Fraid not. Your best window for a pickup in the general economy is 4-5 years from now. Look at how things went under Jimmy Carter. This is very similar.

With technology and immigration driving down labor costs in many segments of the economy, we're lucky things are as good as they are.

I'd like some more commentary on it, cause I hear things like how unemployment rate keeps dropping, gas is cheaper - but everything still sucks.

I'd like some more commentary on it, cause I hear things like how unemployment rate keeps dropping, gas is cheaper - but everything still sucks.

1) There are winners and losers.

2) Things are relative. The world's standard of living has increased greatly over the last 50 years. But we end up comparing ourselves to those around us, or to those we see in popular media. I think my life sucks because my neighbor has a yacht and I don't.

3) Wealth is measured by stuff/person. Though our production of things has increased, we have more people around that all this stuff gets divided by. When our roads, public spaces, work places, and land in general carries more and more people; our overall wealth may go up but our personal wealth goes down.

Doombuggy,

Technology and immigration are complete non-issues. The major drags on the economy are sarbox and ocare. Repeal sarbox and repass glass-stegall. Repeal/severely trim ocare. Get the executive to actually follow the law instead of rewriting it at a moments notice. And you will see 3-4 years of >5% annual GDP growth in this country.

Gooseegg,

Gas is getting cheaper due to fracking. This has significantly increased domestic production. It has also been fought and stalled by the democrats at every turn. Over the last 20 years the majority of oil production has been on federal 'lands'. Offshore drilling being a significant portion of those 'lands'. Fracking is almost entirely a private business. It has not been possible to get a permit from the federal government for ~5 years.

As for unemployment, it is down mainly due to people falling out of the workforce. Essentially the government isn't counting those people as unemployed but instead as retired. They still don't have jobs and aren't making any money so the difference is mainly on paper. If you look at labor participation by education you see a huge bimodal distribution i.e. two americas. There are those with a degree in a difficult/productive field vs. those with high school and non-directly productive degrees. The first group are doing great. Wages are up. Participation is significantly up. Unemployment is around 3%. The second group is still in the shitter. Wages haven't moved in 5 years. And labor participation is the lowest it has been in 30 years. On the bright side labor participation seems to have bottomed out and is rising slowly.

You assume a fix sized economy Doombuggy. And for the last 5 years that has been true. But typically it is not.

Look at research and capital investment. Since the passage of ocare this dropped significantly and never recovered. Look at small business starts. It too has dropped and never recovered. This has left the total economy essentially stagnant. At that point the rich get richer and the poor get poorer at least in relative terms.

Dodd-frank and sarbox imposed high fixed costs on every publicly listed business. If you are a large business you could spread that cost out over more people. But if you are a small business the reporting and accounting costs made public listing unprofitable. I.e. if you are a 10,000 employee company and need to hire 5 people to handle the new paperwork you added a 0.05% cost. But if you are a 10 man business and you only had to add 1 person to handle the paperwork you added a 10% labor cost. I know these numbers are simplified but they give you the basic idea. Large businesses absorbed the hit and didn't notice. Small businesses looked at the cost of listing on a public stock market and walked away. You couldn't raise enough money to cover the paperwork costs.

Ocare had a different effect. It did increase the cost of labor leading to increased mechanization and the elimination of low skilled jobs. But even more significantly it severely increased regulatory and liability uncertainty. The executive order blowout has had a similar effect. People can't predict what is legal and what is not. So US businesses have largely stopped investing. It is not worth the risk.

Without new business you will not increase the size of the economy. And without investment and risk you will not find new business.

Don't worry - the wealthy will adapt to the fall of America - they'll simply live in greater splendor amidst the smoking trash heaps of the poor.

If they experience a moment of angst they can bury it by enjoying a fabulously expensive Strawberries Arnaud.

Humanity is reverting to the mean. Don't have kids.

Let me clarify the sucks - I mean that for me personally my wages have decreased instead of increased since 2009. I am currently employed at a job that is production-based but I will never, ever get a raise. They have told us such. I can only work harder, and at times I have no work. The benefits are numerous and so I choose to stay - I work from home, my hours are good, the pay is sufficient. But it will never be what it was 7 years ago with growth potential. So my job is at a stalemate, and it seems the economy is the same.

Look at how things went under Jimmy Carter. This is very similar

Really? Very similar? I have difficult time believing that, but I'm not the sharpest fork in the knife drawer or whatever.

Corporations are making record profits and employee wages aren't keeping up, if I can believe the report I read:

One way to look at the current situation is to compare 2013 with 2006, the last full year before the recession began. Adjusted for inflation, corporate profits were 28 percent higher, before taxes, last year. But taxes were down by 21 percent,so after-tax profits were up by 36 percent. At the same time, total employee compensation was up by 5 percent, or less than the 7 percent increase in the working-age population over the same period.

I thought Carter signed significant deregulation legislation and broke up Ma Bell as well.

Greed and myopia have been part of the human experience for centuries, so I guess we're not much different than the 1970s in that sense.

@gooseegg There are many economic indicators out there, each has it's own flaws but the Unemployment Rate (UR) is probably the worst one. It is based on the idea that if you haven't actively ( weird gov't definition of actively) been job hunting you aren't counted. So those who want to work, but gave up, or went back to school, or stayed in school, or hit the beach aren't considered unemployed.
A better one to look at is the workforce participation rate (PR). Which basically says, if you are a working age adult you are counted if you worked and were paid for a single hour this week.
Proponents of UR argue PR includes people who are retired, or are non-workers like Stay at home parents. Proponents of PR argue, those who retired at 20 aren't a significant number and UR ignores a lot of people who are unemployed but want to be.
Both have certain problems, such as, underemployed people, you work part time because you can't find full time.
There is also the jobs added, which sounds great till you realize, for a growing population, it needs to be several hundred thousand just to keep even with the population growth, plus toss on seasonal adjustment for seasonal jobs (construction is a big one)and can see how those numbers don't tell the whole story.
The general population, ignores these numbers, they go by the personal thing of how many of my family and friends are unemployed, barely making it.
So when the media hypes the great unemployment numbers they get a twinge of hope, (maybe it's just my town) but then look around at the reality and talk to friends in other parts of the country and know it's a lie. After they get lied to enough they stop getting that twinge of hope.

As to gas prices, some is, new sources of oil/energy some is with fewer people commuting to work, or going out, there is much less demand.

Much of this hits the core of the broken Keynesian economic model.

Jason S,

Profits are up but revenue is flat. As I said the level of corporate investment in R&D as well as capital expenditures have dropped like a rock. That money then gets added to profit making it look like the company is doing well. But it is a false hope. Without R&D or other forms of expansion the company stagnates. When large numbers of people do this the economy stagnates.

And this is also what happened under Jimmy Carter. As you said Jimmy was breaking up large politically unfavored businesses. That caused significant regulator uncertainty. We even have the high inflation causing stagflation with a new brand name of QE.

Technology and immigration are complete non-issues. (Ben)

Lower in the same post, you discuss the bimodal economy, where those of lesser ability are being turned away from any sort of career ladder by technology and immigration.

You assume a fix sized economy

Our population growth is fully capable of out pacing economic growth.

"Our population growth is fully capable of out pacing economic growth."

It outpaces our current growth. I just don't see any reason we can't go back to our historic growth levels. And immigration is not really depressing wages. Mechanization and robots are the biggest issue for non-specialized labor. Since the government is increasing the cost of labor and especially since those costs are not clearly spelled out replacing people with robots looks like a really good idea from a management standpoint.

Look at how quickly things turned around after Jimmy Carter. Honestly presidents don't have that significant of an effect on the economy. But the Carter to Reagan transition is a good way to mark time.

After Reagan was elected congress passed a fair amount of domestic legislation. The key things were it went into effect immediately. And then they left things alone for several years. Compare that with ocare. Ocare was passed several years ago and it still isn't fully implemented. And that is just what is written in the law. How the government will implement the unwritten parts is still being worked out. And you have significant lawsuits to top it all off.

How do you plan in a regulatory environment like that?

And immigration is not really depressing wages. Mechanization and robots are the biggest issue for non-specialized labor. ~ Posted by: Ben at November 10, 2014 12:58 PM

Don't forget container cargo making the off-shoring of manufacturing processes financially viable.

Before the invention of container cargo, shipping costs were up to 75% of the cost of goods sold for goods manufactured overseas. That meant, no matter how cheap the labor to make something overseas, the cost of getting a large product to market was almost prohibitive. A kitchen appliance or television set made in the US was cheaper at retail than one made in Asia, despite the wage differential.

With the advent of container cargo, the cost of shipping products manufactured overseas is less than 10% of the cost of goods sold. Shrinkage due to "lost" items is down because the items are shipped in a box locked at one end of the journey and unlocked at the other end.

A traditional cargo ship used to take 3-6 days to unload cargo and load new cargo. Most of the loading and unloading processes were done manually. A container ship port can unload cargo and load new cargo from a container ship in 6 hours; and the containers can be packed for optimal unloading at the next port of call.

Ben,

I think you're right about companies holding on to cash and eschewing investments in new capital and projects. That is definitely boosting their books.

How much does an average big US company invest in R&D, though? Not sure if that has such a dramatic effect on the economy or even innovation overall. Nokia spent big on research, and they now face bankruptcy, I think. On the other hand, Pharmaceuticals spend big on research and still reap big profits.

Another reason why revenues are flat is because US workers don't have more to spend, or have decided to pay off debt

>" But the Carter to Reagan transition is a good way to mark time."

Well, there was that recession in the early '80s and the savings and loan corruption. My parents had to mortgage their home to keep the business going. I don't know if that was crap from the Carter administration surfacing or if it had to do w/ Reagan. And inflation was way higher in the '70s and '80s than it is now -- 8 to 10% compared to 2% now, or something. I would think that inflation would be higher now, though.

Jason S.,

Inflation is not measured the same way now as it was in the 70s and 80s. I am too lazy to go back and find the research, but within the last year I read that if we simply measured inflation now the same way we did in 1980, we'd be looking at rates of inflation somewhere around 7%-8%.

Everyone has to spend money on food and energy bills, but those things are not counted. Also, there is the substitution effect, which means that if the price of beef goes up, you will substitute with chicken or some other lower-priced meat. Maybe it ends when you reach dog food, I don't know.

But the inflation rate is another one of those bullshit government statistics like unemployment, as Joe J mentions.

What's curious is that the Fed is mandated to stop its counterfeiting operation (more commonly known as quantitative easing) when unemployment levels and inflation levels are deemed acceptable.

Yet when the statistics are lies, and the government still needs someone to buy its debt, how can it ever stop? Grab a bowl of popcorn.

Thanks, Pirate Jo.

Interesting. I wouldn't be surprised if the whole thing is smoke and mirrors.

The history of the container cargo box:

http://www.amazon.com/Box-Shipping-Container-Smaller-Economy/dp/0691136408/ref=sr_1_1?ie=UTF8&qid=1415665104&sr=8-1&keywords=the+box

Jason S.,

Even large companies need innovation or they vanish. At one time Sears was a big deal. A few years back people would joke when the zombie apocalypse starts just duck into a Sears. You'll be safe in all the empty aisles. They are doing a bit better today.

For quite a while large US companies have farmed out their innovation. If you had a good idea and wanted to try something new and the management were interested they would spin you off into a small company where the large company held a significant ownership. Typically in the 40% range. This helps to limit liability as well as bureaucratic drag. If things work out the big company buys the remaining 10% and takes over. If it fails liability is limited to the initial investment. Large companies would also buy small competitors all the time, bringing their innovation into the fold.

This has largely stopped. As I said above the number of new small companies has dropped. And most are not being publicly listed, making tracking and acquisitions more difficult. Those small companies are where most of our economic growth come from. Without them you can see what has happened.

And immigration is not really depressing wages.

???!

Is it in any way, shape, or form increasing wages?

In general, when you increase the supply of something, it becomes less scarce, and its price goes down relative to other factors.

Since the government is increasing the cost of labor and especially since those costs are not clearly spelled out replacing people with robots looks like a really good idea from a management standpoint.

In other words, we are getting screwed in both ends: gov't limits available jobs in one area; then they flood the remaining job openings with the excess populations from across the border.

Abandon all hope ye who enter here.

Conan,

While I agree that current shipping and logistics are important and innovative I don't think they have the effect you are claiming. The US is one of the least regimented societies in the world and has been for quite some time. The strong individual and libertarian tendencies have made the US labor force ridiculously flexible.

80% of millionaires in the US are first generation self made millionaires. Most of the millionaires in the US are not politically connected. This is just not true in most nations. Who are the millionaires of Russia? Ex-KGB just like their current dictator. Any nation in south or central america, you better be politically connected. The Indian subcontinent, same story.

Europe has so many rules and laws that doing something new is quite difficult. We complain about hairdresser certification here while they have bar owner certification. And the certification is just as useless.

What is happening in the US is we are moving towards a European style of government. It should be no surprise that we now have European levels of growth.

Doombuggy,

While I agree with you in general, the effects of government regulation are much higher than the effects of immigration. At least in my opinion.

Here in Texas right on the border grocery workers are being replaced with robots, not illegals. And I've seen the illegals getting replaced with robots all through manufacturing and retail.

South park even had a show about how Obama has solved the illegal immigration problem by making the US so crappy no one wants to come.

"The history of the container cargo box:"

Looks like a fascinating book.

There was a great article a couple weeks ago about the Dutch shipping company Maersk and their colossal vessels and how the economy is affecting the shipping industry

http://nyti.ms/1CIAuSc

While I agree that current shipping and logistics are important and innovative I don't think they have the effect you are claiming. The US is one of the least regimented societies in the world and has been for quite some time. The strong individual and libertarian tendencies have made the US labor force ridiculously flexible. ~ Posted by: Ben at November 10, 2014 5:20 PM

Container freight made offshoring the manufacturing process feasible due to low shipping costs. Before that, shipping costs were high in both time and money and negated the labor cost savings.

I don't know if you're old enough to remember when the waterfronts of major cities were full of piers, bars, and longshoremen rather than condos, coffee bars, and hipsters. Container freight left cities with once-bustling ports scrambling to repurpose their waterfronts. Cities like San Francisco and New York lost their roles as major ports of entry to Oakland and Port Newark. England's busiest port today is no longer London, but Felixstowe.

This article was written in 2006, but it does a pretty good job of summarizing the global impact of containerized shipping on logistics and the manufacturing process.

http://news.bbc.co.uk/2/hi/business/4943382.stm

Excerpt:

"It [now] costs less to ship a container between China and Felixstowe than it does to then send it on the road to Scotland." ~ Philip Damas (Drewry Shipping Consultants)

==============================

The flexible labor force paradigm you describe, Ben, works for skilled labor, but minimum wage laws and labor regulations have made the US labor force prohibitively expensive for unskilled labor needs where the work can be done anywhere.

Unfortunately, too many in the US labor (organized and unorganized) have not adjusted to this change and are demanding a higher minimum wage and greater regulatory oversight instead of working on going a skill set beyond fogging a mirror.

a skill set beyond fogging a mirror.

Can we really expect everyone to attain skilled labor status?

If US unskilled labor can't compete against foreigners; and foreigners can't compete against automation; then we are faced with eventually subsidizing a significant portion of our population.

And how much reproduction do we need from that set?

I agree with you completely, doombuggy. But people with what you might call the "lowest level of utility" tend to be those least likely to question whether reproduction is a good idea before doing it. Once the words "I want" cross their brains, all other logic and reason comes to a complete halt.

It seems like it should be simple and straightforward. If everyone would think, 'Hey, I am really having trouble keeping food in the fridge and paying the electric bills, so I really don't have any surplus left over for the raising of additional humans; therefore, I will not have children until my economic situation improves, if ever,' well, after one generation there would be no more poverty and everyone would have a job. But even that basic level of reasoning eludes most people. The poorest tend to have more children, not fewer.

I'm not sure people even grasp the concept that their children are their own responsibility. Even among the non-welfare people I know, I tend to hear useless platitudes like, 'You just make do,' or 'Things will work themselves out,' or 'Somehow we will manage.' But you CAN lose your job. You CAN run out of money. You CAN lose your home. And if you are smarter than that and take the affordability factor into consideration before having children, you have to listen to these same dim bulbs say to you, in an accusatory tone no less, that 'If you wait until you can afford children to have them, you'll never have them!'

Because in a way they are right and eventually, if you pop out kids and then go broke, the public will support you. Until it can't, anyway. But there is this big, messy, stupid cultural split we have about having children and it being our own obligation to support them. Imagine a big Venn diagram that only intersects in the middle a little bit. That is going to have to change before we ever see full employment and an improving standard of living.

I give it 100 years at least, maybe 200.

Conan,

Container shipping suddenly happened in 2009? Because that is the time frame we are talking about. Look at US real GDP growth on a log scale and you will a nearly straight line. There are two major blips that stand out. The 1930, i.e. the great depression, and 2009 the great recession. Neither of these dates correspond with logistics innovation or off-shoring. They do correspond with US politics.

Also, not only the low skilled are affected by off-shoring and shipping. The electronics industry is heavily influenced. There are smart, educated, and more importantly desperate people in Russia, India, China, and more recently all over south asia. With computers and telecommuting engineers compete on a world wide scale just as much as the guy who screws the heads onto dolls.

And your port story doesn't help your argument. You say we are shipping more good over the oceans. And I agree with you on that. Then you say there are fewer good passing through your local ports. How does this support your argument? What happened is the newer ships have lower drafts and can dock in shallower ports. New York and LA were significant because of their deep water ports. Now they have more competition and people are less willing to pay their high docking fees.

One last comment, New York and LA are not the entire US. In fact they are increasingly irrelevant to the US economy.

Jo,

There is another side to what you describe. The people with fur coats, diamond rings, brand new foreign car, who also say 'I'll have a kid just as soon as I can afford one.'

While people are not rational they do respond to incentives. When we lowered the incentives for people on welfare to have multiple children the number of new children with parents on welfare dropped. Tax a behavior and you get less of it. Subsidize one and you get more of it.

If US unskilled labor can't compete against foreigners; and foreigners can't compete against automation; then we are faced with eventually subsidizing a significant portion of our population. ~ Posted by: doombuggy at November 11, 2014 1:00 AM

Or, we stop pretending that someone with no skills and no record of job performance should be paid on a par with someone who spent time in school (trade or college) and acquired some knowledge and skills; or even someone who didn't go to school, but went to work and acquired a long record of showing up, not stealing office supplies, and doing the job to the satisfaction of an employer.

Minimum wage laws operate on the pretext that No Experience Johnson is equal to Assembly Line Worker Smith or even Long-Time Employee Morgan. Because of that pretext, Johnson, Smith, and Morgan are all losing their jobs to Chao, Guttierez, and Robot X.

It's time to change the pretext.

Container shipping suddenly happened in 2009? Because that is the time frame we are talking about. Look at US real GDP growth on a log scale and you will a nearly straight line. There are two major blips that stand out. The 1930, i.e. the great depression, and 2009 the great recession. Neither of these dates correspond with logistics innovation or off-shoring. They do correspond with US politics. ~ Posted by: Ben at November 11, 2014 8:30 AM

Container shipping was invented in 1956. It came into its own during the Vietnam War when traditional port operations couldn't handle the volume of war materials needed by US troops. The US Army opened a container port Cam Ranh Bay to supply US troops.

From Forbes:

In early 1965, the U.S. government began a rapid buildup of military forces in Vietnam. In the process, it created what may have been the greatest logistical mess in the history of the U.S. armed forces. Few places on earth were less suited to supporting a modern military force than South Vietnam, which had primitive roads, a single rail line that was largely inoperative, and only one deep- water port.

Malcom McLean'’s persistence in pushing containerization was vital to the U.S. war effort in Vietnam. The U.S. military had never used container shipping, and many officers wanted no part of it. Against much resistance, McLean won contracts to build a containerport at Cam Ranh Bay and to run containerships filled with military goods from California to Vietnam. His ships delivered 1,200 containers a month to Vietnam. Containerization enabled the U.S. to sustain a well-fed and well-equipped force through years of combat in places that otherwise would have been beyond the reach of U.S. military might. Without it, the U.S. military would have experienced extreme difficulty feeding, housing and supplying the 540,000 soldiers, sailors, marines and air force personnel who were in Vietnam by the start of 1969.

That's not to say the in 1965, US industry and consumers immediately embraced offshoring. It would take some time for industry to realize the logistics savings the would make offshoring feasible. And some more time to make the contacts and build the factories. And some time for offshore factories to reach an acceptable level of quality. And even more time for US consumers to embrace goods made offshore (Remember Kmart's Goldstar appliances? They had a reputation as junk. They were made by LG. Look at LG today and its reputation for quality today.)

The digital revolution has played a major part in changing the way people work, eliminating many of the white collar clerical jobs that were ubiquitous in offices everywhere and detatching many jobs from their proximity requirements.

However, the point about container freight remains. The reason offshoring of manufacturing is financially feasible today is not because the foreign labor is cheaper or the boss can keep tabs on the operation via computer. It's because the shipping costs are neglible where they weren't before the advent of the box.

Read The Box. It's much more fascinating than the subject matter would indicate.

==============================

You say we are shipping more good over the oceans. And I agree with you on that. Then you say there are fewer good passing through your local ports. ~ Posted by: Ben at November 11, 2014 8:30 AM

No, Ben, there are fewer goods passing through the old-school ports (San Francisco, Boston, London, New York, etc.) and more goods than ever passing through new-school container ports (Oakland, Long Beach, Felixstowe, Houston, Port Newark, etc.).

What happened is the newer ships have lower drafts and can dock in shallower ports. New York and LA were significant because of their deep water ports. Now they have more competition and people are less willing to pay their high docking fees. ~ Posted by: Ben at November 11, 2014 8:30 AM

New York and LA did not decline as ports because of deep water issues or high docking fees. They declined because they cannot handle the large volumes of traffic and cargo that newer container ports can. Container ports are land-intensive, requiring rail and truck connections, storage, and space for the large cranes. New York and LA didn't have the land to install container freight depots, so they lost out to areas than did (like Port Newark and Long Beach).

Nice article, Jason S.

I like the part where the Chinese government acknowledges that competition is better for the consumer (at least when they are the consumer:

"China is also exerting its influence on the industry. The country’s regulators recently blocked an attempt by Maersk and two European rivals to form a partnership, saying it would hinder competition."

Nice article, Jason S.

I like the part where the Chinese government acknowledges that competition is better for the consumer (at least when they are the consumer:

"China is also exerting its influence on the industry. The country’s regulators recently blocked an attempt by Maersk and two European rivals to form a partnership, saying it would hinder competition."

"New York and LA are not the entire US. In fact they are increasingly irrelevant to the US economy."

The Port of Los Angeles is the busiest port in the US. Combined w/ the port in Long Beach, it's the 9th busiest in the world.

New York is the third busiest in the US and the biggest on the east coast. Both LA and NY have recently dredged deeper to accommodate the massive new Maersk ships that will travel through the bigger Panama Canal once it's complete.

And NY has bought more land to expand their container port facilities.

LA and NY are still important.

Thanks, Conan.

Yeah, I was amazed by how many containers and vikume the ships can carry.

I was also amazed that Maersk makes up 19% of the Netherlands's GDP. And who knew the Swiss have a shipping line that is one of the Netherlands's biggest competitors?

It would be interesting to watch how they unload containers in Oakland.

New York is the third busiest in the US and the biggest on the east coast.

That third busiest port in the US is actually the Port of New York and New Jersey (mostly New Jersey). There is a smaller container freight facility on Long Island, but the majority of freight passing through New York Harbor is handled in New Jersey.

The Port of Los Angeles is the busiest port in the US. Combined w/ the port in Long Beach, it's the 9th busiest in the world.

The Port of Los Angeles handles container freight through a facility on San Pedro Bay, 20 miles south of downtown LA and adjacent to the Port of Long Beach container freight facilities. LA is busier, but Long Beach actually handles more tonnage.

Up until the mid-20th century, the Port [of Los Angeles] received cargo in crates, pallets, and small lots of varying sizes and shapes. Because of the lack of uniformity and security, unloading cargo was painstakingly slow and the frequency of damage, pilferage and loss of cargo was high. Providing a better solution, the containerized cargo revolution came to the Port in the late 1950s.

Conan,

All you've presented shows container shipping is not a significant drag on the US economy or US employment. The timeline of the drop was the last 5 years. As you said container shipping has a long history. You show it goes back before 1965.

And I would believe you about the major issue for old ports being cheap land for facilities instead of fees and depth. Clearly you've studied this much more than I have. But one again this doesn't support your argument.

Your comment on minimum wage is spot on.

Jason,

NY and LA are old wealthy cities. But their rate of economic growth is pretty low. And that is unlikely to change any decade soon. Yes if they were nuked tomorrow it would be a tremendous loss of wealth. But due to their low growth rate their size relative to the rest of the nation is dropping. If they were nuked 10 years ago it would have been more economically significant to the US than if they were hit today. I expect in 2025 they will have fallen even farther compared to the rest of the US. This is a fairly old and stable trend line.

Ben,

There's a slight disconnect here (possibly my fault).

I'm not arguing that container shipping is or has been a drag on the US economy. I'm arguing that it made offshoring of manufacturing practical.

And that practicality will have an effect on efforts to revive the economy as it will make bringing large numbers of low-skill and no-skill manufacturing jobs back to the US in an age of escalating US minimum wage laws economically impractical to the manufacturers.

I have no hope. We've passed the point where the majority is willing to vote for government control over everyone's lives, as long as certain libertine freedoms are maintained. People today expect coddling and freebies, and if that means depriving others of rights and hard-earned property, they're OK with that.

(Don't worry about the libertine freedoms. As soon as government consolidates its control over the population, those will be gone.)

And lately I've been asking myself this question. Let's say that some other country out there got a wild hair and decided to liberalize; write itself a new constitution guaranteeing individual and transactional freedoms, and started inviting industrious Westerners to move there -- but you can't bring anything with you from the old country, except your immediate family and money (whatever it is still worth after currency exchange). Would you and your family (assuming they agreed to it) be willing to walk away from everything in your life, taking with you only memories and a handful of personal possessions, to move to a new land of boundless opportunity? It's a hard question. If I were 20 years younger, I'd probably jump on it. At my age, though, I'm not sure I would. Then again, I'm not sure I wouldn't.

That third busiest port in the US is actually the Port of New York and New Jersey (mostly New Jersey)

True.

Your boyfriend forgot the Outlaw Josey Wales quote, "Buzzards gotta eat, same as worms."

it will make bringing large numbers of low-skill and no-skill manufacturing jobs back to the US in an age of escalating US minimum wage laws economically impractical to the manufacturers.

Conan, true, but labor costs in China are increasing, too, as workers are asking for more compensation. China is the world's manufacturing giant -- and will probably remain the leader for years to come -- but the wage gap between China and the US is closing.

US manufacturing is seeing a slight uptick in the past two years as organized labor's membership and strength is softening. Labor has even created lower tier lower wage positions.

Caterpillar recently moved back to the US from China, I think. And a Chinese computer company has even moved to the US to build goods closer to the US market.

Here's a remarkable (at least to me) statement:

But the $2.1 trillion of U.S. manufacturing value added in 2013 was a new high—in real terms. Indeed, if U.S. manufacturing were its own country, it would be the world's 10th-largest economy, just after Russia and before India. Excluding cyclical recession years, U.S. manufacturing sets records almost every year with respect to value added, revenues, exports, imports, profits, and returns on capital. Yet the myth of manufacturing decline persists like a chronic medical condition.

As of 2013, nearly $1 trillion of foreign direct investment was parked in U.S. manufacturing, by far the number-one manufacturing investment destination world-wide. Clearly, the most successful foreign-headquartered companies see a future for U.S. manufacturing.

As Ben said, US labor is far more competitive than Europe (UK, Germany, France) and even Japan. We're comparable to South Korea.

Conan,

At this point we agree, although not entirely in scale. The minimum wage along with other government mandated costs associated with work are the real issue for minimally skilled workers. Off-shoring is one response. Increased mechanization, in my opinion, is a much more significant one.

Jason,

It is funny to listen to the Chinese bitching about off-shoring. ;->