These industries have squeezed the blood out of US suppliers. I don't think a correct solution is the government building capacity and supply chains.
IMO a more sustainable strategy is the government taxing the environmental and human rights externalities of off-shore production.
But aren't most chips made in Taiwan and Japan? Not exactly hotbeds of human rights abuses. I think the big Taiwanese company is already at work building a plant in Phoenix. Seems like this is a money grab by an industry truing to capitalize on a big money giveaway.
Li'l story. I did a couple seminars with a completion bond producer up in Vancouver. This is a guy who, when your movie eats shit, comes in to turn it back into something that can be sold so that the insurer underwriting the production can recoup some of their losses. It won't be good, it won't be the director's artistic vision, but it'll be something that can be sold at a market somewhere. So, no surprise, he knew a thing or two about selling low-budg and micro-budg terrible movies. Funny thing about Canada. They've got content rules that require 50% of what they air to be indigenous. And, since that wouldn't pay worth a crap left to its own devices, they fund it. Heavily. My completion bond buddy thought this was the worst idea imaginable. Because, according to him, Canada as an exporter of content ranked somewhere below Chile. Nobody watches Canadian stuff except Canadians. Far and away, the best system was the American one, where the free market decides what you're going to watch, no subsidies anywhere. But that was 2003. The advent of digital production and internet communication made it so that pretty much anybody could suck down some of those sweet, sweet Canadian subsidies and tweak things a little so that Netflix can basically make things kinda Canadian, shoot in Canada and reap all those subsidies. The states caught on pretty quickly; you spend tax money on getting Californicators to show up and shoot in your back yard and your multiplier is 4x, 5x. So now your true-blue Hollywood production probably has eight key guys from Los Angeles and everyone else is a local whose wages are effectively paid by the tax subsidies necessary to drag Roland Emmerich and the 600 people he's paying out to a sound stage in Albuquerque to shoot Independence Day 2. So now Hollywood basically brands global shit and produces fuckall of it locally and everyone trying to make a living in the Valley is stuck doing porn. Know who subsidizes chip manufacture? Everyone but the United States. Korea doesn't even really have a delineation between business and government. Taiwan? Morris Chang came to the US to go to Harvard, transferred to MIT, got a Ph.D from Stanford, worked three years for Sylvania, spent 25 at Texas Instruments, became VP of Semiconductor Research and was told that was as high as his slant-eyed face was going to go. Imagine where we would be if Xerox's Palo Alto Research Center had been a government nonprofit?After he left General Instrument Corporation, Sun Yun-suan recruited him to become chairman and president of the Industrial Technology Research Institute in Taiwan. As head of a government-sponsored non-profit, he was in charge of promoting industrial and technological development in Taiwan. Chang founded TSMC in 1987, the beginning of the period where firms increasingly saw value in outsourcing their manufacturing capabilities to Asia. Soon, TSMC became one of the world's most profitable chip makers.
I didn't know that history. Really fascinating. I've read every foreign policy pontificator speculate recently that Xi is just waiting for an excuse to annex TSMC (sure and the rest of Chinese Taipei, too). It will be a sad day for the good people of Taiwan, but from our perspective they really can't build that Phoenix plant fast enough.
I'm... coming around on China. I mean... they failed to successfully invade Burma. they failed to successfully invade Vietnam. Yeah China has definitely expanded a great deal since 1979 but... they're still China. They display outward contempt to every border state. Their OBOR dealings have largely been regarded as punitive by everyone. Their navy is built around a Soviet-era Kuznetsov-class ski jump carrier. It doesn't take much to stymie a big navy. I think China's navy is a jobs program intended to intimidate, not dominate. Get a lot of ships out there, run a lot of drills, build a lot of bases, sure. I mean that was the basic Soviet playbook - if you look impressive enough you never have to prove it. The minute shit gets kinetic, though, you have a lot to lose. How much face does China lose if they take a flyer at Taiwan and don't absolutely dominate? How complicated does their foreign policy become? How quickly does their new millennium become their old millennium? You might be too young to remember this but Iraq had the fourth largest army in the world back in '90. Desert Shield was the dreaded, dreadful pause before we embarked on another Vietnam or worse; casualties could have been in the tens of thousands because of all the WMD and the Elite Republican Guard but we put up our yellow ribbons and supported the troops and we went from first shot to ceasefire in one hundred hours. Popular memory insists that the Japanese were a fearsome strategic threat during WWII. The reality of the situation is they successfully ambushed the allies in December and were fighting a war of attrition by the following June. If the Japanese hadn't boxed themselves into a totalitarian death cult domestically the Pacific theater would have been over at Midway. As it was, US forces ended up fighting a war of near-extermination. I think the Chinese would have to be truly foolhardy to start a shooting war with someone who can credibly fight back. Trade rocks across Ladakh? Sure. But I think they know their narrative falls apart the minute they launch Silkworms. Speaking of SilkwormsThe Silkworm was developed at the Institute of Mechanics under Qian Xuesen, a Chinese scientist who did his graduate studies at MIT and Caltech, before being deported by the United States in 1955 after being suspected of Communist ties. A book about this scientist's life was written by Iris Chang, entitled Thread of the Silkworm.
Came back to this, since you linked it elsewhere. This statement has become verifiable in the last 3 months. Maybe it was verifiable since 2003, because while the US kicked the shit out of the Iraqi military, we didn't dominate the political landscape in the way we should have. And that's obviously part of being dominant generally. In the leadup to Iraq II, when it became clear that the US was serious, Hussein started offering every concession except resignation. We should have taken him up on it. Zelensky did the whole world a favor by not capitulating to Putin's demands, insofar as we get to see in real time what not backing up your mystique looks like. Russia can't fight a one front war against an inferior enemy. Can China? Maybe. Across a straight, where they would use air power followed by an amphibious force? Maybe less so. With Biden coming out and telling them that the US would consider it an act of war against the US? I would think long and hard about that if I were Xi. Because the only major power militaries we've seen in action in recent years are the US and Russia, and the verdict is that Russia sucks and the US, for all our political ineptness, can put a real hurt on you from a distance that you can't match. If I were Xi, and I were looking for foreign adventurism to distract from my utter domestic failure, I would look straight to my limitless, eternal friend Russia. Go ahead and take back Vladivostok and see if the world cares....if you look impressive enough you never have to prove it. The minute shit gets kinetic, though, you have a lot to lose.
It's been really interesting watching the world discover that "obsolete Soviet hardware with adequate training" vs. "obsolete Soviet hardware with inadequate training" equals an utter and total bloodbath. I've seen it argued that the truly asymmetrical losses of Russia vs. Ukraine are directly attributable to the Russian inability to adopt standard combined-arms practices and that no, if your tankers weren't basically out there alone without radio support without air support without training without resupply without logistics, "Javelin vs. T-72" would be a lot less decisive. I have seen NO ONE argue that the presence of NATO weapons used by NATO soldiers would be anything but an utter charnel house for the Russians. The US has by far the largest military in the history of the world, and spends by far the largest amount on it. On the one hand, it's a giant oligarchic public works project that enforces a global world order that we sit atop of and collect rent. On the other hand, the only way we lose is if we don't actually want to fight. Gulf War 1 was a turkey shoot. Panama was a wargame with live ammo. If you really want a delight watch Clint Eastwood's Heartbreak Ridge in which a bunch of Marines are supposedly under threat by a couple detachments of Cuban regulars in Grenada. The argument in Vietnam is we won every battle and lost the war; from a military standpoint we weren't defeated in Afghanistan, we failed to pacify it which, had we gone at it Soviet-style, would have been high-speed genocide and everyone knows it. The Battle of Mogadishu was a debacle because we lost 19 men; in the process we killed just this side of a thousand. More importantly, everybody whose economy flourishes under the umbrella of American imperialism has basically given the go-ahead for American Imperialism to handle Ukraine however we see fit. My personal suspicion is that the American Project benefits the most from the appearance of Ukraine handing Russia its ass because it makes Russia look all the weaker and the world can continue to assume that Americans are invulnerable, rather than using a bunch of Seiko wristwatches and surplus explosives to force us to invent MRAPS in eighteen months or whatever. The only active measures campaign run by the CIA between 1960 and 1999 was a Ukrainian independence movement. I think the men in gray suits knew what Soviet faction to support going way back. You don't need a Q clearance to know that the Americans are neck-deep in Ukrainian counter-intelligence, Ukrainian espionage, Ukrainian clandestine ops, Ukrainian ELINT, Ukrainiant IMINT and every other -INT we can leave fingerprints on but not be photographed doing. These guys are toooooooootalllllly sticking to the base, guyz, I promise! The calculation China has to be making is "what would it look like if the US could use Taiwan as a base of operations" and considering that has been their absolute horror since Chiang Kai-shek moved there in 1950, they have to take into account the speed with which they could irrevocably control Taiwan. it took China the better part of a year to control Hong Kong. They could still be that stupid. I'm still stinging from the revelation that even a former head of disinformation for east germany can believe what he wants to believe that hard. But Xi has a lot more shiv-wielding opportunists around him than Putin does. I honestly don't think Xi can act as rashly as Putin did.