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Rust Belt Reflections

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Brian Fuller
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Re: A region's evolution
Brian Fuller   3/11/2013 8:51:06 PM
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My esteemed contributor and fellow NFL fan suggests a response in my comment that doesn't exist. 

Certainly global economic forces play a role in the evolution of any region, including the Rust Belt. 

So too do the actions of company management and ownership within the Rust Belt. Take the automotive industry. Detroit's response to the '70s gas embargo and price spikes was to make what? Big cars that guzzled a lot of gas. 

Japan made not-so-big cars that had better gas mileage and lasted a lot longer. Consumers voted with their pocketbooks, rewarding not industrial complacency but innovation. (Except for my old man, a Ford man until his death, but even he, in the '80s and '90s, ended up expoxying his relatively new car's falling parts back on himself). 

You can worry about protectionist policies abroad only so much. A business owner needs to leverage technology to make great products that people will buy. 

And politicians like Ryan should see that they'd serve their constituents better not so much by the keeping the old Big Factory open but by luring the next new Big Factory and new industry to town. 

 



Brian Fuller
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Re: A region's evolution
Brian Fuller   3/11/2013 8:51:05 PM
NO RATINGS


My esteemed contributor and fellow NFL fan suggests a response in my comment that doesn't exist. 

Certainly global economic forces play a role in the evolution of any region, including the Rust Belt. 

So too do the actions of company management and ownership within the Rust Belt. Take the automotive industry. Detroit's response to the '70s gas embargo and price spikes was to make what? Big cars that guzzled a lot of gas. 

Japan made not-so-big cars that had better gas mileage and lasted a lot longer. Consumers voted with their pocketbooks, rewarding not industrial complacency but innovation. (Except for my old man, a Ford man until his death, but even he, in the '80s and '90s, ended up expoxying his relatively new car's falling parts back on himself). 

You can worry about protectionist policies abroad only so much. A business owner needs to leverage technology to make great products that people will buy. 

And politicians like Ryan should see that they'd serve their constituents better not so much by the keeping the old Big Factory open but by luring the next new Big Factory and new industry to town. 

 



Ned Ludd
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Re: A region's evolution
Ned Ludd   3/11/2013 11:12:35 AM
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My esteemed editor makes an argument that hearkens back to the seminal work on economics, Adam Smith's "The Wealth of Nations." He suggests that the flow of jobs. manufacturing and capital from the U.S. to low-wage nations is some sort of natural phenomenon, like water flowing downhill. This analysis conforms roughly to Adam Smith's "invisible hand" metaphor, which has become a staple of simplistic economics commentary, especially among conservatives.

However, as anyone who has read "The Wealth of Nations" knows, Smith's insights extended far beyond the basic notion that an invisible hand somehow directs capital toward each actor's best interests, thus establishing an economic equilibrium. Smith knew that many forces prevented that invisible hand from acting efficiently. Much of "The Wealth of Nations" consists of Smith's cri de coeur against international forces of mercantilism — the use of one government's power to thwart the economic potential of rival nations. As we know from the behavior of countries from France to China, mercantilist policies are alive and well in the world, warping the ability of more laissez faire governments (like the U.S.) to compete both in the global market and in the national and regional markets of these protectionist regimes. Adam Smith would be as frustrated today as he was centuries ago.

To suggest that the death of the Rust Belt, and the American decline in high-quality manufacturing (in favor of the crappy stuff that tends to emerge from China) has not been actively advanced by the aggressive policy of nations like China, Japan and even Mexico, and the rampant protectionism that afflicts most EU countries, is to resort to a state of intellectual complacency tha predates the wisdom of Adam Smith.

FLYINGSCOT
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Supply Network Guru
GE turning the tide
FLYINGSCOT   3/11/2013 5:54:58 AM
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I saw a TV programme last night about GE building loads of home appliances again in the USA as excessive shipping costs and offshore labor costs are now making it viable to build locally once more.  I am sure popolous pressure also has a lot to do with it.  I hope a similar trend happens in the Rust Belt.  It is part of Americana and should be protected.  Mind you the GE jobs created were all failrly low paid so that might put a dampener on things.

Brian Fuller
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Blogger
A region's evolution
Brian Fuller   3/8/2013 5:50:51 PM
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Benji, an elegiac piece, my friend. There is a unique evolution going on in that part of the country, but at least it's finally occurring.

The Rust Belt (whether it was steel, automotive or other industrial) ruled the global manufacturing for decades. Their industries matured, and, as this happened, the strong developed blind spots. Next thing you know, the Japanese and Koreans are making great affordable cars and we're buying steel from them. Chinese are getting there as well in some heavy-industrial areas.

Some pockets of the Rust Belt felt the old ways would win out after the storm passed; others realized they needed to change processes and technologies and work forces and moved to get globally competitive. 

You paint a beautiful picture of the woof and warp of the Rust Belt economy. It may be that the voters will turn out guys like Ryan; or it may be that they support politicians who believe the old ways of manufacturing may not last forever and that new economies need to be nurtured. 

Time will tell. 

 

 



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