As some of you may know I have a dream shared by millions of Americans to bring manufacturing back to the USA. The above speech delivered by JD Vance currently making the rounds on Twitter gives us new hope for this project.
You may say manufacturing never fully left the US and to an extent that’s true. According to FRED employment in manufacturing peaked in 1979 at almost 20 million and over the years since it has dropped to 12.5 million in 2024. The largest part of that drop came after 2001 with China’s entry into the World Trade Organization and provision of “most favored nation trading status” by the Dubya administration (the offshoring of American manufacturing was a fully bipartisan affair).
That’s a 38% drop during a period when the US population grew from 225 million to 340 million. If we had maintained the roughly 1 to 11 ratio of manufacturing to non-manufacturing jobs the US would now support ~31 million manufacturing jobs. 12.5 million versus 31 million. Even if you factor in robotics and automation that’s an apocalypse.
When you add to this the fact that most of what we now call manufacturing is largely assembling parts made in foreign countries you can get an even clearer sense of the disaster. If we don’t produce components we are at the mercy of foreign suppliers. The engines in many of our cars are made in Japan, Germany, Italy, Turkey, Canada, and Mexico. Many of the other parts are manufactured in foreign countries as well. GM, Ford and BMW manufacture at least some of their engines in the US so we still have this expertise. Roughly 50% of the parts for our disastrously over-complex and expensive weapons come from across the world — including competitors like China.
And then there’s the famous Apple “designed in Cupertino, CA” many of us have seen if we purchase one of their products. In his speech JD Vance makes two important points I wish to highlight here. One is that design cannot be isolated from manufacturing. Design and manufacturing are heavily interrelated with manufacturing capabilities affecting design and vice-versa in a complex interplay that has allowed China to become proficient at both while leaving the US behind. “Designed in Cupertino” hides more than it reveals. Even the fantastic new Apple M series chips are manufactured in Taiwan.
The other point Vance makes is that cheap labor is a drug that leads to poor innovation and productivity. He points to nations that have imported vast numbers of foreign workers only to see productivity collapse. These ideas underlie the globalist push of the last forty years and are flat-out wrong.
Vance makes it clear that importing cheap labor and offshoring are both opposed by the Trump Administration. The globalist push that offshored and betrayed the working people of this country was founded on these false assumptions and the quick easy buck. I’ve been asking for decades how Germany — a high wage, high cost economy — could maintain a successful manufacturing base long after the US offshored its industry. The answer is they efficiently produce excellent products that people want and have (had) full government support via robust industrial policies. China produces a lot of cheap crap despite all the government support. I’m sure many of you have horror stories about Chinese junk appliances.
The US was once such a manufacturing powerhouse that produced high quality and affordable products. It was mainly a push by Wall Street and corporate boards that stole this legacy aided by long-winded defenses and justifications fabricated by useful tools like “economist” Paul Krugman. For decades the US government has studiously avoided maintaining any industrial policy which effectively means US firms could not compete in global markets. Trump’s import tariffs, low-cost energy policies and tax cuts for US manufacturers mark the return of a pro-industrial policy that will allow the US to compete against other nations that already provide support for their heavy industries.
The Trump Administration has vowed to turn around the last forty years of betrayal and we should all celebrate this and make sure they hold to these promises. Vance’s speech is inspiring and I recommend you watch all 25 minutes.
(There is also a transcript link next to the video. I have not proofread the whole thing but what I read looks pretty good. Thanks Substack!)
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