How Times Have Changed

North Carolina has partially forgotten old racist roots in order to embrace new bigotries

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Old rich white men used to lynch people for doing what they’re asking this guy to do.

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Missing the Point of Manufacturing’s Decline

Manufacturing output per American worker is 70% of what it was in 1973

American manufacturing has a peculiar status in American political discourse, in how we’re going to be making great stuff again and the Chinese are screwing us and the unions are dead. It’s a conduit through which a lot of hopes and fears are projected, because it hearkens back to some halcyon time when blue collar workers without college degrees could have a steady job, good pay, a home, and a retirement. It turns out that’s not really the case (if you were manufacturing in the 70s, you’re retiring now, and that means if you’re an average American retiree you’re a lot more dependent on your Social Security check than you thought you’d be in your thirties), but so it goes with myths.

Anyhow, the latest version of manufacturing-as-America comes in The Atlantic in a piece that’s ostensibly about Trump having bad ideas about the economy but is really about how manufacturing is never coming back big in America. That may be, but there’s nothing so fatalistic about it as presented, and let me show you why I think that’s the case:

fredgraph

This graph presents two lines: in blue is the industrial production of the American manufacturing sector, per worker. We’re adjusting the scale so that this equals 1. So, 1 worker in American manufacturing in 1973 produces 1 unit of worth. Today, that 1 worker creates around 0.71 units of worth. Note that we’re adjusting for inflation here; in nominal terms that worker is creating a lot more dollars, but those dollars are worth less than they were in 1973.

In red, we have manufacturing capacity. That is, how much could we actually produce? Again, this is scaled so that our capacity in 1973 is 1. Today it’s around 0.85, or 15% less than what it was in 1973.

The story here is that the American manufacturing sector is more idle than it was in 1973, and making less real output per worker. Even if capacity was operating at its 1973 levels, we’d still be manufacturing less in terms of real output. We’re simply less competitive.

I don’t have the capacity to go into the why, here, but I will say that manufacturing is America is not beaten down from some unseen hand. It’s simply less efficient than it once was and holds a less imposing presence in the world than it once did. Bringing back high-paying manufacturing jobs isn’t going to do anything, and is sort of nonsensical on its face for Presidents to be talking about unless they’re considering subsidizing manufacturing wages. In the real world, somehow the American manufacturing sector must get more productive and efficient relative to the rest of the world in order to bring back American manufacturing, and that’s an issue that’s much bigger than the sector requiring greater base skill and education in order to be hired. It’s the existing sector itself which needs help and in a deep, structural way, not simply more labor.

The North Carolina GOP Fears the Gays

North Carolina’s GOP candidate for Attorney General has some interesting ideas about being gay, and by interesting I mean dumb.

‘”Go home, tell your friends and family who had to work today what this is all about and how hard we must fight to keep our state straight,” [Buck Newton] said to applause.’ – from Reuters

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COMMUNISM and/or homosexuality is coming for us all!

What a terrifying world it must be to believe that culture is disintegrating in front of your eyes, being torn apart by forces you cannot comprehend and that terrify you with their openly decrepit ideas. It’s generally the same feeling I get when I think about what life would be like with a guy like Buck Newton as my state’s attorney general. Luckily I live in Massachusetts, where our flavor of oppression is much more neoliberal.

Anyhow, imagine the mental gymnastics required to be the state’s representative of the law and also have a literally ignorant disregard for civil liberties. It’s not peculiarly American, but it certainly is the most common kind of fear-driven pearl-clutching reaction to a world confronting you with some kind of strange change you never considered before. The Other! They’re going to destroy us!

It’s such a well-worn trope that it’s easy enough to spot once you’re on the outside of it, but when you’re on the inside – say, when a terrorism victim’s family supports an unhelpful war or the expansion of security at airports or what-have-you – it’s a very, very hard sell. I have compassion for those folks; I’m sure I’m on the inside of some struggles myself, such as my position as an upper-class white male making me more amenable to capitalism than presumably a lot of other people. This is a democracy, and that means that sometimes what you or I might consider to be bad ideas are still the majority will and the representative’s will as well, and while screaming at people can be helpful for various reasons in a larger social context, I’ve always considered compassion and patience more effective in my personal life.

So, let’s just say a prayer for North Carolina that the GOP doesn’t get the Attorney General’s office, and helpfully remind people that being gay is almost certainly not a choice and that laws barring transgender folks from peeing where they’re most comfortable isn’t going to keep anyone straight.

 

Retirement and the American Hustle

Nothing changes unless something changes.

America can’t retire. There just isn’t enough money saved, for reasons like:
  • Decades of stagnant wages
  • Increased healthcare and housing costs
  • Decline of the pension
  • …and most importantly, American optimism
The problem isn’t just personal – it’s systemic. Pensions are underfunded with around $3T of unfunded liabilities – amounts the institutions were supposed to pay into the pensions but didn’t, hoping to get around to it later. They haven’t. It’s only going to get worse.
 
There’s a mismatch between expectations and reality which is pervasive in America, and it goes both ways. Everyone was sold the idea that each generation will be better than the previous, and it’s become so much of a given that no one is really pushing to actually make that happen… they just expect it to happen. Employers don’t pay employees in order to hoard cash and execute stock buybacks to pump their paper worth for shareholders; the wealthy are happy to underfund public education and infrastructure and healthcare because they can get around those hurdles; government expects that everything is going to be fine because markets are magic; employees don’t organize or make demands because they’ve been systemically disempowered and are just happy for crumbs.
 
There’s no architect’s union. No programmer’s union. No barista’s union. The only talk of Social Security is how to cut it. Companies are happy to pay less wages until for some reason no one has enough money to buy their trinkets. Everyone is complicit because no one can take responsibility individually for the entire mess, and there’s not enough social cohesion to make the sort of culture-wide compact to work together to solve the problem. In the end people look to the federal government to either institute some kind of socialist-light response or to back off and just let the market double-down on all the failures they already own. Neither one of those work any more because the aristocracy won, and no one wants to bother with a revolution because things are juuuuuuust good enough to let them ride a bit longer.
 
Something’s eventually going to give.