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Comment by lenerdenator | Hacker News Reader

> This is an inherently political subject, but I would appreciate a dispassionate argument explaining how this could be even remotely good for the U.S.'s economy in a way that is light on MAGA ideology and doesn't simply claim the overwhelming majority of economists are dumb.

The slim hope to a voting bloc in the Upper Midwest that maybe, somehow, this will bring back manufacturing.

They've tried everything else; why not this?

We can't simply legally punish the people who shipped the factories off and drove the region into despair, so why not tax the stuff the factories made overseas as a part of the trade-off?

I'm not saying it's a good idea, I'm saying this is their logic.

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I’m from Southern Ohio which was not hit as hard, but I know the attitude well. I call it “rust belt rage.”

I remember during the first Trump election hearing quotes like “I hope he does as much damage as possible” and “I can’t throw a bomb into the White House but I can throw a Trump.” Lots more like that.

The attitude in that region of the country is absolute seething rage. A lot of people from Northern Ohio, Western Pennsylvania, Michigan, etc. would be gleeful if they saw people hanged. It’s that kind of rage.

Imagine what the vibes would be on the West Coast if there was a huge set of policy changes that decimated and liquidated the high tech industries. All those software and engineering jobs just vaporize in a span of 20 years. Places that were once the wealthiest in the country look like failed states and war zones. Everyone who can leave leaves.

Then the media makes you the butt of jokes. Calls you “flyover country.”

> Imagine what the vibes would be on the West Coast if there was a huge set of policy changes that decimated and liquidated the high tech industries

We had large inflation caused by Joe Biden's industrial revival acts (spurring a massive increase in factory construction (see https://home.treasury.gov/news/featured-stories/unpacking-th...) that led to interest rate rises and a TON of tech layoffs! People on this forum should be aware that the chain of causality runs in that direction.

And are you saying that the US media doesn't pillory Californa as a liberal hellhole? I actually don't even know what distribution of media you consume that doesn't handwring over the morality of liberals.

Originally the Intel Ohio One fab was being lobbied for by some housewife in Lorain. It went to New Albany because that part of Northern Ohio couldn't get its act together in contiguous land acquisition.

> that led to interest rate rises

Interest rates didn't rise because of industrial revival acts; they rose because they had been artificially low for a decade and someone had to throw water on the economy to cool it lest hyperinflation hit.

> and a TON of tech layoffs!

The nature of tech layoffs and what has happened in the Midwest over the last 50 years are completely different. When a guy is let go from Meta, he's let go from a job that earned him well over the median salary for Americans. Provided he hasn't blown it out his ass on courses at microdosing at Esalen, he should have something in savings. He has resources. He has connections. He has opportunities. When you work in an area with that much money in it - remember, Larry Ellison, Elon Musk, and Mark Zuckerberg each have a net worth that puts them on par with the yearly gross economic product of small American metropolitan areas - you can recover.

When a guy was let go from an automotive parts supplier in Michigan in 1988, he's making near that median salary. He has far less cushion. The nature of his work does not allow him to simply open his laptop and toy around with new business ideas, or open a startup; his former employer was the employer in town. When it went under, the town went under, and he had no way to get out.

And that's before accounting for what the rusting hulks of machinery did to the town. Chemicals dumped before regulation poison the water and soil. Major swathes of real estate needing millions of dollars in cleanup before any real redevelopment can occur. Maybe the Feds will get around to it with the Superfund in a generation or two; the developer from back east sure as hell isn't going to pay for it. By the way, can the town - which is already short on funds - give them tax increment financing for that redevelopment? They'll never come out ahead otherwise. You can't just convert a former brake pad manufacturing plant to lofts like you can with a former tech headquarters in San Francisco.

> And are you saying that the US media doesn't pillory Californa as a liberal hellhole? I actually don't even know what distribution of media you consume that doesn't handwring over the morality of liberals.

... where are you getting that from OC's comment?

> Interest rates didn't rise because of industrial revival acts; they rose because they had been artificially low for a decade and someone had to throw water on the economy to cool it lest hyperinflation hit.

I hate "artificially low" why artificial? What makes something artificial and what makes it real? In economics, there's an idea of a natural interest rate: the interest rate which is the lowest under which inflation will not occur. That has been trending lower, see https://www.newyorkfed.org/research/policy/rstar. It absolutely is not artificially set anywhere: the fed doesn't set the natural rate of interest, it accommodates it with a policy rate and has to deal with a 12-18 month lag for their policy to be effective (a fun quirk - there's a cool badeconomics thread on this) which is why it was hard to deal with inflation caused by the russian invasion: you can't predict that 12-18 months out!

> The nature of tech layoffs and what has happened in the Midwest over the last 50 years are completely different.

No data backing this up.

> where are you getting that from OC's comment?

OC talking about media calling them 'flyover country' as if it matters / is somehow out of bounds conduct at all.

> I hate "artificially low" why artificial? What makes something artificial and what makes it real?

When people have cheap access to money, they spend it. When they spend it in such a manner that it outpaces the ability of the supply side to, well, supply, the result is inflation. And that's what we saw in '21 and '22. You had someone handing out PPP loans like candy and forgiving them outright, you had stimmy checks (that weren't backed by anything real, but that's another story), you had people sitting around looking for stuff to pass lockdown with, etc.

So at that point, by definition, we're lower than the "natural" interest rate. This showed that a lot of businesses in the tech industry couldn't survive without dirt-cheap money to give them ever-increasing amounts of runway. You can't just hyper scale like Uber when borrowers expect the rate of return dictated by the now-higher "natural" interest rate.

> No data backing this up.

Besides decades of economic, social, environmental, and political events and trends, you're right. Wanna have a bottle of water from Flint, MI? I can pull one out of the cellar. 2015, a fine year.

> OC talking about media calling them 'flyover country' as if it matters / is somehow out of bounds conduct at all.

1) that's not indicative of the stuff you were charging 2) yeah, it is out-of-bounds conduct. It's an a-hole move to belittle poorer regions in your country, whether explicitly or in more tacit ways. If you do it long enough, you get where we are now. Anyone happy about that?

> And that's what we saw in '21 and '22. You had someone handing out PPP loans like candy and forgiving them outright, you had stimmy checks (that weren't backed by anything real, but that's another story), you had people sitting around looking for stuff to pass lockdown with, etc.

Yes, this is my whole point. The American Rescue Act and subsequent policies that were very much propping up salient jobs (certainly not wfh tech jobs that are, definitionally, resistant to lockdowns) fueled inflation that led to the end of zero interest rate period which led to large layoffs in tech.

> Wanna have a bottle of water from Flint, MI?

Flint falsifies your point, it is a democratic bastion. If you'd expect that to radicalize people, it should be deep deep read.

> yeah, it is out-of-bounds conduct

Out of bounds is a social norm over time. Donald Trump, their far and away champion, gives such egregious conduct I can't read this with a straight face.

But we can go further back. Was 'just say no' not egregious enough for you? AIDS shaming? The vicious anger against gay people? I can take any snapshot of the past - conservatives will always be the cry bully at any of the years in time you want to pick.

> Yes, this is my whole point. The American Rescue Act and subsequent policies that were very much propping up salient jobs (certainly not wfh tech jobs that are, definitionally, resistant to lockdowns) fueled inflation that led to the end of zero interest rate period which led to large layoffs in tech.

Those are of little consequence compared to FRS interest rate policy. Also, those people need a place to work. Sorry.

> Flint falsifies your point, it is a democratic bastion. If you'd expect that to radicalize people, it should be deep deep read.

Democratic or Republican doesn't matter. When you have no more money because of major regional economic changes, you can't do the basic functions of government. There's also demographic differences.

> Out of bounds is a social norm over time. Donald Trump, their far and away champion, gives such egregious conduct I can't read this with a straight face.

That's what rage does.

> But we can go further back. Was 'just say no' not egregious enough for you? AIDS shaming? The vicious anger against gay people? I can take any snapshot of the past - conservatives will always be the cry bully at any of the years in time you want to pick.

You're confusing "conservative" with people in the part of the country that we're talking about.

I'm from between Cleveland and Youngstown. They could have kept voting for Traficant and Cafaro if they wanted to give middle fingers and throw bombs.

Oh, I'm from Kansas City. I get it, and like Southern Ohio, we weren't hit as hard, but I heard the same comments.

> Imagine what the vibes would be on the West Coast if there was a huge set of policy changes that decimated and liquidated the high tech industries. All those software and engineering jobs just vaporize in a span of 20 years.

> Then the media makes you the butt of jokes. Calls you “flyover country.”

The people in your analogy are not the same types suffering from rust belt rage. One group is willing and very wanting to learn and grow and build, and the other is openly antagonistic to any sort of growth.

That's why they became flyover country. I don't think that would happen on the west coast if your scenario were to occur because of the different culture.

What can I say except: I don’t buy that at all. I lived in Los Angeles for 8 years and Boston for 5. There are some cultural differences but the people there are still just human.

When a region and a culture declines, it gets more nostalgic and reactionary. The arrow of cause and effect goes that way. Places like Detroit were innovation centers and much more culturally open before their entire economy was rug pulled.

If California were rug pulled you’d end up with a culture that lives permanently in the shadow of its boom times and rages at the world.

Damn. Because California has been rug pulled. The underground weed economy was responsible for hundreds of millions of dollars in black market revenue. That money's now gone to Oklahoma because the legal cannabis laws are more favorable there, leaving a absolutely gaping hole in California's economy that can't be replaced by growing alternative crops like saffron, or, in keeping with the illegal theme, poppies/heroin or coca/cocaine. Because it was illegal before legalization, there are scant few stats on just how large it was, but where'd growers used to get $4,000/lb, they're now getting $400/lb. (I have this conspiracy theory level theory, in that San Francisco used to be home to illegal grow ops which forced pg&e to upgrade transformers and substations to support pre-led grow lights, which were massively power hungry. since that power is now no longer needed because those grow ops are no longer viable thanks to legalization, but the upgraded substations remain, the rise of electric cars isn't quite the emergency it should be.)

So much of the arts and Burning Man and entire communities in the Emerald Triangle were propped up by that money, and it's gone.

Time will tell how things go for California. I remain hopeful, but there's just no real data about the black market thanks to its very nature, so it's hard to know just how large that gaping hole is.

That’s fascinating. I always figured that real estate hyperinflation just drove all the arts and cool counterculture stuff away.

The upper Midwest had a lot of culture too. Disco (Chicago was a big place for that), Motown (named after Detroit), techno (also Detroit), industrial (Cleveland / Akron), and house music (Chicago and Detroit) all either came from or had large contributions from what is now called the rust belt.

That whole region used to be solidly Democratic. It drifted a bit R in the 90s and 2000s until Trump flipped it with one word: tariffs. Another quote I remember from a guy in Michigan in 2016: "when Trump started talking about trade... I'd die for this man. I don't care what else he does."

Different people have different reasons for supporting a politician, but for these people it's... I'm not even sure it's hope at this point. For some of them it's revenge. They feel lied to and betrayed.

I guess that's part pretty different from the old Cali weed industry. Nobody promised them anything. For these people the Democrats told them NAFTA would bring jobs.

LA and Boston are both centers of creativity, curiosity and learning, without religion encroaching on every day life of guiding peoples thoughts.

None of that is true for the rust belt or bible belt.

I lived in Southern California for 8 years and I'd say that Orange County and parts of LA are at least as religious as Southwest Ohio where I now live, maybe more.

It's a different kind of religion, a different vibe, but there's not less of it. There's also a ton of new agey stuff in California that is no more rational or secular than old school religion, just different.

Boston may legitimately be less religious and less superstitious, but I'd be surprised if it was by a lot. Again, the religion is just different. There's a lot of Judaism, mainline Protestantism, and Catholicism up there vs. evangelical Christian and new agey stuff elsewhere.

So it's an issue of fundamentalism, maybe. Those areas like LA and Boston might be as religious in many ways as rust/bible belt places, depending on the metric, but they fundamentally are not confusing a day old zygote with a developed fetus, insisting the earth is literally 6000 years old and dismissing the idea we came from 'monkeys', they don't have issues with homosexualty to the same extent and maybe even belong to a church that is fine with it, etc etc.

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