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As a former U.S. manufacturer (for nearly 3 decades), I can confirm Hua Bin’s China thesis

Insofar as Trump, Kirk and others may blame China for the destruction of the U.S. manufacturing base, we know the real culprit

At the risk of bringing any of the bile and ignorance permeating these United States of America to my little corner of the internet, truth must be spoken at a time like this. Reference:

Why is Charlie Kirk a big deal? by Hua Bin, stating his view about why the demonization of China as the problem, as the perpetrator of America’s industrial decline is just plain wrong. * It is wrong, and I know it for a fact because I lived it. More on that in a moment.

Frankly, I am someone so far removed from divisive politics that all I knew about Charlie Kirk as of a few days ago was that he was a noted ultra-conservative of some kind and I did not particularly like his face. Seriously, that was it. I had no positive or negative feelings about him because I did not know much of anything about him.

Now I do. But that is beside the point. The point is that a political commentator and influencer was killed while doing what he does, arguing his political views. He should have been allowed to continue doing that as long as he wanted to, rather than being silenced. This is America, and at least until now, you can say what you want. It’s, you know, one of our freedoms.

But that is also beside the main point. The main point is that ignorance on both extremes ** of our political spectrum is in full flight, with algorithms merrily (and profitably) feeding those with ever more extreme views what they want to hear, reinforcing them rather than feeding them the unvarnished truth that they may need to hear.

So, keeping this on the specific subject of China’s involvement in the decline of America’s manufacturing base, allow me to interject some personal experience. Frankly, it was Japan and then Mexico that were the main threats to U.S. manufacturing before the great frontier of China was fully opened up, and became involved. But Japan and Mexico were not malicious threats. Nor would China be that.

In my experience, Japan’s manufacturing capabilities evolved exponentially in the 1980s and 1990s (when buying the latest automated equipment in the 1990s/2000s I would only consider Japanese-made, Matsuura or Kitamura) after Japan had begun cutting into U.S. manufacturing dominance as far back as the 1970s. For my company and me personally, with respect to the then relative low quality of U.S. made choices in manufacturing equipment, it was truly “automate or die” in this new global marketplace. We chose not to die.

Japan became a model for U.S. manufacturers, which would later incorporate new philosophies like J.I.T. (Just In Time manufacturing), Continuous Improvement, and even bring Japanese Kaizen philosophies directly in-house to U.S. manufacturing floors. I lived these initiatives through our customers’ directives.

Then came Mexico. U.S. companies fell all over themselves to set up operations just over the boarder to grab that cheap labor and drive price-competitiveness. Now why on earth go to such extremes (disenfranchising American workers from their well paid jobs) to be price-competitive? Because that directly informs corporate bottom lines, of course.

Efficiency and productivity are good things. But how far is too far? Who, may I ask, is the driver of the bottom line above all else? Our friends on Wall Street, that’s who. This pertinent segment from Mr. Bin tells what happened, and it aligns with my personal history. Also, he mentions Kirk, as that was a focus of his article. I shall not mention that name again and add to the hype out there. As ideology goes, there are thousands of Kirks and Kirk wannabes out there.

As financialization took root in the 80s, US capitalists prioritized the more profitable finance, high tech, and service sectors over manufacturing.

US deindustrialization had already happened well before China’s entry into WTO in 2001 when trade with the US started to grow more rapidly.

The root cause of the deindustrialization is the drive for profit maximization by the capitalist owners. With or without China, US businesses would have pursued the same strategy.

The 1987 Oliver Stone movie “Wall Street” captured the spirit of the “free enterprise system” and the ethos of the time when Gordon Gekko told his protégé that “I create nothing, I own”. WALL STREET Clip – “Democracy?” (1987) Michael Douglas

Clearly Kirk understood very little about the economic system he lived in. And he knew nothing about the history of China’s economic relationship with the US.

“I create nothing, I own” indeed. That is the financialized economy I and many others have been writing and talking about since Greenspan began the process of inflating us to full-on financialization in 2001. Of course, by then we had already exported our industrial base, instead transitioning to rolling bubbles, from stocks to real estate to mortgages to policy itself.

My view is that beginning with Bernanke, the “hero”, anything became possible in a Wonderland of financialized possibilities. Hence, the naming of my service. It’s why I call policy itself the bubble, rather than stocks or one hyped, overdone sector (e.g. AI or long ago, dot.coms) or segment of the economy (e.g. Real Estate) or another.

On a related matter, I believe we are in the midst of the most dangerous bubble of all; a bubble in ignorance thanks in large part to Social Media and the algos driving it.

In the monetary world, operations like J.I.T., Continuous Improvement and Kaizen have been replaced, effectively if not completely, in importance by the likes of QE, YCC (yield curve control) and MMT (Modern Monetary Theory, AKA… TMM, Total Market Manipulation). All of it in service to keeping America’s massive financial and general services economy afloat.

Ladies and Gentlemen, meet your policy bubble, now in the process of popping due to the implications of the new macro (oh well, why not include my best representative chart for the 1001th time?) and my handy Continuum chart, which helps me keep a nice visual perspective on the process.

Meanwhile, a highly influential guy with ill-conceived talking points about China and U.S. manufacturing has been murdered, and it’s big news. A president with a similar view is always big news. The algo-biased media continue to feed the flames of ignorance and we as a nation become ever more a reflection of the media, large and small, driving debates, all too often with false narratives.

Wall Street related bankers, brokers, analysts, sales/pitch men got stupid rich (“I create nothing, I own”) while Joe Sixpack followed an algo that got him looking in other directions for other scapegoats. I’ve been writing about this in one way or another for 21 years. But Mr. Bin’s article gave me more perspective on it, and prompted the former manufacturer in me to speak some truth (to ignorance).

As a side note, I once got pissed when I lost an important contract to “China”, which undercut the price we were able to produce the product in question for (which we had been doing reliably and at a fair price for years). The customer – a medical oxygen equipment company – came back to us after “China” provided them with inferior product. I said “sure, here’s the new price” and I never heard from them again. They must have found a cheaper bottom line elsewhere.

Ah, financialization… proudly produced right here in the good ole’ US of A for the last quarter century.

* A note that I did not read all of Bin’s article because it seemed to focus too much on critiquing Kirk and by extension, Trump. It was the simple concept of U.S. blame heaped on China rather than the U.S. financial complex that got my attention because I lived it. Let us not scapegoat. Let’s place blame where it belongs. China is simply being China. In my opinion, there is plenty of malfeasance on those shores. But here on our own shore is the root cause of America’s industrial decline.

** I happen to run into the ignorance on the extreme right more often than the extreme left, I believe, because the realm I operate within, the financial markets, is proportionally more populated by Republicans and conservative people. However, dear liberals, my most obnoxious interaction came just this year at a sub-Reddit that fancied itself to be an honest information source on inflation. When I posted that inflation has been created by means on both sides of the political aisle I was down-voted like crazy, called a MAGA and banned from the forum. It turns out it was a forum about Trump hatred disguised as inflation talk. Amazing, and disgusting.