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Can Apple Start Making Their Product In The U.S. Again? The Answer Is YES.

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Last fall, we pondered whether Apple could start building iPads and iPhones in the U.S.  Our conclusion was, YES, Apple could indeed start assembling products in the U.S. 

Some key points:

1. Labor costs are not the key factor.  As Michele Nash-Hoff (President of ElectroFab) and Curtis Ellis (of the American Jobs Alliance) have explained, labor is a small part (probably less than 10 percent) of Apple’s cost of manufacturing, far less than capital equipment and components.  With wages rising in China, and U.S. manufacturing workers actually being far more productive, the labor cost differential become very small.

2. Apple is the rare product that competes on quality, not price. While it may or may not cost more in total to assemble iPads in the U.S., Apple is not competing against dozens of similar products.  And so, retail price is not the key criteria because consumers are already buying iPads due to their unique quality and attributes, not “low sticker price.”

3. Thanks to high productivity and top quality, U.S. manufacturing offers its own cost-savings and benefits.  U.S. manufacturers are recognized as being the most productive, efficient, and safe in the world.  A state-of-the-art U.S. manufacturing facility would offer its own cost savings by virtue of its incredibly productive and streamlined assembly processes.

Okay, so why are we analyzing the Apple production process today?  Because Apple CEO Tim Cook was quoted this week at an All Things Digital Conference as saying he’d like to see his company make more components, and possibly assemble them, in the U.S.

Specifically, Cook said:

“There are things that can be done in the U.S., not just for the U.S. market but that can be exported for the world…On the assembly piece, could that be done in the U.S.? I hope so, again, one day.”

There are stumbling blocks to a possible reshoring of Apple products, though. Andrew Nusca at Between the Lines says that American companies can always “go overseas for greater flexibility, lower price and sheer speed.”  He also cites the potential shortage of skilled high-tech workers in the U.S. who can tackle the logistical and competitive needs of such competitive, state-of-the-art production.

But these are battles worth fighting.  For starters, a high-tech facility COULD produce in the manner required by Apple for rapid market response.  And as for worker skills needed in such a high-tech industry, the Alliance for American Maufacturing (AAM) has repeatedly urged that the U.S. needs to prioritize such training in order to compete successfully in the 21st Century.

All of this is a battle worth fighting, and a very necessary one if the U.S. is to maintain a solid middle class economy.  Apple can do it, and so can the U.S.  The question is who will take the big step first?


Reposted from Campaign for America’s Future

Steven Capozzola  |  May 31, 2012  |  Campaign for America’s Future

55 Responses to “Can Apple Start Making Their Product In The U.S. Again? The Answer Is YES.”

  1. China Watcher says:

    Doesn’t the notion that China has the “skilled high-tech workers” that the US lacks sound phony? Foxconn’s work force is recruited from China’s farms and small towns. They are the product of China’s seriously deficient educational system. Do we honestly believe that American workers cannot outproduce such people? What Cook really is saying that American productivity does not outweigh Chinese subsidies.

  2. Tom T. says:

    When some country like China in cahoots with CEOs of major companies uses currency manipulation or a host of other tools, they cheat the U.S. labor market out of demand. That means U.S. workers get less pay and less jobs.

    The sad thing is that this is the policy this disastrous Congress and political leaders have adopted to enrich the 1%. It is one of the major things wrong with the economy.

    As long as the trade deficit is as large as it is, both the CEOs (and their shareholders–the 1%) profit off of policy that is bad for our economy.

    Our current political leaders should be held accountable for allowing this to happen. They truly are at the root of the economic crisis in our country and perhaps the world.

    There is nothing in this country that 1 president and 535 members of Congress can’t fix (setting aside social issues). They are just incompetent to or corrupt enough to not fix this problem so our economy flounders.

    Tom T.

  3. Bruce Bishop says:

    Re: “Labor costs are not the key factor.”

    Every molecule of every Apple product came from the earth. There was labor involved in every process that converts “dirt,” sand and petroleum into a finished product.

    If we take the simplistic view that manufacturing an I-phone involves assembling part A to part B and sticking it in a box, then the labor component is insignificant. If we do a cost roll-up of the entire process, including the building of the machines and facilities, the engineering, the supervision and the management, it’s all about people. And people are labor. People are cheaper in China, whether they are digging in the dirt or designing facilities to manufacture I-phones. The energy, transportation, business services, office supplies, manufacturing supplies and toilet paper are cheaper in China because they are made with cheap labor. Chinese labor is not just “cheaper,” it is two orders of magnitude cheaper, (fifty cents an hour vs. fifty bucks an hour.)

    This terrible misunderstanding of labor cost is due to the fact that Financial Accountants are not required to take a course in “Managerial Accounting.”

    The argument that our loss of jobs to China is NOT due to cheap labor is silly.

    As to quality versus cost, Apple has positioned itself as the choice of wealthy, “hip,” white kids who don’t have to work to buy their own computer or smartphone. Remember the Apple vs. PC ads, with the overweight nerd in the cheap gray suit representing the PC, while the young Jackson Browne look-alike in jeans and T-shirt represented the Apple. There is no evidence that Apple products are superior other than that people who can afford to pay a few hundred extra tend to buy them. That is known as “snob appeal.”

    • MK says:

      Actually, after you factor in travel, cannibalization of the market, loss of the strategic advantage of fast feedback from customer to engineering (that is an affect of proximity), shipping, loss of intellectual property rights, defense of intellectual property rights, cost of capital (you have to buy way ahead to prevent shortages in the supply chain) AND loss of local customers (yes, factor workers do eat their own bread)…when you factor all those in, the difference for any given product DISAPPEARS WITHIN TWO YEARS.

      I went through this model with Harry Mosher of reshorenow. I am getting ready to write about it. The advantage is not really there. He hasn’t factored in the loss of local customers yet, but I can tell you that offshoring high tech jobs cut Microsoft’s customer base in about 1/2. How is that smart? They then had to raise the prices of their software 2X to make up the difference. That reduced those able to buy their stuff by another fraction.

      I am tired of these short-sighted analyses. Since I am part of the 3 percent of intellects in this country, I can see through the specious reasoning often used to justify what is essentially an anti-US stance.


      I liked him before other people knew that he existed. I like Keynes because HE IS RIGHT. The free marketeers have tried their approach at least three times that I know of…every time, it has caused widespread unemployment and a DEPRESSION, consolidation of wealth and a universal slowdown. How many times do we have to keep doing the same stuff BEFORE we conclude that it doesn’t work?


      The analysis is flawed. Living quarter to quarter is foolish.

      • Bruce Bishop says:


        Thank you for the link to Stiglitz. It certainly gives me a better understanding of where you are coming from.

        I will look forward to reading your analysis, should you choose to share it with us.

        If you can convince the multinationals that they have actually been losing money for the past dozen years by utilizing cheap Chinese labor, there will be a tsunami of manufacturing jobs crashing down on our shores that will make the last industrial revolution look like a sewing circle.

        But, of course, poor Stiglitz will have to go somewhere else to peddle his socialist solutions.

      • Jim Schollaert says:

        Unfortunately MK, Stiglitz still embraces free trade, even as he rightly describes the adverse consequences to workers in developed countries. As a liberal, he laments these results but as a conventional economist schooled in orthodoxy, he cannot bring himself to call for an end to free trade policy. I witnessed this up close when he appeared in DC 2 years ago at a forum I attended, and was grilled on this point. His solution is lame, more education and U.S. workers and more financing for companies hiring U.S. workers. Stiglitz is still apparently mired in this economic miasma in the article you cite as he refers to our “unskilled” workers as the victims of globalization. He just cannot bring himself to seeing that our skilled labor is hit even harder, since that would undermine his lame, liberal prescription for more education.

        • Bruce Bishop says:

          Jim Schollaert,

          Excellent post! Thank you for sharing your unique insights on Mr. Stiglitz. After reading his article, which was linked earlier in this string, I came to the conclusion that the man is CONFUSED. Your comments seem to confirm that conclusion.

          It has been stated, unchallenged, on this blog that there are 1,800,000 engineers in this country who are below retirement age, who are either not working at all or who are working at something other than engineering. If there were actually jobs available that required “more education,” some of these folks would be snatching them up.

  4. Tom T. says:

    MK, thank you for restating in more exact terms. It isn’t even hard. Why in the heck have our political leadership sold off our economy in this manner and to Chinese who will not work constructively on N. Korea or their threats to Taiwan and the rest? Is it worth decreasing the demand for workers here in the U.S. and structurally destroying the economy?

    I just saw an excerpt on the German economy. Their minimum salary to imported workers is $45,000 Euros. They will not allow companies hire foreign workers needed unless they pay them this much money (which protects the labor force). The oligarchs in this country need only bribe a Congressman that much to get their profit maximizing economy destroying way. We have absolutely the most incompetent or corrupt politicians in the world.

    We have the best political leadership money can buy and they are catering to the money off this false assumption that the lowest cost is the answer when not all the costs are counted. It is a total capitulation to the wealthy pulling the political puppet strings.

    Tom T.

  5. Arthur Taylor says:

    MK again makes the point that free market free trade theory is not, and will never be the road to prosperity it’s evangelists claim.

    I recently took the time to read The Road to Serfdom by the globalist utopian, Austrian (read: foreign) writer, F.A Hayek. As a degreed political scientist, I can pronounce the book outdated, disproven and totally irrelevant to our world today, especially that of the U.S. There is zero chance that the U.S. government, under Obama, or any other leader is going to nationalize the means of production in this country (socialism). A loan to the car companies and representation on their boards is not nationalization. Bailouts to the banks are not nationalization. Even forcing people to have health insurance is not nationalization of the health industry. We force people to carry auto insurance. Is that nationalization? No. It is not. So to bring up socialism is nonsense. We don’t have it and we never will.

    But more importantly, the book makes a number of claims that simply are not true: State owned enterprises, run by means of central planning are not always doomed to fail. The top four banks in China are state owned and they seem to be doing a nice job of providing the financing that is kicking our butts. The largest and most productive steel mills in China are state owned and they can outcompete the entire world on price. There are thousands of examples that prove Hayek’s laws false. The only reason he has any relevancy today is because his believers are religious zealots who maintain their faith regardless the outcomes of his theories.

    It is mind boggling that we let his adherents infiltrate our economic system and make his outdated and disproven theories the economic policy of this nation.

    • Bruce Bishop says:

      Mr. Taylor,

      Would you please share with us the page or passage in “The Road to Serfdom” that suggests to you that Hayek was a “globalist utopian.”

      • Arthur Taylor says:

        Bruce, It’s not in “The Road to Serfdom,” which is a lengthy thesis against socialism and central planning, and may have been apropos at the time of it’s publishing in 1944; and for it’s intended audience – Europe (Hayek makes this clear in his narrative of the book’s introduction to America).

        In my humble opinion, it was a book, it was an opinion. It was certainly not a work that should underpin the economy of the United States today. In fact it is foolhardy to use it as scripture guiding our economy, as the book never gave us plausible answers for currency manipulation, bureucratic tariffs, VAT penalties, etc. etc., blah, blah, blah.

        When I refer to Hayek as a Globalist Utopian, I refer to his “Studies in Philosophy, Politics and Economics (1967, p. 168)” – “from the first establishment of [trade] which served reciprocal but not common purposes, a process has been going on for millennia which, by making rules of conduct independent of the particular purposes of those concerned, made it possible to extend these rules to ever wider circles of undetermined persons and eventually might make possible a universal peaceful order of the world.”

        I don’t know what you believe in Bruce, but if you think free markets and free trade are the answer, I would suggest you cast a critical eye to the last twelve years in this country and the lousy, lice infested results free market / free trade policies have given us: 2% averaged growth, trillions in trade deficits, trillions in bailouts, 6 million jobs lost, 56,000 plants shuttered, and very little room to maneuver our way out of this mess.

  6. Bruce Bishop says:


    You have extrapolated Hayek’s words, “. . . might eventually make possible a universal peaceful order of the world.” into “Hayek was a globalist utopian.”

    I would grant you that Hayek was a guarded optimist, but to say he was a “globalist utopian” seems to be a bit of an overreach.

    As to the last twelve years, as Paul Craig Roberts says, “The offshoring of American jobs is the antithesis of free trade. Free trade is based on comparative advantage. Jobs offshoring is an activity in pursuit of the lowest factor cost – an activity that David Ricardo, the originator of the free trade theory, described as the betrayal of one’s own country . . .”

    Our horrible economy and our job losses are due to two things: 1. Decades of ever-increasing regulations by an over-zealous, liberal-“progressive” government, and 2. The opening of the back door by that same government which sent our manufacturers running into the “loving arms” of Communist China.

    More government is not the solution to our problem. Government IS the problem.

    • Joe Brooks says:

      Bruce, Hayek was certainly a globalist utopian, he spent most of his career at the London School of Economics, founded by Communists.

      “Hayek lived in Austria, Great Britain, the United States and Germany, and became a British subject in 1938. He spent most of his academic life at the London School of Economics (LSE) [They were Fabian free trading Communists, recall George Bernard Shaw], the University of Chicago, and the University of Freiburg.”

      • Bruce Bishop says:


        If you have evidence that Hayek was a globalist utopian, I would be happy to take a look at it.

        In the meantime, what do you think about Buffett’s recommendation that we impose “balanced trade” limits on importers of Chinese goods?

        • Joe Brooks says:

          Bruce, the discussion of Buffett has already occurred, recall our debate with Haresh on EIC. For Hayek, please read his economic roots:

          Here is a point by point proof that the London School of Economics was founded and financed by Communists. As you will see, the Austrian School is virtually identical in thought to the LSE Communists thru Hayek and many other “free traders”. Free trade for Anti Communist countries is a con game, to loot and weaken their enemies.

          The London School of Economics was founded in 1895[18] by Beatrice and Sidney Webb,[19] initially funded by a bequest of £20,000[20][21] from the estate of Henry Hunt Hutchinson. Hutchinson, a lawyer[20] and member of the Fabian Society,[22][23] left the money in trust, to be put “towards advancing its [The Fabian Society's] objects in any way they [the trustees] deem advisable”.[23] The five trustees were Sidney Webb, Edward Pease, Constance Hutchinson, William de Mattos and William Clark.[20]

          LSE records that the proposal to establish the school was conceived during a breakfast meeting on 4 August 1894, between the Webbs, Graham Wallas and George Bernard Shaw.[18] The proposal was accepted by the trustees in February 1895[23] and LSE held its first classes in October of that year, in rooms at 9 John Street, Adelphi,[24] in the City of Westminster.

          • Arthur Taylor says:

            Then it is agreed: Frederick Hayek is a globalist utopian with communist inspired office furnishings and decor!

          • Bruce Bishop says:

            Apparently, Arthur and Joe agree that Hayek was a “globalist utopian.” The rest of us are yet too be convinced. The fact that I once swam in a river doesn’t make me a fish.

            Besides, what if Hayek WAS a globalist utopian. It is irrelevant to the message of “The Road To Serfdom.”

          • Joe Brooks says:

            Guys, my point is, after years of study, there really is little difference between all of the “isms”.

            The only major break from every other “ism”, including feudalism, was the American School of Capitalism.

            From an earlier post:

            If this attitude is missing [benevolence], which is the goal of Communism, Libertarianism, Objectivism, Anarchism, Scumbagism, then that society degenerates into selfishness, greed and then street justice for those who were not born into successful circumstance or are unable to sociopath their way to prosperity.

        • Joe Brooks says:

          “The Marxian and other 19th century communist utopias”

          • Arthur Taylor says:


            Thanks for link. Once we get these ism’s straightened out, we can begin the actual debate! Forward! (Just kidding)

  7. Arthur Taylor says:

    You can believe whatever you want Bruce, but that don’t make you right. What do you think triggered the implosion of the financials and the trillions in bailouts? It certainly wasn’t more regulation.

    It’s obvious you watch FOX News a lot. I’d advise you stop drinking their Kool-Aid immediately, as it causes myopia and 70 percent loss of vision.

    The very notion that government regulation is the cause of our problems is fool hardy. What.. do we abandon clean air and water and sink to the level of the Chinese?
    Do we get rid of Social Security and Medicare and leave ourselves less of a nation and put the old people out on the street? Do we become the law of the jungle? Every man for himself? What kind of thinking is that?

    The principles of Ayn Rand, Hayek and the libertarians would never hold long for the electorate because very few people are so hard. It’s a young man’s game and with age and wisdom come the realization that no man is an island and your success is never truly your own. If someone lives only for themselves.. well, I feel sorry for them. The average American lives for each other. That’s the fundamental hope of a Judeo-Christian society.

    You know, Ayn Rand died in her apartment in New York City with only a paid servant in attendance. At her funeral, Alan Greenspan and group of mourners presented a six foot tall floral arrangement in the form of a dollar sign… That wouldn’t pass for much out here in my country, and I’d be ashamed if that was the tribute they paid to me at my funeral.

    The very term “United States,” signifies a collective. We are a society – a team. Our Founding Fathers would have scoffed at Ayn Rand, her atheism and her philosophies. They would have scoffed at F.A. Hayek and his ideas which amount to nothing more than Laissez-faire. Their sacrifice was for the liberty of our country, not themselves. To think 360,000,000 million Americans, each pulling for themselves alone, is any kind of embodiment of their dreams is utter nonsense.

    • Bruce Bishop says:


      The “implosion of the financials and the trillions in bailouts” were caused by our corrupt government.

      For a “fair and balanced” treatment of the issue, I suggest that you consult Gretchen Morgenson, a Pulitzer-prize winning business columnist from the New York Times.

      The book, “Reckless Endangerment” by Gretchen Morgenson and Joshua Rosner explores the history and the causes leading up to the crisis. The book names names — names you will recognize.

      I think it might change your perspective a bit. It might even help you to get over your Ayn Rand hang-up.

      • Arthur Taylor says:


        My reading on the crisis is extensive. House of Cards by William Cohen,
        Crisis Economics By Nouriel Roubini, Meltdown by Thomas Woods, On the Brink by Henry Paulsen, Decision Points By George Bush, and the best of all: The Big Short by Michael Lewis – which I had to read twice because it is such a fantastic telling of the cause and effect of the recent crisis.

        One of the better books regarding the events leading up to the passage of Glass Steagall is The Hellhound of Wall Street by Michael Perrino, about Ferdinand Pecora’s investigation of the events leading to the crash of ’29. Another book I’ve read within the last two years is The Myth of the Rational Market by Justin Fox, which rips apart the idea that free markets are perfect markets.

        My reading of periodicals has been extensive as well. Frankly Bruce, you have no right to belittle my knowledge base. Additionally, I think it important to discuss Rand and Hayek, as they have had a profound effect on the current economic policy of this country, and their views are held sacrosanct by the individuals who are currently cash cowing America.

        You and I will always be opposites. In the past, you’ve belittled the experience and the entrepreneurism that shape my views. You’ve admitted that you think America is doomed to fail and have felt that way for decades.. Then you opine in favor of the very policies that underlye our failures. I have nothing in common with you and I don’t respect your viewpoint because I find you to be a defeatist at best and anti-American at worst.

        Free market free trade theory has been a bust for this country. The corrupt politicians you speak of were merely corrupt in implementing these policies on behalf of their pimps. The true problem, as I see it, is that people like you can’t see the obvious, you’ve bought in to the branding, and you muddy the water as to the fundamentals underling this country’s problems.

        • Bruce Bishop says:


          I suggested that you read “Reckless Endangerment” by Gretchen Morgenson (of the New York Times,) and Joshua Rosner. The reason I suggested that book is because you seem confused about the whole issue. And, your snarky comment about Fox News and Kool-Aid indicated that you would only consider information from the liberal-left as worthy of your time.

          Arthur, with all due respect, when you overload a weak frame-of-reference and an under-developed logic processor with tons of agenda-driven data, as you appear to have done, you get what the computer geeks refer to as GIGO (garbage in, garbage out.)

          I am sorry that I had to hurt your feelings; and, yes, it was intentional. It was you who first introduced snark into our conversation. Along with your snark was an overly-developed sense of satisfaction at your “having read books,” and “having been an entrepreneur.” As Thomas Sowell says, “You have to learn an awful lot before you realize how little you actually know.”

          Arthur, young people who attend liberal-run colleges might be exposed to tons of information in the form of books and periodicals, but if all of that information is rooted in a leftist perspective, they not only never hear both sides of any issue, they never even realize that their is another perspective.

          Arthur, you seem like a nice person despite your ineffective attempts to be snotty. Your problem is, you have only one oar in the water — the one on the left side. Until you broaden your perspective and start using the other half of your brain, you will continue to go in circles. And, having a Tom T., who is just as confused as you, cheering you on, is no indication that you are on the right track.

          • Arthur Taylor says:


            You’re deluded when you suggest I’m a leftist liberal. As usual, anyone who disagrees with, or points out the pathetic performance of free market free trade theory or any of the other currently preposterous reasons being advanced as the cause of American decline is branded by the FOX news crowd as a liberal. Quick, hand me a tissue, I’m weeping like a little child.

            You’re furthermore deluded when you suggest that somehow, your knowledge base exceeds that of those of us out there who have actually created jobs and wealth from thin air.

            Again, I have no respect for your opinion because you are a defeatist who would mock any effort that truly could change America’s fortunes. I mean seriously, why do you even post on this website, when it is no more than a band of optimists who still believe in America’s greatness? You’re a naysayer, and people like you are poison to those of us who would dare try the impossible. To those of us who have the courage and moral conviction to go against the tide. You ought to be ashamed of yourself.

            Now go back to your Ayn Rand and delude yourself as to how much you alone have accomplished in life and how little anyone else matters.

          • Brucie Bishop says:


            I don’t think you are a “leftist liberal.” Your thinking is a bit too muddled to place you firmly in any ideological camp.

            I post on this website in an effort to offset the wrong-headed positions taken by people like you. I do that in case someone who is trying to understand the mess we are in happens to read these posts. Your opinion of me is none of my business and none of my concern.

            The fixations with Fox News and Ayn Rand are yours alone. I haven’t read anything by Rand for thirty years and I don’t watch television at all.

          • Bruce Bishop says:

            Arthur Taylor,

            My last post got lost because I mistyped my name. This is in response to your 6/10 at 11:58 post.

            I don’t think you are a “leftist liberal.” Your thinking is too muddled to place you firmly in any ideological camp.

            Your fixations on Fox News and Ayn Rand suggest that you have been drinking leftist Kool-Aid. That could be causing cognitive dissonance as your experience flies in the face of the leftist dogma.

            In any case, I don’t watch television at all and haven’t read Ayn Rand in over 20 years.

            Your opinion of me is none of my business and is of no concern to me.

            I try to counter the wrong-headed posts and articles on this and other blogs in case someone drops by looking for answers. As Orwell said, “Sometimes just telling the truth becomes a revolutionary act.”

  8. Tom T. says:

    Over zealous regulations would not be needed if we had a competent and efficient justice system. The one we have now is just full of cronies which makes more regulations necessary as they utilize ever more far reaching excuses to not enforce the law appropriately.

    In my case, the problem wasn’t with the regulations, it was with the court’s refusal to enforce the law as written and take cases out of the hands of juries (because they knew the ones they were protecting were liable to lose). This required the regulatory apparatus to promulgate more “rules” to undue the incompetence and cronyism in the courts. It is a seemingly endless game of cat and mouse where the ones with the money continue to get yet another free pass. It is part of the rigged game of crony capitalism.

    It isn’t some philosophical argument between Hayek and Ann Rand or anyone else. It is just plain old money buying the system.

    Freeing the financial system of regulatory and policy framework created the financial collapse that the taxpayer had to bail out because of the necessity of a working financial industry to fund capitalism. It was the repeal of the Glass Steagal and the separation between investment banks who gambled and the banking system who had to keep depositor’s money safe. One must remember that we still had the S&L crisis in the 70’s even with this separation but the current deregulation and “let them gamble, we can get the fed and taxpayer to back their bad calls” is so much worse.

    Anyone who wants to simplify the current situation as one where too many regulations are killing the economy fails to see the real cause— China has no regulations and we have to compete with them because we have a sorry trade policy. They have a competitive advantage in this regard and many others but who wants the middle class in America to have the same wealth as the average Chinese?

    More regulations are not necessarily the answer— but competent regulation is required (and competent enforcement in the courts no matter how many lawyers and money are behind you). The republican party seems to push incompetent or no regulation and then claim that government can’t work (it will never work with this type of management).

    Tom T.

    Tom T.

    • Bruce Bishop says:

      Tom T.

      If our government continued to load environmental regulations on our manufacturers in the name of “saving the environment,” then why would they allow those manufacturers to so easily avoid those regulations by having their goods produced in China?

      In my opinion, the “progressives” in our government have intended to drive manufacturing OUT of this country all along.

      I could ask the same question in regard to human rights, worker safety, product safety, depletion of resources, etc. But, I don’t have to. If you answer the first question, you will have the answer to all of the rest.

      • Tom T. says:

        I don’t think this is a “progressive” plan. It is just plain stupidity from our trade policy and the people who make it.

        Any product from overseas that can be produced here in the U.S. should be certified to have followed all environmental and other laws that pertain to our country. To do anything different is plain stupidity. You can’t blame this on “progressives”. Blame it on a sorry trade policy.

        I don’t think it is wise of the U.S. to not hold goods from overseas to the same standards our laws require. It is one of the stupidest policies we have and one of the reasons we have huge trade deficits that eat at our economy.

        We can not continue to undermine our own economy this way. Don’t blame this on “progressives” unless you blame my republican senator who seems to support the lowest price as the way in which competition is measured. The fallacy is that it includes none of the real externalities that are included in the cheap price and none of the costs to our own economy.

        I really don’t see why you continue to find other people like “progressives” responsible for the irresponsible behavior of our federal government when it comes to our global trade idiocy. I see it more directly related to those who profit from those policies.

        Tom T.

        • Bruce Bishop says:

          Tom T.,

          Don’t assume that your “republican senator” is NOT a “progressive.” On the other hand, he may simply be an opportunist who ran as a Republican because that provided his best chances for getting elected.

          The “progressives” have always been hostile to commerce in general and to manufacturing in particular. After decades of trying to regulate manufacturing to death, they found a way to allow it to go away by opening the doors to China and other countries.

          The “progressives” are all about power. It was the growth of manufacturing and the middle class that thwarted the dreams of that original “progressive,” Karl Marx.

          When our economy was strong and most Americans could find good jobs, there were not many takers for the “progressive” government programs. Now that nearly half of the population is getting some form of government assistance, the “progressives” wield a lot more power. And, that power is growing as our jobs continue to flow overseas.

          So, while there are Republicans who are simply profiting from the destruction of our economy, it is the “progressives” who are trying to “fundamentally change America.”

          Whether our government is simply “stupid” as you suggest, or doing it for a reason, we agree that they are destroying our economy.

          The proactive approach to this problem is to replace the “progressives” and the opportunists in our government with conservatives who will halt the deficit spending and begin to turn our economy around. It is not just the trade deficit that is killing us. The budget deficit is even more deadly.

          Several of the posters on this blog have advocated “balanced trade” as a solution to our trade deficit. I would be interested in your thoughts on “balanced trade.”

    • Arthur Taylor says:

      Tom T,

      I’ve been reading Ha-Joon Chang’s book: 23 Things They Don’t Tell You About Capitalism. Very interesting. He makes the point that what matters regarding regulation is the quality of regulation. Which would mirror your comments above.

      I think you would be very interested in Chang’s book by the way. A lecture he gave can be found here:

      • Bruce Bishop says:


        Caution: “23 Things They Don’t Tell You About Capitalism” was written by a “progressive” for “progressives.” The author was mentored by a Marxist. If it is your goal to join the “progressives,” then this book will give you some useful talking points. If your goal is to learn the truth, then I suggest you examine some of the “less than Five Star” reviews of this book.

        • Arthur Taylor says:

          Well, there you go again. Bruce.

          Anybody that disagrees with your disproven free market free trade theories is now a marxist. See, you’re confused. You call Obama a socialist, but when has he advocated for the nationalization of American industry? You call me a leftist liberal, but I merely opine for a return to the ideals of the Founding Fathers. I don’t even like Obama, but I can’t help thinking how uneducated you people are when you can’t even keep your ism’s straight.

          That’s what FOX news does to people. It turns them into spittle drooling fools who can’t see through the network’s drummed up hatred long enough to realize that Roger Ailes is a master at propaganda, divide and conquer, and getting middle class America to look elsewhere while the establishment robs them blind.

          I’ve read Ha-Joon’s book and as a degreed political scientist who came of age in the middle of the cold war, found no Marxist content (what’s your degree Bruce?). It was full of interesting facts. Facts that again make the case for returning to the American School of Economics a la Washington and Hamilton.

          By the way, you’ve never come close to hurting my feelings. To begin with, you’d have to start with an intelligent argument.

          • Joe Brooks says:


            Pretty self=explanatory and why “free trade” with Communist and State Capitalist countries should be rejected without question. He even provides a brief description of the American School.

            Free Trade -> Misery -> Social Revolution.
            (1) Karl Marx on Free Trade (2) Frederick Engels on Free Trade (3) Trotskyists for Free Trade
            (1) Karl Marx on Free Trade
            Karl Marx’s major statement about Free Trade was an address delivered to the Democratic association of Brussels, Belgium, on January 9, 1848, around the same time as he wrote the Communist Manifesto.
            “Moreover, the Protective system is nothing but a means of establishing manufacture upon a large scale in any given country, that is to say, of making it dependent upon the market of the world: and from the moment that dependence upon the market of the world is established, there is more or less dependence upon Free Trade too. Besides this, the Protective system helps to develop free competition within a nation. Hence we see that in countries where the bourgeoisie is beginning to make itself felt as a class, in Germany for example, it makes great efforts to obtain Protective duties. They serve the bourgeoisie as weapons against feudalism and absolute monarchy, as a means for the concentration of its own powers for the realization of Free Trade within the country.
            But, generally speaking, the Protective system in these days is conservative, while the Free Trade system works destructively. It breaks up old nationalities and carries antagonism of proletariat and bourgeoisie to the uttermost point. In a word, the Free Trade system hastens the Social Revolution. In this revolutionary sense alone, gentlemen, I am in favor of Free Trade.” ”

  9. Bruce Bishop says:

    Back to the article, bullet point #3 says:

    “3. Thanks to high productivity and top quality, U.S. manufacturing offers its own cost-savings and benefits.”

    While this is a lovely sentiment, it is fairly meaningless in regard to our loss of manufacturing jobs. It suggests that the writer doesn’t really understand productivity or “quality.”

    It’s like Lake Wobegon, where all of the kids are above average.

    If you are paying fifty cents an hour for labor, as opposed to paying $20 per hour, do you really worry all that much about the “productivity” of the former? On the other hand, all of the evidence points to higher productivity for the former. If one is running a piece of automated machinery and the other is using manual methods, then we are not talking apples to apples.

    Quality is conformance to specifications. Take a look at your laptop, your I-pod, your I-pad, your I-phone. Do you somehow imagine that American workers would have produced a product closer to specifications?

    It is my belief that these naive excursions are hurting, not helping, in the effort to bring back U.S. manufacturing jobs.

    • Tom T. says:

      China is largest source of prison labor and yes, it costs less to hire prisoners than non prisoners, especially if you can bribe them with mere cigarettes rather than high wages.

      The beneficiaries of this prison labor might possible be the prisoners who get a few more cigarettes and a little less monotony, but the real beneficiaries are those profiting in the market by using this prison labor instead of hiring non prison labor.

      It is these people who always want the prison labor available to them so they can out compete their competitors and capture more of the demand produced in an economy.

      Does this help the economy?

      Two things happen:

      One is that goods are somewhat less expensive because the prison labor actually is cheaper, even if not more productive per individual, the cost of mere cigarettes is cheap compared to paying more to the labor force.

      This leads into the second thing. The labor force gets less pay because prison labor is being used instead of their labor and their demand decreases because they have less pay in their pocket to create demand.

      The question in my mind is not whether we should use prison labor of the world, but, “Why in the heck are we allowing some to compete in our market with prison labor and thus capture the demand for their own self interests while destroying the economy?”

      These are the rules our illustrious politicians have allowed to develop while they cater to those who capture the demand by cheating the economy.

      I say it is time to think about this differently. Maybe we should make the ones currently arbitraging the economy to prison labor the prison labor force.

      We have the best Congress money can buy and the most crooked are breaking all the rules of the competition game, paying off the rule enforcers (the politicians) to get away with it, and rewarding the worst people in the economy in the competition game because they are cheating.

      Talk about moral hazard!

      These are the rules our bought and paid off Congress have set up for the economy. No wonder it isn’t working as well as it should.

      Bruce, I agree with you that differences in environmental standards to produce goods and labor force are major impediments to U.S. manufacturing when they compete with prison labor that has no standards with which they have to follow. We end up with the cheaters having the lowest cost, arbitraging the economy down to prison or world standards, concentrating the profits of the demand into the hands of the cheaters. It is clearly wrong but the question is, why do our politicians keep doing it and why do we continue to keep allowing them to do it? The answer can be found when you follow the money and other non money compensation.

      Tom T.

      • Bruce Bishop says:

        Tom T.,

        The entire country of China is a prison. Remember Tiananmen Square?

        Our government allows us to import cheap goods from China, made with prison labor, and with no environmental controls, for two reasons: 1. For the “progressives,” it is way to destroy U.S. manufacturing, which they despise. 2. For the opportunists, allowing U.S. companies to make millions by dealing with the criminal enterprise that is China, keeps them in power, perks and privilege. No doubt, there are some in Congress who represent both reasons.

        Our only hope is to throw out the “progressives” and the opportunists and replace them with honest people who will do what is best for our country in the long run. If we fail, this November, to take back our government, we are in for a long dark ride.

        • Tom T. says:

          “The entire country of China is a prison. Remember Tiananmen Square?”

          Bruce, that was my point.

          It is not some conspiracy by “progressives” trying to destroy the economy by formulating standards. It is a political system that is so incompetent or imbibed in their self interests to not be able to govern competently. The current political system, last I checked, is composed of mainly democrats and republicans which are prone to be bought off by those benefiting from a dysfunctional government that will not hold them or foreign goods accountable to the laws and standards of the land.

          It is time to stop blaming “progressives”, “liberals”, “blacks” or even “Jews”. It is time we put the failure of our government to govern worth a darn right into the hands of those benefiting from bad governance. It is party leadership in both parties and their lemming followers who cheer on their side of incompetence. It is crony capitalism trying to blame everyone but themselves for destroying the economy. The long run has caught up with the short run.

          It took about 10 years for the repeal of the Glass Steagal Act to wreak its havoc on the economy and let Wall Street gamble with public backed funds. It was not progressives that did this, it was Phil Gramm (former economics prof) who was educated enough to know what he was doing. It was incompetence and cronyism that changed the national policy into a publicly backed gambling casino with no consequences to those creating the gambling losses. This wasn’t a progressive, it was the right hand lead economist for the republican party’s cronyism. He could be seen on John McCain’s campaign and Senator Brownback’s campaign as well as others running for president. This one man should be hunted down like an Al-Qaeda operative because of the scope of damage done to our system but we find ourselves arguing about “progressives”?

          It is time we put a little more reality into the discussion and a little less scapegoating. Cheer for your party all you want but you must also hold them accountable. We just don’t do that in an effective manner in this country.

          Tom T.

          • Bruce Bishop says:

            Tom T,

            Not to over-simplify, but it sounds like, by your logic, the solution to incompetent sheep dogs would be to get new sheep.

            You have apparently absorbed a revisionist tale of the economic collapse. No doubt, a clever journalist could find a conspiracy in which a coalition of left-handed people were responsible — or left-handed people pretending to be right-handed.

            I’m sure you have been warned by your leftist sources to avoid people like Thomas Sowell. Or, more likely, you have never even heard of Thomas Sowell. His book, “The Housing Boom and Bust,” might change your outlook a bit — like 180 degrees.

            I recommended to Arthur that he read “Reckless Endangerment” by a genuine New York Times business columnist – Gretchen Morgenson.

            Until you are able to explain the role of the “Community Reinvestment Act,” Chris Dodd and Barney Frank in the economic collapse, you are not even close to understanding what happened.

            As to the “progressives,” they go by many names and they keep changing those names to throw people off their trail. If you can get them to admit what they are trying to accomplish – what their vision for the country is – only about 20% of the population would be in favor of it.

          • Tom T. says:

            Bruce, here is a definition of “progressive”:

            Progressivism is a general political philosophy advocating or favoring social, political, and economic reform or changes usually in opposition to conservative or reactionary ideologies,

            Anyone looking at what both parties have done to contribute to our financial collapse (thanks Gretchen Morgenson and Joshua) should be progressive to change from their corrupt practices that lead to the collapse. It isn’t conservative or liberal to be a self serving crook hiding behind a party name. It is just plain crooked.

            There was nothing particularly conservative about repealing the Glass Steagal Act (Gretchen starts her 7th chapter on it) and replacing with the “Modernization Act”. It only allowed Wall Street to skim profits and leave the taxpayer holding the bag.

            The Community Reinvestment Act has been pounced upon but was not the real culprit. It had minor effects. The corrupting influence of money from Freddie and Fannie to undermine underwriting standards to get more business and more bonuses (while lying that their govt. implicit backing was going all to consumers). That is not conservative or liberal, it is just super bad policy that exploded. Republicans and democrats made that bad policy and allowed Fannie to exploit them politically through money and campaign donations to members of both parties. If you ask me, these people need to be held accountable from whatever party they come from but they are not. Wall Street found its backing for their gambling by tying in Investment Banks with Commercial Banks. We have to save the depositors in banks no matter what and that is precisely what we did. AIG and the others were bailed out to stop the domino affect because they were all tied in (thanks to that “modernization act” that repealed G-S. The taxpayer’s terms on bailing out Wall Street were not looked out for, which is why most people are rightly upset with how it went down.

            Incompetence and corruption made the disaster as it is doing with our foreign trade policies.

            I don’t think we need more sheep. I think we need the sheep to hold the corrupt sheep dogs accountable. We are not doing it.

            Have Stumo give you my email address if you want to argue these points out off this board. I totally agree with you that we can make Apple or any other company manufacture their products here in the U.S. instead of China. We just need to set the rules so it is more profitable to do so instead of producing in China.

            That doesn’t mean we cater to Apple’s or every corporation’s wish list. There is a time for actually governing the country instead of pandering to every interest group with money that lobbies Congress and this is one of them.

            Tom T.

          • Arthur Taylor says:


            I disagree with one minor point. Wall street had completely gamed the system and wreaked their havoc by 2006. 2007-2008 was the reveal. Thus it seems that they were able to ruin the system in LESS than 10 years.

            You are spot on with regards to Phil Gramm!!! He is one of the major architects of our current situation. He is one of the people I’m talking about when I say that free market free trade theory is a religion and to debate the theory and it’s results rationally is an impossibility because of the fervancy of their belief.

        • Tom T. says:

          Arthur, you are right about the timing but I would go one further and state that the policies that were put in place at the time of the “modernization” of Glass Steagal was the critical course that lead to our crisis.

          We learned all these lessons after the Great Depression in policy but so easily are the lessons forgotten so that the crooks can game the system yet again. We are not holding politicians responsible in the long term, nor the party leaders who guide or allow the policy to be pushed through and just as important, allowed bad policies to remain largely in place. When you have a choice between a) corrupt Republicans masquerading as conservatives and b) democrats who try to “right” things through the public purse but still have corruption in the ranks, the outcome is that the powers that are can get a majority to do the wrong thing or to block the other political party.

          Tom T.

    • Arthur Taylor says:

      How can you say “Quality is performance to specifications”? How do we know whether or not the specifications were written with quality in mind? How do we know that the product for which the specifications were written was a quality product?

      And again you show your defeatism when you ask the question: “Do you somehow imagine that American workers would have produced a product closer to specifications?” Of course, American workers can produce magnificent products! Who do you think taught the Chinese?

      • Bruce Bishop says:


        I said “quality is CONFORMANCE (not performance) to specifications.” That is how quality is defined in the world of manufacturing. Folks who are not familiar with manufacturing often confuse “grade” with quality. Grade is the difference between a Chevy and a Cadillac. Quality is the difference between a new Chevy (or Cadillac) with a half-dozen defects, and one with zero defects.

        To your question, “How do we know that the product for which the specifications were written was a quality product?” Answer: If you are looking for a quality product, you would start with a reputable company. Then, you might consult “Consumer Reports” or some other source of buyer feedback. If you are looking for the “cheapest” product, you are taking your chances.

        Arthur, other than one-off works of art, most manufactured products begin with a complete set of specifications, including blueprints, bill-of-material and, as appropriate, step-by-step methods for assembly or manufacture. Also, to the extent that quality is variable or critical, there would be a document with “critical hold” dimensions, quality control checkpoints and aesthetic or performance standards.

        The “training” for a new assembly-line worker can sometimes be just a few minutes, which would allow for the completion of several repetitions of the work-station cycle. For a machine operator, the training might amount to: “When the box gets full, move it to the pallet and put an empty box in its place. If the machine jams, hit the red button and tell your supervisor.”

        There is not a lot of opportunity for American Ingenuity to make a difference.

        My attitude is not defeatist. I have been an advocate for “balanced trade,” which is the one government action that would bring our manufacturing jobs home. Unfortunately, until we throw the “progressives,” the opportunists and the idiots out of Congress, we will continue to bleed jobs. Professor Alan Blinder of Princeton University has estimated that upwards of 28 million MORE jobs are at risk of being offshored.

        As a realist, I do get annoyed at people who are clueless about manufacturing, and apparently about politics, who keep advocating “solutions” that are no more than rainbows and unicorns. I will continue to take a harsh stance against the know-it-alls who are dispensing bad or useless information. I do that for the benefit of newcomers who visit this blog looking for answers.

  10. Joe Brooks says:

    Hey Bruce

    Apple could easily produce here in the US. Of course, it would require the courage and will to take action on the part of Congress to achieve a completely US made electronic product, but Apple could easily follow this companies’ example. It is a simple matter of the desire to do so.

    The motherboards and as much is possible is made in-house, since we have given most production of discrete and active components to Red China and Japan, in most cases these must currently be acquired from them.

    This is the only tuner I will use on my vehicles, I picked up 40 RWHP and knocked 4 tenths of a second off the 1/4 mile with their Predator device and a few minor modifications. Made and Engineered In The USA.

    • Bruce Bishop says:


      Are you familiar with the term “balanced trade?” (You can Google it.)

      We spend so much time on this blog chasing butterflies and bunny rabbits, but very few ideas of any substance are discussed.

      Warren Buffett recommended that our government mandate “balanced trade” back in 2003. In 2006, two senators (Dorgan and Feingold) introduced a “balanced trade” bill in the Senate, but it died there.

      Our government could easily mandate that our imports from China would NOT EXCEED China’s imports from us. Buffett suggested a five-year phase-in period. The website is dedicated to this issue, and the three professors who run the site have written an excellent book on “balanced trade” entitled “Trading Away Our Future.” The authors are Raymond Richman, Howard Richman and Jesse Richman — three generations of economists. They review Buffett’s recommendation and offer an alternative method of implementation.

      I have been studying the impact of “globalization” on U.S. manufacturing jobs for over ten years. So far, “balanced trade” is the only viable, robust, solution that I have seen offered.

  11. Joe Brooks says:

    “There is not a lot of opportunity for American Ingenuity to make a difference.”

    Bruce, the above is just wrong. I worked decades for a manufacturing company and I suggested many changes that were adopted in the manufacturing process. Some were as simple as “in the field this component has an excessive failure rate, I would suggest using a 75 volt rated capacitor”, all the way to complete redesign of a circuit, or a change in the manufacturing process, usually involving heat, that required a different chain of events to preserve the viability of a component. These are just a few examples.

    Most of the current manufacturing processes were pioneered in the US, then preempted by Multi-Nationals and their State sponsored funding.

    There is absolutely no reason to believe that there is no more opportunity for American engineering, given the chance to shine.

    Bruce, you may want to see my post on the Diablo people.

    • Bruce Bishop says:

      Joe Brooks,

      Thanks for the feedback. I see where you are coming from as regards my statement. Of course, you are right – where there is manufacturing, there are opportunities to “make a difference.”

      My career in manufacturing began with eight years of assembly line balancing, methods and work measurement. I learned early on that the people who were working with their hands would often come up with ideas that reduced cost or made the job easier. Some of them even manufactured tools and fixtures at home and brought them to the plant. I always encouraged these displays of ingenuity because they made my job easier and increased acceptance, by the team, of company generated ideas.

      But, in those days, there was a wealth of jobs with high value-added labor content. Those jobs were among the first to be offshored, leaving behind mostly highly automated, low value-added labor content jobs. In other words, the complex assembly work went to China, but we kept things like automated injection molding where the operator’s only responsibility was to change boxes and hit the red button if the machine jammed. These “box changers” in an injection molding plant have few opportunities to apply ingenuity to the job. That is what I was referring to when I said “There is not a lot of opportunity . . .”

  12. Bruce Bishop says:

    Tom T.

    There was no reply link on your latest post. You have defined progressive as favoring political, economic and social change. That simply converts one undefined term into three undefined terms. What political change? What economic change? What social change?

    Chesterton said, “Progress is a comparative of which we have not defined the superlative.”

    You can email me at

    • Tom T. says:

      I guess that is my point, Bruce. There are tons of labels out there, some put on us by ourselves and others by others. I just want the label replaced with the substance so I can understand what one is saying.

      There was no reply on your last post so I replied to my last post. I guess we are just getting in the weeds too much.

      To stay on this topic, any actions like producing a product in the US as opposed to another place in the world only depends on how one sets up the economics of the situation. If it costs less to make something in the U.S. because the U.S. inspects every cargo ship and delays the shipment (a former Japanese tactic) to market or any other costs imposed like tariffs because of VAT taxing, would do the trick or add up to do the trick. The thing is that we are lost in ideological and greed land instead of dealing with the real world.

      Tom T.

      • Mo says:

        When it comes to manufacturing its all about funding. If manufacturing is not going to be funded then there won’t be any manufacturing in the US. For example look at Germany, Japan and China. These are countries that have higher and lower labor costs, more and less regulation, higher and lower valued exchange rates, higher and lower taxes, less natural resources and yet they all manufacture goods because the money they create goes into funding industrial activity. In the US money is created to fund outsourcing, overseas conflicts, etc.

        Also to note when politicians say we are now a services economy, its not a result of free trade theory. Nothing in free trade theory ever says an economy will morph into a services economy or that taxpayers have to subsidize corporations moving overseas.

        Actually you can’t become a services economy without an industrial base because a lot of services actually gets consumed in the manufacturing process. Politicians think the only service jobs that exist are customer service, tourist guides and waiters. They don’t realize that as the economy advances manfuacturing never goes away; just some branches become more automated where more workers either go into other industries to manufacture or work to provide services that get consumed in the manufacturing process.

        To illustrate, only a few million americans actually farm but over 30 million workers work in food services. So to truly become a services economy an industrial base is needed. This was made clear by a 1982 report by president Reagan which estimated that 25 per cent of America’s GDP was generated by services that manufacturing used as inputs.

        • Tom T. says:

          It is just about the rules that are set up and enforced by politicians. Funding manufacturing is one of them. I can totally see your point, Mo, on what is happening. Barriers to entry or in kind trade policies would do the same thing.

          One of the things about being a reserve currency is that it messes up trade. When the world runs to the dollar for safety in times of uncertainty, it makes the dollar stronger compared to other currencies and thus gives other countries comparative advantage compared to what they had. This will eat away at an industrial or manufacturing base if there are not safeguards. It seems every country in the world is smart enough to have policies to address these issues except the United States. It is one major reason we have trade deficits that eat away at our own economy.

          Tom T.

          • Mo says:

            If the politicans knew anything about economics they could have used the dollar as being the reserve currency to the USAs advantage. For instance they could have printed all the money they wanted to buy high tech foreign capital goods that could have improved productivity in US industries tremendously. Also for industries that are under intense competition, it could have subsidzed them by giving them the funds to import top of the line capital if needed. Unfortunately the politicans wasted the reserve currency status to artificially increase consumption and military conflicts.

            When it comes to the trade deficit its the terms of trade that matters. The US ran current account deficits from 1850-1900 where the US incurred debt to import high tech capital goods so that it could use them to manufacture goods to repay back its debt. Excluding the civil war this was a period of improving living standards.

            Today with the trade deficits its a horrendous terms of trade because the US exports jobs, factories, technlogy and trades ownership of US companies to import consumer goods. It’s like exporting the cow for milk. This is not the result of free trade but managed trade where special interests get politicians to implement policies that benefit the special interests only. Free trade theory assumes a sound monetary system where money is backed by gold, silver or some other commodity. When the US ran trade deficits from 1850-1900 it occured when the US had sounder money.


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