(I’m RW )There’s no way wages can keep up with market inflation of housing. There’s no market solution to housing prices or rents. The recent measures taken (combined with a fear of the masses and people especially the young) have lowered the line /line go down but not enough. Now as the government got involved with housing and the markets via FANNIE/FREDDIE, Bailouts, TARP and QE et al THEN the government can get involved in getting the costs down. The virginity and virtue of Maiden Market has long been gone, there’s no Market Maidenhood to defend. So GOVERNMENT having “Known” maiden market can now make Her an Honest Woman that looks after the Kids … instead of her running around all over town and indeed the world. Oh Fair Lady, thou shall be a better mother, let them eat cake doth not suffice.
This has just been done with PHARMA and other areas of Healthcare, so it’s *consistent* with policy including the beneficial pro people policies of the administration.
Why does a typical UL or similarly certified actuated valve (say 2") cost on the order of $1000?
While I can believe that the cost of living plays a role, someone is taking a massive profit. If I am to guess, it would be UL---a product of the insurance industry, the latter of which current massive font of fraud.
A big part of the existing economy does need to die in some form or another, e.g. society would do well to have the whole (project) manager ecosystem decimated. Regulators have also gutted engineering as a serious discipline by refusing in-house engineering and demanding that everything go through a consulting engineer, again likely at the behest of the insurance crowd
Also, Festina Lente --- too much running around (at the insistence of project managers and the like) like decapitated chickens, not enough time doing industrial small scale experiments.
I'm digesting this, thanks for sharing. I live in South Carolina which is big on "advanced manufacturing" with Boeing, Mercedes, BMW, Bosch, GE, Volvo, Nucor. We have had some problems with poor quality labor, the state has paid out for ad hoc job training but that doesn't produce human capital like the German apprenticeships. There have also been billions in subsidies for risky EV projects at Volvo and Scout Motors that may or may not still run production in 5 years.
What scenarios do you envision for a southern US state with ~20 year mfg history, used to have cheap COL now Rapidly rising? Our public schools aren't Missisippi bad but it is lopsided. The competent kids mostly aspire to the professional managerial class
Natalie, thank you. You live there and I don't, so you know things about this that I can only read about. I did go and spend a some time on it before answering.
The thing that changed my view: SC passes the export test my piece was about. BMW Spartanburg was the largest US automotive exporter by value in 2025, close to 200,000 vehicles and $9 billion. So your state is not the "we built it and nobody came" story. It sold to the world for twenty years and still didn't get the layer underneath.
On training, I think you're right about the result and I'd push back on the cause. SC copied the German system on purpose (BMW Scholars, Apprenticeship Carolina since 2007) and didn't get German outcomes. What I believe is missing is the destination. In Germany an apprenticeship ends with a path to owning something. In an FDI state it ends at a plant headquartered in Munich.
On the subsidies: Scout took about $1.29 billion from the state and hasn't built a vehicle in three years. BMW exports $9 billion a year. BMW simply following the demand, and Scout is a bet that demand shows up. It takes time and there are still a lot of uncertainty.
Since you're there, here's what I'd most like to know: are the small shops around those plants growing, or selling?
You’re basically advising to ignore manufacturing labor except at the commanding heights, and even saying that low purchasing power in manufacturing now is a government problem.
Absurd. You can further automate manufacturing labor but there’s no reason to import Walmart merch in the current global situation, which as you said is why China is sending factories to Thailand and still facing challenges.
Someone has to make the low-cost stuff. If it means we don’t get eighty different silverware handles to choose from, fine, but somewhere along the line, people forgot something. They used to know how to buy inexpensive things from people who survived in the same cost of living environment they were in. Why is that being talked about like it’s impossible?
America still makes low-cost stuff at scale. Cement, drywall, cardboard boxes, glass bottles, beer cans, paint, tissue. Cheap things, made here, bought by Americans every day. Nobody notices them because nobody shops for them. What left the country was the light and small stuff, because that is what ships for nothing. The rule is not “cheap goes abroad.” The rule is “cheap and light goes abroad.” Where the freight math is bad, the domestic cheap-goods economy is alive and it is running right now.
So the question is not whether we can make inexpensive things. It is which inexpensive things survive a $35 hour. Answer: the ones where labor is a small part of the cost. You cannot get the cheap thing and the labor-heavy line at the same time in this country. One of the two has to go, and it is not going to be the cost of living.
On commanding heights, I think you have it backwards. Germany runs about 20% of its jobs in manufacturing, the US just under 10%, and Germany pays more per hour. The high-wage layer is not a small elite at the top. It is a bigger employer than what we have, not a smaller one.
Now the part where you are right. People did once buy inexpensive things from people who lived in the same economy. That worked at a different volume. A household bought one set of silverware and kept it thirty years. What broke is not the factory, it is how much we consume and how fast we replace it. You can rebuild the factory. Reversing the consumption habit is a much bigger ask, and no one is going to run for office on it.
And on the government point, I am not saying wages are Washington’s job. I am saying rent, healthcare and school are priced outside the factory gate. A shop owner can raise pay ten percent. He cannot lower rent. So when a machinist says the wage does not work, part of that is the wage and part of it is a bill nobody in manufacturing sets. Both are true, and only one of them is ours to fix.
I don’t think you get what I meant by “commanding heights”, it certainly wasn’t a minority of elite wage-earners. Germany’s champions are at the top of the field and working in making cutting edge things that make things, right? This is good, but it probably can’t be replicated at 20% of the labor force here. To maximize both national autonomy and job creation, you need the small, cheap stuff, made here.
It can be further automated, and then you can get a bigger piece of that market at $35 an hour, or maybe less because we aren’t talking about abolishing the working class here, we need to be utilizing it for something other than lattes and lawnmowers. $25 is a livable wage if you aren’t buying housing in California. And maybe those are the people who might want to cut down on buying the cheapest and lightest stuff from outside the country.
There’s a lot to it, I just don’t think that the strategy you’re going with here is actually making for a realistic manufacturing base and it’s globalized in a way that’s throwing huge numbers of people off the train. It would be better if they had cheap seats, especially since we have no way to get a nicer seat for them anyway.
We’ve had the industrial labor pool taken from us prematurely because we didn’t care about blue collar work, we let Japan and then China eat market share, leveraging poverty wages. The tariffs could help rebalance it if the culture were in touch with reality. The problem is expectations, and I don’t think ANY strategy will fix this without changing those.
How does he or any business fix the Culture of Real Estate, rents and the human nature to look after one’s own interests as far as real estate? The Culture War ye would have him wage (by wages?) is rather broad and deep in scope; change human nature as far as Greed and Fear. The Greed may be indeed Fear of letting down one’s own family, children, employees by not being profitable; that Fear extends from Father invests in rental properties to the 401K Fund manager who knows many retirees depend on their 401Ks now not later, and is also thinking of his own children. There’s also the Fear of WHO moves in to the lower cost rental or housing; that’s a crime and vice problem- and indeed became a cultural issue; and the State intervened long ago on the main cost drivers of land, ownership, property, Schooling at every level and Healthcare. The American state- the government-has done these harms that began decades or centuries ago as Goods and now has an obligation to protect those people harmed.
No business can compete with its own government and very few could compete with any foreign government; never mind BOTH. What you ask was beyond the powers of Elon Musk in California and he had to flee to Texas. Many great firms have fled Delaware incorporation to other states because of one erratic Judge.
Truly Bismarck you would have this man Wage Kulturkampf not just against the Papists but Human nature and the world all at once? Wage by wages?
BUT In Real Life Bismarck- THE STATE in One Man- instituted Social Security and Medical Care for the Workers. He didn’t crush unions either, just the Leftists taking advantage of the workers desperation. If the Iron Chancellor can do , so can we… but asking a shop owner to do the Chancellor’s work is unreasonable.
As it happens we for this brief moment have an Iron Chancellor… and he does believe in bettering the lot of the commons, so there is the Culture we got. As Bismarck said the statesman can only grab the hem of opportunity as she passes by… so gentlemen… do catch the ladies eye.
(I’m RW )There’s no way wages can keep up with market inflation of housing. There’s no market solution to housing prices or rents. The recent measures taken (combined with a fear of the masses and people especially the young) have lowered the line /line go down but not enough. Now as the government got involved with housing and the markets via FANNIE/FREDDIE, Bailouts, TARP and QE et al THEN the government can get involved in getting the costs down. The virginity and virtue of Maiden Market has long been gone, there’s no Market Maidenhood to defend. So GOVERNMENT having “Known” maiden market can now make Her an Honest Woman that looks after the Kids … instead of her running around all over town and indeed the world. Oh Fair Lady, thou shall be a better mother, let them eat cake doth not suffice.
This has just been done with PHARMA and other areas of Healthcare, so it’s *consistent* with policy including the beneficial pro people policies of the administration.
Why does a typical UL or similarly certified actuated valve (say 2") cost on the order of $1000?
While I can believe that the cost of living plays a role, someone is taking a massive profit. If I am to guess, it would be UL---a product of the insurance industry, the latter of which current massive font of fraud.
A big part of the existing economy does need to die in some form or another, e.g. society would do well to have the whole (project) manager ecosystem decimated. Regulators have also gutted engineering as a serious discipline by refusing in-house engineering and demanding that everything go through a consulting engineer, again likely at the behest of the insurance crowd
Also, Festina Lente --- too much running around (at the insistence of project managers and the like) like decapitated chickens, not enough time doing industrial small scale experiments.
I'm digesting this, thanks for sharing. I live in South Carolina which is big on "advanced manufacturing" with Boeing, Mercedes, BMW, Bosch, GE, Volvo, Nucor. We have had some problems with poor quality labor, the state has paid out for ad hoc job training but that doesn't produce human capital like the German apprenticeships. There have also been billions in subsidies for risky EV projects at Volvo and Scout Motors that may or may not still run production in 5 years.
What scenarios do you envision for a southern US state with ~20 year mfg history, used to have cheap COL now Rapidly rising? Our public schools aren't Missisippi bad but it is lopsided. The competent kids mostly aspire to the professional managerial class
Natalie, thank you. You live there and I don't, so you know things about this that I can only read about. I did go and spend a some time on it before answering.
The thing that changed my view: SC passes the export test my piece was about. BMW Spartanburg was the largest US automotive exporter by value in 2025, close to 200,000 vehicles and $9 billion. So your state is not the "we built it and nobody came" story. It sold to the world for twenty years and still didn't get the layer underneath.
On training, I think you're right about the result and I'd push back on the cause. SC copied the German system on purpose (BMW Scholars, Apprenticeship Carolina since 2007) and didn't get German outcomes. What I believe is missing is the destination. In Germany an apprenticeship ends with a path to owning something. In an FDI state it ends at a plant headquartered in Munich.
On the subsidies: Scout took about $1.29 billion from the state and hasn't built a vehicle in three years. BMW exports $9 billion a year. BMW simply following the demand, and Scout is a bet that demand shows up. It takes time and there are still a lot of uncertainty.
Since you're there, here's what I'd most like to know: are the small shops around those plants growing, or selling?
You’re basically advising to ignore manufacturing labor except at the commanding heights, and even saying that low purchasing power in manufacturing now is a government problem.
Absurd. You can further automate manufacturing labor but there’s no reason to import Walmart merch in the current global situation, which as you said is why China is sending factories to Thailand and still facing challenges.
Someone has to make the low-cost stuff. If it means we don’t get eighty different silverware handles to choose from, fine, but somewhere along the line, people forgot something. They used to know how to buy inexpensive things from people who survived in the same cost of living environment they were in. Why is that being talked about like it’s impossible?
America still makes low-cost stuff at scale. Cement, drywall, cardboard boxes, glass bottles, beer cans, paint, tissue. Cheap things, made here, bought by Americans every day. Nobody notices them because nobody shops for them. What left the country was the light and small stuff, because that is what ships for nothing. The rule is not “cheap goes abroad.” The rule is “cheap and light goes abroad.” Where the freight math is bad, the domestic cheap-goods economy is alive and it is running right now.
So the question is not whether we can make inexpensive things. It is which inexpensive things survive a $35 hour. Answer: the ones where labor is a small part of the cost. You cannot get the cheap thing and the labor-heavy line at the same time in this country. One of the two has to go, and it is not going to be the cost of living.
On commanding heights, I think you have it backwards. Germany runs about 20% of its jobs in manufacturing, the US just under 10%, and Germany pays more per hour. The high-wage layer is not a small elite at the top. It is a bigger employer than what we have, not a smaller one.
Now the part where you are right. People did once buy inexpensive things from people who lived in the same economy. That worked at a different volume. A household bought one set of silverware and kept it thirty years. What broke is not the factory, it is how much we consume and how fast we replace it. You can rebuild the factory. Reversing the consumption habit is a much bigger ask, and no one is going to run for office on it.
And on the government point, I am not saying wages are Washington’s job. I am saying rent, healthcare and school are priced outside the factory gate. A shop owner can raise pay ten percent. He cannot lower rent. So when a machinist says the wage does not work, part of that is the wage and part of it is a bill nobody in manufacturing sets. Both are true, and only one of them is ours to fix.
I don’t think you get what I meant by “commanding heights”, it certainly wasn’t a minority of elite wage-earners. Germany’s champions are at the top of the field and working in making cutting edge things that make things, right? This is good, but it probably can’t be replicated at 20% of the labor force here. To maximize both national autonomy and job creation, you need the small, cheap stuff, made here.
It can be further automated, and then you can get a bigger piece of that market at $35 an hour, or maybe less because we aren’t talking about abolishing the working class here, we need to be utilizing it for something other than lattes and lawnmowers. $25 is a livable wage if you aren’t buying housing in California. And maybe those are the people who might want to cut down on buying the cheapest and lightest stuff from outside the country.
There’s a lot to it, I just don’t think that the strategy you’re going with here is actually making for a realistic manufacturing base and it’s globalized in a way that’s throwing huge numbers of people off the train. It would be better if they had cheap seats, especially since we have no way to get a nicer seat for them anyway.
We’ve had the industrial labor pool taken from us prematurely because we didn’t care about blue collar work, we let Japan and then China eat market share, leveraging poverty wages. The tariffs could help rebalance it if the culture were in touch with reality. The problem is expectations, and I don’t think ANY strategy will fix this without changing those.
How does he or any business fix the Culture of Real Estate, rents and the human nature to look after one’s own interests as far as real estate? The Culture War ye would have him wage (by wages?) is rather broad and deep in scope; change human nature as far as Greed and Fear. The Greed may be indeed Fear of letting down one’s own family, children, employees by not being profitable; that Fear extends from Father invests in rental properties to the 401K Fund manager who knows many retirees depend on their 401Ks now not later, and is also thinking of his own children. There’s also the Fear of WHO moves in to the lower cost rental or housing; that’s a crime and vice problem- and indeed became a cultural issue; and the State intervened long ago on the main cost drivers of land, ownership, property, Schooling at every level and Healthcare. The American state- the government-has done these harms that began decades or centuries ago as Goods and now has an obligation to protect those people harmed.
No business can compete with its own government and very few could compete with any foreign government; never mind BOTH. What you ask was beyond the powers of Elon Musk in California and he had to flee to Texas. Many great firms have fled Delaware incorporation to other states because of one erratic Judge.
Truly Bismarck you would have this man Wage Kulturkampf not just against the Papists but Human nature and the world all at once? Wage by wages?
BUT In Real Life Bismarck- THE STATE in One Man- instituted Social Security and Medical Care for the Workers. He didn’t crush unions either, just the Leftists taking advantage of the workers desperation. If the Iron Chancellor can do , so can we… but asking a shop owner to do the Chancellor’s work is unreasonable.
As it happens we for this brief moment have an Iron Chancellor… and he does believe in bettering the lot of the commons, so there is the Culture we got. As Bismarck said the statesman can only grab the hem of opportunity as she passes by… so gentlemen… do catch the ladies eye.