| Monday,
March 30, 2009 Government Motors has changed CEO's.
Will we continue to have an automobile industry in the US? Who will be in
command of it? Will it make cars people want to buy, or will it make stuff
people have to be coerced into buying through regulations and "incentives"
(read high taxes on competing products)? It's a new ball game, and I don't
think anyone knows where we will be going with this. And you ain't seen
nothing yet.
In the past we have used regulations to export jobs and change the
character of American industry. As an example, a lot of stuff -- consumer
goods -- is made of plastic using injection molding. It is very nearly
impossible to operate an injection molding machine in the United States.
There are just too many environmental regulations, permits, and pollution
abatement costs. As a result we have exported that industry in its entirety,
and you won't find much made in the USA with that technology.
What, then, do we make in the US? More to the point, what should we be
making? And who should decide this?
There are several possibilities. There's the capitalist system in which
the market makes that decision, largely through experiments. We seem to be
in the process of abandoning that decision process. It's not clear what we
will replace it with.
We note that the auto industry got something under $20 billion in
taxpayer money. This is no small sum, but it's pretty small potatoes
compared to the TARP funds, and positively tiny compared to what's been
shoveled into the financial products industry. Apparently the government
intends to keep the financial products industry going in the US at all
costs.
================
Earth Hour Report: Apparently Las Vegas turned out a lot of the glitter
(although apparently not in the casinos). Reports are that Al Gore turned
off some of the spotlights that usually illuminate his mansion, but not the
driveway spotlights.
More later. It's time for our walk.
===============
You wrote "As an example, a lot of stuff -- consumer
goods -- is made of plastic using injection molding. It is very nearly
impossible to operate an injection molding machine in the United States.
There are just too many environmental regulations, permits, and pollution
abatement costs. As a result we have exported that industry in its
entirety, and you won't find much made in the USA with that technology."
Your "glittering generalities" are inflammatory.
Where is your data? And what examples support those
causal relationships?
Ask the CEO of Phillips Plastics whether he agrees
with you.
I think you are poorly informed on the subject of
manufacturing.
This outburst on a subject I know makes me wonder
about your veracity when you expound on something I do not know.
I think you are "just too" emotional on this
subject.
steven.
-- Steven @ The BAF
I was told that by someone who ought to know, but it could well be wrong.
The neat thing about a public log book is that someone will correct
me.
Whether in the specific case of injection molding the regulation are that
severe may well be questioned; but the general case isn't unclear. I don't
know how many of Phillips Plastics products are made in the USA, but I do
know that it's nearly impossible to have a Chinese product free household.
For a good part of this Century the US economy was supported in large part
by buying consumer products from China, with many of the products paid for
by the profits of financial products. This wasn't sustainable, and won't be
again. My point was and remains that while there are lots of ways to make
money, the route to sustainable wealth is to make things. Selling services,
and particularly financial services, can be highly profitable, but at bottom
an economy based on selling each other financial products is like an economy
based on taking in each others' washing.
My major point remains: we have to figure out what it is we ought to be
making in this country. Someone is going to make that decision; the question
is who? And once areas are identified, the best thing the government can do
is find out how to get out of the way; that may require research into how to
make things without harming the environment; and that kind of research may
well be a very legitimate activity of government, which was the real point
of my musings. The free enterprise system is one of our best engines of
wealth creation. Unregulated free enterprise generally has unpleasant
consequences. Over regulation leads to low productivity or job export.
And some regulations are explicitly designed to make it very difficult
for anyone new to enter the industry.
Apologies if I misled anyone.
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