Not Letting This Crisis Go To Waste

Mr. “never let a good crisis go to waste” himself, Rahm Emanuel takes to the pages of the Washington Post with an op-ed proposing ways in which we should respond to the crisis presented by COVID-19. I don’t agree completely with his first two ideas (increased public health spending and creating a “surge capacity” in hospital beds) but I do agree with this one:

Third, despite all the double talk coming from the White House, it is clear our strategic supply chain is inadequate. As demonstrated by the frustrating struggle to produce the ventilators, masks and other equipment that health-care workers need in this crisis, we must continue to make investments in re-industrializing the United States. For years, plants and industries have migrated offshore in search of cheaper labor. While diminished trade barriers have played some role in that shift, the search for lower production costs eroded our industrial capacity. We now have technology that allows Americans to compete on price with more distant economies.

I completely agree that companies have a right to seek lower costs for their products, the components they use to assemble their products, or labor anywhere they care to including offshore. I also believe that we should not be dragooned into underwriting the risks they assume by doing it. I also think that companies involved in the production of strategic goods (the list is long—everything from semiconductors to N95 masks) should be taxed for offshoring that production and the money earmarked for domestic production. It is unconscionable for the U. S. to be dependent on China or any other country for memories, for example, but we are.

I’ll dive into the hospital beds issue in a later post.

12 comments… add one
  • Guarneri Link

    “I also believe that we should not be dragooned into underwriting the risks they assume by doing.”

    I almost (almost) 100% agree. (Although this is 100% true of the stock buyback crowd. One may recall that I defended stock buybacks. But I also noted that it increased their risk. Miller-Modigliani. If they willingly took the risk for a benefit, don’t look to be bailed out now.)

    I think the complicating factor in China offshoring is a point I’ve made for years. If your competitor offshores, and consumers take their resultant lower price – and they will – you’re dead. We need a mechanism that keeps the playing field level. I don’t have an answer for that.

    A separate issue is the strategic products. Its easy to tell the environmentalists to shove it when it comes to things like, say, rare earths. But how long a list is that “strategic” products list? Before this pandemic, who would have said surgical masks? No one, apparently.

  • But how long a list is that “strategic” products list?

    It’s extremely long. It may include practically everything. It certainly includes food, medicines, food additives, and my pet inclusion, memories.

  • Guarneri Link

    Heh. So it became nauseating to listen to Mataconis going on and on about “Trumps unwise trade war.” The globalists are everywhere. But how are you going to preclude offshoring? By law? Huge tariffs? Can you imagine the lobbying effort for exemptions. It’s a serious question because supply has become too vulnerable.

    China can’t be trusted. They are perma-enemies. They have all but declared war on the west. And now they have a white hot pissed off population. We are going to have to grapple with this.

  • TarsTarkas Link

    I wouldn’t go so far as to call China a perma-enemy. Their current regime and ruling institution certainly are unscrupulous rivals. But I personally believe that under a different regime the US and the Empire could be less bitter less fraught more cooperative rivals. I could live with that.

    I think Xi is the one who should be more worried about the pissed-off population. Most of the ‘America is the source of Kung Flu’ propaganda is for domestic consumption. There will always be some people who will buy that, but I think a lot of people don’t. Watch the watchers, the surveillance corps that monitors the speech and behavior of the masses. If you start seeing Winnie the Pooh and other anti-Xi memes and rants staying up on social media, Xi’s goose is cooked.

    Mostly it is raw naked nationalism that drives the Chinese. The Han are the greatest people in the world (just ask them), they are the Middle Kingdom, and so it is their destined role to rule the world. Asian Indians feel the same way. So do Muslims. Russians. Many Americans still feel that way. The British and the Mongols and the Romans and the Greeks and the ancient Persians once did. When a people or a nation no longer feel that they are the best people or nation in the world, they are toast, because they will no longer defend much less promote their own interests. America sux is a defeatist slogan.

  • In general I agree with that interpretation, TarsTarkas. Our most serious issue is with the CCP.

  • Guarneri Link

    And here I thought I was to rule the world……

    I agree with you Tars. “China” is short hand for their government. As far as the term permanent-enemy, I think we are dancing on the head of a pin. We are not dealing with the Average Chinaman. We deal with their government.

  • steve Link

    The Chinese are just a symptom. As Drew pointed out if we can get cheaper stuff from elsewhere, that is where we will get it. If it wasn’t China then Brazil or Mexico or India, etc. Maybe a cluster of countries like in SE Asia. Who knows, maybe even Africa gets it together.

    Don’t see a great answer here either. Ranting about China will help win an election or two, but doesnt solve anything. (Would it help to have our critical needs spread out more rather than just in one country? I don’t know. Look at Taiwan. They have tons of masks. They arent sharing.)


  • Andy Link

    The issue with China is two-fold – all the trade issues, but also the fact they are a near-peer competitor who is hostile to our interests. If we’re going to inevitably off-shore, don’t off-shore to China.

  • all the trade issues, but also the fact they are a near-peer competitor who is hostile to our interests

    IMO it’s somewhat worse than that. China views international relations as a zero-sum game. For them to gain we must lose. Not just us but Japan, South Korea, Germany, France, everybody. But mostly us.

  • Dave, I’m curious as to what you mean by “It is unconscionable for the U. S. to be dependent on China or any other country for memories.” I gather from the conversation that this is a pet issue of yours but I’m not seeing an explanation in the archives.

  • Random access memories. Memory chips. They’re used in a tremendous number of things including military hardware and nearly all are produced somewhere other than here, particularly in China and Taiwan.

    In a digital society depending on China for memories, semiconductors generally, is like depending on Japan or Germany for oil in World War II. Indeed, there’s one interpretation of World War II that it was primarily about access to oil.

  • Dave: Thanks. I thought that’s what you meant but I’ve never heard RAM called “memories,” always “memory.”

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