Posts Tagged ‘industry’
“Jobs in factories will come roaring back into our country”*…
When President Trump announced sweeping tariffs on “Liberation Day” last spring, the promise was that manufacturing– and the jobs it provides– would return to the U.S. Scott Lincicome (from the conservative Cato Institute) assesses the “progress” to date…
US manufacturing ended 2025 with a thud, capping a rough year for the sector. To recap, manufacturers shed 63,000 jobs, according to the latest data from the Bureau of Labor Statistics. It wasn’t just labor that was hurting. The Institute for Supply Management’s manufacturing index clocked in at 47.9 for December, marking the 10th consecutive month of contraction as new orders were especially weak and costs at historically elevated levels.
Then there’s the Federal Reserve’s Beige Book of regional economic conditions and surveys from the regional Fed banks, which have repeatedly documented cases of manufacturers delaying hiring and investment amid weak market conditions, rising costs, shrinking profit margins and persistent uncertainty. As for the “hard” data, manufacturing capacity and output, while incomplete, sagged through the Fall.
Overall, the evidence reveals a sector that’s stagnant at best, and a long way from the manufacturing renaissance President Donald Trump promised when he took office for a second time a year ago. No wonder administration officials have pivoted from predicting a factory boom in 2025 to now saying it will happen in 2026 and beyond.
Better tax, regulatory, and monetary policy should indeed provide a tailwind for manufacturing, but the sector will probably continue to struggle. If so, Trump’s tariffs will be a big reason why…
[Lincicome unpacks the several ways that Trump’s tariffs have confounded domestic manufacturing: increased costs (especially on materials/compnents not available in the U.S.) and tariff and policy/regulations that might be politely called “inconsistent” (or less politely, “flighty”); last year, the US tariff code was amended 50 times)– which has added management/coordination costs (Federal Reserve economists estimate that domestic manufacturers will pay $39 billion to $71 billion annually to comply with the new regime, representing time and money they can’t spend on their businesses); but perhaps even more damagingly, has created uncertainty that has slowed corporate action/investment. Lincicome concludes…]
… The harms to manufacturers are consistent with research on past tariff episodes and help to explain why the sector struggled in 2025 — and why things might not get much better this year. Recent forecasts also suggest caution, with manufacturers and supply chain professionals predicting continued headwinds due to the costs, uncertainty and complexity of tariffs. And the Supreme Court won’t save them. If it invalidates Trump’s “emergency” tariffs in the coming days, administration officials have promised to invoke alternate authorities to recreate them.
Global supply chains took years to develop. They’ll take even longer to reorganize and will do so at great cost if, that is, they don’t break altogether in the meantime…
“America’s Manufacturing Renaissance Is Missing in Action,” (gift article) by @scottlincicome.bsky.social in @opinion.bloomberg.com.
Relatedly, Trump’s immigration policy was (like the “manufacturing boom”) supposed to have reduced the federal deficit. The Administration is deporting immigrants at a brisk clip– but at an extraordinary cost, both economically and constitutionally. That’s not to mention the costs to the targeted immigrants themselves, to their familires and to the companies and economies of which they have been preponderantly positive and productive parts. Indeed, a different group at Cato recently published a thorough study demonstrating that– far from being a drag on the economy– immigrants have reduced federal (and state and local) deficits by $14.5 Trillion since 1994… though, of course that contribution is now, thanks to the ICE storm, slowing down.
The immigration crackdown was also supposed to turbo-charge job growth (for the U.S.-born); it has not. Indeed, the climate of fear and the difficulty in securing visas has led to a hiring boom abroad: “Silicon Valley can’t import talent like before. So it’s exporting jobs.”
It’s easy to see Trump’s election and the imposition of his economic and immigration policies as America’s Brexit. That abrupt rupture of social, cultural, and economic conventions is now about a decade old… and the results aren’t pretty…
Brexit, the United Kingdom’s decision to withdraw from the European Union, is a rare contemporary example of a major developed economy raising trade barriers and more generally pulling back from international economic integration. When the Brexit referendum took place in 2016, academic and professional economists generally forecast that the policy about-face would result in a negative hit to the United Kingdom’s economy of about 4% of GDP over the long-term. Rather than a sudden, visible economic shock following the vote, the costs of Brexit have been gradual and cumulative. Now, almost a decade later, new research aims to assess Brexit’s actual impact on the United Kingdom’s economy, which involves the challenging task of comparing the country’s economic indicators to what they would have been if the United Kingdom had remained in the European Union. This research finds that, ten years on, the economic cost of Brexit has been larger than analysts predicted and that prolonged policy uncertainty contributed importantly to the magnitude of the impact… We estimate that by 2025, Brexit had reduced UK GDP by 6% to 8%, with the impact accumulating gradually over time… Understanding the ways in which Brexit resulted in a drag on economic growth for the United Kingdom provides potential lessons about the costs of abruptly pulling back from the global economy for other countries… – “The Economic Costs of Brexit on the UK” (where there is much more detail)
* Donald Trump
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As we interrogate empty promises (and lest we think that history doesn’t rhyme), we might recall that it was on this date in 1856 that the Know Nothing Party (dba, “the American Party” and “Native American Party”) convened in Philadelphia to nominate its first presidential candidate. A nativist (and largely anti-Catholic) group composed of anti-immigrant/Old Stock breakaways from the American Republican and Whig parties, the Know Nothings nominated Millard Fillmore.
The last member of the Whig Party to serve as President, Fillmore had been a Congressional Representative from New York who was elected to the Vice Presidency in 1848 on Zachary Taylor’s ticket. When Taylor died in 1850, Fillmore became the second V.P. to assume the presidency between elections.
Fillmore’s signature accomplishment was the passage of the Compromise of 1850 passed, a bargain that led to a brief truce in the battle over slavery– but was so ill-conceived (it contained the Fugitive Slave Act) and unpopular that Fillmore failed to get his own party’s nomination for President in the election of 1852, which he sat out. Unwilling to follow Lincoln into the new Republican Party, he got the nomination of the Know Nothings– though he was not a member of the party and hadn’t sought it; he was out of the country during the convention. Fillmore finished third in the 1856 election. By the 1860 election, the Know Nothings were no longer a serious national political movement.
“Mastering others is strength; mastering yourself is true power”*…
After skipping last year (presumably to finish his best-seller Breakneck: China’s Quest to Engineer the Future), Dan Wang is back with his “annual letter.” An excerpt…
… I think the US continues to systematically underrate China’s industrial progress for several reasons.
First, too many western elites retain hope that China’s efforts will run out of fuel by its own accord. Industrial progress will be weighed down by demographic drag, the growing debt load, maybe even a political collapse. I won’t rule these out, but I don’t think they are likely to break China’s humming tech engine. Demographics in particular don’t matter for advanced technology — you don’t need a workforce of many millions to have robust production of semiconductors or EVs. South Korea, for example, has one of the world’s fastest shrinking populations while retaining its success in electronics production. And though China suffers broader economic headwinds, technology firms like Xiaomi continue to develop new products and enjoy rising revenues. Technology breakthroughs can occur even in a suffering society. Especially if the state continues to lavish resources on chips or anything that could represent an American chokepoint.
Second, western elites keep citing the wrong reasons for China’s success. When members of Congress get around to acknowledging China’s tech advancements, they do not fail to attribute causes to either industrial subsidies (also known as cheating) or IP theft (that is, stealing). These are legitimate claims, but China’s advantages extend far beyond them. That’s the creation of deep infrastructure as well as extensive industrial ecosystems that I describe above.
Probably the most underrated part of the Chinese system is the ferocity of market competition. It’s excusable not to see that, given that the party espouses so much Marxism. I would argue that China embodies both greater capitalist competition and greater capitalist excess than America does today. Part of the reason that China’s stock market trends sideways is that everyone’s profits are competed away. Big Tech might enjoy the monopolistic success smiled upon by Peter Thiel, coming almost to genteel agreements not to tread too hard upon each other’s business lines. Chinese firms have to fight it out in a rough-and-tumble environment, expanding all the time into each other’s core businesses, taking Jeff “your margin is my opportunity” Bezos with seriousness.
Third, western elites keep holding on to a distinction between “innovation,” which is mostly the remit of the west, and “scaling,” which they accept that China can do. I want to dissolve that distinction. Chinese workers innovate every day on the factory floor. By being the site of production, they have a keen sense of how to make technical improvements all the time. American scientists may be world leaders in dreaming up new ideas. But American manufacturers have been poor at building industries around these ideas. The history books point out that Bell Labs invented the first solar cell in 1957; today, the lab no longer exists while the solar industry moved to Germany and then to China. While Chinese universities have grown more capable at producing new ideas, it’s not clear that the American manufacturing base has grown stronger at commercializing new inventions…
Eminently worth reading in full: “2025 letter.”
Pair with “U.S.-China Economic Competition” (from Rand) and “The Outlook for China-US Strategic Competition in 2026” (an interview with Sarah M. Beran in The Diplomat)
* Lao Tzu
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As we grapple with geoeconomics and geopolitics, we might remind ourselves just how fast China’s rise has been: on this date in 1967, in the midst of the Cultural Revolution, the Shanghai People’s Commune was established following the seizure of power from local city officials by revolutionaries. Shenzen was, at the time, a sleepy backwater, just off what was then the British colony of Hong Kong.
“These gems have life in them: their colors speak, say what words fail of”*…
Ryan McManus on geologic byproducts, American automotive lore, and the hidden beauty of the industrial age…
Let’s be real for a second: gems are basically very pretty garbage. A byproduct of a geologic or biological process we hang on our bodies for some weird reason. Diamonds are just charcoal that has been squeezed a little longer than usual. Geodes are dried lava that got a little wet. Pearls? Oyster mucus, secreted to smooth out the bivalve equivalent of a stone in one’s shoe. They are unintentional, accidental and, due to the peculiarities of our brains, unquestionably beautiful.
So, if nature can accidentally create works of art while going about its business, why not us?
In the 1940s and 50s, Detroit’s automotive factories had a beautifully messy problem: paint. Workers hand-sprayed enamel paint onto cars on assembly lines, with excess overspray gradually building up on the tracks, skids, and walls of painting bays. This oversprayed paint accumulated over years, layer by layer—creating thick, multicolored deposits that factory workers would periodically chip away and discard.
What they were throwing out, however, would eventually become one of the most sought-after materials in contemporary jewelry making: Fordite, also known as Detroit agate.
Fordite is a man-made gemstone (technically a non-faceted gemstone, called a cabochan), but not like the rubies and diamonds grown in labs. The material represents a fascinating intersection of industrial inefficiency and geological mimicry: As cars were spray painted by hand, the hardened enamel paint built up and baked, creating sedimentary-like layers that mirror how natural agates form over millennia, except compressed into decades of automotive production.
When cut and polished, the visual result is striking—especially in the most valuable samples from the late 1960s and early 1970s, the period of bright “high impact” colors like Ford’s Grabber Blue or Mopar’s Plum Crazy purple. Fordite reveals psychedelic swirls and bands that chronicle automotive color trends year by year, strata by strata: It’s essentially a cross-section of American car culture, with each stratum representing a different model year’s palette. Like the proverbial Jurassic Age mosquito trapped in the stone of amber, the DNA of a bygone epoch is hidden inside.
But Fordite’s deeper appeal lies in its accidental scarcity and temporal specificity. By the 1980s, car manufacturers had moved away from hand-spray painting, adopting an electrostatic process that magnetizes enamels to car bodies, leaving little to no overspray. Efficient, yes—but this electrostatic process ended Fordite production in abundance by the late 1970s. The material can never be recreated—it’s a finite byproduct of a particular moment in industrial history.
This creates a curious value proposition: Fordite is valuable precisely because modern manufacturing has become more efficient. It is industrial waste transformed into luxury material through the simple passage of time and technological progress. With the old factories long gone and today’s automated systems eliminating waste, each piece of Fordite becomes increasingly rare (and expensive), turning Detroit’s former inefficiency into today’s artisanal treasure.
In an age of planned obsolescence and disposable manufacturing, Fordite stands as an accidental monument to the beauty that emerges from industrial imperfection—proof that sometimes the most interesting materials come from processes we’ve intentionally left behind.
A better poet might even see Fordite as metaphor for the City of Detroit itself—forever tied to the automobile, often written off as worthless; unrecognized as a thing of curious quality and glorious beauty waiting for its moment…
More beautiful examples at “Fordite,” from @ryantomorrow.bsky.social in the always-illuminating Why is This Interesting?
* George Eliot (Mary Ann Evans)
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As we rethink remnants, we might recall that it was on this date in 1899 that America’s first fatal automobile accident occurred. At West 74th Street and Central Park West in New York City, Henry Hale Bliss, a 69-year-old local real estate dealer, stepped off of a south bound 8th Avenue trolley car and was struck by the driver of an electric-powered taxicab (Automobile No. 43). Bliss hit the pavement, crushing his head and chest. He was taken by ambulance to Roosevelt Hospital, but upon arrival the house surgeon, Dr. Marny, judged his injuries too severe to survive. Bliss died the next morning.
“Labor is the superior of capital, and deserves much the higher consideration”*…
Christopher Payne is watching Gay Burdick work, and I am watching Christopher Payne work.
We’re at the MTA’s 207th Street repair shop, which Payne has, for some time, been photographing for the New York Times. Payne says he wants to wrap up the shoot and publish the photos; the MTA has experienced some turnover since the project began; they want to meet with Payne (and writer David Waldstein) and get a better understanding of what his goals are. While we’re here, Payne wants to see Gay’s workstation again…
Spencer Wright with an appreciation of photographer Christopher Payne— and his chosen subject matter…
I became aware of Payne through his previous work in the Times, where he has published shoots from factories that make colored pencils, container ships, and the paper version of the Times itself. His photography is striking, and from the accounts in his most recent book, Made in America, his process is meticulous. Payne will apparently return to the same factory dozens of times, waiting for the moment when a production run lines up just right, or the material being processed is just the right color, or — I don’t know — his subject finally lifts their hand in a particularly elegant way. Payne is an artist, and his art documents, explains, and valorizes manufacturing, fabrication, and maintenance work.
Aspects of Payne’s work might be categorized as genre art. He captures moments in everyday time; he captures human intention and effort; he captures the infrastructure required to make stuff. His subjects are often highly engineered (he has photographed ASML’s EUV machines, Boeing’s 787 assembly line, and NASA’s Space Launch System), but just as often they’re highly soulful (Payne published a book about Steinway pianos; he has also photographed Martin’s guitar factory and Zildjian’s cymbal production process). Regardless of what he’s shooting, Payne’s photographs often feel just as carefully assembled as the objects in them…
…
… In the introduction to Made in America, Simon Winchester writes about industrialization, consumerization and the abstraction of knowledge and skill that occurred in the past few centuries. Before factories, it took forty-three individual craftsmen to make a block for the British Navy; in 1803, with the invention of Henry Maudslay’s block-making machines, that number was reduced to ten. Winchester writes of this transition with reverence, but he also suggests that Made in America “poses questions which, given the uncertain condition of our present-day planet, sorely need to be addressed.” I asked Payne what these questions were, and his answer mirrored something that he had written in the book’s afterward: “My photographs are a celebration of the making of things, of the transformation of raw materials into useful objects… They are also a celebration of teamwork and community…These are the people who make the stuff that fuels our economy, and in this time of social polarization and increasing automation, they offer a glimmer of hope.”
But I think that Payne himself is the one who offers a glimmer of hope. The factories he visits are complicated, complex, kludgy. Factories take knowledge away from craftspeople and turn it into bureaucracy and institutional anxiety. Factories pollute our waterways. Factories take razor-sharp lathe swarf and try to convince us it’s jewelry; factories enlist workers to help someone else fulfill their dreams. But then Christopher Payne comes in, and he crawls around for a few months, and he finds parts of the factory that we can be purely and unabashedly proud of. I don’t think that Payne’s work is asking questions at all; he’s just taking something messy, and pointing a spotlight on the honorable parts. And, to be honest, I think that’s probably what we need…
Documenting the making and maintenance of things– fascinating and beautifully illustrated: “The Honorable Parts,” from @the_prepared. Eminently worth reading in full.
* Abraham Lincoln
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As we pay attention, we might recall that it was on this date in 1919 that fiery hot molasses poured into the streets of Boston, killing 21 people and injuring scores of others– the Great Boston Molasses Flood:
The United States Industrial Alcohol building was located on Commercial Street near North End Park in Boston. It was close to lunch time on January 15 and Boston was experiencing some unseasonably warm weather as workers were loading freight-train cars within the large building. Next to the workers was a 58-foot-high tank filled with 2.5 million gallons of crude molasses.
Suddenly, the bolts holding the bottom of the tank exploded, shooting out like bullets, and the hot molasses rushed out. An eight-foot-high wave of molasses swept away the freight cars and caved in the building’s doors and windows. The few workers in the building’s cellar had no chance as the liquid poured down and overwhelmed them.
The huge quantity of molasses then flowed into the street outside. It literally knocked over the local firehouse and then pushed over the support beams for the elevated train line. The hot and sticky substance then drowned and burned five workers at the Public Works Department. In all, 21 people and dozens of horses were killed in the flood. It took weeks to clean the molasses from the streets of Boston.
This disaster also produced an epic court battle, as more than 100 lawsuits were filed against the United States Industrial Alcohol Company. After a six-year-investigation that involved 3,000 witnesses and 45,000 pages of testimony, a special auditor finally determined that the company was at fault because the tank used had not been strong enough to hold the molasses. Nearly $1 million [over $15.5 million in today’s dollars] was paid in settlement of the claims… – source
“Not all private equity people are evil. Only some.”*…
But as Rogé Karma explains, that could be enough to cause big trouble, as a large and growing portion of our economy is disappearing behind a veil…
The publicly-traded company is disappearing. In 1996, about 8,000 firms were listed in the U.S. stock market. Since then, the national economy has grown by nearly $20 trillion. The population has increased by 70 million people. And yet, today, the number of American public companies stands at fewer than 4,000. How can that be?
One answer is that the private-equity industry is devouring them. When a private-equity fund buys a publicly traded company, it takes the company private—hence the name. (If the company has not yet gone public, the acquisition keeps that from happening.) This gives the fund total control, which in theory allows it to find ways to boost profits so that it can sell the company for a big payday a few years later. In practice, going private can have more troubling consequences. The thing about public companies is that they’re, well, public. By law, they have to disclose information about their finances, operations, business risks, and legal liabilities. Taking a company private exempts it from those requirements.
That may not have been such a big deal when private equity was a niche industry. Today, however, it’s anything but. In 2000, private-equity firms managed about 4 percent of total U.S. corporate equity. By 2021, that number was closer to 20 percent. In other words, private equity has been growing nearly five times faster than the U.S. economy as a whole.
Elisabeth de Fontenay, a law professor at Duke University who studies corporate finance, told me that if current trends continue, “we could end up with a completely opaque economy.”
This should alarm you even if you’ve never bought a stock in your life. One-fifth of the market has been made effectively invisible to investors, the media, and regulators. Information as basic as who actually owns a company, how it makes its money, or whether it is profitable is “disappearing indefinitely into private equity darkness,” as the Harvard Law professor John Coates writes in his book The Problem of Twelve. This is not a recipe for corporate responsibility or economic stability. A private economy is one in which companies can more easily get away with wrongdoing and an economic crisis can take everyone by surprise. And to a startling degree, a private economy is what we already have.
America learned the hard way what happens when corporations operate in the dark. Before the Great Depression, the whole U.S. economy functioned sort of like the crypto market in 2021. Companies could raise however much money they wanted from whomever they wanted. They could claim almost anything about their finances or business model. Investors often had no good way of knowing whether they were being defrauded, let alone whether to expect a good return.
Then came the worst economic crisis in U.S. history…
Read on for a bracing account of: “The Secretive Industry Devouring the U.S. Economy,” (gift article) in @TheAtlantic.
* Paul Krugman
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As we clean our glasses, we might spare a thought for Ivy Lee; he died on this date in 1934. A publicity expert and a founder of modern public relations, he was among the first to persuade business clients– foremost among them, the Rockefeller family– to woo public opinion. Ultimately he advised rail, steel, automobile, tobacco, meat packing, and rubber interests, as well as public utilities, banks, and even foreign governments.
Lee pioneered the use of internal magazines to maintain employee morale, as well as management newsletters, stockholder reports, and news releases to the media. And he did a great deal of pro bono work, which he knew was important to his own public image; during World War I, he became the publicity director for the American Red Cross.
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