It sounds like the Surface Pro 10 will be a good example. Early reviews of the Snapdragon X Elite sound promising. It wouldn't take much for others to start making competitive offerings as well.
Not all software is compatible with arm64. Specifically I would be worried about attempting to run Windows applications not compiled for arm64, for which there are many. The compatibility layer Windows ships comes at a significant performance impact.
A strong percentage of Intel's current sales are vendor lockin from the historical "Wintel" age (windows + intel). This is a moat Apple finally crossed after great effort, and Windows has made a few attempts to cross.
If chips were sold purely on hardware specs and not software lockin then Intel would have much fewer sales. The US giving grants, tax credits, and cheap loans to Intel only serves to extend the lifespan of a company whose compeitive edge is failing.
Given that their parts have been, up until the past 5 years, clearly better than AMDs (and any other chip manufacturer), and in the last 5 merely competitive, that’s quite the statement. Nevermind that with Gaudi, they also have the only viable AI accelerator besides Nvidia and AMD.
These grants are for a completely different side of the business. The fab side, and that side is strategically significant for the US government so it makes sense they put some money in. The rest of the world is doing the exact same as well.
They're getting $5.5bn in tax breaks, and loans for $11bn on generous terms too. Their total support package from the CHIPS money is $25bn. Intel are putting in $75bn, taking the total project to $100bn.
I just don't get it - the country has over $34 Trillion in debt already and we are handing out money to mega-rich corporations who don't need the money (among other things we waste money on).
This is not going to end well - our kids and grand kids will be paying for it.
They would be paying far more if chips suddenly stopped coming out of Taiwan in the future and the U.S. had no onshore capacity to make their own.
It’s more of an insurance policy than a subsidy. Intel needs a reason to build in the U.S., and grants tip the ROI scale on their side to make it happen.
IMO this is a big enough national security threat that what intel is doing is similar to if Lockheed said “we’re going to start selling to Russia instead of the US unless the US gives us nice grants”.
It shouldn’t even be an option for Intel to continue manufacturing in other countries. It should be “move manufacturing back to the US or the Fed will take ownership of the whole company and do it for you.”
(And maybe it’s sort of an unspoken assumption that if they don’t take this carrot, then the US really would use the stick to force their manufacturing back into the US).
An expropriation of this kind and magnitude by the US government would be historic. Has it happened before? I'm curious.
I know there's talk about TikTok either selling to a USA owner or leaving, which seems pretty monumental too. Not quite an expropriation since the state wouldn't be taking control of it, but somewhat similar.
I mean, if Intel is only motivated to build in the USA when it gets a fat check rather than out of conviction, I think that's a problem too, no? Does this mean that whenever maximizing (short-term) shareholder value is at odds with national sovereignty the USA will have to hand them out a check?
I don't know that this is what's going on here, perhaps Intel really is committed to the USA beyond the individual gain of its executives and shareholders. It's worth noting though, there's some prominent examples in US history where this hasn't been the case. Banks for example got really rich at the USA's expense in the years leading to 2008.
and yet INTC has been in business for decades, profitable the whole time, producing chips without this grotesque handout of taxpayer monies.
They have already used their excess profits - many $10's of billions of dollars in recent years, for stock buybacks, but apparently they really, really need this money from taxpayers to stay a going concern.
This is a thing intel didn’t care about doing. The government wants the fab strategically so is incentivizing them to do it. It has nothing to do with intel’s profitability otherwise.
It’s no different from grants to build renewables, farms, housing, munitions, whatever the government wants done in the country.
However, it is a very indirect way of getting what the government wants, prone to manipulation.
The more direct option is to contract and purchase the finished product.
The general problem is twofold. First, it can be more financially efficient to spend on incentives then finish product. Second, much of the public do not trust their representatives to perform this analysis and negotiate in good faith.
Is a 25 billion Upstream incentive cheap compared to the Chip Price premium the government would have to pay to have the same incentive?
The other question is who benefits from domestic chips and if the government is the right person to pay.
I guess in your mind it is not possible for both things to be bad? As long as we have the bogeyman of the DOD budget, any money spent that is even a penny less than the DOD budget is OK, is that how you see things?
People have been repeating this tired trope for decades and yet we persist. The US doesn't even have the worst debt load of developed countries and ones that are significantly worse are still operating fine!
In the past 15 years Intel has spent almost $100 billion on stock buybacks. They don't need the money.
This is a pure transfer of wealth from taxpayers to the rich. And they're getting more like $20 billion not once you include loans, etc.
The wealthy make massive amounts of money, take it out for themselves, and then complain that they don't have capital. That's pure junk. And then we wonder why Biden's approval ratings are terrible and why we might end up with Trump again.
We need to make stock buybacks illegal again. They provide no value to everyone but the ultra wealthy.
Edit: Wow, the downvotes are amazing. A company gives away $100 billion then comes hat and in had to taxpayers asking for another $20 billion and we just hand it out. And I'm getting downvoted?
I never understood the anti-dividend and anti-buyback mindset.
I've given quite a bit of money to partially own a business (and I don't mean publicly traded shares, but literally buy a portion of a business). I have an agreement with the operator that I'll get N% of proceeds (as long as the business can handle that percentage). Are you saying that I, as an owner, am not entitled to it? That's rather ridiculous.
Imagine a friend coming to you who says "Hey, I need $50K capital to start a business. Let's be partners - you provide the capital, and I'll do the operations. Oh, and I'll give you whatever money I want, whenever I want. Perhaps none at all. It'll be entirely up to me."
Would you take that deal? Because that's how shares work.
Shareholders, on paper, are partial owners. Yet they do not even have an agreement like I do. The company can decide not to share any money at all with shareholders. IMO, all companies that sell shares to the public should be required by law to give a representative amount of money to these owners.
BTW, my N above is significantly higher than the percentage almost any company pays back in dividends. Intel used to give about 4.5% return via dividends, and that was triple the industry average. They've since reduced it to 1.5% to be in line with the industry.
> I never understood the anti-dividend and anti-buyback mindset.
I'll try to explain it.
Companies use stock buybacks to give away massive amounts of capital. Capital that they clearly need for their long term health. Then, because they're important to the economy when they have a downturn they come to taxpayers and ask for massive amounts of cash.
This is for example what happened to the airlines which then got over $50 billion or so in bailouts. They spent about 80% of that in the previous few years on stock buybacks. They would have been healthy enough to survive without the bailouts. So what happens is companies give their money away to the rich, constantly fail because of that, and take money away from the poor to cover up for their failure.
Stock buybacks create a conflict of interest where companies can directly manipulate their stock prices. So instead of building the best enterprise, they can pump money into bringing their stock up artificially.
The fact that this overt manipulation of your own stock price is bad was well understood after the Great Depression and that's why it was basically banned by the act that set up the SEC in 1934. The SEC then passed Rule 10b-18 granting companies an exception from the market manipulation rules under Reagan.
That's a pretty clear case of a regulatory agency going against the will of Congress to create basically its own law. It will be interesting to see what happens to Rule 10b-18 if the Supreme Court reverses Chevron in a few months.
> The new CEO banned buybacks.
Of course. After 20 years of stock buybacks where they gave away the vast majority of their cash the new CEO wants money from the CHIPS act which says they cannot have buybacks for 5 years.
It will also be interesting to see if the CHIPS act has any teeth. BAE took the money but is doing buybacks anyway.
My personal position is far more extreme, there should be a clear ban and the SEC should not be allowed to overturn the law as it was written with a regulation. Certainly if the EPA cannot regulate carbon through the same logic, the SEC should not be allowed to do so.
You start a business and have partners who have bankrolled you. They own a percentage of the company. At some point, you want to buy out their share. But the government just banned it. You can only dilute your share, never increase your ownership stake.
Does that make sense? Because that's what banning stock buybacks will achieve.
> Companies use stock buybacks to give away massive amounts of capital.
It's one use of stock buybacks, amongst many. Companies also do buybacks to get a greater ownership stake. They also do it if they think their stock is undervalued.
Banning buybacks is throwing all good options out to prevent a few bad options. It's a kneejerk reaction.
My company has done buybacks multiple times. It barely made any impact on the stock price. The much believed notion that it manipulates stock prices ... needs hard data. Look at all the companies who've done it in the last 30+ years - how many of them saw a significant gain in stock price in the short term?
I can agree that these transactions need to be regulated. But banned? Nope. For me, though, reform is useless unless they solve the problem I mentioned above: That it is currently legal for me to get an ownership stake in a company and not be entitled to anything in return. Shareholders should have a contractual right to returns that is independent of the stock price.
> Companies also do buybacks to get a greater ownership stake.
Greater ownership stake in what? Companies, at least in the US, can't own themselves. Stock buybacks merely reduce outstanding shares effectively increasing the percentage of the company owned remaining shareholders.
If we eliminated stock buybacks tomorrow, little would be lost other than insiders wouldn't be able to use buybacks to unduly enrich themselves and people having to pay some capital gains taxes.
Buybacks and dividends are not the same thing. Buybacks get preferential tax treatment and are in their entirety manipulative (that's why they were banned under SEC rules until Reagan deregulated capital markets) to the market it serves. Dividends are predictable, have a consistent rate across the years and are pretty much impossible to game the market with, as they return value to shareholders over a longer time period, avoiding temporary volatility.
> Buybacks and dividends are not the same thing. Buybacks get preferential tax treatment and are in their entirety manipulative
OK - answer me this. How can a publicly traded company buy more of its own shares (i.e. to get a higher ownership stake)? Or even buy them because they believe they are undervalued?
> Dividends are predictable, have a consistent rate across the years
Except this is not true. A company decides each quarter how much dividend to pay out. There's usually nothing preventing them from saying "Nah, sorry."
We all know plenty of companies that simply don't pay dividends, no matter how profitable.
It's unlikely at this stage it's possible to bootstrap a company that makes CPUs, GPUs, etc, so it seems to me the US government wants to hedge their bets and keep Intel alive for now. $25B in total is a small price to pay for that.
That being said, I would've preferred it's not Intel that gets the life-line.
And all rely on ASML, though some of their EUV stuff was in part tech transfer from a US government collab that included Intel (EUV LLC), and that's why we have still have some security veto over selling EUV machines to China.
The thing is that it’s not leading edge chips that are the most important for most consumer goods like cars and random other products. It’s the trailing edge chips that companies like TSMC is manufacturing on fully depreciated equipment.
While it makes no sense financially for a new company to buy equipment to build trailing edge chips, it’s perfectly logical for TSMC just to keep old fans running
They could force them to license the production to one to three other companies who kick back a percentage of the profits to Intel. That makes two to four suppliers who receive the $25 billion. Then, we have competing firms.
If they think that’s unfair, they can quit asking for our tax dollars to expand their for-profit businesses.
Nobody needs to force Intel to do this, Intel is already doing it. They manufacture other company's designs for hire. Opening up their foundries for use by other companies is part of Intel's current business strategy.
There are only three companies in the world with cutting edge semiconductor manufacturing capability: Samsung, TSMC and Intel.
You just argued with yourself. You said there’s only three suppliers, two of which the U.S. wants to avoid. Then, that Intel is controlling and benefiting from how those projects are manufactured. That means the billions would shore up a domestic monopoly that’s in a tiny oligopoly.
My proposal would use our tax dollars to create plants that use Intel technology, but aren’t under their control, with different business strategies, operational priorities, and money going to other directors. The supplier diversity would increase competition domestically while strengthening us. While not done the same way, my precedents for increasing suppliers are Intel having to license to AMD and IBM licensing to Freescale.
Ok, I misunderstood what you meant. I thought you meant license access to the foundry, like TSMC does.
What you're proposing is that the US stand up a semiconductor fab that can compete with Intel. That's going to be hard!
I think "use Intel technology" is a lot less practical than it might seem. After all, Intel uses ASML technology, and anyone with enough money can buy the machinery (as long as they're not based in China). Intel manufacturing tech is the sum total of all the skill and expertise of Intel's employees.
Why pissed off? Intel is the one with experience and the US is desperate de-risking TSMC and control more of the chip as chips is one of the most important resources now and in future. Would they give it to Y-combinator startups? If Yes they would be a fraction of it, Intel earned this by being American and being the cornerstone of American Chip business for past few decades
I'm opposed to it here as I am to it happening in China. Except that I felt Huawei phones were superior to everything else I had used from an OS perspective (They made lots of optimizations). I don't Intel as a company in good standing; they've committed personnel, product and corporate fouls. I'd rather see 20 million go to that kid that made his own CPU. I have faith he'd do more to better humanity than Intel.
The US is spinning $1T new public debt every 100 days and there's no credible path to return to a sustainable trajectory. Plus, the poster child for federal corporate welfare-- Boeing-- has not done so well with that largesse, Intel is a rather sad candidate to carry that torch forward.[1]
> The US is spinning $1T new public debt every 100 days and there's no credible path to return to a sustainable trajectory.
How are you calculating this? The full-year deficit is running at less than $1T... You aren't counting it when Treasury rolls maturing bonds over into new debt, are you? That's normal and irrelevant.
There's a few things worth mentioning, since after all that is still a big deficit.
1) Debt service costs are over $1T annually, as the end of many years of ZIRP finally starts to bite. There's no guarantee that we return to lower rates in the future, but it's likely, and that will reduce debt service burden over time.
2) Deficits are calculated inclusive of the costs of debt service, but do not include the impact of inflation on the public debt (which is substantial right now).
3) Deficits can absolutely be sustainable. The economy (i.e., GDP) grows over the long term, and the tax base grows with it. GDP is around $23.3T, and assuming long-run 3% growth, that would mean deficits of $700B are sustainable.
Overall the fiscal picture is not great, but anyone acting like there's an acute crisis is probably doing it for political reasons.
Your link indicates a $1.7T deficit for FY23 which is not "less than $1T". That's roughly twice the figure you offer as " sustainable" ($700B).
It's been widely reported [1] that the US debt reached $32T in June 2023, $33T in Sept 2023, $34T January 2024, achieving those milestones roughly every 100 days. The projections indicate an exponential increase, which doesn't help the case for sustainability.
Sovereign debt and fiat ultimately are confidence games. Being unable to offer credible long-term math is a problem.
You're right, I mistook the year-to-date figure for the full-year projection.
That said,
> It's been widely reported [1] that the US debt reached $32T in June 2023, $33T in Sept 2023, $34T January 2024, achieving those milestones roughly every 100 days. The projections indicate an exponential increase, which doesn't help the case for sustainability.
These figures aren't interesting because they include debt that the government owes to itself (intragovernmental debt). The debt held by the public is presently around $27T.
When actually considering long-run sustainability, you don't just consider the real GDP growth rate (as I did above). You really need to consider several factors:
1) Deficits
2) Nominal GDP (i.e., disregarding inflation)
3) Nominal interest rates
If you have a ton of inflation, you can effectively reduce the debt burden in terms of a % of GDP, since the GDP grows with inflation and the debt does not.
You'll note an explosive increase due to the extreme pandemic deficit spending (and during the financial crisis), but lately it's actually not an "exponential increase".
The bottom line is it's not as though these are uncharted heights, or that we're presently on an uncontrolled exponential trajectory -- but, we have "run out of room", and if we have another crisis, we're going to be unable to engage in the kind of deficit spending that we have in the past without serious consequences.
Nice smooth exponential curve, debt held by public as percentage of GDP through 2053.[1] During the GFC, the projections always flattened over the long term. There's no longer even a pretense of plans to normalize. We've lived for a long time in the "no serious consequences" regime; this set of projections seems different.
This seems to have more to do with population growth projections over the very long run rather than anything that's actually going on in Congress right now.
Bottom line, our taxes need to go up modestly in the coming decades... but only if these assumptions actually prove to be true:
> Inflation slows through 2026 to a rate that is consistent with the Federal Reserve’s long-term goal of 2 percent and then remains at rates that are consistent with that goal from 2026 to 2054.
> Interest rates generally rise over the next three decades, largely as a result of projected increases in federal borrowing and in capital income as a share of total income.
... I doubt it! Look what happens to interest rates in graying countries like Japan.
Yes this is corporate welfare, and sadly it's probably necessary. We need to be able and willing to blow the TSMC fabs if China invades Taiwan, and being able to credibly make that threat decreases the chance that they will invade.
I bet my life that Nancy Pelosi did some trades based on this grant.
Bought way in the money calls or purchased shares... I guess we will find out in 45 days....
You're commenting about a press release from the Agency which grants the investments that was published today - so I think it's safe to assume, "Yes, it's back on"
I'm sure Intel will be very happy to bolster their cash savings with this investment. Or have we already forgotten about that broadband investment from way back?
It's more of an inducement to get the company to do what they might not do on their own. Intel doesn't need the CHIPS act, America does, and America is paying Intel to make it happen.
You're not wrong, but having an incredibly important dependence on an industry 100 miles off the coast of China (and the target of their increasingly erratic dictator) is worth paying billions to break.
2 - comparing a minor economic investment ($8B on a $23T gdp) to slavery, and the economic system built on slavery, is the stupidest thing I've read this week, so, well, congrats. I guess?
3 - not a naive economic policy; US government investment built silicon valley and that's going ok.
Well it's a bit like how I see universal healthcare. Would it be worth paying billions for? Oh absolutely. Do I believe the current US Gov could actually take all the money in the world and make it happen in a way I'd be happy with? LOL.
I think the parent is implying that the government would be better-off subsidizing the startup space or something else, rather than propping up a large incumbent that is failing.
I feel sorry for any startups looking to innovate in this space. It's hard enough competing against established players without them getting billions in free money.
Intel has had the resources to build out fabs in the US for decades. Instead, they've chosen to build elsewhere, and now they're rewarded for it?
They recently announced their $20b facility in Ohio is being "put on hold":
The big difference there is SpaceX was able to incrementally build up. Falcon 1, Falcon 9, Falcon heavy, Starship. Each step allowed them to prove that it worked and gain investors and government contracts.
Who in their right mind would invest $10b just to build the manufacturing capability without having a well established product? And if you have a well established product are you still a startup?
Rockets turned out to be expensive not because the technology demanded it, but because the companies were intentionally inefficient, e.g. it was actually fine to build a rocket in a tent with simple tools than to setup a massive clean room facility. This was fine because the government would hand them a blank check with a guaranteed profit percentage, and the handful of commercial customers would just swallow the cost.
However, it isn't as clear if the same applies to semiconductors, since even a bit of dust is indeed a serious problem for producing a chip where the transistors are much smaller than most dust. Until very recently there were no blank checks, every improvement required mostly private investment, so it's less likely that the inefficiencies are intentional.
Any industry wouldn't be "really a startup kinda business" if only a few players are pumped more than everyone else combined by orders of magnitude. Having to scale to everyone's demand is a lot more costly than if the market was fragmented.
I feel sorry for any startups looking to innovate in this space. It's hard enough competing against established players without them getting billions in free money.
Which startups would be harmed by this type of investment? as a relatively casual observer, I didn't think there was much in way of startups that were looking to go head-to-head with a company like Intel or AMD in chip fabrication.
>They recently announced their $20b facility in Ohio is being "put on hold"
I have a friend who lives in Ohio who was very excited about this, and I told him not to hold his breathe, its likely they will do everything they can to get subsidies to pay for it, rather than pay for the majority of it out of their own pocket and re-coup some via subsidy, therefore I suspect they will delay opening until they get more subsidies.
As much as I agree, and I really do, this is also a company that mentions they have $7.24 billion available for sock buybacks [1].
Sure, maybe they don't actually make any buybacks. This is what's left from $110.0 billion they approved for stock buybacks in the past, not a quantity that's been approved or seemingly needs to be used this year. They haven't bought back any stock since 2021 [1].
One just wishes they'd invested in fab-building earlier. They've spent $152.05 billion in buybacks since 1990 [1], a fab apparently costs anywhere from $3-20 billion [2]. That's say ~10 potential fabs that instead became just checks for investors.
I understand why Intel is getting these, but would be nice to see this money go to companies that are still innovating and are somewhere in the US coalition/orbit (TSMC, Samsung, etc.)
I wonder if this is coming from a position of ignorance... Samsung is among the companies of the world that might be producing negative externalities that weigh more than their positive contributions
Intel is still innovating though? What's with everyone acting like they aren't innovating just because they aren't the leading performance x86 chip manufacturer? They're still shrinking node sizes, they've entered the GPU market, they're opening up their fabs to also make chips for other companies...
Bit hard to claim they are shrinking nodes, when Intel 4 claimed to be in production in 2022, but is still MIA except for low volume laptop products.
And Intel 3 still has yet to appear.
I think the general perception is that they're playing catch-up rather than meaningfully pushing the limits themselves. Yeah, they moved into the GPU market, but the cutting-edge in GPUs is by NVIDIA. As is the cutting-edge in AI chips. The cutting edge in fabrication is by TSMC. The cutting edge in mobile by Apple.
Intel's bread and butter has always been x86, but not only is it an ISA that's proving non-ideal for a couple new applications (mobile is ARM, AI is in the GPU or NPUs, etc), AMD is really putting up a good fight in that market too, and the crown has been traded a copule times in the past few years.
Right now one of the biggest blockers in on-shoring semiconductor fab at any kind of reasonable price-point and timescale is the lack of a skilled workforce. This legislation has dual objectives: train new people to get into sophisticated manufacturing AND to build out the actual infrastructure itself. That almost guarantees it won't be the most efficient way to actually get these chips on American soil. Whether we look back in 20 years and think "wow glad we took that hit upfront" is anyone's guess.
Or we are going to be training Junior engineers with outdated skill sets and build outdated infrastructure.
Sometimes top down planning works, but I think I would personally need to trust the leadership and the incentives.
Unfortunately incentives on these are typically to do bare-minimum so you can meet the criteria to get subsidies. Sure the chips will be usable, but you spent a multiplier of the cost it takes to get it, and the chips aren't cutting edge.
I'd a bit more interested in some moonshot idealism than just some military buildup.
It really doesn't matter if it's a bit out-dated, you cant create senior engineers without them being junior. All seniors trained on currently 'old' methods by definition of time passing
We learned from the pandemic that a huge amount of the world's manufacturing economy depends on the availability of old and outdated chips. Being competitive in cutting edge CPUs and GPUs is only one facet of the problem. Incrementally addressing chip production needs seems better than doing nothing for longer in an attempt to solve everything at once, or a riskier leapfrog attempt that's likely to fail.
/s should hopefully be obvious, but it does seem like anytime AI gets mentioned, it's clear cut to remove all US jobs away within the next 3-5 years, so it's ironic seeing a "lack of a skilled workforce" comment.
I don't think Intel is going to train a new skilled workforce. Their domestic hiring is minimal. Like the rest of tech these bills are leveraging work visas that ensure the Corp has feudal control over their workers.
The right thing to do is to block these big waves and force global competition.
Right now the high-end fabrication competition is TMSC, Samsung, and Intel. All three are supported by nations. The idea that we should just let the freemarket handle the issue doesn't feel grounded in practicality.
The issue is there are few opportunities for junior people to start their careers. There is no shortage of talent but where do we start? I’ve been applying for jobs in the semi conductor industry but haven’t had any luck because ever Is looking for senior staff but nothing for newcomers.
In most of the west (with few exceptions) is that you should waste at least a decade training yourself with little information of what's useful to learn.
Then, you'll be talked down for being poor and lost. And whatever money you make will be put directly in the hands of your landlords, that profits off scarcity.
> Whether we look back in 20 years and think "wow glad we took that hit upfront" is anyone's guess
Globalization is breaking down quickly. Chips are crucial to national security and our economy. The supply chain for advanced chips is heavily dependent on East Asia which is a geopolitical powder keg and a demographic time bomb. The only thing more expensive than whatever we end up with is chips unavailable at any price because East Asia devolves into a war stricken basket case. We needed to have been starting this panic training/building 10 years ago but better late than never!
Is it? I don't know if there's a concrete way of measuring "amount of globalization", but I'd guess that right now we're probably the most globalized we've ever been. "More things that you use are made outside your own country" has only been growing, and with the advent of full remote companies that also includes much more software than before -- it used to be that only huge corporations would offshore software development, now everybody can do it.
Global trade as a percentage of global GDP peaked somewhere around 2011 and has been steadily declining.
If you look at the US in particular the relative value of imports and exports is down about 30% from the peak 10 years ago. That's a big change for such a short duration
And simultaneously the US has been ploughing massive amounts of capital into domestic manufacturing construction. Money that would have previously been invested into China or elsewhere, is now staying domestic (with a lot of capital also going to eg Mexico).
What do you mean when you say that the money would have previously been invested into China?
Was the US federal government previously funding fab development in China?
That is to say, it seams like this investment is to meet a very specific need, and wouldn't have happened otherwise. Similarly those paying aren't the same either.
You could proxy a measurement of "amount of globalization" by disruptions in global shipping of food, energy, manufactured goods, etc. Covid caused disruptions, Houthi attacks in the Suez Canal disrupted shipping, Panama Canal is facing issues with water due to drought.. US continues to withdraw from Naval security commitments from the Bretton Woods era
Physical goods are much more complicated to move around the globe than code
> US continues to withdraw from Naval security commitments from the Bretton Woods era
Would you mind listing all the naval security commitments - from the Bretton Woods era - that the US has withdrawn from (eg over the past decade or so, anything relevant to "continues to")?
I'm not aware of any meaningful reduction in US naval security commitments. If anything the US is as busy as ever with its global naval security efforts. It's hyper busy everywhere: from Latin America, to Australia, to Europe, to the Middle East, to Asia.
The notion that the US has stepped back at all is entirely unsupported by the actual facts. It's just a weak myth being posted endlessly since Trump began spouting isolationism in 2015-2016. Meanwhile, in actuality, the US just spent another hundred billion dollars on a foreign war in two years.
> The notion that the US has stepped back at all is entirely unsupported by the actual facts.
40 years ago the US Navy was equipped and staffed to patrol the global oceans. Now, the US has a relatively few massively powerful forces of naval power projection but is woefully understaffed and under-equipped to maintain the global order against multiplying chaos. This is unlikely to change at all let alone be fast enough to influence outcomes. Growing sentiment after decades of the war on terror is for the US to be hesitant to intervene internationally, and while that isn’t current policy it’s predictive of future policy. It’s not at all clear that it would be popular in the USA to, for instance, go to Moldova’s defense.
> the US just spent another hundred billion dollars on a foreign war in two years.
The vast majority of this was accountancy fictions about the value of stockpiled obsolete materiel we couldn’t sell but had to pay to maintain or pay to scrap. We have demonstrably not gone all in on supporting Ukraine and Congress is currently strangling any attempt to do so. This is another sign of the US inevitably devolving into an unreliable defense partner.
Ask me in 20 years. There are a lot of worring signs right now that things will get bad, but nobody really knows.
When the Soviet Union broke down 30 years ago the US decided the biggest worries were small countries (Iran in particular), and things like 9/11 proved they were right. However Russia is now attacking Ukraine and many think that countries like Poland or Latvia (both in NATO) are next. China is setting up so that they could take military action to take Taiwan, and other countries in the area. Nobody knows for sure if either of these predictions will come to pass, but there are signs that should worry you.
Billions are already starving. You just never hear about them. Millions are starving today on American streets. Yet we do nothing but sit on our hands, play hot potato between generations, point fingers, start culture wars, start class wars.
It’s all quite boring. Nobody is interested in solving the issue. Only a rat race to see who can con the next person(s).
Some days this monologue from Westworld rings true:
“ I think humanity is a thin layer of bacteria on a ball of mud hurtling through the void. I think if there was a God, he would’ve given up on us long ago. He gave us a paradise and we used everything up. We dug up every ounce of energy and burned it. We consume and excrete, use and destroy. Then we sit here on a neat little pile of ashes, having squeezed anything of value out of this planet, and we ask ourselves, “Why are we here?” You want to know what I think your purpose is? It’s obvious. You’re here along with the rest of us to speed the entropic death of this planet. To service the chaos. We’re maggots eating a corpse”
Millions of Americans suffer from "food insecurity" i.e. "reduced food intake and disrupted eating patterns at some time during the year." [1] This is very bad, but, there are also food stamps, soup kitchens, food banks, school lunches, family members, and random good samaritans that prevent actual famine amongst those populations because there is no shortages of food present. This is very distinct from real mass starvation where millions of people are dying of hunger in a famine where there is insufficient food available which is what I believe the GP is referring to.
The battle is already lost if we can only feed the people Alice today through a global, centralized food industry.
Such a system is doomed to fail eventually, there's no way around it. Not to mention the fact that its just a big shell game with everyone trying to hide the true external costs of industrial agriculture. The larger we build that system the harder it will fall unfortunately, and if there are no local food producers left in business we're all screwed like the Soviets after they realized killing all the people who knew how to farm was a bad idea if you also like to eat.
Globalization is breaking down because of actions being led by the US. It is not some inevitable process that we have to pre-empt, rather it is actively precipitated by our actions.
- The US has almost everything it needs in North America to be self-sufficient. Food, energy, natural resources, manufacturing, trade.
- The US is tired of being involved in the Middle East.
- The US is tired of protecting the oceans and trade for everyone else.
- The US is tired of China stealing its tech, being protectionist, becoming an adversary, not being friendly to US companies, meddling in US trade, etc.
- The US is tired of NATO not stepping up to the plate. It won't back out, of course, but would love for Europe to care more about its own security.
There are so many reasons the US is pulling back. Both the Trump and Biden presidencies are completely on board with it. It's fully bipartisan, and it's going to accelerate.
The US is going to near-shore, friend-shore, and to every extent possible, onshore what it needs.
Good reasons that will raise costs for everyone and lead to measurable impacts on the pace of quality of life improvements. A world that moves towards near-shoring out of security concerns is a world that is long-term poorer. That's real medical innovations, improvements in tech, education, climate that will be delayed because of our new cold war. We are already seeing climate impact in the EV car market where we are hamstringing our own policy efforts.
Globalization does not necessitate middle east involvement.
> - The US is tired of China stealing its tech, being protectionist, becoming an adversary, not being friendly to US companies, meddling in US trade, etc.
WTO already has the mechanisms to deal with this, the CHIPS act is hurting out standing with our allies because of its blatantly protectionist provisions.
> - The US is tired of NATO not stepping up to the plate. It won't back out, of course, but would love for Europe to care more about its own security.
> Good reasons that will raise costs for everyone and lead to measurable impacts on the pace of quality of life improvements
Do we really need to be stuck on a treadmill of always having to make our lives better? People don't know the word "enough," that's a real problem.
There's obvious issues with how current quality of life is distributed, but I'd propose that we don't need to increase QoL with new inventions simply to make sure that we don't ignore those worst off.
Say that to people with cystic fibrosis or muscular dystrophy who are getting real, lifesaving treatments now that were simply not available a few years ago.
Never mind that the world is not constant - we need innovation on the climate front if we want to stay in a stable environment that doesn’t require more sophisticated adaptation.
Making those worst off better without making everyone else poorer would be much faster with globalized trade.
I am sorry you have become so skeptical of progress, but I and others will continue working so that a rising tide lifts everyone, including you.
> Say that to people with cystic fibrosis or muscular dystrophy who are getting real, lifesaving treatments now that were simply not available a few years ago.
Its an unfortunate fact of life that we can't build a utopia with no illness or suffering. We have developed many solutions for different medical conditions over my lifetime and I'm truly happy for those helped. Over the same time, though, we've discovered and named even more. We continue to develop new medications for diseases that didn't exist in text books not long ago, and there's good reason to believe that pharmaceutical companies invent new disease classifications to get fresh funding for a medication they already have on the shelves.
I'm not saying we shouldn't help those in need, only that we can't run down that path forever with a hope that if we can just solve one more condition we'll have it all licked.
> Making those worst off better without making everyone else poorer would be much faster with globalized trade.
I'm not actually sure if this is the worst answer. We frequently hear about the widening wealth gap, fixing that certainly would mean making some poorer.
> Never mind that the world is not constant - we need innovation on the climate front if we want to stay in a stable environment that doesn’t require more sophisticated adaptation.
I wholeheartedly agree with the sentiment behind this, I just start from a different point. I think our best chance of helping reverse the problems we cause to the environment is to first remove the worst offenders of what we do today rather than start from innovating and replacing them. I think a big mistake in the green energy movement had been assuming that it would be untenable to reduce total energy use and that we must instead replace all current use and match the current rate of growth in energy consumption.
> I am sorry you have become so skeptical of progress, but I and others will continue working so that a rising tide lifts everyone, including you.
I'm actually not skeptical of progress, I may need to rephrase things if it comes across that way. I just view progress differently than I think many do today. Progress is often talked about as starting with what we have today and adding to it to make tomorrow better, i.e. always intervening more and never questioning how we got here. Put another way, I view progress worth having as progressing towards specific goals whether that means innovating our way out of it or backtracking to find another path. I don't view progress as an incremental approach that must always push ahead without giving time and consideration to removing when we realize pur current path is fundamentally wrong.
These links all reference process in specific areas with little or no context otherwise. For example, pointing to grain production increases does not acknowledge the required dependence on chemical inputs, water use, or infrastructure to move grained from large growth areas to those who actually eat it. Pointing to cancer treatment, while hugely important to those battling cancer, says nothing of what will plague us if we ever succeed in eradicating cancer.
If you have links or explanation of how we could possibly get to a world with no illness or suffering I'd be very interested. I'm also not expecting anything as that first depends on somehow already knowing what we don't yet know, like what will kill people once we cure cancer.
> US led NATO expansion lead to the war in Ukraine, and Europeans are paying the price.
As an Eastern European, I cannot thank the US enough for pushing NATO. It makes me feel safe. I'm just sad that they could not get Ukraine into NATO before all this madness started.
The prospect of regional wars or worse makes you feel safe ?
Do you think that if Ukraine was not being courted by US that it would've been invaded like that ?
Multiple political analysts, US ones included, say that this would not have been the case.
Wars are only good for those in power, in both sides.
> Do you think that if Ukraine was not being courted by US that it would've been invaded like that ?
Invaded? Probably not. Becoming a second Belarus? Yes. Overall it would have meant a Russia - NATO border closer to me. I prefer an Ukrainian - Russian NATO border far, far more.
> The prospect of regional wars or worse makes you feel safe ?
Membership in NATO prevents regional wars, because it increases the risk for Russia. Standing alone, a country like Finland or Poland can respond only with conventional weapons, which they don't have too many considering the scale of Russian war against Ukraine. By attacking a NATO member, Russia risks with a nuclear response from other alliance members up to a global nuclear war.
Russians understand and react to power, and NATO represents that. When a Russian fighter jet intruded Turkish airspace while flying sorties in support of Assad's regime in Syria and got shot down by Turkish air defense, Russian officials came to apologize instead of ramping up the usual "we'll nuke everything!" rhetoric. Demonstrate credible force and they'll backtrack.
> Do you think that if Ukraine was not being courted by US that it would've been invaded like that ?
The premise of your question is upside down. Ukraine was courting the US to get security guarantees such as NATO membership, not vice versa. The notion that Eastern Europe had to be somehow tricked into EU and NATO is deeply misguided. Instead, these have been the main foreign policy goals for most countries in the region, the holy grail.
The alternative for Ukraine was to become an oppressive dictatorship like Belarus has become under Russian influence. That would've meant that Russia would've moved in their armed forces, installed nuclear weapons and prepared to use Ukraine as a staging ground for further invasions westwards - everything they've done in Belarus so far.
Instead of seeing Kyiv under missile attacks, we'd be seeing the same happening 1000 km westwards in Warsaw. How far towards Paris and London do you prefer to let this thing creep before tackling the problem? Until Picadilly Circus?
NATO doesn’t take countries with active border conflicts and for good reason. I am glad that NATO did not take Ukraine then, even if I am open to it once this conflict resolves.
I am generally not sympathetic to Turkey but I think the Cyprus issue is complicated and the former military junta, now Cyprus Republic, has given very few reasons for Turkish Cypriots to trust that they will be safe under its regime.
I also think that Western international institutions are systemically biased in favor of Greece and other more western nations, which is pretty obvious by the disparate response to Greek invasion of Cyprus vs Turkish.
> US led NATO expansion lead to the war in Ukraine, and Europeans are paying the price.
This is the Russian propaganda of 2 years ago, and we know it is a lie because Putin went on camera and told us so himself. When asked by Tucker Carlson why he invaded Ukraine he gave a half hour history lecture telling us about its history of Russian occupation. Putin justifies his murderous invasion by pointing to former borders of historical Russian entities -- which by the way would not just include Ukraine but Latvia, Moldova, Estonia, Lithuania, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Armenia, Azerbaijan, Georgia, and parts of Germany, Finland, Japan, Mongolia, Romania, and Poland.
Every child in Eastern Europe knows this to be the real case, and only Americans who have no serious understanding of Russian and have generally never even visited believe this hogwash about NATO.
Putin even said in 2002 that Ukrainian NATO membership was a matter between Ukraine and NATO only: "At the end of the day the decision is to be taken by NATO and Ukraine. It is a matter for those two partners."
You cannot dismiss something as "propaganda" or with a reason "Putin said so". In the same interview Putin said that if the US had not broken the promise to Gorbachev to not expand the NATO eastward, the war would not have happened.
I am not an American with no serious understanding, I live in an area that used to be Soviet Union.
Everybody knows you should not corner a wild beast.
> In the same interview Putin said that if the US had not broken the promise to Gorbachev to not expand the NATO eastward, the war would not have happened.
Yet this contradicts his statements in 2002 that it was not a big deal and not his business. He only changed positions when he viewed the Russian economy as big enough to wage war and take territory.
There was also no such promise, this is a complete myth.
Russia is doing what it has always done: try to steal more clay. They have been doing this for a thousand years, far before NATO. Russia was neither cornered nor threatened.
It seems like you are way too invested in this and unable to think clearly. I'm sorry if it has affected you negatively, it is a terrible situation for everybody except the elites.
However, blame is never black or white. It cannot be all Russia's fault.
> However, blame is never black or white. It cannot be all Russia's fault.
Most crimes are a single party's fault. One is the criminal, and one is the victim. Saying it is impossible for it to be all Russia's fault is logically fallacious. Russia chose to invade and commit mass murder. Russia needs to be held to account for that.
This is pure ad hominem. My statements are not emotional at all. Ukraine committed no offense against Russia. Georgia committed no crime against Russia before they aided Abkhazian and South Ossetian rebels. Putin committed these offenses unilaterally against these. Russia chose to steal territory and murder hundreds of thousands of people. These are not emotional statements, they are factual ones.
It is in fact your claims which are clouded by emotionality -- obvious sympathies for Russian propaganda.
> You cannot dismiss something as "propaganda" or with a reason "Putin said so".
If provided without evidence? Yes, you can. What's presented without evidence can be dismissed without evidence.
> Everybody knows you should not corner a wild beast.
Nobody cornered Russia, Russia decided that it wants its old colonies back. Most of them were wise enough to long before ask NATO to protect them this time, Ukraine unfortunately had trusted Russia when it said it will honor Ukraines independence and now pays a heavy price for it.
> In the same interview Putin said that if the US had not broken the promise to Gorbachev to not expand the NATO eastward
Gorbachev called that a myth in 2014 when Putin used it as an excuse to invade Crimea. USSR's minister of foreign affairs Shevardnadze and minister of defence Yazov have said the same thing. Source, excerpt from an interview to ZDF: https://twitter.com/Jesuitchild/status/1749887239226617873
This talking point is a shining example of propaganda. Gorbachev and Shevardnadze have gone as far as explaining why even in theory, such promise couldn't have been made. It's a complete fabrication.
To anyone outside the US, we don't all agree with these blanket statements.
Personally I am embarrassed that we were ever involved in the middle east, am willing to see our resources spent protecting natural resources if we can afford it, want a stronger NATO and only see that happening by us leaning further in, and think the only thing bipartisan about our two presidential candidates is that there is no way they are our two best candidates for the job.
"because East Asia devolves into a war stricken basket case"
The past decade of American media has been promoting this new cold war narrative as if there is inevitably going to be a major war with China.
If there is war in East Asia then the whole international economic system will collapse, people will be starving in the streets. That's if it's not a nuclear Armageddon and we're left to rubbing two sticks together. Nobody will care about chips if there is a war. That will be really far down the list of actual concerns
The world is so interconnected and everyone depends on everyone so much that there is basically no point in planning for this scenario
> The world is so interconnected and everyone depends on everyone so much that there is basically no point in planning for this scenario
There's always a point in planning for a scenario if you think the risk is high enough and there is something you can do to better prepare for it.
In this scenario, the ones most impacted immediately will be the ones most dependent of the global economy. If you can't get the basics like food, water, and shelter if war with China breaks out then sure you'll be in a bad spot. But is it really an impossible task to prepare at all?
I mean .. if you want to waste a bunch of money and prepare for an unlikely war then it still doesn't make sense to worry about chips. You probably should build fallout shelters and secure things like domestic fertilizer production and the make sure agricultural equipment can be entirely made domestically
Even in the most benign case, if China is for whatever reason peacefully cut off from the global economy and we haven't been nukes into the stone age - having to move back to 22nm chips is going to be the least of our problems. To put it in perspective.. this is going to be a world where we no longer have cellphones and toiletpaper (b/c those are all made in China) and most equipment/machinery/refrigerators/washing-machines/cars/trains will overnight become at least in part unrepairable. Basically ever sector of the economy depends at least in some small part on the Chinese supply chain.
Preparing for supply chain issues during wartime and peacetime look very similar other than defence spending. Simplifying supply chains and reducing dependencies helps whether your concern is war, a pandemic, or economic change.
We put chips in almost everything today. If we can live without chips them so be it, but assuming we'd rather not feel the full impact of have zero chips for whatever reason we'd be smart to start building some level of manufacturing capability at home.
We already saw toilet paper supply chains crumble and all it took was a (potentially over-) reaction to a potential global pandemic. It wasn't a war with China that made it clear we really could do some good with a simplified toilet paper supply chain, it was scientific concern amplified but scared/concerned politicians and herd mentality when the public realized they weren't prepared for such a possible future.
What your proposing would basically entail countries indefinitely subsidizing a huge fraction of their economies so that everything is made domestically. You would just keep doing it and keep waiting for a war. It would be incredibly inefficient and make things significantly more expensive and your nation would fall behind (see North Korea). More importantly, by eliminating economic interdependence you create a much more dangerous world where demagogues can easily start wars b/c they can be sustained by these independent domestic economies
But even in this horror parallel reality of yours, cutting edge chips would still be very far down the list of things that are important. Can you provide basic sanitation without anything made in China? Transport? Medical care? Can you feed your nation? Can you maintain your nations basic infrastructure?
Having to go back a few generations in chips is just irrelevant at the scale of disaster you're envisioning
Why do you assume it must be driven by subsidies? Changes in demand can move the needle too, if our consumers prioritize domestic production it wouldn't matter if technically someone could import it for cheaper.
If you are going government intervention, they could reach for tariffs and import taxes rather than subsidies. Forcing prices high enough for domestic production is painful at first but would eventually work all the same.
I fully agree with you that too much of our current infrastructure is dependent on China and other countries. It isn't really a problem if we aren't concerned with major shocks though. It sounds like the difference is that I see the risks high enough to invest in domestic production if possible, you see that solution as unrealistic and that we're better off avoiding/preventing all shocks.
I meant "subsidy" in a more general sense. All goods will be more expensive. More people will be in poverty
Imagine how much more expensive everything would be, and now imagine the cumulative amount of money that represents. Money that could be used to fund education or improve people's lives, or even build armaments if you really are worried about the commies. You're in effect paying an huge "tax"/premium indefinitely for a threat that's very theoretical. In so doing youre seriously slowing down the rate of progress and prosperity
But that goes a bit away from the original point. That even if you want to have a self reliant north Korean model for the economy, chips are not a sensible place to start. You'd probably want your local hospital to be able to run without anything made in China. Going back to 22nm (circa 2014 tech) would be a minor annoyance.
Subsidies and tariffs have very specific meanings. They get at the same goal of increasing domestic production, but one increases government spending while the other increases government revenue through an import tax. Ultimately the domestic consumer pays either through taxes or increased prices, but they are very different mechanisms.
Its overly simplistic to assume that a subsidy will increase prices and harm the economy. We have been subsidizing corn for decades and it has kept prices artificially low. Prices for corn and downstream products like beef are artificially low specifically because of federal subsidies.
If a subsidy creates domestic jobs it could have a net benefit. The ultimate question is what metrics are impacted and at what rate. If domestic jobs are created fast enough to increase demand for employees, wages could rise faster than prices.
I have no idea what the end result would be, but that's ultimately my point. Economic models are just that, models. Models are based on analysis of past events and assumptions if the future. We don't know what we don't know, and we often don't recognize how inaccurate models are when we simplify them down to a handful of measurements.
To your original point, hospitals do seem reasonable to focus on with regards to stability through simplified supply chains. Chips may help there, our hospitals are dependent on a huge amount of tech today. Paper, silicon, and metal products would also likely be high on the list as they are often treated as consumables - the consumable nature of those products may make them more important than chips.
I mean that just goes against the very basics of economics.. Adam Smith, comparative advantage - and goes against the failed history of protectionist policies. You're basically advocating a version of mercantilist theory in the 21st century.. it's incredible anachronistic. But it's hard to argue when you're dismissive of all models
But I'm glad you see that chips are not really the top priority if this was really an issue of national safety. So one then has to wonder what are the real drivers of these jingoistic policies
I may have dove down to many rabbit holes there, sorry if I did.
To wind it back a bit, are you disagreeing that with the idea that subsidies are meant to reduce consumer prices and tariffs are meant to increase prices on imported goods?
Or are you disagreeing with my argument that economics isn't that simply and pulling one lever can have multiple impacts that together may move prices in an unexpected way?
the first point is semantic, but sure. In effect a tariff functions as a subsidy for domestic companies. If it's a net income or expense is kind of irrelevant and matter of taxation or putting the expense on consumers...
To the second point... it's so vague to be meaningless. What you're advocating is basically mercantilism - which is widely seen as ineffective and counterproductive since.. the 19th century. "unexpected ways“ .. is it like the law of gravity and always going to hold? Probably not. But when you are talking about blocking international trade across whole sectors of the economy then it seems like a valid simplification. If you want to argue mercantilism is going to be a net benefit to the domestic economy then the onus is on the advocate of the outdated theory. All past historic experience points to the opposite and to the development of a stagnant backwards economy
Mercantilism is a top-down approach, I was never promoting that. My earlier comments specifically called out what may be possible if consumers prioritized domestic products, the government only came into the conversation when you raised concerns over subsidies.
With regards to subsidies and tariffs I disagree the distinction is semantic and unimportant, though it likely is irrelevant here since I started with the concept of a change in demand at the consumer level.
This is a re-shoring of strategic capabilities not a labor move. The labor will most likely be imported as it doesn’t really exist in the US at the scale needed with an eventual eye towards more domestic labor. Expect large numbers of imported skilled labor in the short term.
> In awarding financial assistance for planning or establishing a Manufacturing USA Institute, an agency shall give special consideration to such institutes that
> contribute to the geographic diversity of the Manufacturing USA program,
> are located in an area with a low per capita income,
> are located in an area with a high proportion of socially disadvantaged residents, or
Oh yes, the bill has all kinds of nice ideas in it.
But then there is reality. And reality is that there isn’t some giant labor pool of fab workers in the US — yet.
- President Joe Biden signed the CHIPS and Science Act into law one year ago, and semiconductor companies across the U.S. have promised to spend $231 billion on building chip manufacturing hubs on American soil.
- Now, as the shovels hit the ground to begin construction, companies are realizing how difficult it is to find talent.
- Taiwan Semiconductor Manufacturing Company said it had to delay production at its $40 billion Arizona plant due to a lack of workers in the U.S.
I imagine we’d have that skilled workforce if companies paid enough.
I’m a former construction contractor who reinvented myself as a software developer.
Each time I run into one of my former peers in the construction industry I hear the same complaints from them. “We can’t hire any good help.” Yet they are still paying the same non living wages that they have for 30 years.
I don't think that dynamic is the same in construction and in semiconductor manufacturing. Certain parts of the chip-building supply chain just plain don't exist in the USA, and so no one in the USA currently has those skills. It's not like there are lots of folks with the skills in the USA but they're all leaving the industry for higher paying jobs.
The reason there are not a lot of folks with the skills in the USA is because 30 years ago, the US labor market did not appropriately reward those parts of the chip building supply chain. Same dynamic as not paying construction workers enough, just with a greater time lag.
I think the distinction is still important, in that the time lag is large enough to have changed the current dynamics, even if they still match on longer timescales. Raising salaries a bit could stem the outflow of construction workers, and raising salaries sufficiently could bring folks like the prior commenter back into the industry. But as more time passes this gets less and less effective, because there's no one left in the industry to retain and no one with recent enough knowledge to pull back in.
What skills are they, specifically? I'd like to see companies like Intel make a resource describing them, at least, and at most, offer to pay training costs and offer a job at the end of it.
To be clear, I'm not saying we can't have this skilled workforce. Merely that we don't have it today. So the pipeline to employ Americans for these jobs is going to require increasing the funnel of people who learn the skills, become junior engineers, learn more on the job, then become senior engineers. That's a long pipeline to beef up the numbers.
Happy to provide evidence from woke literature if you are interested in evidence of any aspect of how it works. They are pretty straightforward about it, but incredibly wordy.
Those are extremely biased, to put it mildly. Also random YouTube videos are not scientific evidence.
DEI has become a new conservative talking point but so far I haven't seen any evidence that such programs do anything to restrict hiring "white and Asian male[s]" as you put it. I've noticed some people complaining about what they imagine DEI means which is just the same old "affirmative action" complaints recycled.
I'm not saying there are not some cases of DEI-induced discrimination - the world is wide after all - but that isn't what DEI policies/programs say in their text or how they're intended to work. I have never seen anyone saying we should lower standards to meet some kind of "quota".
Again I want to point out that the numerous conservative attacks on affirmative action constantly claimed it was a quota system despite that being a flat-out lie. That makes me skeptical about this current round of conservatives blaming everything from the airline pilot shortage to fab personnel issues on "DEI".
You are trying to dismiss my claim by making a moral claim about your opponents instead of formulating an argument for why my claim is wrong or an inquiry.
To your claim there is no evidence. Here are some videos of top executives saying DEI enforce hiring & performance outcomes using Marxist oppressor/oppressed hierarchies:
—- CEO of IBM @ArvindKrishna admits to using coercion to fire people and take away their bonuses unless they discriminate in the hiring process.
So is every black or hispanic person trying to get a job in tech or maybe thinking of going back to school to get another degree is a closet communist trying to… destroy institutions? Asking for a friend.
I understand you are trying to use the woke activist tactic of insinuating that it’s racist to oppose woke communist redistribution and indoctrination schemes.
That’s not an argument and not an inquiry. Eg what you could ask is
“What makes you confident DEI is Marxist?”
It institutes DEI commissars (in Russian: a soviet) in every company like Stalin did to redistribute outcomes through equity from Marxist oppressor categories to oppressed categories while aggressively destroying dissent.
Either you can cherry-pick non-white candidates among the US population or you can claim that there aren't enough skilled candidates in the US and hire H-1Bs from abroad - you cannot have both. Beggars cannot be choosers.
That depends. When I was young and the weather was nice the physical labor job sounded really nice. However physical labor also means when it is -1C and raining, or 40C with no clouds. Now that I'm older my body isn't willing to do that and the office job is a lot nicer (but my doctor keeps telling me to stay active)
Not saying this with snark, but how many of those former peers work for companies with a clear pipeline to train people? Usually when I hear complaints like "We can't hire or keep good help" it's correlated with a company who isn't willing to invest in developing their workforce.
Not sure where in construction he was, but I've worked framing crews before, and the boss would hire anybody (not disabled) who said they were willing to work hard. It isn't hard to teach someone the basic tasks and most people could catch on in just an hour. Most people though realized it was physically hard work and quit in a week (even though this should be obvious).
Plumbers and electricians have a good start from nothing apprentice program. They are sometimes hard to get into, but I know a few people who have gotten in over the years.
If you are training people and they aren’t staying, isn’t the implication that you aren’t paying them enough? Those union apprenticeships are often hard to come by because 1) they pay quite well compared to other viable options and 2) people don't want to leave because of #1. If the job is demanding, the pay should be commensurate. The exception is if it’s rewarding on some other axis (e.g., socially).
Hope you’ll excuse the somewhat off-topic nature of my comment: I’d be curious in hearing your story how you transitioned into software development from construction - would you mind passing along contact information or reaching out to me? I’m in a similar boat and thinking long and hard about my options!
I don't buy this for a minute. It's very easy to train people to work in factories and there are lots of Americans willing to do it if the pay is right. These companies are just complaining so they can get more federal handouts to offset the higher labor costs of onshoring.
Is it that the work is impossibly skilled or that there’s only so much demand to go around and the capital costs to build a state of the art fab is just astronomically high?
A combination of the stock price already having that expectation built in along with CHIPS intentionally funding domestic overcapacity that has its own maintenance overhead. Chip demand is cyclical, which is why chip fabs aren't built to handle peak demand; it would be too expensive for the times when they aren't running at full production.
They didn't get the money. Reading the article, the first sentence explains this is just a proposal...but even the commerce.gov headline is misleadingly worded (to your point).
Wouldn't GlobalFoundries (HQ in New York and supposedly on the "Trusted Foundry" list) have made more sense, since they fabricate chips for multiple different companies, where as Intel only makes them for Intel?
Boosts a competitor, opens up fab capacity for all and moves the needle on the intentions behind the CHIPS act, all at once.
GlobalFoudaries is receiving $1.5B from the CHIPS act. While it might have made sense to try to help them catch up to the competition a decade ago, today we just want to have any domestic capability comparable to TSMC in case China decides to invade Taiwan. Intel and TSMC will be able to get there much more quickly than GlobalFoundaries can. Furthermore, Intel is opening up their Fab to outside customers.
100% right. GF is no longer gunning for leading-edge nodes. They've made their niche in mature nodes for low-power chips and emerging memories (FeFETS, MRAM, RRAM, etc). If you want to get leading edge nodes on American soil, Intel is the best bet.
Correction: Intel has had a Foundry business since 2010 or 2011. Then CEO Paul Otellini pushed hard for it, but had a lot of opposition internally. It then languished after he left until Pat took over.
It never died. It was always there. Pat's just fulfilling the vision Paul had.
You're right on that one, I perhaps should have more accurately said: "Revive". I will say though that the scope of Paul's vision for an Intel foundry didn't shine a light against IFS. There wasn't the same push for increased capacity. More so excess capacity would be given to select customers, and they might maybe increase capacity for big customers like Apple (who were with Samsung at the time rather than TSMC).
It's funny as a side note that their big foundry announcement at the time was making chips for Altera before the merger, and now Altera is parting ways with Intel after 8 years. Time flies.
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[ 3.2 ms ] story [ 362 ms ] threadI would've expected it to be at least disguised as a tax break or something. ('No tax on US-manufactured chips' or whatever.)
From? Apple doesn't count due to the extremely narrow usability of their software and the complexity of using other software on their hardware.
If chips were sold purely on hardware specs and not software lockin then Intel would have much fewer sales. The US giving grants, tax credits, and cheap loans to Intel only serves to extend the lifespan of a company whose compeitive edge is failing.
Wafers have purity requirements so you'd be stupid to not recycle and re-purify the water used.
https://www.intel.com/content/www/us/en/newsroom/article/int...
https://www.intel.com/content/www/us/en/environment/water-re...
This is not going to end well - our kids and grand kids will be paying for it.
It’s more of an insurance policy than a subsidy. Intel needs a reason to build in the U.S., and grants tip the ROI scale on their side to make it happen.
It shouldn’t even be an option for Intel to continue manufacturing in other countries. It should be “move manufacturing back to the US or the Fed will take ownership of the whole company and do it for you.”
(And maybe it’s sort of an unspoken assumption that if they don’t take this carrot, then the US really would use the stick to force their manufacturing back into the US).
I know there's talk about TikTok either selling to a USA owner or leaving, which seems pretty monumental too. Not quite an expropriation since the state wouldn't be taking control of it, but somewhat similar.
I mean, if Intel is only motivated to build in the USA when it gets a fat check rather than out of conviction, I think that's a problem too, no? Does this mean that whenever maximizing (short-term) shareholder value is at odds with national sovereignty the USA will have to hand them out a check?
I don't know that this is what's going on here, perhaps Intel really is committed to the USA beyond the individual gain of its executives and shareholders. It's worth noting though, there's some prominent examples in US history where this hasn't been the case. Banks for example got really rich at the USA's expense in the years leading to 2008.
They have already used their excess profits - many $10's of billions of dollars in recent years, for stock buybacks, but apparently they really, really need this money from taxpayers to stay a going concern.
It’s no different from grants to build renewables, farms, housing, munitions, whatever the government wants done in the country.
However, it is a very indirect way of getting what the government wants, prone to manipulation.
The more direct option is to contract and purchase the finished product.
The general problem is twofold. First, it can be more financially efficient to spend on incentives then finish product. Second, much of the public do not trust their representatives to perform this analysis and negotiate in good faith.
Is a 25 billion Upstream incentive cheap compared to the Chip Price premium the government would have to pay to have the same incentive?
The other question is who benefits from domestic chips and if the government is the right person to pay.
If you are so sure go make millions on the stock market and stop complaining!
This is a pure transfer of wealth from taxpayers to the rich. And they're getting more like $20 billion not once you include loans, etc.
The wealthy make massive amounts of money, take it out for themselves, and then complain that they don't have capital. That's pure junk. And then we wonder why Biden's approval ratings are terrible and why we might end up with Trump again.
We need to make stock buybacks illegal again. They provide no value to everyone but the ultra wealthy.
Edit: Wow, the downvotes are amazing. A company gives away $100 billion then comes hat and in had to taxpayers asking for another $20 billion and we just hand it out. And I'm getting downvoted?
This is the main reason that I dislike stock buy backs, they reduce R&D investment.
If you want to give your investors a prize, pay a dividend. Otherwise, invest in your company!
Usually comp structures look at multiple metrics that owners want to see. Owners prefer stock price to dividends, so they reward it more.
I never understood the anti-dividend and anti-buyback mindset.
I've given quite a bit of money to partially own a business (and I don't mean publicly traded shares, but literally buy a portion of a business). I have an agreement with the operator that I'll get N% of proceeds (as long as the business can handle that percentage). Are you saying that I, as an owner, am not entitled to it? That's rather ridiculous.
Imagine a friend coming to you who says "Hey, I need $50K capital to start a business. Let's be partners - you provide the capital, and I'll do the operations. Oh, and I'll give you whatever money I want, whenever I want. Perhaps none at all. It'll be entirely up to me."
Would you take that deal? Because that's how shares work.
Shareholders, on paper, are partial owners. Yet they do not even have an agreement like I do. The company can decide not to share any money at all with shareholders. IMO, all companies that sell shares to the public should be required by law to give a representative amount of money to these owners.
BTW, my N above is significantly higher than the percentage almost any company pays back in dividends. Intel used to give about 4.5% return via dividends, and that was triple the industry average. They've since reduced it to 1.5% to be in line with the industry.
I'll try to explain it.
Companies use stock buybacks to give away massive amounts of capital. Capital that they clearly need for their long term health. Then, because they're important to the economy when they have a downturn they come to taxpayers and ask for massive amounts of cash.
This is for example what happened to the airlines which then got over $50 billion or so in bailouts. They spent about 80% of that in the previous few years on stock buybacks. They would have been healthy enough to survive without the bailouts. So what happens is companies give their money away to the rich, constantly fail because of that, and take money away from the poor to cover up for their failure.
Stock buybacks create a conflict of interest where companies can directly manipulate their stock prices. So instead of building the best enterprise, they can pump money into bringing their stock up artificially.
The fact that this overt manipulation of your own stock price is bad was well understood after the Great Depression and that's why it was basically banned by the act that set up the SEC in 1934. The SEC then passed Rule 10b-18 granting companies an exception from the market manipulation rules under Reagan.
That's a pretty clear case of a regulatory agency going against the will of Congress to create basically its own law. It will be interesting to see what happens to Rule 10b-18 if the Supreme Court reverses Chevron in a few months.
> The new CEO banned buybacks.
Of course. After 20 years of stock buybacks where they gave away the vast majority of their cash the new CEO wants money from the CHIPS act which says they cannot have buybacks for 5 years.
It will also be interesting to see if the CHIPS act has any teeth. BAE took the money but is doing buybacks anyway.
This is too long of a topic for an HN post. Here's a nice and balanced writeup https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639389
My personal position is far more extreme, there should be a clear ban and the SEC should not be allowed to overturn the law as it was written with a regulation. Certainly if the EPA cannot regulate carbon through the same logic, the SEC should not be allowed to do so.
If you want a gentler writeup, this HBR article has it. https://hbr.org/2014/09/profits-without-prosperity
Does that make sense? Because that's what banning stock buybacks will achieve.
> Companies use stock buybacks to give away massive amounts of capital.
It's one use of stock buybacks, amongst many. Companies also do buybacks to get a greater ownership stake. They also do it if they think their stock is undervalued.
Banning buybacks is throwing all good options out to prevent a few bad options. It's a kneejerk reaction.
My company has done buybacks multiple times. It barely made any impact on the stock price. The much believed notion that it manipulates stock prices ... needs hard data. Look at all the companies who've done it in the last 30+ years - how many of them saw a significant gain in stock price in the short term?
I can agree that these transactions need to be regulated. But banned? Nope. For me, though, reform is useless unless they solve the problem I mentioned above: That it is currently legal for me to get an ownership stake in a company and not be entitled to anything in return. Shareholders should have a contractual right to returns that is independent of the stock price.
Greater ownership stake in what? Companies, at least in the US, can't own themselves. Stock buybacks merely reduce outstanding shares effectively increasing the percentage of the company owned remaining shareholders.
These are technicalities: The point was to prevent things like hostile takeovers:
https://www.sciencedirect.com/topics/economics-econometrics-...
If we eliminated stock buybacks tomorrow, little would be lost other than insiders wouldn't be able to use buybacks to unduly enrich themselves and people having to pay some capital gains taxes.
OK - answer me this. How can a publicly traded company buy more of its own shares (i.e. to get a higher ownership stake)? Or even buy them because they believe they are undervalued?
> Dividends are predictable, have a consistent rate across the years
Except this is not true. A company decides each quarter how much dividend to pay out. There's usually nothing preventing them from saying "Nah, sorry."
We all know plenty of companies that simply don't pay dividends, no matter how profitable.
[1] US to inject billions of fab CHIPS cash subsidies to Intel, Samsung and TSMC:
https://news.ycombinator.com/item?id=39729979
That being said, I would've preferred it's not Intel that gets the life-line.
And besides Intel, there are only two other companies on Earth; TSMC and Samsung.
While it makes no sense financially for a new company to buy equipment to build trailing edge chips, it’s perfectly logical for TSMC just to keep old fans running
If they think that’s unfair, they can quit asking for our tax dollars to expand their for-profit businesses.
There are only three companies in the world with cutting edge semiconductor manufacturing capability: Samsung, TSMC and Intel.
My proposal would use our tax dollars to create plants that use Intel technology, but aren’t under their control, with different business strategies, operational priorities, and money going to other directors. The supplier diversity would increase competition domestically while strengthening us. While not done the same way, my precedents for increasing suppliers are Intel having to license to AMD and IBM licensing to Freescale.
What you're proposing is that the US stand up a semiconductor fab that can compete with Intel. That's going to be hard!
I think "use Intel technology" is a lot less practical than it might seem. After all, Intel uses ASML technology, and anyone with enough money can buy the machinery (as long as they're not based in China). Intel manufacturing tech is the sum total of all the skill and expertise of Intel's employees.
But right now, CUDA rules the day in AI. It'd be nice to have a few strong competitors in that space.
[1] https://www.nytimes.com/2020/09/04/opinion/pefco-export-impo...
How are you calculating this? The full-year deficit is running at less than $1T... You aren't counting it when Treasury rolls maturing bonds over into new debt, are you? That's normal and irrelevant.
https://fiscaldata.treasury.gov/americas-finance-guide/natio...
There's a few things worth mentioning, since after all that is still a big deficit.
1) Debt service costs are over $1T annually, as the end of many years of ZIRP finally starts to bite. There's no guarantee that we return to lower rates in the future, but it's likely, and that will reduce debt service burden over time.
2) Deficits are calculated inclusive of the costs of debt service, but do not include the impact of inflation on the public debt (which is substantial right now).
3) Deficits can absolutely be sustainable. The economy (i.e., GDP) grows over the long term, and the tax base grows with it. GDP is around $23.3T, and assuming long-run 3% growth, that would mean deficits of $700B are sustainable.
Overall the fiscal picture is not great, but anyone acting like there's an acute crisis is probably doing it for political reasons.
It's been widely reported [1] that the US debt reached $32T in June 2023, $33T in Sept 2023, $34T January 2024, achieving those milestones roughly every 100 days. The projections indicate an exponential increase, which doesn't help the case for sustainability.
Sovereign debt and fiat ultimately are confidence games. Being unable to offer credible long-term math is a problem.
[1] https://www.cnbc.com/2024/03/01/the-us-national-debt-is-risi...
That said,
> It's been widely reported [1] that the US debt reached $32T in June 2023, $33T in Sept 2023, $34T January 2024, achieving those milestones roughly every 100 days. The projections indicate an exponential increase, which doesn't help the case for sustainability.
These figures aren't interesting because they include debt that the government owes to itself (intragovernmental debt). The debt held by the public is presently around $27T.
When actually considering long-run sustainability, you don't just consider the real GDP growth rate (as I did above). You really need to consider several factors:
1) Deficits
2) Nominal GDP (i.e., disregarding inflation)
3) Nominal interest rates
If you have a ton of inflation, you can effectively reduce the debt burden in terms of a % of GDP, since the GDP grows with inflation and the debt does not.
This is the data series that should interest you:
https://fred.stlouisfed.org/series/GFDEGDQ188S
You'll note an explosive increase due to the extreme pandemic deficit spending (and during the financial crisis), but lately it's actually not an "exponential increase".
The bottom line is it's not as though these are uncharted heights, or that we're presently on an uncontrolled exponential trajectory -- but, we have "run out of room", and if we have another crisis, we're going to be unable to engage in the kind of deficit spending that we have in the past without serious consequences.
[1] https://www.cbo.gov/publication/59711
Bottom line, our taxes need to go up modestly in the coming decades... but only if these assumptions actually prove to be true:
> Inflation slows through 2026 to a rate that is consistent with the Federal Reserve’s long-term goal of 2 percent and then remains at rates that are consistent with that goal from 2026 to 2054.
> Interest rates generally rise over the next three decades, largely as a result of projected increases in federal borrowing and in capital income as a share of total income.
... I doubt it! Look what happens to interest rates in graying countries like Japan.
Some more discussion: https://news.ycombinator.com/item?id=39764821
Intel made ~55 billion last year. Maybe they don't really need corporate welfare.
"We need slavery - our economy will fall apart without it!"
"We need Standard Oil and US Steel - splitting them apart would be a catastrophe!"
"We need universal healthcare - a public option would place undue burden on insurance companies!"
"We need Boeing - our foreign competitors would eat us up otherwise!"
At some point, it's time to admit that the long-term pain is not worth the short-term benefits we get from naive economic policies.
2 - comparing a minor economic investment ($8B on a $23T gdp) to slavery, and the economic system built on slavery, is the stupidest thing I've read this week, so, well, congrats. I guess?
3 - not a naive economic policy; US government investment built silicon valley and that's going ok.
Intel has had the resources to build out fabs in the US for decades. Instead, they've chosen to build elsewhere, and now they're rewarded for it?
They recently announced their $20b facility in Ohio is being "put on hold":
https://www.tweaktown.com/news/96969/intel-delays-launch-of-...
While at nearly the same time announcing a $25b facility in Israel:
https://www.cnn.com/2023/12/26/tech/intel-israel-investment/...
Who in their right mind would invest $10b just to build the manufacturing capability without having a well established product? And if you have a well established product are you still a startup?
However, it isn't as clear if the same applies to semiconductors, since even a bit of dust is indeed a serious problem for producing a chip where the transistors are much smaller than most dust. Until very recently there were no blank checks, every improvement required mostly private investment, so it's less likely that the inefficiencies are intentional.
The equipment and facilities required for cutting edge fabs are very expensive.
Almost all of Intel's fabs are in America.
I don't think we'll ever have a perfect system, unfortunately. Just makes it that much harder for startups.
Which startups would be harmed by this type of investment? as a relatively casual observer, I didn't think there was much in way of startups that were looking to go head-to-head with a company like Intel or AMD in chip fabrication.
I have a friend who lives in Ohio who was very excited about this, and I told him not to hold his breathe, its likely they will do everything they can to get subsidies to pay for it, rather than pay for the majority of it out of their own pocket and re-coup some via subsidy, therefore I suspect they will delay opening until they get more subsidies.
It looks like I was right, unfortunately
Sure, maybe they don't actually make any buybacks. This is what's left from $110.0 billion they approved for stock buybacks in the past, not a quantity that's been approved or seemingly needs to be used this year. They haven't bought back any stock since 2021 [1].
One just wishes they'd invested in fab-building earlier. They've spent $152.05 billion in buybacks since 1990 [1], a fab apparently costs anywhere from $3-20 billion [2]. That's say ~10 potential fabs that instead became just checks for investors.
[1]: https://www.intc.com/stock-info/dividends-and-buybacks
[2]: https://en.wikipedia.org/wiki/Semiconductor_fabrication_plan...
https://bdsmovement.net/Press-Release-BDS-Launches-Boycott-I...
I wonder if this is coming from a position of ignorance... Samsung is among the companies of the world that might be producing negative externalities that weigh more than their positive contributions
https://www.bloomberg.com/news/articles/2024-03-15/samsung-p...
Meteor Lake appears to be in mass production and shipping in a plethora of laptops worldwide. There doesn't appear to have any availability problems.
Intel's bread and butter has always been x86, but not only is it an ISA that's proving non-ideal for a couple new applications (mobile is ARM, AI is in the GPU or NPUs, etc), AMD is really putting up a good fight in that market too, and the crown has been traded a copule times in the past few years.
Sometimes top down planning works, but I think I would personally need to trust the leadership and the incentives.
Unfortunately incentives on these are typically to do bare-minimum so you can meet the criteria to get subsidies. Sure the chips will be usable, but you spent a multiplier of the cost it takes to get it, and the chips aren't cutting edge.
I'd a bit more interested in some moonshot idealism than just some military buildup.
We learned from the pandemic that a huge amount of the world's manufacturing economy depends on the availability of old and outdated chips. Being competitive in cutting edge CPUs and GPUs is only one facet of the problem. Incrementally addressing chip production needs seems better than doing nothing for longer in an attempt to solve everything at once, or a riskier leapfrog attempt that's likely to fail.
Intel is building two 20A in Arizona and one 18A fab in Ohio. If they aren't cutting edge, what is?
/s should hopefully be obvious, but it does seem like anytime AI gets mentioned, it's clear cut to remove all US jobs away within the next 3-5 years, so it's ironic seeing a "lack of a skilled workforce" comment.
The right thing to do is to block these big waves and force global competition.
Then, you'll be talked down for being poor and lost. And whatever money you make will be put directly in the hands of your landlords, that profits off scarcity.
Globalization is breaking down quickly. Chips are crucial to national security and our economy. The supply chain for advanced chips is heavily dependent on East Asia which is a geopolitical powder keg and a demographic time bomb. The only thing more expensive than whatever we end up with is chips unavailable at any price because East Asia devolves into a war stricken basket case. We needed to have been starting this panic training/building 10 years ago but better late than never!
Is it? I don't know if there's a concrete way of measuring "amount of globalization", but I'd guess that right now we're probably the most globalized we've ever been. "More things that you use are made outside your own country" has only been growing, and with the advent of full remote companies that also includes much more software than before -- it used to be that only huge corporations would offshore software development, now everybody can do it.
If you look at the US in particular the relative value of imports and exports is down about 30% from the peak 10 years ago. That's a big change for such a short duration
Was the US federal government previously funding fab development in China?
That is to say, it seams like this investment is to meet a very specific need, and wouldn't have happened otherwise. Similarly those paying aren't the same either.
Edit: Nevermind, it did reach a new record of 63% in 2022. Globalization seems to be doing fine. https://data.worldbank.org/indicator/NE.TRD.GNFS.ZS
Physical goods are much more complicated to move around the globe than code
Would you mind listing all the naval security commitments - from the Bretton Woods era - that the US has withdrawn from (eg over the past decade or so, anything relevant to "continues to")?
I'm not aware of any meaningful reduction in US naval security commitments. If anything the US is as busy as ever with its global naval security efforts. It's hyper busy everywhere: from Latin America, to Australia, to Europe, to the Middle East, to Asia.
The notion that the US has stepped back at all is entirely unsupported by the actual facts. It's just a weak myth being posted endlessly since Trump began spouting isolationism in 2015-2016. Meanwhile, in actuality, the US just spent another hundred billion dollars on a foreign war in two years.
40 years ago the US Navy was equipped and staffed to patrol the global oceans. Now, the US has a relatively few massively powerful forces of naval power projection but is woefully understaffed and under-equipped to maintain the global order against multiplying chaos. This is unlikely to change at all let alone be fast enough to influence outcomes. Growing sentiment after decades of the war on terror is for the US to be hesitant to intervene internationally, and while that isn’t current policy it’s predictive of future policy. It’s not at all clear that it would be popular in the USA to, for instance, go to Moldova’s defense.
> the US just spent another hundred billion dollars on a foreign war in two years.
The vast majority of this was accountancy fictions about the value of stockpiled obsolete materiel we couldn’t sell but had to pay to maintain or pay to scrap. We have demonstrably not gone all in on supporting Ukraine and Congress is currently strangling any attempt to do so. This is another sign of the US inevitably devolving into an unreliable defense partner.
When the Soviet Union broke down 30 years ago the US decided the biggest worries were small countries (Iran in particular), and things like 9/11 proved they were right. However Russia is now attacking Ukraine and many think that countries like Poland or Latvia (both in NATO) are next. China is setting up so that they could take military action to take Taiwan, and other countries in the area. Nobody knows for sure if either of these predictions will come to pass, but there are signs that should worry you.
Food. Fuel.
Renewables is shifting one of these, but the other will not go backwards, its that or billions will starve.
It’s all quite boring. Nobody is interested in solving the issue. Only a rat race to see who can con the next person(s).
Some days this monologue from Westworld rings true:
“ I think humanity is a thin layer of bacteria on a ball of mud hurtling through the void. I think if there was a God, he would’ve given up on us long ago. He gave us a paradise and we used everything up. We dug up every ounce of energy and burned it. We consume and excrete, use and destroy. Then we sit here on a neat little pile of ashes, having squeezed anything of value out of this planet, and we ask ourselves, “Why are we here?” You want to know what I think your purpose is? It’s obvious. You’re here along with the rest of us to speed the entropic death of this planet. To service the chaos. We’re maggots eating a corpse”
Millions of Americans suffer from "food insecurity" i.e. "reduced food intake and disrupted eating patterns at some time during the year." [1] This is very bad, but, there are also food stamps, soup kitchens, food banks, school lunches, family members, and random good samaritans that prevent actual famine amongst those populations because there is no shortages of food present. This is very distinct from real mass starvation where millions of people are dying of hunger in a famine where there is insufficient food available which is what I believe the GP is referring to.
1. https://www.ers.usda.gov/topics/food-nutrition-assistance/fo...
Such a system is doomed to fail eventually, there's no way around it. Not to mention the fact that its just a big shell game with everyone trying to hide the true external costs of industrial agriculture. The larger we build that system the harder it will fall unfortunately, and if there are no local food producers left in business we're all screwed like the Soviets after they realized killing all the people who knew how to farm was a bad idea if you also like to eat.
- The US has almost everything it needs in North America to be self-sufficient. Food, energy, natural resources, manufacturing, trade.
- The US is tired of being involved in the Middle East.
- The US is tired of protecting the oceans and trade for everyone else.
- The US is tired of China stealing its tech, being protectionist, becoming an adversary, not being friendly to US companies, meddling in US trade, etc.
- The US is tired of NATO not stepping up to the plate. It won't back out, of course, but would love for Europe to care more about its own security.
There are so many reasons the US is pulling back. Both the Trump and Biden presidencies are completely on board with it. It's fully bipartisan, and it's going to accelerate.
The US is going to near-shore, friend-shore, and to every extent possible, onshore what it needs.
Globalization does not necessitate middle east involvement.
> - The US is tired of China stealing its tech, being protectionist, becoming an adversary, not being friendly to US companies, meddling in US trade, etc.
WTO already has the mechanisms to deal with this, the CHIPS act is hurting out standing with our allies because of its blatantly protectionist provisions.
> - The US is tired of NATO not stepping up to the plate. It won't back out, of course, but would love for Europe to care more about its own security.
Again, not contra globalization.
Do we really need to be stuck on a treadmill of always having to make our lives better? People don't know the word "enough," that's a real problem.
There's obvious issues with how current quality of life is distributed, but I'd propose that we don't need to increase QoL with new inventions simply to make sure that we don't ignore those worst off.
Never mind that the world is not constant - we need innovation on the climate front if we want to stay in a stable environment that doesn’t require more sophisticated adaptation.
Making those worst off better without making everyone else poorer would be much faster with globalized trade.
I am sorry you have become so skeptical of progress, but I and others will continue working so that a rising tide lifts everyone, including you.
Its an unfortunate fact of life that we can't build a utopia with no illness or suffering. We have developed many solutions for different medical conditions over my lifetime and I'm truly happy for those helped. Over the same time, though, we've discovered and named even more. We continue to develop new medications for diseases that didn't exist in text books not long ago, and there's good reason to believe that pharmaceutical companies invent new disease classifications to get fresh funding for a medication they already have on the shelves.
I'm not saying we shouldn't help those in need, only that we can't run down that path forever with a hope that if we can just solve one more condition we'll have it all licked.
> Making those worst off better without making everyone else poorer would be much faster with globalized trade.
I'm not actually sure if this is the worst answer. We frequently hear about the widening wealth gap, fixing that certainly would mean making some poorer.
> Never mind that the world is not constant - we need innovation on the climate front if we want to stay in a stable environment that doesn’t require more sophisticated adaptation.
I wholeheartedly agree with the sentiment behind this, I just start from a different point. I think our best chance of helping reverse the problems we cause to the environment is to first remove the worst offenders of what we do today rather than start from innovating and replacing them. I think a big mistake in the green energy movement had been assuming that it would be untenable to reduce total energy use and that we must instead replace all current use and match the current rate of growth in energy consumption.
> I am sorry you have become so skeptical of progress, but I and others will continue working so that a rising tide lifts everyone, including you.
I'm actually not skeptical of progress, I may need to rephrase things if it comes across that way. I just view progress differently than I think many do today. Progress is often talked about as starting with what we have today and adding to it to make tomorrow better, i.e. always intervening more and never questioning how we got here. Put another way, I view progress worth having as progressing towards specific goals whether that means innovating our way out of it or backtracking to find another path. I don't view progress as an incremental approach that must always push ahead without giving time and consideration to removing when we realize pur current path is fundamentally wrong.
That is not a fact.
Progress is accelerating, and we need to keep pushing. It's the quintessential virtue.
https://ourworldindata.org/a-history-of-global-living-condit...
https://ourworldindata.org/grapher/world-population-in-extre...
https://ourworldindata.org/cancer
https://www.vox.com/2014/12/14/7384515/extreme-poverty-decli...
https://www.reddit.com/r/OptimistsUnite/comments/1bjaog6/fil...
If you have links or explanation of how we could possibly get to a world with no illness or suffering I'd be very interested. I'm also not expecting anything as that first depends on somehow already knowing what we don't yet know, like what will kill people once we cure cancer.
As an Eastern European, I cannot thank the US enough for pushing NATO. It makes me feel safe. I'm just sad that they could not get Ukraine into NATO before all this madness started.
Multiple political analysts, US ones included, say that this would not have been the case.
Wars are only good for those in power, in both sides.
https://en.wikipedia.org/wiki/Ukraine%E2%80%93NATO_relations...
Invaded? Probably not. Becoming a second Belarus? Yes. Overall it would have meant a Russia - NATO border closer to me. I prefer an Ukrainian - Russian NATO border far, far more.
Membership in NATO prevents regional wars, because it increases the risk for Russia. Standing alone, a country like Finland or Poland can respond only with conventional weapons, which they don't have too many considering the scale of Russian war against Ukraine. By attacking a NATO member, Russia risks with a nuclear response from other alliance members up to a global nuclear war.
Russians understand and react to power, and NATO represents that. When a Russian fighter jet intruded Turkish airspace while flying sorties in support of Assad's regime in Syria and got shot down by Turkish air defense, Russian officials came to apologize instead of ramping up the usual "we'll nuke everything!" rhetoric. Demonstrate credible force and they'll backtrack.
> Do you think that if Ukraine was not being courted by US that it would've been invaded like that ?
The premise of your question is upside down. Ukraine was courting the US to get security guarantees such as NATO membership, not vice versa. The notion that Eastern Europe had to be somehow tricked into EU and NATO is deeply misguided. Instead, these have been the main foreign policy goals for most countries in the region, the holy grail.
The alternative for Ukraine was to become an oppressive dictatorship like Belarus has become under Russian influence. That would've meant that Russia would've moved in their armed forces, installed nuclear weapons and prepared to use Ukraine as a staging ground for further invasions westwards - everything they've done in Belarus so far.
Instead of seeing Kyiv under missile attacks, we'd be seeing the same happening 1000 km westwards in Warsaw. How far towards Paris and London do you prefer to let this thing creep before tackling the problem? Until Picadilly Circus?
NATO only does things when it benefits the US.
What are you talking about? Turkey's 'occupation' is not of a member state.
Why 'occupation' and not occupation ?
I also think that Western international institutions are systemically biased in favor of Greece and other more western nations, which is pretty obvious by the disparate response to Greek invasion of Cyprus vs Turkish.
This is the Russian propaganda of 2 years ago, and we know it is a lie because Putin went on camera and told us so himself. When asked by Tucker Carlson why he invaded Ukraine he gave a half hour history lecture telling us about its history of Russian occupation. Putin justifies his murderous invasion by pointing to former borders of historical Russian entities -- which by the way would not just include Ukraine but Latvia, Moldova, Estonia, Lithuania, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Armenia, Azerbaijan, Georgia, and parts of Germany, Finland, Japan, Mongolia, Romania, and Poland.
Every child in Eastern Europe knows this to be the real case, and only Americans who have no serious understanding of Russian and have generally never even visited believe this hogwash about NATO.
Putin even said in 2002 that Ukrainian NATO membership was a matter between Ukraine and NATO only: "At the end of the day the decision is to be taken by NATO and Ukraine. It is a matter for those two partners."
I am not an American with no serious understanding, I live in an area that used to be Soviet Union.
Everybody knows you should not corner a wild beast.
Yet this contradicts his statements in 2002 that it was not a big deal and not his business. He only changed positions when he viewed the Russian economy as big enough to wage war and take territory.
There was also no such promise, this is a complete myth.
Russia is doing what it has always done: try to steal more clay. They have been doing this for a thousand years, far before NATO. Russia was neither cornered nor threatened.
However, blame is never black or white. It cannot be all Russia's fault.
Most crimes are a single party's fault. One is the criminal, and one is the victim. Saying it is impossible for it to be all Russia's fault is logically fallacious. Russia chose to invade and commit mass murder. Russia needs to be held to account for that.
I wish you the best.
This is pure ad hominem. My statements are not emotional at all. Ukraine committed no offense against Russia. Georgia committed no crime against Russia before they aided Abkhazian and South Ossetian rebels. Putin committed these offenses unilaterally against these. Russia chose to steal territory and murder hundreds of thousands of people. These are not emotional statements, they are factual ones.
It is in fact your claims which are clouded by emotionality -- obvious sympathies for Russian propaganda.
If provided without evidence? Yes, you can. What's presented without evidence can be dismissed without evidence.
> Everybody knows you should not corner a wild beast.
Nobody cornered Russia, Russia decided that it wants its old colonies back. Most of them were wise enough to long before ask NATO to protect them this time, Ukraine unfortunately had trusted Russia when it said it will honor Ukraines independence and now pays a heavy price for it.
Gorbachev called that a myth in 2014 when Putin used it as an excuse to invade Crimea. USSR's minister of foreign affairs Shevardnadze and minister of defence Yazov have said the same thing. Source, excerpt from an interview to ZDF: https://twitter.com/Jesuitchild/status/1749887239226617873
This talking point is a shining example of propaganda. Gorbachev and Shevardnadze have gone as far as explaining why even in theory, such promise couldn't have been made. It's a complete fabrication.
Personally I am embarrassed that we were ever involved in the middle east, am willing to see our resources spent protecting natural resources if we can afford it, want a stronger NATO and only see that happening by us leaning further in, and think the only thing bipartisan about our two presidential candidates is that there is no way they are our two best candidates for the job.
The past decade of American media has been promoting this new cold war narrative as if there is inevitably going to be a major war with China.
If there is war in East Asia then the whole international economic system will collapse, people will be starving in the streets. That's if it's not a nuclear Armageddon and we're left to rubbing two sticks together. Nobody will care about chips if there is a war. That will be really far down the list of actual concerns
The world is so interconnected and everyone depends on everyone so much that there is basically no point in planning for this scenario
There's always a point in planning for a scenario if you think the risk is high enough and there is something you can do to better prepare for it.
In this scenario, the ones most impacted immediately will be the ones most dependent of the global economy. If you can't get the basics like food, water, and shelter if war with China breaks out then sure you'll be in a bad spot. But is it really an impossible task to prepare at all?
Even in the most benign case, if China is for whatever reason peacefully cut off from the global economy and we haven't been nukes into the stone age - having to move back to 22nm chips is going to be the least of our problems. To put it in perspective.. this is going to be a world where we no longer have cellphones and toiletpaper (b/c those are all made in China) and most equipment/machinery/refrigerators/washing-machines/cars/trains will overnight become at least in part unrepairable. Basically ever sector of the economy depends at least in some small part on the Chinese supply chain.
We put chips in almost everything today. If we can live without chips them so be it, but assuming we'd rather not feel the full impact of have zero chips for whatever reason we'd be smart to start building some level of manufacturing capability at home.
We already saw toilet paper supply chains crumble and all it took was a (potentially over-) reaction to a potential global pandemic. It wasn't a war with China that made it clear we really could do some good with a simplified toilet paper supply chain, it was scientific concern amplified but scared/concerned politicians and herd mentality when the public realized they weren't prepared for such a possible future.
But even in this horror parallel reality of yours, cutting edge chips would still be very far down the list of things that are important. Can you provide basic sanitation without anything made in China? Transport? Medical care? Can you feed your nation? Can you maintain your nations basic infrastructure?
Having to go back a few generations in chips is just irrelevant at the scale of disaster you're envisioning
If you are going government intervention, they could reach for tariffs and import taxes rather than subsidies. Forcing prices high enough for domestic production is painful at first but would eventually work all the same.
I fully agree with you that too much of our current infrastructure is dependent on China and other countries. It isn't really a problem if we aren't concerned with major shocks though. It sounds like the difference is that I see the risks high enough to invest in domestic production if possible, you see that solution as unrealistic and that we're better off avoiding/preventing all shocks.
Imagine how much more expensive everything would be, and now imagine the cumulative amount of money that represents. Money that could be used to fund education or improve people's lives, or even build armaments if you really are worried about the commies. You're in effect paying an huge "tax"/premium indefinitely for a threat that's very theoretical. In so doing youre seriously slowing down the rate of progress and prosperity
But that goes a bit away from the original point. That even if you want to have a self reliant north Korean model for the economy, chips are not a sensible place to start. You'd probably want your local hospital to be able to run without anything made in China. Going back to 22nm (circa 2014 tech) would be a minor annoyance.
Its overly simplistic to assume that a subsidy will increase prices and harm the economy. We have been subsidizing corn for decades and it has kept prices artificially low. Prices for corn and downstream products like beef are artificially low specifically because of federal subsidies.
If a subsidy creates domestic jobs it could have a net benefit. The ultimate question is what metrics are impacted and at what rate. If domestic jobs are created fast enough to increase demand for employees, wages could rise faster than prices.
I have no idea what the end result would be, but that's ultimately my point. Economic models are just that, models. Models are based on analysis of past events and assumptions if the future. We don't know what we don't know, and we often don't recognize how inaccurate models are when we simplify them down to a handful of measurements.
To your original point, hospitals do seem reasonable to focus on with regards to stability through simplified supply chains. Chips may help there, our hospitals are dependent on a huge amount of tech today. Paper, silicon, and metal products would also likely be high on the list as they are often treated as consumables - the consumable nature of those products may make them more important than chips.
But I'm glad you see that chips are not really the top priority if this was really an issue of national safety. So one then has to wonder what are the real drivers of these jingoistic policies
To wind it back a bit, are you disagreeing that with the idea that subsidies are meant to reduce consumer prices and tariffs are meant to increase prices on imported goods?
Or are you disagreeing with my argument that economics isn't that simply and pulling one lever can have multiple impacts that together may move prices in an unexpected way?
To the second point... it's so vague to be meaningless. What you're advocating is basically mercantilism - which is widely seen as ineffective and counterproductive since.. the 19th century. "unexpected ways“ .. is it like the law of gravity and always going to hold? Probably not. But when you are talking about blocking international trade across whole sectors of the economy then it seems like a valid simplification. If you want to argue mercantilism is going to be a net benefit to the domestic economy then the onus is on the advocate of the outdated theory. All past historic experience points to the opposite and to the development of a stagnant backwards economy
With regards to subsidies and tariffs I disagree the distinction is semantic and unimportant, though it likely is irrelevant here since I started with the concept of a change in demand at the consumer level.
This sentiment was very prevalent right before WWI.
> In awarding financial assistance for planning or establishing a Manufacturing USA Institute, an agency shall give special consideration to such institutes that
> contribute to the geographic diversity of the Manufacturing USA program,
> are located in an area with a low per capita income,
> are located in an area with a high proportion of socially disadvantaged residents, or
> are located in small and rural communities.
It seems very much to be both.
[^1]: https://www.congress.gov/bill/117th-congress/house-bill/4346
But then there is reality. And reality is that there isn’t some giant labor pool of fab workers in the US — yet.
- President Joe Biden signed the CHIPS and Science Act into law one year ago, and semiconductor companies across the U.S. have promised to spend $231 billion on building chip manufacturing hubs on American soil.
- Now, as the shovels hit the ground to begin construction, companies are realizing how difficult it is to find talent.
- Taiwan Semiconductor Manufacturing Company said it had to delay production at its $40 billion Arizona plant due to a lack of workers in the U.S.
https://www.cnbc.com/2023/08/09/us-chip-sector-talent-gap-em...
(Though it could be - if you can wait 20 years you could home grow it)
I’m a former construction contractor who reinvented myself as a software developer.
Each time I run into one of my former peers in the construction industry I hear the same complaints from them. “We can’t hire any good help.” Yet they are still paying the same non living wages that they have for 30 years.
“Do you have any evidence that the CHIPS act require DEI?”
Yes, see the relevant sections here: https://x.com/bonchieredstate/status/1766467529151557788?s=4...
“Do you have any evidence that DEI distributes outcomes to favored activist identities?”
A summary: https://youtu.be/n0fpeiFNWMY?si=eiCnRL0LX8RhOlxI
Happy to provide evidence from woke literature if you are interested in evidence of any aspect of how it works. They are pretty straightforward about it, but incredibly wordy.
DEI has become a new conservative talking point but so far I haven't seen any evidence that such programs do anything to restrict hiring "white and Asian male[s]" as you put it. I've noticed some people complaining about what they imagine DEI means which is just the same old "affirmative action" complaints recycled.
I'm not saying there are not some cases of DEI-induced discrimination - the world is wide after all - but that isn't what DEI policies/programs say in their text or how they're intended to work. I have never seen anyone saying we should lower standards to meet some kind of "quota".
Again I want to point out that the numerous conservative attacks on affirmative action constantly claimed it was a quota system despite that being a flat-out lie. That makes me skeptical about this current round of conservatives blaming everything from the airline pilot shortage to fab personnel issues on "DEI".
To your claim there is no evidence. Here are some videos of top executives saying DEI enforce hiring & performance outcomes using Marxist oppressor/oppressed hierarchies:
—- CEO of IBM @ArvindKrishna admits to using coercion to fire people and take away their bonuses unless they discriminate in the hiring process.
“You got to move both forward by a percentage that leads to a plus on your bonus," Krishna said about hiring Hispanics, "and by the way if you lose, you lose part of your bonus.” https://x.com/jamesokeefeiii/status/1734374423124176944?s=46
—- Carole Huntsman, Former Senior VP at Sanofi Pharma: “One in five hires NEEDS to be a black employee for us to meet our goals” … “One in ten HAS to be a Latinx employee.” https://x.com/jamesokeefeiii/status/1737986459007590636?s=46
That’s not an argument and not an inquiry. Eg what you could ask is
“What makes you confident DEI is Marxist?”
It institutes DEI commissars (in Russian: a soviet) in every company like Stalin did to redistribute outcomes through equity from Marxist oppressor categories to oppressed categories while aggressively destroying dissent.
Half the dudes in my high school class couldn’t manage to write a coherent 5 paragraph essay, so low pay office work is not really an option for them.
Plumbers and electricians have a good start from nothing apprentice program. They are sometimes hard to get into, but I know a few people who have gotten in over the years.
Record corporate profits while wages stagnated. Coincidence?
Is American labor really more expensive? Really?
Or do American workers simply have the unforgivable expectation of some kind of profit sharing?
(Yes, yes, yes. CoL in the economically important parts of America is higher. Again, the root cause being windfall profits for the elite.)
If it was so goddamned easy to build a chip fab, they'd be all over the place - everybody needs them, and they're extremely strategic.
Like fighter jets - they're very, very hard to fly and also expensive to build and maintain.
I believe "Intel 4" is their current most advanced mass-produced process.
They have some level of production as advanced as what they call Intel 20A. But it's a very small percent - can it be considered mass production?
https://finance.yahoo.com/quote/INTC/
Boosts a competitor, opens up fab capacity for all and moves the needle on the intentions behind the CHIPS act, all at once.
It never died. It was always there. Pat's just fulfilling the vision Paul had.
Some context from 2013 when they tried their hand at it: https://www.extremetech.com/computing/150217-intel-pumps-up-...
It's funny as a side note that their big foundry announcement at the time was making chips for Altera before the merger, and now Altera is parting ways with Intel after 8 years. Time flies.
Intel is investing 75 billion.
GLOBALFOUNDRIES entire market cap is 25 billion.