Design products in the U.S, send them abroad for manufacturing, study them products, make improvements.

It’s as cheap for people in the U.S to be designers as it is for those in emerging markets to be workers.

Think about it.

One world!

Then maybe you’re at the wrong job? I can’t see how working on a factory line and producing a shovel is better than working as a developer making a software tool that will improve doing something else.

Synchronicity is also at play here, as I caught up on The Daily show today and watched the interview with Peter Schiff.

From the video’s description (http://www.thed...le=Peter-Schiff): “Peter Schiff wants Americans to produce more and consume less.”

Not the right space, or time, to really explore economic theory regarding highest use of capital, barriers of economy/to scale, etc., but I will say that economic theory typically hinges on an assumption of free trade and open borders without inefficiencies (we can also apply the same argument to the “efficient” capital markets). This is clearly not the case. And politics and national sovereignty need to be factored in to the discussion of the need for a manufacturing base versus specializing on only a portion of the supply chain.

So the idea that we don’t make anything is absurd. We just don’t make consumer goods. We make everything else.

(http://www.kant...t-manufacturer/)

But I agree with the rest of your assessment. Electronics, textiles, toys (90% of them) and many other goods are produced outside the US. And unfortunately, what is produced in the US, even by US companies, is usually just something assembled from imports.

We have no articulated goals for what America should look like in 10, 20, 50 years. Do we want to be the strongest economic, military, political power? Or do we just want to improve our standard of living? How do we plan to measure success and progress? Our various, often inconsistent economic policies are just one indication of the fact that we’re a country without a well-defined destination.

How America defines its goals and strategy should inform our government’s policies and then trickle down to corporate/individual investment decisions. If we decide, for instance, that we want to retain our position as #1 economic power then we should create
-immigration policies that attract & retain the world’s best talent
-education policies that ensure a higher percentage of our population has a higher level of skills
-healthcare policies that extend the productive lives of our workforce

If you also want to maintain our military position and improve our strategic position you’d add:
-tax/subsidy/incentive policies that work to strengthen to eliminate our dependence on oil
-incentives to retain heavy manufacturing capability on-shore to ensure war-fighting capability
Etc
-build alliances that structurally enforce our political dominance

The policies you implement should be informed by a clear strategy with specific goals and agreed upon metrics for measuring progress.

But back to the specific debate at hand…If the concern is that America’s trade is imbalanced there are a couple points being missed.

First, we import more than we export because we over-consume. In other words our average standard of living is higher than it should be. There’s a lot of talk here about the need for us to export more. The other lever to pull (try saying this while running for office) is to spend less and save more.

The flip side is that other countries lower their standard of living to curb imports and as result we have fewer buyers for the goods/services we do export. China is the best example here. Their anti-inflationary or anti-extreme growth measures are aimed squarely at reducing consumption.

I haven’t been to Rwanda (I’m going in ~2 weeks) but my hunch is that America has a lonnnng way to fall before the two countries can fairly be compared.
toby

This is to inform you that when you open with “this is to inform you” it has an even more pompous air than the writing you complain about. I, for one, liked the article just fine.

Taking your Silicon Valley “manufacturing” point a bit further, we must ask the question. What about software? I am of the opinion that the Oracle’s, MSFT’s, SAP’s, and the 100’s of others in the country do in fact count as US manufacturing. That’s real labor creating real goods increasing American import dollars (when not pirated).

Web 2.0’s? OpenSource? Not so much.

We do seem to have lost an edge somewhere along the way, especially in my field of software development. I don’t believe it’s just a VC issuse however. All corporate America has labor arbitrage fever related to IT.

Another thing that is interesting is that Toyotas and Hondas were in general, *never* cheaper than domestics. They have almost never competed on price, only on quality and features.