Where it has gone down is in the number of people it employs, and in its share of the overall GDP. Both of these are to some extent linked to the fact that tasks that used to be internalised (and counted as "industrial" jobs) have been externalised (outsourced) to companies counted in the service sector, even if fundamentally they do the same thing.
Finance makes sense only if it helps an underlying activity happen more effectively or makes it happen because it allows the requisite capital to be available at the right time and the right conditions (ideally cheaper). A decent part of finance does do that.
The problem is when finance becomes the driver, and making short term profits, including by playing with underlying cash-flows, predominates over other company goals (such as maintaining quality, keeping an innovation edge, thinking about the long term well being of the workers) - and worse, when such thinking begins to dominate societal habits. In the long run, we're all dead. John Maynard Keynes
When Apple sells me a laptop, the profit is added to the US balance sheet, but the laptop itself is manufactured in China.
US-only manufacturing seems to be limited to aerospace (creaky), automotive (largely at death's door), IT hardware (aggressively outsourced), and military (heavily subsidised).
Pharma/bio, agribusiness and chemical seem to be reasonably healthy, and there's a nascent green sector. But I don't think you can take the national summary statistics at face value - the overall picture may not be quite as healthy.
How much of that output is manufactured elsewhere but counted as domestic product? When Apple sells me a laptop, the profit is added to the US balance sheet, but the laptop itself is manufactured in China.
The bits produced in China are counted as China's in domestic product. They'd be counted as American in national product.
Some of the other tech companies do produce here. I think (could be wrong) Apple is actually a little odd as tech companies go, with all, or almost all, of its production in China. Dell's got stuff in Appalachia. Intel's got stuff in the Southwest.
Obviously that's simplifying things too much, since they're manufacturing computers in America with RAM from Taiwan, processors from Phoenix, etc.
And obviously the jobs in Cupertino doing the development are valuable ones. There's a good contribution to GDP from that. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
I think (could be wrong) Apple is actually a little odd as tech companies go, with all, or almost all, of its production in China.
Apart from a couple of the major US manufacturers, its pretty much that the apples are coming from the same factories as the pcs nowadays, since the transfer over to Intel chips. Any idiot can face a crisis - it's day to day living that wears you out.
Most importantly, the Reality Distortion Field is still American-made, so I think we're alright for now. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
the Reality Distortion Field is still American-made
The importance of this is not to be underestimated! That is how all of this financialization and hollowing out of the economy can be out in the open and yet have only a few actually see it. IT IS CLOAKED IN PLAIN SIGHT, by, as it is otherwise know as, the "PR Tanks" and their paradigm--the source of the Reality Distortion Field. As the Dutch said while fighting the Spanish: "It is not necessary to have hope in order to persevere."
In essence, RDF is the idea that Steve Jobs is able to convince people to believe almost anything with a mix of charm, charisma, bluster, exaggeration, and marketing. RDF is said to distort an audience's sense of proportion or scale. Small advances are applauded as breakthroughs. Interesting developments become turning points, or huge leaps forward. Those who use the term RDF contend that it is not an example of outright deception but more a case warping the powers of judgment. The term "audience" may refer to an individual whose attitudes Steve is intending to affect. Often the term is used as a derogatory remark to criticize Apple's products and the effect they have on the space-time continuum.
Often the term is used as a derogatory remark to criticize Apple's products and the effect they have on the space-time continuum.
So now that the dollar is falling, US firms are supposed to be able to take the price reduction and turn it around and sell in the European market.
And let's take the example of something like small engine production. Engines are heavy, and expensive to ship.
There used to be an entire industrial sector that dealt with the production of these types of products.
But now any firm wishing to take advantage of currency arbitrage is hampered, because the minor advantage of labor and other inputs being less expensive is overcome by the fact that you have to call into existence a whole slew of industrial capacity that was wiped out of existence when all the factories where shipped overseas.
Industrial productivity that took decades to develop was destroyed in a little more than a decade.
And an American firm wanting to build a new engine factory to replace imports from the European Union faces high capital costs in the form of not only making the factory itself, but the added cost of importing the machine tools needed to produce the machines that make engines. It's difficult to just go out on the street and find someone with the experience needed to do this kind of work.
Economists (of the American pundit variety) are often under the impression that there is little in the way of human capital found in the modern American factory.
They really think that you can take a guy off the street, and put them to work making precision machinery. American companies have tried to do this in Mexico. I have relatives who are auto engineers, and when the company decided to outsource a portion of US production to Mexico, the went from 1/100 defect rate, to a 1 in 5 defect rate. The literally had vehicles come off the line that simply wouldn't run, and were forced to have engineers go through and figure out where the problem was before they could sell the vehicle.
There is a high degree of skill involved in labor in the manufacturing sector, and arguably the advantages of skilled labor overcome the low cost of cheap labor.
Much of that has been destroyed.
I would not be the least bit surprised if a closer examination of the manufacturing figures for the US showed that if you take final assembly out of the picture that what you see is a lot worse.
Its one thing for a billion dollars of economic activity to represent the ability to make the engine, the transmission, and all the other inputs that go into a car, and then assemble them. Then for that same number to represent a much larger number of final assembled vehicles, but only being able to occur with imports of the various inputs. In the first case its much easier to retool to meet rapid changes in the market. In the second, not so much. And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
