Friday, August 26, 2011

Collapse

I suspect that when the details of the American collapse are analyzed, a lot of the credit will go to Reagan, Bush, Clinton, and Bush.  Together they collaborated in the outsourcing of American manufacturing expertise.  Arun links to a Forbes article on why Amazon can't make the Kindle in America.  I will repeat his quote for those too lazy to click through:

So the decline of manufacturing in a region sets off a chain reaction. Once manufacturing is outsourced, process-engineering expertise can’t be maintained, since it depends on daily interactions with manufacturing. Without process-engineering capabilities, companies find it increasingly difficult to conduct advanced research on next-generation process technologies. Without the ability to develop such new processes, they find they can no longer develop new products. In the long term, then, an economy that lacks an infrastructure for advanced process engineering and manufacturing will lose its ability to innovate.”
Interestingly enough, the reasons this occurs formed some of the subject matter of the research that won Krugman the Nobel.