Vienna Teng @ViennaTeng - Twitter Profile

about 1 year ago

"well, we need to bring manufacturing back" this isn't how to do that. "well, how would you do that, then?" First, think about what you are hoping to accomplish. Is this a jobs program? Is the point to have high-paying factory jobs for the non-college men who used to work in those jobs, independent of whether the output of those factory jobs is cost-competitive or quality-competitive with foreign-made goods? You can run a jobs program, if you want - America is absurdly rich, we can really do absolutely anything at all that we choose to make a priority - but you can't serve two masters here. If the point is a jobs program don't expect high quality goods or goods that are competitive on the export market, because that requires embracing automation and new mechanical processes and the people working these jobs have no incentive to go full speed ahead on that, and since you've chosen to give them a captive market you don't have a good way to push them on quality or on price. To my mind, if we're going to do a jobs program it's silly to make it a factory jobs program. Factory jobs kind of sucked. My own quixotic dream of a jobs program is to put our national muscle behind fixing our perilously broken education system. Kids benefit a lot from one on one tutoring; hire a million Americans to offer one on one tutoring to every student between the ages of 5 and 9 to fix our horrifying collapse in general reading ability. Boys learn better if some of their teachers are men, so make sure half of your hires are men. There, jobs program, and the work isn't 'undercutting Vietnam in the garment industry', it's raising the next generation. If you don't like my personal idea, fine, but I think if you list the pros and cons of five different jobs programs you thought of in ten minutes apiece 'take back the textile industry from Vietnam' isn't going to be the most appealing of any of them. What if your aim isn't a jobs program? What if it's defense? That's also fine, but keep in mind you still can't serve two masters; if this is about defense then we are going to laser-focus on defense production, and we're not treating this as a jobs program at all. Go to every manufacturer of munitions, planes and cars in the country. Ask them for all their suppliers. Acquire those companies, or partner with them, or hire a bunch of their leadership, and pay them to start up a plant in the US. Instead of scaring our allies with bizarre threats to add them to our territory, which has made many of them back away from commitments to the American defense industry, build those ties very strongly and start asking them for purchase agreements. Find really good CEOs who grew a complex logistical business in a related industry rapidly - yes, Elon Musk absolutely qualifies here, frustrated as I am with him - ask them to take responsibility for a supply chain and 10x production in the next two years, and give them the resources they need to do it. Send Ukraine an obscene amount of materiel, enough to actually win the war instead of just be stalemated in it. Make advance commitments to buy the munitions to do that, to support those companies in growing capacity. What if your goal is neither jobs nor defense, but fostering the growth of an industry in the US that could stand on its own two feet once it existed but will never get started? Here's where tariffs actually make sense, but they should be relentlessly narrow, specific and targeted. What do you want to sell? Who in America is trying to build it? What inputs do they buy from abroad? Make it a priority of our trade policy to get them those inputs cheaply. Most of what you're doing is, once again, buying bits of the supply chain and hiring people who know how to do it, plus subsidizing them, but tariffs will be part of the picture. The CHIPS act was this done well. Every single tariff and every single subsidy should have an incredibly specific objective in mind, and if it isn't working to achieve that objective should be adjusted. What if your goal is to negotiate a free trade agreement? Well, we've successfully negotiated lots of free trade agreements, it's not exactly a totally unknown art form. Have smart, competent, skilled negotiators with knowledge of the other side's constraints, resources, political concerns, and where we have leverage. Have bilateral negotiations; emerge with a deal; have Congress ratify it. Trying to do many-to-one negotiations doesn't work because it is so visible that a country's behavior to date has nothing to do with the tariffs that were imposed, because the way the tariffs were imposed puts many other countries' leadership in a position where doing what we want would be deeply unpopular at home, and because no one involved knew anything about the countries they were throwing tariffs at. Again, we can do any of these things. We are not a country on the brink of becoming a failed state; we can execute on ambitious, ludicrous, serious things, and we absolutely should. We just have to figure out what we want and then line up the levers to get it done. I've always found something beautiful about the capacity of healthy societies to change gears on a dime, to set down their knitting and go do a shift at the munitions factory, to build cities in the dust overnight. We can reshore. Just not like this.

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