Expound more please. Genuinely curious
It goes more or less like this...
WW2 created a mini industrial revolution/ explosion in the US based off of war production. The USSR believed, along with certain folks in France and the UK. The idea was that post war production levels were going to fall and without a war and the US was going to be left with a bunch of unemployed GI's because even with the women and blacks being displaced by white GI's there wasn't enough output to go around.
That didn't materialize for three reasons. 1) Europe needed to be rebuilt 2) Bretton Woods/ Marshall Plan 3) GI Bill. 1) Is pretty obvious as the US picked up the bulk of the load for European output and helped rebuild Europe. 2) flows into 1 because the Marshall plan allowed subsidies cheap loans to be taken by the euros and help finance the reconstruction. 3) allowed the GI's to be retooled for advanced manufacturing that pushed a further mini economic boom into the 60's.
By the 60's the US had a clear leg up on manufacturing competition and an advanced workforce, but then things started looking shaky. Advanced manufacturing and high margins in the absence of huge demand and little competition created higher tax brackets, and labor unions reached peak power. And why not? Plenty of money to go around at the time.
Then a few different items came to a head, capital shortages caused by high tax rates, Europe officially being rebuilt, and the micro chip. With Europe rebuilt demand fell and competition increased from the Europeans and Japanese. High taxes meant the cost of rebuilding or expanding the factories to better compete became prohibitively expensive and with the invention of the micro chip any capital scrounged up went into that at a lower cost and higher return. By the 80's Reagan came along and manufacturing was clearly sunsetting, he cut rates and we went from a capital shortage to a surplus. Manufacturing found it cheaper to grow in the absence of demand by offshoring to Asia and investing there, and more money here flowed into technology and equity creating the modern incarnations of Silicon Valley and Wallstreet. And labor unions were gutted btw.
Here we are today, Asia is not reaching max capacity and falling into what is called the income trap. To compete with modern technology you almost have to have people work at subsistence level and then heavily subsidize the material. That's not really sustainable in China and as a result the manufacturing that was done by labor can be better done by robots. When the largest consumer markets int he world are in the US and Europe, it doesn't make any sense to run a manufacturing operation in Asia when the marginal cost of production is virtually zero. Factories are naturally coming back to the first world.
The South is the largest economic bloc in the US and is the fastest growing right now. It's the fastest growing right now because the labor unions haven't strangled the country, there is very little protectionism, and our property rights are fairly well preserved at the state and local levels. You don't have regulatory nightmares like California or Ohio. You want to fuck that up, all you have to do is turn the clock back to the 1960's and shut down trade in favor of protectionism and boost the unions and then tax the shit out of everyone. Because that's what happens when the government sees a golden goose, it'll strangle it.
The common argument against what I'm saying is all the unemployed blue collar assholes snorting meth. Well, learn to fucking code and grow with the market. Now can a guy who is only good for fixing sinks or delivering pizzas code? Of course not. But he could take higher paying jobs in other markets that are currently occupied by people who could shift their work worlds into more lucrative service jobs and in turn open the door to the blue collar guy to fix sinks, or learn other skills.
The biggest issue with the blue collar liberal protectionist republicans is that they'll put us directly back into the same environment that created the shit show we are currently in. Only it will be worse because there is no Europe to rebuild.
www.politico.com
