Tag Archives: political economy

I Can’t Think of a Reason

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Mark Zuckerberg wants to automate ad-creation in his Meta.

That’s not all he wants to do, though. Zuckerberg said this at his recent shareholder meeting (keep in mind that the these meetings generally are Zuckerberg talking to himself since he owns the controlling number of voting shares) [emphasis added].

In the not-too-distant future, we want to get to a world where any business will be able to just tell us what objective they’re trying to achieve, like selling something or getting a new customer, how much they’re willing to pay for each result, and connect their bank account and then we just do the rest for them[.]

Which of those processes—customer convenience or Meta convenience—is the one intended to be jumped on with both feet, and which is the one intended to be slipped past us?

I, for one, have no reason at all to let anyone other than myself or my wife have whenever-they-feel-like-it access to my financials.

Backwards

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Interior Secretary Doug Burgum thinks he has a deal with New York’s Progressive-Democratic Governor Kathy Hochul: he’ll lift the pause on an off-shore windmill project she wants if she’ll unblock a couple of natural gas pipelines that ex-Progressive-Democrat Governor Andrew Cuomo blocked. The pipelines would vastly lower energy costs for New York and for the northeastern States on the other side of New York from Pennsylvania, where the pipelines would have originated.

Burgum lifted the pause on the wind farm, and then—and only then—Hochul said she’d work with the Trump Administration and companies on “new energy projects.”

This is backwards, and it foolishly trusts a Progressive-Democratic Party politician to follow through in any serious fashion.

It’s easy enough for Burgum to lift the pause on the wind farm; he can do it with the stroke of his pen. It’ll take a while for Hochul to lift the ban on the pipelines—if she does it at all rather than just engaging in stalling rhetoric, empty words like work with…on “new energy projects.” The correct order for execution of this agreement would have been for Hochul to lift the ban and get construction started. Then lift the pause.

Nvidia and Investing in the PRC

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Nvidia‘s honcho, Jensen Huang, says it’s not straightforward for his chipmaker to leave the People’s Republic of China altogether. Many of his arguments, though, are irrelevant.

In the end, the platform that wins the AI developers wins AI. Export controls should strengthen US platforms, not drive half of the world’s AI talent to rivals.

You bet. But our chipmakers don’t need to be in the PRC to win the race—which isn’t a race, anyway, since technology always advances. It’s a never-ending journey. American chipmakers need to be elsewhere, tapping other talent, including American talent that still is second to none.

The US government’s decision in April to stop the company from selling its H20 chips to the Chinese market cost the company about $2.5 billion in lost sales in the April-ended quarter and will cost another $8 billion in the current period ending in July. That is because the H20 chip was designed specifically for the Chinese market to comply with then-current export restrictions, so it isn’t really salable anywhere else.

Avoiding export restrictions is entirely legal, but this is a trade and technology war that the PRC has been inflicting on us for years. Huang had to know that export restrictions would evolve in that war, just as weapons technology and export restrictions evolve in shooting wars. Again: American chipmakers don’t need to be in the PRC. American chips, of any generation, don’t need to be in the PRC.

Also, an irrelevancy from the peanut gallery:

“China is a quarter of the market. It’s a big number,” UBS analyst Tim Arcuri said in an interview. He added that Nvidia would have a “dominant hold” on that market if it were able to compete there.

Here’s a bigger number. Three-quarters of the market is not in the PRC. Nvidia would have a dominant hold on that market if it wanted to.

Dominant hold in the PRC chip market? What about all that PRC techie talent about whom Huang worries so much if left in isolation? Won’t they move even faster with American chips in their suite? Beside that, other companies, American and European, have held a variety of “dominant holds” there: GM, Tesla, Volkswagen, Nokia, Ericsson, and on and on, all had dominant holds, until they didn’t. And the reason they don’t anymore isn’t because they can’t compete on technology and market skill, it’s because they can’t compete with PRC government subsidies of domestic companies and PRC naked theft of intellectual property.

And this, from Huang, again:

China’s AI moves on with or without US chips[.]

Of course; that’s obvious. The PRC, though, does not need easy access to American chips—or those of other Western chipmakers’ chips—in order to do that. The presence of American chips (and others’) inside the PRC only makes it easier for PRC techies to “move on” through their reverse-engineering, theft of techniques, software, intellectual property, and so on.

Certainly, switching out of the PRC would be short-term disruptive to American chipmakers, but it would be mid- and long-term beneficial to them and to our nation. Especially if our chipmakers, and our government, were to arrange coalitions of Western chipmakers to do development and marketing rather than working strictly alone. There would be anti-trust problems here if the coalitions aren’t set up properly, but that’s doable, and has been done in many other venues.

Another Reason Why

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Here is another reason our nation’s student loan debt has gotten out of hand. The subheadline goes

Millions of Americans suddenly owe billions of dollars in student debt after years of forbearance

The foolishness of the forbearance itself contributed to the enormous risks the massive student loan overhang represents for our economy. There’s nothing sudden, though, about the reappearance of that debt.

The article then does nothing to correct this distortion. Here’s the lede:

Millions of Americans had their student-loan payments put on pause during the pandemic. Now they are back on the hook again.

They never were off the hook; none of those loans were forgiven in any legal way. They’ve always been on the hook. “Millions of Americans” have owed those billions of dollars all along. This sort of distortion is even more heavily contributory to those risks.

Full stop.

Misguided Categorizations

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The Wall Street Journal has them in its article concerning some outcomes of the just-passed House version of the budget reconciliation bill. The headline reads

The Biggest Losers in Trump’s Megabill

Some Medicaid users are categorized as losers. House-passed work requirements would mean some few millions would lose Medicaid coverage unless they show they’re working part time or are actively seeking work or they are volunteering. Separately, nearly a million and a half illegal aliens would lose coverage. It’s hard to see how these are losers. Those going back to work rather than coasting on our taxpayer handouts stand to gain morally and in the medium- and longer-term economically by having jobs and being able thereby to move up the economic ladder. Those volunteering will do much good for their community while gaining—if they volunteer seriously—valuable work experience. The illegal aliens being denied coverage can’t be losers, since it’s not a loss to no longer receive that to which they were never entitled in the first place.

Older food-aid recipients are categorized as losers from those same work requirements, here being extended to age 64. This is an especially wrong categorization since these folks actually gain in two ways. The first and immediate way is from the same gains as just above, for all that the longer-term part is absent. The second way these folks actually gain, though, directly addresses that longer term: by working those added years, they’re plussing up the Social Security payments they’ll receive when they actually retire.

Clean-energy projects are categorized as losers. The House-passed bill cancels these projects’ tax credits on an accelerated (relative to the originally proposed glacial) schedule. This time, the projects really are losers, but our economy gains enormously by cutting off those money wasters and by reducing the energy production and market distortions such credits have created.

Some student-loan borrowers are categorized as losers. The House-passed bill would put them on one of two offered repayment plans. This actually makes the borrowers winners, since it makes it possible for them actually to repay their loans and get those yokes off their necks.

EV/hybrid car owners and buyers are categorized as losers. Here, as with clean energy, the battery car buyers will lose out on subsidies, but our economy as a whole—and ultimately those battery car buyers—will gain sharply. These wastes of our taxpayer money will stop, and those subsidies’ production and market distortions will disappear.

While it’s true enough that the House-passed bill has much for which to be criticized—it doesn’t reduce tax rates enough, and it doesn’t cut spending nearly enough—these five items aren’t on that list.