At RealClearPolicy Mark Mills explains the importance of manufacturing to the U. S. economy:
A dollar added to the GDP by a factory generates a spillover economic benefit some three-fold greater than a dollar added by a car or food service. This well-established phenomenon is what economists call a “multiplier effect.†It means that policies directed at boosting manufacturing’s 12 percent of the economy are as impactful as an equal boost to 40 percent of the rest of the economy.
Of course, none of that matters if we have, in fact, entered a post-industrial era wherein making “stuff†is yesterday’s news. The Internet and now the “gig†economy have emboldened a worldview that has been fashionable ever since 1973, when Harvard sociologist Daniel Bell published “The Coming of Post-Industrial Society.†According to the post-industrialists, the denouement has finally arrived. In response, policymakers, they argue, shouldn’t try to rescue American factories but, instead, think in hospice terms: offer those displaced by the new high-tech economy handouts, whether in the form of welfare or a guaranteed minimum income — packaged of course with counseling.
He goes on to show that properly considered manufacturing remains the largest employer in the country and should remain so.
The eloi imagine a self-congratulatory future in which manufacturing does not exist. But it continues to exist underground, maintained by the bestial Morlocks on whom the eloi depend for their very existence. Someone should write a book about that.
What do those regulations entail? Serious question. Guarneri?
One hardly knows where to start. But fairly routinely there are articles or guest posts (say, at ZeroHedge) outlining the travails of businesses. Take a read. There is generally a rendition that goes like this: it took seventy-eleventy dollars to do 23 studies to comply with 14 government entities who have issued 36 different regulations……….and 3 years time. And many of the regs are in conflict and devolve into turf wars. And that’s just the upfront permitting. Then come the licenses, the worker safety or employment rules, the ongoing air, water and waste permitting, and on and on. And all this comes with Administration. Oh, and then graft. iL’ current situation isn’t due to politician’s ignorance of the issues facing businesses and funneling resources to government. It’s about perpetuating the money machine.
Generally, sniping like mine is met with “oh, so you want to poison the environment and harm workers in pursuit of filthy lucre.” Bull. Perhaps 25% of regulatory burden is warranted. Most is ham-fistedly implemented, and nearly all sans cost benefit analysis. The pendulum has simply swung way too far.
Every business is different, so the burden varies. A steel mill or a plating operation are different than a board stuffing operation. But those numbers don’t surprise me at all for some businesses I’ve seen. If one really has a goal of increasing manufacturing employment rather than welfare rolls or waiters and hair stylists one would eliminate regulatory headwind. If, that is, that was your objective.
What about the businesses you’ve had a hand in?
The Morlocks raise the Eloi for food.
Patience.
Sorry, Janis. The golf course beckoned.
Except for graft we have experience with all those issues I cited. (And that could be wrong; we just pulled any bids from construction work in IL for the reasons cited in other articles. Who knows what had been asked of local management?) So for example, we had a paper processing company in MA (MA !!) and one that processed epoxy resin with operations in MI and TX. The inspections and air permitting in MI were a tremendous burden. It finally got so bad those jobs, well, they ended up in TX. The facility in MI stands vacant, and I’ve heard rumors they could use jobs in Detroit, MI. Interestingly, when we bought the MI facility they were OUT of regulatory compliance. It took we dirty, bestial PE guys to do the right thing and rectify this. Then came the badgering, then it was “hello, Texas.”
In a pie assembly line we had a guy who decided to violate our rules on loose clothing. Got his tee-shirt caught in the conveyor. Injury. So then we have to build a cage around the entire conveyor system with special work stations to reach it in selective cases. You hoped a pie didn’t fall off the line mid-cage and shut it down. This exercise shut us down for weeks, and before this guy we had no injuries. Later on we discovered he was stuffing rags down the filling drains. All this for a saboteur.
I could go on. The real point is that these regulations are designed by know nothings, zealots and anti-capitalists who view them as tools to impede businesses. There are, no doubt, abuses and worthy regulations, but they are much more rare than the saves. And the worst among them should probably be resolved by tort law. Look at my MI example. If you are a TV “reporter” making a million a year you can live a nice lifestyle and feel good about yourself exposing the “evils of capitalists.” If you are a worker, you are fucked. The world has gotten too competitive and economies too mature to be throwing sand in the gears for dubious benefit.
Thanks. That pie factory business sounds especially lousy.
The two states I cited are MI and PA. Name two states that flipped for Trump? Hmmm. We haven’t done a deal in IL in so long I can’t remember. Maybe they will wise up there.
Nahhhh……
OT – This illustrate the ignorance of economists, policy makers, and many (most?) people:
Are Banks Hoarding Cash? Debate Over “Free Money†Interest on Excess Reserves
The economist has no clue how banking and, subsequently, the monetary system works.
Note: I am not commenting on the content.
OT – Follow up to avoid the spam catcher:
One Fed President Says The Rate Hike Decision Was A Choice “Between Faith And Data”
This is a rare admission of ignorance for the same group as preceding comment.
Note: Again, I have no comment concerning the post.