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Comment by bumby | Hacker News Reader

>However, it's arguably a better export that commoditized goods, from a margin standpoint.

Importantly, this is the same dynamic that causes economies to move away from manufacturing towards service-oriented economies. Capitalism is going to chase higher margins, but there should be guardrails that mitigate the negative externalities of such behavior. Else we are left with an eroded middle class, lack of supply chain resilience, disproportionate costs for sectors that can’t chase geo-arbitrage, weakened national security manufacturing capacity, etc.

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The US is manufacturing more than ever and is the second largest manufacturer in the world after China. The US middle class has actually "eroded" upwards -- our wealthiest population cohort has tripled in the last thirty years.

Counterpoint: We aren’t necessarily manufacturing the things that contribute to national security in the same way we were after WW2. The DoD has listed lost manufacturing capacity as a major risk.

And I think you’ll need to elaborate more on your point about the middle class. Depending on how you measure it, people can move from middle class into upper class, but also into lower classes. Your post acts as if class mobility is only in one direction. A bifurcated distribution supports the point that the middle class is eroding.

That’s what the data shows until you peel back the covers and understand that nothing at all could be manufactured here at all without enormous imports of not just raw materials but partially completed goods. US manufacturing output looks large economically because it’s mostly final assembly of imported partially completed goods, but if you looked at the value added (manufacturing output minus imports) it would be much smaller than other countries like China which own entire supply chains.

Outside of a few strategic industries or products, why is this bad?

Because we can't actually make the strategic products. You might have a factory to assemble the highly strategic fighter jet in the US but it is problematic if you are dependent on foreign countries to source or manufacture the multitude of parts.

That was in the premise of the question. Obviously if you don't have a secure supply chain for all the parts of a jet, you don't have a secure supply chain for a jet.

It’s probably hard to silo a modern weapon system in the way your question supposes, meaning it may not be a good premise.

By that logic, I guess we oughta onshore everything right? Lest there be a forgotten screw that we don't produce.

And yeah, engineering a market economy is hard (read: impossible). That's why it's largely a fool's errand to try to do it comprehensively.

This is a bad faith argument, and I think you know it. There is a wide gulf between “just a few industries” and “everything”. The first is naive and the latter is impractical. My suggestion is we take a targeted stance, where the solution resides in that gulf.

And for what it’s worth, your screw argument belies a poor understanding, especially given your example of a jet. Aerospace parts are notoriously expensive because we want to track and manage the entire supply chain. That’s why an airplane screw can cost $1k, when naive people assume you can just pick up an equivalent part at Home Depot.

But you just said we effectively can't do it for narrow industries.

I’m saying it’s much harder than your original comment insinuates. That jet in your example has tens of thousands of parts and if you want to protect the entire supply chain, it can’t just be a few companies. Many of those suppliers are also not just supporting jet manufacturers. Eg, a company that makes teflon o-rings for the jet likely makes o-rings for dozens of non-aerospace products. Complex machines are not nice, vertically integrated manufacturing ventures in the modern economy.

I am aware of this, but obviously it's much easier (in that it doesn't outright destroy our way of life) to do it in narrow cases than for everything.

Perhaps I’m confused and misreading your previous comments. It seems like on one hand you’re advocating narrow application, while also saying an entire supply chain would need to be protected to have the intended effect. In a modern economy, those two seem in conflict in any complex system. This means the execution is neither easy nor obvious. The only one I can think of where that may apply is nuclear weapons, which is so tightly controlled it’s more of a quasi-government manufacturing endeavor.

I’m going to offer a less defense-oriented point of view: manufacturing jobs are more lucrative than service jobs that are available to uneducated people, and allow them to live a more prosperous, happy life. More of these jobs is a net benefit for society.

If you want a jobs program just say you want a jobs program. Instead of churning out uncompetitive widgets how about we tax the wealthy and employ people fixing our infrastructure?

It’s fallacious that manufacturing can’t be done competitively in the US, it absolutely can, but policy allows business owners to make slightly more profit by offshoring production, so that’s what happens.

Regarding fixing the infrastructure, I like that idea too, but the government is pretty incompetent and full of grifters so I don’t really think that’s an efficient way to get money to poor uneducated people - most of the money will go to consultants and non-profit directors and so on.

>the government is pretty incompetent and full of grifters

Is this based on actual data or just vibes from your interactions with the DMV, IRS, etc.?

Michael Lewis writes well about this. His perspective is that the govt often shoulders the hard problems that lack a clear path to profitability for private industry. He’s studied govt extensively and seems to have the opposite view.

I know you aren’t the other guy, but it’s a really interesting argument that despite spending more and more money every year to solve this kind of problem, and seeing that the problem is getting worse (quality of life and economic security for uneducated people, in this case), one can still argue that the government is actually efficient and competent. It seems obvious to me that they are not successfully solving this problem with spending. I know a natural reaction is to blame one political party or the other for being especially bad, but you can see a lot of examples of failures to improve outcomes despite increasing spending at the state and local levels for both parties in the US. So if a politician comes along and says you know what, let’s try to solve this problem with policy instead of spending, the people who are suffering listen to that, even if the outcome isn’t certain.

What government jobs programs have we been dumping increasing amounts of money into with diminishing returns?

Seems to me your logic actually applies to the argument of not doing that, and letting the free market figure it out.

With respect, I asked for data and you came back with “it seems obvious to me…” without citing any real data. I know enough to know people who make feelings-based arguments can’t be persuaded by data-driven discussions.

You can go find the data about the diminishing financial security of this class yourself - your only argument was an appeal to authority, btw.

As requested below: which jobs programs have we been shoveling money into with diminishing returns?

A reference is not an appeal to authority, it’s an opportunity for you to verify the stance and poke holes in it if you have the capability to do so. You have the opportunity to use whatever authority you want and cherry pick data. I’m just asking for an effort that has some rigor beyond “I can’t prove it, I just know it’s true because my gut tells me so”

A significant portion of the trade deficit is due to heavily discounted Canadian crude imports that American oil refineries refine and resell domestically and internationally at a large markup that brings in massive revenues.

American lobbying has to date successfully prevented Canada from building up its refinery capacity. Now that Trump doesn't seem to like this arrangement, Canada will likely simply stary refining its own crude.

This will definitely reduce the US trade deficit but may not be good overall for the American economy.

The blanket generalization that all trade deficits are subsidies is flat out wrong. You need to look into the details to determine whether a given trade arrangement is beneficial for the US or not.

By dollar value, but not by actual amount of manufacturing. When you peel back the US's real GDP growth, it just turns out prices rose faster than inflation.

No. The US will win the next world war by replying on its advanced capabilities in restaurant work and business consulting.

The US will withhold their advertisements until they capitulate.

You joke, but wars are won on logistics. Famously, the US military can deploy a Burger King anywhere on Earth within 24 hours.

> You joke, but wars are won on logistics. Famously, the US military can deploy a Burger King anywhere on Earth within 24 hours.

But not only on logistics. If the "US military can deploy a Burger King anywhere on Earth within 24 hours," but little else, it's fucked. Right now its production base is so addled and weakened that it can't even sustain the wartime production really needed by Ukraine without cleaning out the cupboards. It has only enough missiles to last days in a high intensity conflict, and the lead time for more is years. It definitely can't win in a sustained conflict against China (who has 40-effing% of world manufacturing capacity.

A sustained conflict with a nuclear power is a no go. The risk of nuclear escalation is too great.

> A sustained conflict with a nuclear power is a no go. The risk of nuclear escalation is too great.

That was the rationale for letting the US military get into this state, but the conflict in Ukraine proved it to be unwise and founded on false assumptions.

When did the us join that conflict and when did it run out of tanks?

Huh? Ukraine isn't a nuclear state.

“With a nuclear power” != “between two nuclear powers”

Which was part of the rationale for supporting Ukraine: the best way to build up a manufacturing base is if you have customers, and so supplying munitions to Ukraine was a win/win/win from the military's point of view: Ukraine gets ammo, the US gets to ramp up domestic military production with, effectively, someone else paying the bill. (Granted, some of that was US funds, so the 'someone else' was often another part of the US government, but the point stands in terms of manufacturing capacity.)

While there are shortages in some areas, I'm not aware of any reports of across-the-board procurement issues. In 2023 there was a shortage of 155mm artillery shells (at a production rate of ~8000/month), but no shortage of small arms ammo, APCs, or tactical vehicles [1]. By February 2025 the US was "manufacturing 30,000 155mm rounds per month" and "the Army is now “on a path” to producing 70,000 to 80,000 rounds per month by the end of 2024 or early 2025" [2].

That might not be enough to sustain a conflict with China if it started today, but it does demonstrate that the US is perfectly capable of scaling up domestic arms manufacturing if they choose to invest in it.

[1] https://www.csis.org/analysis/rebuilding-us-inventories-six-...

[2] https://www.nationaldefensemagazine.org/articles/2024/9/11/a...

Note that Ukraine is using somewhere around 5k shells per day, and that's only because they have to ration it due to insufficient amounts.

For another comparison, Russia is making 250k shells every month, and using 10-15k every day.

At peak levels of artillery use in late 2023, when both sides still had ample stockpiles, the combined total was ~40k shells per day.

So, yeah, it's good that we're ramping it up, but also, no, it's nowhere near fast enough if we want to be ready for a major war.

How many aircraft was the US producing in 1940? What about 1945?

The increase in aircraft manufacturing during that period came at the expense of lost civilian automobile manufacturing. There were practically no civilian American cars made from 1942-1945. Same can be said for other industries. To a certain extent, this belies load shifting rather than increases in overall capacity like your statement may suggest.

In 1940 the US manufactured 3MM cars. In 2024 it manufactured 10MM. Seems like there's industrial capacity to go around?

Sure, if you want to stop making cars to make weapons instead for a long period of time. Have you ever retooled a highly automated assembly plant? I have, and I can tell you it’s not something that can be changed on a whim.

Is your contention that we should be churning out wartime levels of war materiel when we're not at war? Like specifically what do you think we should be doing?

My perspective is that we shouldn’t be trivializing the problem and recognize the tradeoffs and externalities. Pretending we have lots of manufacturing capacity for weapons systems because we know how to make cars misses the point of how difficult a transition from one to the other would be.

We agree then! I was confused how GP expected anyone to infer meaning from statements about shell consumption.

To chime back in, my contention is that we should be churning out at least enough to keep Ukraine fully supplied without the need to ration, and the fact that we still aren't there 3+ years into this war is not a good sign.

Speaking more broadly, I think that the proper amount of war-related industry should depend not just on whether the war is ongoing or not, but on how likely it is. Right now I believe that a major war that US will likely need to participate in sooner or later is more likely than not by 2050.

I don't think our "not being there" has anything to do with ability but with political appetite. If both political parties wanted to produce a lot of shells, we'd produce a lot of shells. Right now one political party wants Ukraine to lose, so we don't.

Otherwise largely agreed with your comment.

You're conflating civilian production with military production. Does China have 40% of world military production? Or is the plan to throw electric golf carts at US aircraft carriers?

No, in order to win a war, it must have a clear objective which can be successful. The US is terrible at this because the objectives of war by a democratic country will be set by politicians, who've never seen an objective which couldn't be made vaguer. Operation Iraqi Freedom had so many sub-objectives key military leadership didn't even agree what the goals all were - and even then some of those goals are nonsense, predicated upon false narratives spread by politicians who wanted a war and needed some sort of justification. Remember the Weapons of Mass Destruction your army was sent to find? Never existed. Terrorists they were sent to eliminate? More were created than had existed previously.

Battles may be won on logistics but you can't win a war without a clear and achievable objective. Corporate had a clear objective. Overlord had a clear objective. Take Desert Shield, to give an example of a US-led operation with clear objectives. If you turn up and the Iraqis all say "Fuck this, I'm off home" freeing Kuwait that's success. If you kill half the Iraqi population but they're still occupying Kuwait when your funding runs out that's failure. That's what you need if you want to win a war, clear objectives.

>key military leadership didn't even agree what the goals all were

This seems to imply vague leadership is a very human issue, and not necessarily relegated to just politicians.

Under your premise that you must have a clear objective to the exclusion of other things, Russia would have handily won its war against Ukraine years ago. Their objectives are very clear.

It's a necessary but not sufficient criterion.

> No, in order to win a war, it must have a clear objective which can be successful.

You said no.

I did, all the logistical prowess in the world can't help when your objective is too vague. Logistics are useful, often key to the final outcome, but they're nowhere close to the necessity of clear objectives.

The US military used to be good at logistics. Is it still?

> weakened national security manufacturing capacity,

What products specifically would be a national security concern? The CHIPS act was passed to revitalize semiconductor manufacturing because we rely heavily on Taiwan. From my understanding, we already have a lot of domestic manufacturers for various parts, who are too expensive for the average American but are the main suppliers to the DoD.

As mentioned in another post, the DoD lists lack of manufacturing capabilities as a growing risk. There are many small batch parts that the US could manufacture, but companies aren’t interested. There are also those items which they no longer have the capacity to make, or deliver. Ted Koppel’s book Lights Out gives examples of long lead time items that can’t be made in the US and we also lack the ability to deliver them because the necessary infrastructure is no longer there

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