Thank you Ronnie

Getty / Futurism

A good friend of mine, wise in the arcane world of high finance, educated me on the irreparable harm Reagan had on America by offshoring manufacturing to gin profits for stockholders. End result, we made modern China while coring, from the inside out, the manufacturing prowess of a once great nation known as America.

Western automotive and green energy executives who visit China are returning humbled — and even terrified.

As The Telegraph reports, the executives are warning that the country’s heavily automated manufacturing industry could quickly leave Western nations behind, especially when it comes to electric vehicles.

“We are in a global competition with China, and it’s not just EVs,” Ford CEO Jim Farley told The Verge last month. “And if we lose this, we do not have a future at Ford.”

Some companies are giving up on new initiatives altogether, with the founder of mining company Fortescue, Andrew Forrest, claiming that his recent trip to China led to him abandoning attempts to produce EV powertrains in-house.

“There are no people — everything is robotic,” he told The Telegraph.

When you don't make anything anymore, you lack the innate understanding of how manufacturing and systems work, something China knows in spades while the US no longer does.

Official portrait 1981

In 1986, the year President Ronald Reagan signed reform legislation, most businesses were set up as traditional corporations and U.S. companies earned most of their income from sales inside the United States. That meant lawmakers didn’t have to worry too much about the difference between corporate and individual rates or the way foreign earnings were taxed.

That’s no longer true.

Now , the majority of businesses are structured as “pass-through” entities in which owners pay the regular income tax — often lower than the corporate tax — on their earnings. The U.S. has around 1 million fewer traditional “C corp” businesses than it had in 1986.

And unlike then, companies in the Standard & Poor’s 500-stock index now generate about half of their earnings from sales outside the United States. But the U.S. is an outlier among most developed countries as it still collects domestic taxes on income earned abroad, leading companies to park around $2.6 trillion abroad rather than face double taxation.

The rate of domestic investment in the U.S. is also about half what it was in 1986.

Those far-reaching economic changes have led to a bipartisan consensus that the U.S. corporate tax code is a broken mess, encouraging companies to game the system by nominally moving operations overseas and stashing cash offshore. But there is still widespread disagreement over exactly how the code should be changed, and given today’s hyper partisan political environment, there is no guarantee changes will be made.

In essence, this is how we got Trump.