the US.

To get back to the horseshoe nails, recently I ran into a video on the big ten, the huge presses that the US government had built to enable large aircraft forgings to be pressed.

Here is more on the heavy press program.

The heavy press program is something is something that the US probably cannot do again, at any price simply because the companies that fabricated the machines are no longer in business.

This is not unusual. One thing that  I have found in my career and when I have looked after reading a story about one company or another is the company long gone and the building doing some other thing, if the site isn’t turned into something else.

As far as I know, 60 minutes has never done a report on the effects of the hollowing of American  industry. The hollowing that continues, business by business. Here is the article that the Russian report is based  on.

It’s not pretty.  It’s also the tip of the iceberg. It isn’t that the companies that made tent fabric, aluminum armor or silicon switches went out of business. It’s that the companies that made the machines to make those things and thousands of other things went slowly into the night while the elites in Washington partied and made excuses for the destruction. The problem has never been China, Japan or anybody else. The problem has been ourselves, especially the people that have partied on the promenade deck and never noticed the rotting machinery of the  ship of state.

Here’s  a recent  story from Forbes:

One comment

  1. Dale Snyder · November 8, 2018

    Excellent article!


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