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Speaker 1: Hello there, Odd Lots listeners, You are about to hear

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Speaker 1: a live episode recording of the Authoughts podcast.

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Speaker 2: YEP.

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Speaker 3: This episode was recorded in front of a live audience

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Speaker 3: at the Decades Bowling Allie in Lancaster, Pennsylvania. We hope

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Speaker 3: you enjoyed the show.

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Speaker 1: Hello, and welcome to another episode of the All Thoughts podcast.

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Speaker 1: I'm Tracy Alloway.

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Speaker 4: Joe So, Joe.

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Speaker 1: Uh, we can't seem to get away from semiconductors.

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Speaker 4: No, we can't.

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Speaker 3: And you know, we recently talked to two of the

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Speaker 3: pupil basically running the Chips Act in a recent episode.

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Speaker 3: But I think if we're going to ask the question

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Speaker 3: like how the Chips Act is going, we can't just

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Speaker 3: talk to the pupil running.

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Speaker 1: No biased you think, Uh no, we need some outside perspective.

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Speaker 1: And I'm very happy to say that in this very

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Speaker 1: special episode of Odd Lots, which we are recording live

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Speaker 1: at the Decades Bowling Allie, we are going to be

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Speaker 1: speaking to two of the perfect guests. We are going

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Speaker 1: to be speaking to Dan Wong, visiting scholar at Yale

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Speaker 1: Law School's Side China Center, and tech analyst over at

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Speaker 1: Gavical Dragonomics. Perhaps the only man who's ever read a

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Speaker 1: full copy of the Chinese Communist Party's Internal Policy Journal

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Speaker 1: from cover to cover.

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Speaker 4: Q Speaking Truth, Seeking Truth.

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Speaker 1: And special guest. A last minute addition, just to keep

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Speaker 1: our producers and our tech audio people on their toes,

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Speaker 1: we're also going to have Adam Ozamak. He is, of

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Speaker 1: course chief economist at Economic Innovation Group and also our

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Speaker 1: host for this wonderful event. So thank you both so

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Speaker 1: much for coming on odd lots without further Ado, Dan,

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Speaker 1: you recently moved back to the US and now you're

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Speaker 1: in Lancaster at a bowling alley. Isn't it great that

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Speaker 1: we're all here?

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Speaker 5: No one is more surprised than me, Tracy, that we've

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Speaker 5: all gotten over here.

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Speaker 4: If I could heighten.

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Speaker 5: This realness of the moment just a little bit, I

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Speaker 5: want to point out that my parents are also here

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Speaker 5: in the back slow over from their home in suburban Philadelphia.

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Speaker 4: They are shy. I hope we can involve them in

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Speaker 4: the bullying.

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Speaker 3: Adam, are you surprised to be an economist who owns

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Speaker 3: a bowling la and to issue your own tokens?

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Speaker 6: I'm a little used to it at this point, but

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Speaker 6: I enjoy being an economists who issues.

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Speaker 4: Okay, that's fair enough.

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Speaker 1: So maybe just to set the scene. I mean, Joe

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Speaker 1: and I started talking about semiconductors years ago now because

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Speaker 1: of supply chain shortages, which we've since gone on to

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Speaker 1: explore in various ways. But in the years that have

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Speaker 1: passed since, semiconductors have become like a huge policy point.

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Speaker 1: Why is this of interest in particular to someone like Adam?

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Speaker 1: Why does this interest you?

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Speaker 6: Well, it's part of a broader discussion around industrial policy,

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Speaker 6: and I think that, you know, if we're going to

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Speaker 6: be trying to pick specific industries that we want to grow,

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Speaker 6: I sort of put myself in the camp of I

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Speaker 6: think this is possible, but we have to do it

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Speaker 6: very smartly. It's not easy, and so my interest in

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Speaker 6: the discussion is trying to make sure we're doing this

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Speaker 6: the right way to maximize the odds of success. A

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Speaker 6: lot of times, you know, you sort of find two camps.

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Speaker 6: There's the critics of industrial policy who just say it

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Speaker 6: can't work, it's impossible, there's public choice problems, it's doomed,

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Speaker 6: and then you sort of have another side that's just like,

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Speaker 6: as long as we're spending the money, we're already mission accomplished.

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Speaker 6: They might not say that, but that's kind of an

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Speaker 6: act sometimes. Sorry guys, but I think we need to

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Speaker 6: be critics who think it can succeed and trying to

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Speaker 6: make it succeed by being critical and ensuring that it's

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Speaker 6: done smartly.

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Speaker 3: So, you know, one of the things that the first

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Speaker 3: time we ever did a COVID related episode, it was

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Speaker 3: actually with Dan and I think it was before we

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Speaker 3: knew like quite how much it was going to change

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Speaker 3: the world, and it was like very specific, like, well,

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Speaker 3: what's COVID gonna do to like, essentially electronics manufacturing in.

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Speaker 2: China?

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Speaker 3: And that was like the extent to which we're thinking.

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Speaker 3: I think it was like February twenty twenty. Obviously, then

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Speaker 3: we you know, the world change. We don't need to

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Speaker 3: go over all of those things, but let's just start

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Speaker 3: with this simple point when it comes to from your perspective,

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Speaker 3: can it succeed? Not like the specifics of the Chips

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Speaker 3: Act yet or whatever, but do you accept the premise

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Speaker 3: that the attempt to turn around domestic manufacturing of high

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Speaker 3: end semiconductors in the US is conceivably possible.

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Speaker 4: I think it is possible.

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Speaker 5: I think it is conceivably possible, and I think that

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Speaker 5: we are off to a good start with an emphasis

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Speaker 5: on start. Now, the Financial Times are recently tabulated that

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Speaker 5: there's something like two hundred billion dollars of new investment

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Speaker 5: in clean tech as well as in semiconductors after the

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Speaker 5: passage of the IRA as well as the chip SAC.

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Speaker 5: At two hundred billion dollars is quite a lot. We're

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Speaker 5: seeing these flurries of investments in semiconductors from the likes

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Speaker 5: of Samsung and TSMC as well as Intel.

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Speaker 4: And we're seeing also a lot of battery makers.

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Speaker 5: We're seeing a lot of solar photootaeic makers announcing these

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Speaker 5: very large facilities in the US.

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Speaker 4: So we are off to see a start.

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Speaker 5: And I think what I really really wonder about is,

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Speaker 5: you know what exactly are the criteria for success? Is

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Speaker 5: spending money really just efficient or as you've had the

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Speaker 5: Chips Act administrators come on tell you know, there has

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Speaker 5: to be a little bit more.

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Speaker 4: And the test that I would propose for you know,

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Speaker 4: everyone to.

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Speaker 5: Think about are I would say, you know, probably to

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Speaker 5: focus on these two things. The first is you know

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Speaker 5: what exactly is the economic criterion for success? If we

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Speaker 5: are going to have, you know, a thriving chip industry.

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Speaker 5: If we're going to have a thriving clean tech industry,

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Speaker 5: then you know, the economics have to work out in

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Speaker 5: some big way.

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Speaker 4: And I think the.

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Speaker 5: Challenge for a lot of this is that, you know,

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Speaker 5: when I spend a lot of time looking at the

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Speaker 5: clean tech supply chain in China, it is going to

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Speaker 5: be pretty difficult, I think, for the United States to

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Speaker 5: become a lower cost producer in China and a lot

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Speaker 5: of these important manufactured products. But is there some criterion

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Speaker 5: here that could be met in a bit of a

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Speaker 5: lower way. Are we going to see some self sustaining

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Speaker 5: dynamics that is not being primarily.

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Speaker 4: Driven by foreign investment.

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Speaker 5: Are we going to be able to see you know,

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Speaker 5: the cost curve, perhaps with some help from tariffs, you know,

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Speaker 5: be able to get us to some competitive products.

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Speaker 4: And then the second test.

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Speaker 5: I would propose that you know, we really think about

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Speaker 5: is some threshold of a national security test. Now, you know,

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Speaker 5: this is really up for the national security folks in

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Speaker 5: DC to debate.

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Speaker 4: What this shouldn't really mean.

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Speaker 5: But what I would look at is the structure of

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Speaker 5: these investments because a lot of what we see right

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Speaker 5: now in terms of, you know, the actual investments in chips,

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Speaker 5: the actual investments in clean tech that's overwhelmingly going to

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Speaker 5: the downstream industries.

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Speaker 4: In both of.

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Speaker 5: These sectors, we're seeing a lot of investments in the

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Speaker 5: battery sells. We're seeing a lot of the investment in

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Speaker 5: solar modules, but really these are only the assemblies of

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Speaker 5: all of the components that you need. There hasn't been

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Speaker 5: quite so much investment in the critical minerals for batteries

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Speaker 5: in the US. There hasn't been quite so much investment

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Speaker 5: in the solar cells, the solar poly silicon.

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Speaker 4: This is much more difficult stuff.

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Speaker 5: So if the US is spending a lot of this money,

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Speaker 5: you know, two hundred billion dollars, you know, potentially far

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Speaker 5: more than that, mostly to import products mostly made in Asia,

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Speaker 5: in China, and then assembling a lot of these things here, well,

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Speaker 5: it doesn't look to me like they are really going

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Speaker 5: to have be a you know, pushing past that threshold. So,

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Speaker 5: you know, for ultimate measures of success, I would look

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Speaker 5: at the economics, and I would look at the structure

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Speaker 5: of these investments.

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Speaker 1: Adam, I kind of want to ask you the same question,

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Speaker 1: which is, how are we judging the success of this

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Speaker 1: program because it does seem, as Dan just laid out,

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Speaker 1: there are all these different targets. So on the one hand,

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Speaker 1: the Chips Act is sort of the poster child for revived,

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Speaker 1: more activist industrial policy. I know that's a negative term

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Speaker 1: in some economic circles. I've heard people call it industrial strategy. Instead,

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Speaker 1: maybe I'll use that people trying to fix supply chain shortages,

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Speaker 1: create new jobs, geostrategic interests. As Dan just mentioned, like

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Speaker 1: the list of potential goals here is quite long. So

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Speaker 1: how should we be judging the success of this type

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Speaker 1: of program.

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Speaker 2: Well, I think we need to focus.

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Speaker 6: I think that's really important, and we need to focus

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Speaker 6: on the goals that actually make sense versus the goals

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Speaker 6: that not only do they not make sense, but they're going.

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Speaker 2: To be a distraction for achieving our primary goals.

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Speaker 6: So, if you think about national security interest, I think

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Speaker 6: we have a genuine economic interest in making sure that

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Speaker 6: specific mature node chips that we rely on for our

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Speaker 6: military we have a safe and steady supply with them.

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Speaker 2: Doesn't necessarily mean they need to be here.

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Speaker 6: It means they need to be some of them here

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Speaker 6: and some of them on allies that we can trust.

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Speaker 6: That to me seems like a completely reasonable national security

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Speaker 6: concern that I don't see why even you know, you know,

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Speaker 6: libertarian neoclassical style economists wouldbject to. I think having the

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Speaker 6: most advanced production here, there's an argument for that too,

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Speaker 6: at least having some of it for the purpose of,

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Speaker 6: you know, making it more less geographically concentrated. You know,

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Speaker 6: a lot of the production, ninety percent of advanced chips

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Speaker 6: is made in Taiwan. That's a hugely risky situation. So

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Speaker 6: I think we think of that as like insurance. So

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Speaker 6: we don't want them all the advanced production concentrated one place.

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Speaker 2: We want it to be insured.

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Speaker 6: Again, this is an area where we should be relying

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Speaker 6: on allies, and we shouldn't see it just as a

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Speaker 6: goal of producing it here, but a goal of making

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Speaker 6: the supply of that more resilient, less risky. I see

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Speaker 6: those as reasonable policy goals. I see the idea that

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Speaker 6: this is going to be something that creates good jobs,

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Speaker 6: skilled or low skill as being a distraction. I think

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Speaker 6: that the idea that we're going to you know, have

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Speaker 6: more resiliency in a huge variety of chips is not

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Speaker 6: really realistic. I mean, there's so many chips made so

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Speaker 6: many countries, and you just you're not going to know

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Speaker 6: which ones we need to ensure against. If you look

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Speaker 6: at like the auto industry, the reason they had a

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Speaker 6: chip shortage wasn't because we couldn't make enough chips for them.

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Speaker 6: It's because they canceled all their chip orders early in

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Speaker 6: the pandemic. And then by the time they realized they

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Speaker 6: had made a mistake and they went to the chip

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Speaker 6: makers that actually, we do want those.

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Speaker 1: Chips classic bull whip effect, right.

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Speaker 6: And so like, how were we going to solve that?

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Speaker 6: And I don't really hear any clear answers about that,

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Speaker 6: and even when I do hear an answer, it's sort

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Speaker 6: of not fully thought out in my mind. So we're

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Speaker 6: going to create mature node production here. What's going to

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Speaker 6: happen next time something like this happens, right? Are the

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Speaker 6: automakers going to cancel their orders again? If not, then

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Speaker 6: we don't have a problem. And if so, then what

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Speaker 6: are we going to do? Use the Defense Production Act

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Speaker 6: to seize it? Because it's here. It just it seems

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Speaker 6: like a solution that's a little disconnected from the problem.

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Speaker 3: Well, this actually gets to another thing, like Dan, I

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Speaker 3: mean let's say we all everyone were just sort of

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Speaker 3: accept the national security case for domestic advanced semiconductor manufacturing.

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Speaker 3: Is there another problem that we need that actually needs

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Speaker 3: to be solved beyond that? I mean, like, can we

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Speaker 3: just sort of like, yeah, I have maybe more diversified

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Speaker 3: globally or something like that, Like it seems like, okay, yes,

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Speaker 3: it's pretty crucial the military part. Can what about just

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Speaker 3: going back to the status quo outside of that?

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Speaker 4: Would that be fine?

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Speaker 2: Well?

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Speaker 5: The wonderful thing Joe about national security in the US

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Speaker 5: is that no one can ever define it. You know

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Speaker 5: it is, you know it is. You know, the president

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Speaker 5: is very reluctant to define it. The federal judges are

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Speaker 5: always very differential about you know, how the US president

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Speaker 5: defines what national security is. Maybe you should just come

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Speaker 5: up with our own definition.

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Speaker 2: You know.

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Speaker 5: I think that I take an expansive view of you know,

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Speaker 5: US national security. I think there should be quite a

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Speaker 5: lot more manufacturing jobs. You know, we're speaking in Pennsylvania.

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Speaker 5: This is, you know, a site of quite a lot

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Speaker 5: of manufacturing. I value manufacturing for.

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Speaker 4: Its own sake.

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Speaker 5: I think that I love heavy industry. You know, the

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Speaker 5: heavier the better, and so you know, it is you know,

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Speaker 5: really great that we should be thinking about these sort

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Speaker 5: of things. So, you know, if I were able to,

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Speaker 5: you know, think about, you know, what is a good

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Speaker 5: vision of all of these things, I would ideally like

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Speaker 5: to see. You know that even if automakers make some

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Speaker 5: big mistakes in the beginning of the pandemic cancel other orders,

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Speaker 5: that was no doubt a mistake that somehow the you know,

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Speaker 5: US manufacturing system is able to be somewhat robust, to

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Speaker 5: be able to be self correcting enough to rescue you know,

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Speaker 5: a lot of these manufacturers from their mistakes.

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Speaker 4: Because what I was quite surprised by in.

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Speaker 5: The early days of the pandemic was that, you know,

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Speaker 5: in the earlier days of March twenty twenty, when the

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Speaker 5: US had a pretty big deficiency then of masks and swabs,

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Speaker 5: which we were simple products by any measure, there were

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Speaker 5: a lot of manufacturers that were not able to quickly

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Speaker 5: retool and make these pretty simple products. That manufacturing employment

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Speaker 5: even up until I think something like the last three months,

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Speaker 5: did not you know, surpass the peak in March twenty twenty.

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Speaker 5: That it is pretty surprising that both the manufacturers and

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Speaker 5: the workforce were not really able to respond in a

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Speaker 5: pretty robust way, be supple enough to make.

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Speaker 4: A lot of these types of products.

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Speaker 5: And so I would start there by thinking about, you know,

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Speaker 5: from a workplace issue, less from an optimization, less from

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Speaker 5: an efficiency issue, are we able to build some sort

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Speaker 5: of workforce economic system that response robust.

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Speaker 4: Link to emergencies.

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Speaker 1: So just on the national security point, and you know,

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Speaker 1: I take Dan's point that this is sort of like

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Speaker 1: a moving and very flexible goal, but I did see

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Speaker 1: a headline flow by this week basically saying that Germany

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Speaker 1: is in talks to limit the export of certain chemicals

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Speaker 1: that are important to chip production. I guess my question is, like,

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Speaker 1: what is the ultimate goal here? Is it just to

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Speaker 1: cut off chip production within China? Or is it to

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Speaker 1: limit chip production in other countries that might be interested

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Speaker 1: in developing it is the future goal that we just have,

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Speaker 1: you know, a strategic industry of semiconductors that is concentrated

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Speaker 1: in a few select Western countries. I'm being very careful

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Speaker 1: not to use the word Western bloc, but that kind

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Speaker 1: of feels like we're heading.

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Speaker 5: Yeah, it's it's a pretty important question, Tracy. And so

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Speaker 5: you know what I wonder about with something like the

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Speaker 5: IRA with something like the Clean Tech Bill, is what

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Speaker 5: exactly is the ultimate objective of the United States government.

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Speaker 5: Is it to decarbonize as quickly as possible or is

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Speaker 5: it to build out a clean tech supply chain in

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Speaker 5: the US as quickly as possible, Because to some extent,

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Speaker 5: these two are somewhat intention You know, China does have

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Speaker 5: all the solar as well as.

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Speaker 4: Quite a lot of the battery technologies.

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Speaker 5: It would be much simpler to decarbonize if you just

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Speaker 5: imported all of that. But that is, you know, totally

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Speaker 5: not acceptable. You know in the present day now with

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Speaker 5: respective chips, you know that is a little bit of

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Speaker 5: a different story. But again, the targets here are not

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Speaker 5: terribly clear. You have the National Security Advisor, Jake Sullivan

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Speaker 5: say that, you know that it can't be enough for

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Speaker 5: the United States to be just two generations ahead of

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Speaker 5: China on semiconductors. You know, they really should be seeking

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Speaker 5: some sort of an absolute advantage. This is someone else

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Speaker 5: in the National Security Council, Tarun Chabra said, you know,

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Speaker 5: we no longer want a comparative advantage against China's technology capabilities.

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Speaker 5: The US really needs to have an absolute advantage now

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Speaker 5: if you're removing comparative, you know, if you're in the

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Speaker 5: realm of the absolute, then becomes quite a lot more

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Speaker 5: difficult to figure out exactly the degree to which the

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Speaker 5: US really needs to be a hid But you know,

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Speaker 5: I think in general, what it seems like here is

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Speaker 5: that the US really wants, you know, quite a lot

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Speaker 5: of the most advanced stuff, a lot of the everything

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Speaker 5: else as well, and it would be ideal if China did

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Speaker 5: not get that much further out of here.

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Speaker 3: So I want to go back to something where since

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Speaker 3: there is some disagreement, get some debate going, and that

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Speaker 3: is essentially about employment as a good thing per se.

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Speaker 3: And I could see sort of your argument is like, look,

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Speaker 3: if the goal is we want to have advanced chips here,

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Speaker 3: then the goal should be we want to have advanced

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Speaker 3: chips here, and the fact that it creates jobs jobs

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Speaker 3: are good, but that is a secondary goal and we

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Speaker 3: wouldn't want the job creation aspect to be a distraction

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Speaker 3: from the advanced chip.

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Speaker 4: To your point, however.

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Speaker 3: There is this sort of like seems like slightly different take,

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Speaker 3: which is that, no, we want to have an economy

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Speaker 3: in which a lot of people are capable of working

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Speaker 3: in complex heavy industry, and you don't get there if

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Speaker 3: you don't start with employing more people in complex heavy

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Speaker 3: industry and the training. I'm thinking about a recent conversation

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Speaker 3: we had with Henry Williams and David Ox, like economic

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Speaker 3: complexity is a really good thing and is part of

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Speaker 3: what drives well. But maybe we could like explore this

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Speaker 3: a little bit. Maybe start like, what are your concerns

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Speaker 3: about the degree to which some of these secondary goals

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Speaker 3: may undermine the main goal, and maybe like sort to

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Speaker 3: hear both of your perspective on whether jobs per se

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Speaker 3: is a good.

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Speaker 2: Part of the ambition.

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Speaker 6: Yeah, I mean, I think Dan acknowledges that we already

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Speaker 6: are seeing the trade off between domestic employment and the

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Speaker 6: main goal when it comes to clean energy, right, I mean,

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Speaker 6: we could be importing more clean energy, we'd could be

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Speaker 6: getting you know, cleaner, greener, faster, and we're not to

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Speaker 6: preserve jobs. And the reality is the wage premium that

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Speaker 6: a low skilled person earns and manufactured has declined massively

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Speaker 6: over time. It's just not there anymore. These aren't great

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Speaker 6: jobs anymore. It's just not the case. We don't have

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Speaker 6: an economic interest in taking someone from services to manufacturing anymore.

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Speaker 6: I think a lot of what we're seeing is a

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Speaker 6: relic of ten to twenty years of a bad economy.

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Speaker 6: Like I think, we had a long, long, great recession,

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Speaker 6: and before that we had the China Shock. So it's

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Speaker 6: been a long time since we've seen a legitimately good

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Speaker 6: labor market, and I think people lost faith in that.

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Speaker 6: They lost faith in basic macroeconomic policy's ability to generate

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Speaker 6: decent wage growth for people with less than a college degree,

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Speaker 6: and I think that's just misplaced. I think the fundamental

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Speaker 6: mistake there is macro policy. I don't think it's industrial policy.

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Speaker 6: I don't think the solution to a ten year recession

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Speaker 6: is getting more people in manufacturing.

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Speaker 2: And I think if we do that, we don't need

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Speaker 2: to do that.

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Speaker 3: Dan, you want to defend the idea of Jeff creation

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Speaker 3: as part of industrial policy.

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Speaker 5: Sure, well, you know, I think it's impossible to disagree

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Speaker 5: with Adam that, you know, the wage premium here is

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Speaker 5: not good in terms of a lot of manufacturing, and

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Speaker 5: I think it is going to be pretty difficult to

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Speaker 5: entice these workers who are working in semi inductors to

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Speaker 5: you know, get out of you know, Silicon Valley, Bean bags,

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Speaker 5: and then you know, go into these fab rooms where

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Speaker 5: you know, if you ever go into one of them,

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Speaker 5: they have a very strange light. It is yellowish purplish light.

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Speaker 5: You're sitting there, you know, looking at you know, these

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Speaker 5: transistors for eight hours a day. It is pretty strange work,

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Speaker 5: you know, to try to do something like this where, yes,

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Speaker 5: if you can you know, get into those bean bags,

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Speaker 5: or you know, if you are able to just work

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Speaker 5: as a let's say, in as a home healthcare worker,

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Speaker 5: where your wages can be you know, just as high

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Speaker 5: as working in these grueling factory jobs. You know, I

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Speaker 5: think that is pretty difficult to entice a lot of

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Speaker 5: people to take a look at the situation and say, well,

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Speaker 5: let's do a lot more manufacturing. You know, I'm sitting

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Speaker 5: at a law school now, I'm hardly turning wrenches all day,

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Speaker 5: and so I want to be the first put up

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Speaker 5: my hands and say, you know, this is you know,

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Speaker 5: quite quite challenging for me to envision, you know, myself

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Speaker 5: as doing something like that as well. But I think,

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Speaker 5: you know, in general, what I would love to do

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Speaker 5: is to you know, imbue manufacturing with a special sense

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Speaker 5: of dignity. Let's imbue complexity with a special sense of

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Speaker 5: economic dignity, and that you know that we should say

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Speaker 5: that culturally in general, that we should you know, exalt manufacturing,

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Speaker 5: that we should exalt economic complexity, that we should consult

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Speaker 5: the types of technology that involve a lot more of

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Speaker 5: this creation, because I think that is good for both

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Speaker 5: the economy as well as for national security.

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Speaker 1: So we managed to mention bullwhip effect and bean bag,

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Speaker 1: so we just need to mention mint the coin and

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Speaker 1: then we'll hit like all the traditional.

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Speaker 3: Talking about you are to talk about his token.

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Speaker 1: Yeah that's true. Yeah, okay, So just on this point, Dan,

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Speaker 1: maybe you can explain. So one thing I've always wondered is,

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Speaker 1: you know, we talk about US China rivalry when it

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Speaker 1: comes to semiconductors, but China is far behind a lot

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Speaker 1: of other countries when it comes to semiconductor technology, but

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Speaker 1: it's doing pretty well, as you already mentioned with clean tech.

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Speaker 1: What are the differences between those two industries as they

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Speaker 1: relate to China's economy and social fabric Because I think

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Speaker 1: that'll also give us some insight into whether or not

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Speaker 1: this type of traditional quote unquote industrial policy will actually

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Speaker 1: work in the US.

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Speaker 5: Sure, So you know, maybe you know, we can think

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Speaker 5: a little bit about where China is on most technology,

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Speaker 5: and so if I can give a very quick snapshot

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Speaker 5: of where China is on most of its technology endeavors,

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Speaker 5: roping up clean tech as well as semiconductors, what I

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Speaker 5: would say is that at this point, I think China

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Speaker 5: is pretty competitive with the US in manufactured products outside

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Speaker 5: of two big areas. The first is semiconductors, where China

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Speaker 5: is has built pretty much the basics of competition in

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Speaker 5: all of the you know, semiconductor production, but it is

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Speaker 5: leading in absolutely nothing that it is at best ten

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Speaker 5: years behind the market leaders here. China is also really

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Speaker 5: weak in something like aviation, so you know, in terms

442
00:22:27,600 --> 00:22:30,560
Speaker 5: of China's answer to airbuts and bowing, it is really

443
00:22:30,600 --> 00:22:34,400
Speaker 5: really far behind. But outside of these two big areas,

444
00:22:34,680 --> 00:22:38,960
Speaker 5: again in manufactured technologies only, I would say that China

445
00:22:39,000 --> 00:22:42,040
Speaker 5: has broadly caught up to you know, the West red

446
00:22:42,119 --> 00:22:46,000
Speaker 5: large on most manufactured products. It is leading the US

447
00:22:46,040 --> 00:22:48,240
Speaker 5: and Europe in most of clean tech, by which I

448
00:22:48,320 --> 00:22:52,960
Speaker 5: mean solar wind batteries as well as hydrogen electrializers, and

449
00:22:53,040 --> 00:22:55,120
Speaker 5: it is you know, leading and all sorts of these

450
00:22:55,160 --> 00:22:59,760
Speaker 5: boring industrial products you know, things like hydraulic pumps, which

451
00:22:59,760 --> 00:23:02,919
Speaker 5: would never grace the headlines of you know, fine papers

452
00:23:02,920 --> 00:23:03,520
Speaker 5: like Bloomberg.

453
00:23:04,320 --> 00:23:07,320
Speaker 1: But the Hydraulic Pumps Act isn't coming anytime.

454
00:23:07,040 --> 00:23:10,240
Speaker 5: Soon, No, but we definitely need something like that. But

455
00:23:10,320 --> 00:23:13,040
Speaker 5: China is you know, leading in all of these broad

456
00:23:13,080 --> 00:23:15,760
Speaker 5: manufactured products. Where I think, you know, it is a

457
00:23:15,760 --> 00:23:18,440
Speaker 5: weak relative to the US is that I think that

458
00:23:18,800 --> 00:23:23,440
Speaker 5: any scientific area, any technology sector that involves the complex

459
00:23:23,480 --> 00:23:27,440
Speaker 5: integration of different you know, scientific disciplines, China tends to

460
00:23:27,440 --> 00:23:31,000
Speaker 5: be pretty weak. So in semiconductors that involves the integration

461
00:23:31,160 --> 00:23:37,399
Speaker 5: of chemistry, electrical engineering, computer science, aviation involves the integration

462
00:23:37,560 --> 00:23:43,080
Speaker 5: of material science, aerodynamics, many other things. This is something

463
00:23:43,119 --> 00:23:46,080
Speaker 5: where the US is still really really strong at you know,

464
00:23:46,119 --> 00:23:49,439
Speaker 5: building these vance manufacturing products. Where the US tends to

465
00:23:49,480 --> 00:23:52,280
Speaker 5: be weak is where the science is pretty mature. But

466
00:23:52,400 --> 00:23:56,439
Speaker 5: all of the execution risk lies with manufacturing. So you know,

467
00:23:56,560 --> 00:24:00,600
Speaker 5: in anything that the manufacturing operation is pretty complex. If

468
00:24:00,640 --> 00:24:03,440
Speaker 5: I'm thinking about something like putting together a battery cell,

469
00:24:03,720 --> 00:24:06,960
Speaker 5: involves about a dozen different steps, everything from cell filling

470
00:24:07,000 --> 00:24:09,879
Speaker 5: into final ceiling. All of these demand you know, perfect

471
00:24:09,960 --> 00:24:13,000
Speaker 5: handoff between each one of these steps. And this is

472
00:24:13,000 --> 00:24:15,840
Speaker 5: where the Chinese are really really strong that they learn

473
00:24:15,920 --> 00:24:19,880
Speaker 5: from building iPhones, building complex electronics. They're just really good

474
00:24:19,960 --> 00:24:23,399
Speaker 5: at building products high intricacy at high volume. And so

475
00:24:23,520 --> 00:24:25,600
Speaker 5: this is where I would love to see the US

476
00:24:25,600 --> 00:24:28,199
Speaker 5: become a little bit better at this more volume production.

477
00:24:29,080 --> 00:24:30,080
Speaker 4: And I want to go back.

478
00:24:30,000 --> 00:24:32,360
Speaker 3: To something you said, which I think is like really key,

479
00:24:32,440 --> 00:24:35,360
Speaker 3: which is that you know, perhaps some of the US,

480
00:24:36,000 --> 00:24:39,440
Speaker 3: the diagnoses of the US, we forget that we had

481
00:24:39,520 --> 00:24:43,359
Speaker 3: really many years of slack labor markets, poor demand, maybe

482
00:24:43,480 --> 00:24:46,919
Speaker 3: ten plus years, and weak economic growth going back to

483
00:24:47,000 --> 00:24:50,440
Speaker 3: like glob before the economic crisis, the two thousand and

484
00:24:50,440 --> 00:24:52,679
Speaker 3: eight two thousand and nine crisis. One thing that strains

485
00:24:52,720 --> 00:24:55,120
Speaker 3: me now that I've been trying to think about is, Okay,

486
00:24:55,160 --> 00:24:57,359
Speaker 3: we're in this like tightening cycle with the FED, et cetera,

487
00:24:57,560 --> 00:24:59,760
Speaker 3: but there's still a lot of money coming, you know,

488
00:25:00,000 --> 00:25:02,639
Speaker 3: by multiplier money. It seems like building all these factories,

489
00:25:02,760 --> 00:25:07,000
Speaker 3: batteries chipped, et cetera. Do you see are you, like

490
00:25:07,119 --> 00:25:10,600
Speaker 3: to what extent looking from a macro lens, do you

491
00:25:10,680 --> 00:25:14,080
Speaker 3: see some of this investment allowing the US to maintain

492
00:25:14,560 --> 00:25:18,840
Speaker 3: robust job growth, strong economic activity, and strong wages, et cetera.

493
00:25:19,600 --> 00:25:21,879
Speaker 3: Even as a you know, it's sort of like helping

494
00:25:21,960 --> 00:25:24,320
Speaker 3: us avoid going right back into the gold slump.

495
00:25:24,960 --> 00:25:28,000
Speaker 6: Yeah, I mean, I think ongoing capital investments great. It's

496
00:25:28,400 --> 00:25:31,080
Speaker 6: nice to see that the interest rates haven't fully shut

497
00:25:31,119 --> 00:25:33,560
Speaker 6: that down. And I think that that's you know, sort

498
00:25:33,560 --> 00:25:35,240
Speaker 6: of the risks that we're playing with right now.

499
00:25:35,520 --> 00:25:38,199
Speaker 2: I think all eyes should be on growing GDP.

500
00:25:38,320 --> 00:25:41,080
Speaker 6: How do we increase GDP, how do we do more

501
00:25:41,119 --> 00:25:43,000
Speaker 6: because the reality is we have had we've had tight

502
00:25:43,080 --> 00:25:46,800
Speaker 6: labor markets over the last two years, but a substantial

503
00:25:46,840 --> 00:25:50,199
Speaker 6: part of that has been reduced labor supply and so

504
00:25:50,600 --> 00:25:53,200
Speaker 6: and also just the speed at which things moved, right.

505
00:25:53,240 --> 00:25:56,560
Speaker 6: So I think that looking forward the next five to

506
00:25:56,640 --> 00:25:58,800
Speaker 6: ten years, I think when we think about how many

507
00:25:58,800 --> 00:26:00,439
Speaker 6: people are working, we can do better.

508
00:26:00,760 --> 00:26:02,280
Speaker 2: The labor market can do better.

509
00:26:02,680 --> 00:26:05,280
Speaker 6: And so we shouldn't look at the amount of people

510
00:26:05,359 --> 00:26:07,400
Speaker 6: working down and say, oh, we hit the.

511
00:26:07,400 --> 00:26:09,280
Speaker 2: Lab that's the capacity, it's over.

512
00:26:09,680 --> 00:26:11,919
Speaker 6: It's really a lot of things happening that you know,

513
00:26:12,400 --> 00:26:15,200
Speaker 6: short term neighbor was a lot realer than it ever

514
00:26:15,240 --> 00:26:17,520
Speaker 6: has been, and so I think we should think about

515
00:26:17,920 --> 00:26:21,679
Speaker 6: capital investment growth and higher employment. All is you know,

516
00:26:21,840 --> 00:26:23,520
Speaker 6: that's the next five to ten years that's what we

517
00:26:23,520 --> 00:26:24,320
Speaker 6: should be aiming for.

518
00:26:24,880 --> 00:26:27,240
Speaker 1: So just on this note, though, is there a risk

519
00:26:27,600 --> 00:26:32,720
Speaker 1: that we're front loading capex or pulling forward too much

520
00:26:33,320 --> 00:26:37,240
Speaker 1: investment at a time when the economy is arguably running

521
00:26:37,440 --> 00:26:41,040
Speaker 1: hot and at the risk of not having Oh god,

522
00:26:41,080 --> 00:26:44,119
Speaker 1: I'm about to veer into MMT territory. But at the

523
00:26:44,240 --> 00:26:44,760
Speaker 1: risk of.

524
00:26:44,920 --> 00:26:46,920
Speaker 3: The water's warm, water is warm.

525
00:26:47,640 --> 00:26:50,200
Speaker 1: When the economy is slowing, maybe we won't have that

526
00:26:50,440 --> 00:26:54,200
Speaker 1: fiscal policy or investment lever to pull.

527
00:26:55,520 --> 00:26:59,760
Speaker 6: I think the economy is confusing right now and the

528
00:26:59,800 --> 00:27:04,439
Speaker 6: rezillions of spending, the resilience of durable goods spending, and

529
00:27:04,560 --> 00:27:06,280
Speaker 6: I wouldn't be surprised that there are a lot of

530
00:27:06,560 --> 00:27:09,800
Speaker 6: factory owners and a lot of you know, manufacturers across

531
00:27:09,840 --> 00:27:11,320
Speaker 6: the country who don't know.

532
00:27:11,359 --> 00:27:14,000
Speaker 2: Yet what the permanent trajectory looks like.

533
00:27:14,240 --> 00:27:17,399
Speaker 6: And so given that there's uncertainty, there's I think, you know,

534
00:27:17,440 --> 00:27:20,560
Speaker 6: it would be surprising if there weren't people building factories

535
00:27:20,560 --> 00:27:21,040
Speaker 6: that it's going to.

536
00:27:21,080 --> 00:27:22,120
Speaker 2: Turn out that they don't need.

537
00:27:22,240 --> 00:27:25,119
Speaker 6: You just hope that the economy has enough strength to

538
00:27:25,160 --> 00:27:28,919
Speaker 6: sort of reabsorb that stuff as companies do realize some

539
00:27:29,000 --> 00:27:30,480
Speaker 6: of that malinvestment.

540
00:27:30,520 --> 00:27:32,240
Speaker 2: To put my Austrian at on.

541
00:27:33,000 --> 00:27:35,800
Speaker 3: DAN going back to actually some of the national security

542
00:27:35,880 --> 00:27:38,919
Speaker 3: questions like is there a level which the US can

543
00:27:38,960 --> 00:27:39,680
Speaker 3: feel comfortable?

544
00:27:39,720 --> 00:27:41,800
Speaker 4: And so it's in terms of like, okay, we have

545
00:27:41,920 --> 00:27:42,440
Speaker 4: hit enough.

546
00:27:42,840 --> 00:27:44,720
Speaker 3: Is there any may even like knowing or like being

547
00:27:44,760 --> 00:27:49,080
Speaker 3: able to quantify excuse me, level like okay, the factories

548
00:27:49,080 --> 00:27:53,280
Speaker 3: are up and running. Yes, probably the majority of manufacturing

549
00:27:53,400 --> 00:27:56,520
Speaker 3: is going to be in Taiwan or China or elsewhere

550
00:27:56,560 --> 00:27:59,159
Speaker 3: in Asia. But it's like we're good here, like we

551
00:27:59,240 --> 00:28:01,960
Speaker 3: actually did. Is like do you do you have any

552
00:28:02,000 --> 00:28:04,399
Speaker 3: sort of analytical way of like figuring out what that

553
00:28:04,520 --> 00:28:05,000
Speaker 3: number is?

554
00:28:05,560 --> 00:28:08,399
Speaker 5: I think that is pretty difficult to say if I

555
00:28:08,520 --> 00:28:11,000
Speaker 5: had to come up with my own tests. It is

556
00:28:11,040 --> 00:28:14,840
Speaker 5: that you know that the United States regularly runs into

557
00:28:15,040 --> 00:28:18,720
Speaker 5: problems of oversupply of a lot of these things rather

558
00:28:18,800 --> 00:28:22,760
Speaker 5: than under supply and having you know, basically these spiraling

559
00:28:22,800 --> 00:28:27,119
Speaker 5: cost curves chasing after fewer and fewer goods that you

560
00:28:27,119 --> 00:28:29,000
Speaker 5: know at least you know. Again, it is hard to

561
00:28:29,000 --> 00:28:32,480
Speaker 5: say what the US national government declares to be national security.

562
00:28:33,080 --> 00:28:34,520
Speaker 5: But you know what I would say is you know

563
00:28:34,640 --> 00:28:37,480
Speaker 5: that you know if from I think hopefully that the

564
00:28:37,520 --> 00:28:40,040
Speaker 5: folks that econ Twitter can agree on is you know

565
00:28:40,080 --> 00:28:41,880
Speaker 5: something like, you know, to bring down.

566
00:28:41,720 --> 00:28:45,080
Speaker 4: The cost curve for infrastructure that you know it is.

567
00:28:45,240 --> 00:28:48,360
Speaker 5: It's still kind of mind blowing that these subway extension

568
00:28:48,400 --> 00:28:51,400
Speaker 5: lines in New York City costs about ten times more

569
00:28:51,520 --> 00:28:55,920
Speaker 5: than in you know, European countries. That it becomes you know,

570
00:28:55,960 --> 00:28:59,600
Speaker 5: super difficult to build these upsolar farms, to build these

571
00:28:59,640 --> 00:29:03,680
Speaker 5: sorts of transmission grids. I never knew what an obscene

572
00:29:03,680 --> 00:29:07,480
Speaker 5: four letter word NEPA was until the folks at IFP

573
00:29:08,120 --> 00:29:13,080
Speaker 5: told me so that Neepa, CEQA, it's close cousin just

574
00:29:13,160 --> 00:29:17,239
Speaker 5: really block all sorts of development in the US, and

575
00:29:17,280 --> 00:29:19,360
Speaker 5: that you know, if we don't have, you know, some

576
00:29:19,400 --> 00:29:23,040
Speaker 5: sort of a robust system to save automakers from their mistakes.

577
00:29:23,240 --> 00:29:26,080
Speaker 5: Although these automakers make you know, probably too many mistakes

578
00:29:26,280 --> 00:29:28,600
Speaker 5: to to really try to save them from. But you know,

579
00:29:28,720 --> 00:29:30,520
Speaker 5: unless you know, you are able to, you know, have

580
00:29:30,640 --> 00:29:33,760
Speaker 5: this sort of you know, robustness bring down these cost curves.

581
00:29:33,800 --> 00:29:38,320
Speaker 5: Have regular problems of oversupply rather than persistent undersupply where

582
00:29:38,480 --> 00:29:41,320
Speaker 5: you know, prices just keep rising to chase after these

583
00:29:41,320 --> 00:29:44,320
Speaker 5: goods where it's not at all clear where one hundred

584
00:29:44,360 --> 00:29:47,000
Speaker 5: million dollars in the New York public school system goes,

585
00:29:47,200 --> 00:29:49,280
Speaker 5: It's not very clear where you know, tens of billions,

586
00:29:49,400 --> 00:29:52,560
Speaker 5: hundreds of billions of dollars of infrastructure investment goes. Then

587
00:29:52,720 --> 00:29:54,200
Speaker 5: I think we can be a little bit more at

588
00:29:54,200 --> 00:29:57,000
Speaker 5: ease and thinking about having a robust economic.

589
00:29:56,640 --> 00:29:59,160
Speaker 1: System just on this point. I mean, there is a

590
00:29:59,200 --> 00:30:01,760
Speaker 1: perception out there that when it comes to China, it's

591
00:30:01,800 --> 00:30:04,840
Speaker 1: a command economy, and you know, Shei Shimpin can wake

592
00:30:04,920 --> 00:30:06,640
Speaker 1: up up one day and say we're going to make

593
00:30:06,720 --> 00:30:13,000
Speaker 1: semiconductors a strategically important industry. But actually the way that

594
00:30:13,280 --> 00:30:16,560
Speaker 1: happens it usually isn't a bunch of money thrown at

595
00:30:16,600 --> 00:30:18,880
Speaker 1: that problem. It's sort of a wink and a nod

596
00:30:19,040 --> 00:30:21,840
Speaker 1: to the banks and the credit providers, like, hey, you

597
00:30:21,840 --> 00:30:24,959
Speaker 1: should lend these guys some more money at cheap rates.

598
00:30:25,640 --> 00:30:26,120
Speaker 4: I guess my.

599
00:30:26,160 --> 00:30:29,440
Speaker 1: Question is what kind of policy response would we expect

600
00:30:29,440 --> 00:30:31,360
Speaker 1: to see from China on this front, and would they

601
00:30:31,440 --> 00:30:35,160
Speaker 1: start to tweak their own way, their own version of

602
00:30:35,160 --> 00:30:37,840
Speaker 1: industrial policy in response to what the West is doing.

603
00:30:38,320 --> 00:30:41,880
Speaker 5: Yeah, I tend to think that, you know, China is

604
00:30:42,520 --> 00:30:46,800
Speaker 5: mostly pretty focused on building all of these capacity without

605
00:30:46,880 --> 00:30:50,440
Speaker 5: thinking too much about these other competitive forces. You know,

606
00:30:50,520 --> 00:30:53,240
Speaker 5: that creates a lot of these problems. You know, it

607
00:30:53,440 --> 00:30:56,840
Speaker 5: creates these usual issues of oversupply. But I think the

608
00:30:56,960 --> 00:31:00,280
Speaker 5: Chinese is you know, mostly thinking about its own pernal

609
00:31:00,360 --> 00:31:03,040
Speaker 5: system rather than you know, trying to figure out how

610
00:31:03,040 --> 00:31:05,320
Speaker 5: to you know, make the rest of the world more happy.

611
00:31:05,560 --> 00:31:08,880
Speaker 5: So when the Chinese decide that you know, semiconductors are

612
00:31:09,000 --> 00:31:12,520
Speaker 5: a critical technology, where that solar is a critical technology,

613
00:31:12,600 --> 00:31:15,760
Speaker 5: as you say, the central government would do something like

614
00:31:15,880 --> 00:31:19,640
Speaker 5: name solar a strategic emerging industry, as the State Council

615
00:31:19,840 --> 00:31:22,959
Speaker 5: did in twenty ten, it would trigger you know, a

616
00:31:23,040 --> 00:31:27,160
Speaker 5: vast cascade of subsidies which lead to business creation.

617
00:31:27,600 --> 00:31:30,320
Speaker 4: It encourages the local governments to.

618
00:31:30,680 --> 00:31:34,520
Speaker 5: Give free land to favorite industries, have the banks lend

619
00:31:34,560 --> 00:31:38,720
Speaker 5: at very cheap rates, sometimes these you know, direct grants.

620
00:31:39,200 --> 00:31:41,880
Speaker 5: But you know, in general, what the Chinese tend to

621
00:31:41,920 --> 00:31:45,360
Speaker 5: do is to you know, have oversupply. They don't they

622
00:31:45,400 --> 00:31:48,080
Speaker 5: have no ability to stop themselves from building. And I think,

623
00:31:48,120 --> 00:31:50,040
Speaker 5: you know, if I had to choose, I would you know,

624
00:31:50,120 --> 00:31:54,160
Speaker 5: rather choose that set of economic problems that that was

625
00:31:54,400 --> 00:31:57,400
Speaker 5: the trigger that has made it so that China builds

626
00:31:57,840 --> 00:32:01,680
Speaker 5: basically as much renewable structure every year as the rest

627
00:32:01,680 --> 00:32:04,800
Speaker 5: of the world combined that these Chinese local governments cannot

628
00:32:04,840 --> 00:32:08,680
Speaker 5: stop themselves from building more you know favorite industries in

629
00:32:09,080 --> 00:32:12,440
Speaker 5: something like solar or wind farms, that what they really

630
00:32:12,480 --> 00:32:13,120
Speaker 5: try to do.

631
00:32:13,440 --> 00:32:16,320
Speaker 4: Is to you know, they can't stop themselvesselves from building.

632
00:32:16,800 --> 00:32:19,640
Speaker 5: They build, and they build even when there is no interconnection,

633
00:32:19,720 --> 00:32:23,160
Speaker 5: when these farms aren't really connected to the grid. They build,

634
00:32:23,440 --> 00:32:26,720
Speaker 5: you know, hydroelectric dams that displace millions of people. They

635
00:32:26,720 --> 00:32:29,440
Speaker 5: build even when the central government tells them to stop building,

636
00:32:29,800 --> 00:32:32,800
Speaker 5: because you know, it just wants this sort of capacity

637
00:32:32,920 --> 00:32:35,520
Speaker 5: and employment out there, and that is just you know,

638
00:32:35,560 --> 00:32:37,440
Speaker 5: that's what the US is kind of up against. And

639
00:32:37,480 --> 00:32:39,560
Speaker 5: I wonder, you know, how these two systems can be

640
00:32:39,600 --> 00:32:40,160
Speaker 5: more adaptive.

641
00:32:40,240 --> 00:32:42,240
Speaker 2: Well this I want that feeds into.

642
00:32:42,440 --> 00:32:44,400
Speaker 3: So it really does feel like we have the opposite

643
00:32:44,400 --> 00:32:47,560
Speaker 3: problem where people are always writing substack posts about how

644
00:32:47,640 --> 00:32:49,920
Speaker 3: terrible we are at building things, and then you have

645
00:32:50,000 --> 00:32:52,800
Speaker 3: Dan Turk about no, they literally can't stop the building

646
00:32:52,960 --> 00:32:54,520
Speaker 3: even when they say.

647
00:32:54,320 --> 00:32:55,160
Speaker 2: Stop the building.

648
00:32:55,680 --> 00:32:57,920
Speaker 3: Is it really as simple as like, oh, there's some

649
00:32:58,040 --> 00:32:59,960
Speaker 3: laws from the Carter era that we have to get

650
00:33:00,080 --> 00:33:02,480
Speaker 3: rid of it. Then suddenly we could like build some

651
00:33:02,600 --> 00:33:04,840
Speaker 3: way and rail as fast as they do in.

652
00:33:04,920 --> 00:33:06,840
Speaker 4: Europe and Asia, Like what do you like.

653
00:33:07,240 --> 00:33:08,000
Speaker 1: Just sitting asunde?

654
00:33:08,040 --> 00:33:10,640
Speaker 4: Like I said, like, how do we get to do to.

655
00:33:10,720 --> 00:33:12,880
Speaker 3: Get the US building again? How do you like rank

656
00:33:12,960 --> 00:33:14,440
Speaker 3: the priorities.

657
00:33:13,880 --> 00:33:14,640
Speaker 4: Or get good at that?

658
00:33:15,560 --> 00:33:15,800
Speaker 2: Uh?

659
00:33:15,880 --> 00:33:18,160
Speaker 6: Yeah, I mean I think there are important laws to change,

660
00:33:18,160 --> 00:33:21,000
Speaker 6: But I think what we have to understand is that

661
00:33:21,520 --> 00:33:22,040
Speaker 6: a lot.

662
00:33:21,880 --> 00:33:25,160
Speaker 2: Of the blockers, Like why are those laws there? Right?

663
00:33:25,200 --> 00:33:28,120
Speaker 6: Like we can't just like erase them and say they

664
00:33:28,120 --> 00:33:30,600
Speaker 6: should be going to be gone. A lot of the

665
00:33:30,960 --> 00:33:34,520
Speaker 6: blockers to lower cost are there because someone wants them

666
00:33:34,560 --> 00:33:37,680
Speaker 6: to be there. Sure, and because we don't have enough

667
00:33:38,200 --> 00:33:42,280
Speaker 6: you know, bipartisan't cross ideological.

668
00:33:41,640 --> 00:33:43,480
Speaker 2: Agreement that these things should go.

669
00:33:44,240 --> 00:33:45,440
Speaker 6: You know what I mean, all we have to do

670
00:33:45,560 --> 00:33:48,200
Speaker 6: is get enough people to agree that buy America is

671
00:33:48,240 --> 00:33:50,000
Speaker 6: a problem, and then we can get rid of by

672
00:33:50,040 --> 00:33:54,840
Speaker 6: American provisions. But like this is the law of the problem, Yes,

673
00:33:54,880 --> 00:33:57,920
Speaker 6: to an extent. But the problem is, for whatever reason,

674
00:33:58,240 --> 00:34:00,960
Speaker 6: we can't overcome the force that push for now.

675
00:34:00,960 --> 00:34:03,320
Speaker 3: But there's also like I mean, buy America I presume

676
00:34:03,480 --> 00:34:06,520
Speaker 3: is not why forever with the Second Avenue subway which

677
00:34:06,520 --> 00:34:08,600
Speaker 3: I don't know, I think it exists or maybe it

678
00:34:08,600 --> 00:34:12,360
Speaker 3: has a few stops, And why there are like large

679
00:34:12,360 --> 00:34:15,040
Speaker 3: swaths of the country where they can't put a electrical

680
00:34:15,200 --> 00:34:17,120
Speaker 3: wires and stuff like that. There seem to be like

681
00:34:17,320 --> 00:34:18,120
Speaker 3: that seems like.

682
00:34:18,040 --> 00:34:20,360
Speaker 6: There's more sure, there's a lot of there's a lot

683
00:34:20,400 --> 00:34:22,640
Speaker 6: of problems, and behind most of those problems there's some

684
00:34:22,680 --> 00:34:25,359
Speaker 6: party pushing for them. And I would argue that what

685
00:34:25,400 --> 00:34:29,040
Speaker 6: we need is more ideological alignment among the people who

686
00:34:29,080 --> 00:34:31,040
Speaker 6: wish to push back against those things.

687
00:34:31,239 --> 00:34:33,719
Speaker 2: You know, like NEPA is a huge issue.

688
00:34:33,600 --> 00:34:36,560
Speaker 6: Right, but like it exists for reason, it's defended for

689
00:34:36,600 --> 00:34:40,200
Speaker 6: a reason. There are people who sue using NEPA because

690
00:34:40,280 --> 00:34:43,200
Speaker 6: you know, that's that they want those outcomes, and so

691
00:34:43,719 --> 00:34:44,200
Speaker 6: we need.

692
00:34:44,080 --> 00:34:45,320
Speaker 2: To have more agreement.

693
00:34:45,760 --> 00:34:48,640
Speaker 6: Here are the set of problems and sort of work

694
00:34:48,640 --> 00:34:51,680
Speaker 6: in a bipartisan way to push behind them. And you

695
00:34:51,719 --> 00:34:55,799
Speaker 6: have to be realistic about people are on the other

696
00:34:55,880 --> 00:34:58,880
Speaker 6: side of the table of the everything bagel problem.

697
00:34:58,960 --> 00:35:02,440
Speaker 2: And they that's who we're up against if we're going

698
00:35:02,480 --> 00:35:02,920
Speaker 2: to get rid of it.

699
00:35:19,480 --> 00:35:21,799
Speaker 1: Just going back to the beginning of this conversation when

700
00:35:21,840 --> 00:35:25,200
Speaker 1: we were talking about the goals of the Chips Act

701
00:35:25,360 --> 00:35:28,239
Speaker 1: and the IRA as well, it does feel like there

702
00:35:28,360 --> 00:35:33,399
Speaker 1: is a tension between a recognition that these are strategically

703
00:35:33,440 --> 00:35:36,879
Speaker 1: important things for the US, whether they're semiconductors or clean

704
00:35:37,000 --> 00:35:41,320
Speaker 1: energy tech, and then the ability to actually scale these

705
00:35:41,960 --> 00:35:44,880
Speaker 1: and sell them in a way that is appealing to

706
00:35:45,400 --> 00:35:51,160
Speaker 1: American people and corporations. Is that tension insurmountable. I'd like

707
00:35:51,200 --> 00:35:52,840
Speaker 1: to hear from both of you on this point.

708
00:35:56,040 --> 00:36:01,080
Speaker 5: I think it is probably going to be a pretty

709
00:36:01,120 --> 00:36:04,560
Speaker 5: serious tension, and I think that the US government has

710
00:36:04,600 --> 00:36:08,080
Speaker 5: to work through, you know, all these sorts of tensions.

711
00:36:08,400 --> 00:36:12,120
Speaker 5: Some of these things will be resolved through the executive process.

712
00:36:12,280 --> 00:36:14,480
Speaker 5: So if I think about something like, you know, the

713
00:36:14,600 --> 00:36:18,520
Speaker 5: Treasury Department will give guidance on which electric vehicles are

714
00:36:18,560 --> 00:36:21,320
Speaker 5: actually subject to the full seventy five hundred dollars in

715
00:36:21,360 --> 00:36:24,719
Speaker 5: subsidies from the IRA and so it has to threat

716
00:36:24,760 --> 00:36:27,319
Speaker 5: these needles. If it is, you know, a little bit

717
00:36:27,320 --> 00:36:32,240
Speaker 5: too tight, then you know, the electric vehicle industry uptake

718
00:36:32,239 --> 00:36:34,600
Speaker 5: will be pretty slow because most of these batteries are

719
00:36:34,680 --> 00:36:38,399
Speaker 5: used with minerals process in China. On the other hand,

720
00:36:38,440 --> 00:36:40,160
Speaker 5: if it is you know, if it is too strict,

721
00:36:40,200 --> 00:36:42,680
Speaker 5: then no one will buy electric vehicles. If it is

722
00:36:43,040 --> 00:36:45,759
Speaker 5: not strict enough, then none of these automakers feel that

723
00:36:45,800 --> 00:36:48,320
Speaker 5: they have to, you know, get rid of their China

724
00:36:48,320 --> 00:36:51,359
Speaker 5: dependence on all of these batteries. And so these are

725
00:36:51,400 --> 00:36:54,080
Speaker 5: basically a lot of these tensions that I think are

726
00:36:54,680 --> 00:36:56,920
Speaker 5: going to be pretty difficult to try to solve.

727
00:36:57,600 --> 00:37:01,399
Speaker 6: Adam, I think there's a couple of facts that didn't

728
00:37:01,440 --> 00:37:05,400
Speaker 6: matter here. One is that we have a huge cost gap,

729
00:37:05,760 --> 00:37:09,080
Speaker 6: especially when it comes to advanced semiconductor production. You TSMC

730
00:37:09,200 --> 00:37:12,320
Speaker 6: says it's forty to fifty percent, so it's too expensive

731
00:37:12,320 --> 00:37:14,960
Speaker 6: to start. We used to make it here and we

732
00:37:15,000 --> 00:37:17,960
Speaker 6: don't anymore, and that's for a reason. And the reason

733
00:37:18,040 --> 00:37:20,839
Speaker 6: is because of costs, and you know, it made more

734
00:37:20,880 --> 00:37:22,920
Speaker 6: sense to make it in other countries. So you have

735
00:37:22,960 --> 00:37:24,759
Speaker 6: to be laser focused on those costs. Because of the

736
00:37:24,760 --> 00:37:27,719
Speaker 6: third reason, which is this is a globally competitive industry.

737
00:37:28,160 --> 00:37:32,000
Speaker 6: It's ruthless, and you have to be focused on costs

738
00:37:32,000 --> 00:37:34,920
Speaker 6: and you have to be focused on prices, and policy

739
00:37:34,960 --> 00:37:38,160
Speaker 6: should reflect that. And if policy doesn't reflect that, I

740
00:37:38,160 --> 00:37:39,160
Speaker 6: think that's a problem.

741
00:37:39,320 --> 00:37:41,799
Speaker 5: If I can amplify that point a little bit, that

742
00:37:42,280 --> 00:37:44,000
Speaker 5: you know, I think that you know, what is really

743
00:37:44,000 --> 00:37:47,400
Speaker 5: strange when it comes to something like clean tech in

744
00:37:47,680 --> 00:37:50,759
Speaker 5: the United States is that I think the US is

745
00:37:50,760 --> 00:37:53,600
Speaker 5: in a very strange position where it is trying to

746
00:37:53,640 --> 00:37:57,000
Speaker 5: engage in technological catch up with a lower wage competitor,

747
00:37:57,080 --> 00:38:01,440
Speaker 5: which is China. That China makes you know, solar photovotaic

748
00:38:01,520 --> 00:38:04,720
Speaker 5: panels that are both cheaper as well as more efficient.

749
00:38:04,600 --> 00:38:05,240
Speaker 4: Than the US.

750
00:38:05,800 --> 00:38:08,320
Speaker 5: And uh, you know, often the same goes for batteries,

751
00:38:08,520 --> 00:38:10,239
Speaker 5: and so you know, usually one of these things is

752
00:38:10,280 --> 00:38:13,040
Speaker 5: not true that you know, you are either technologically ahead

753
00:38:13,320 --> 00:38:15,920
Speaker 5: or you are cheaper. But the US really has a

754
00:38:15,960 --> 00:38:17,720
Speaker 5: hard time here, which is why I want to echo

755
00:38:17,960 --> 00:38:20,480
Speaker 5: Adam's point that you really have to focus on bringing

756
00:38:20,480 --> 00:38:23,600
Speaker 5: down this cost card. The other, you know, slightly novel

757
00:38:23,680 --> 00:38:28,560
Speaker 5: thing is that you know, China developed technologically by embracing

758
00:38:28,920 --> 00:38:33,319
Speaker 5: a lot of foreign investment into China. These involved you know,

759
00:38:33,440 --> 00:38:38,240
Speaker 5: Apple through Fox Con building enormous electronics factories in China.

760
00:38:38,640 --> 00:38:44,400
Speaker 5: Tesla has a wholly owned factory in Shanghai that you know, Intel, Dell, whatever.

761
00:38:44,719 --> 00:38:48,360
Speaker 5: All of these American technology giants invested a lot in China,

762
00:38:48,440 --> 00:38:52,240
Speaker 5: and then Beijing was extremely welcoming into in their investment

763
00:38:52,440 --> 00:38:55,560
Speaker 5: and has not you know, retaliated against them throughout the

764
00:38:55,600 --> 00:38:59,279
Speaker 5: many years of President Trump's trade war. By contrast, the

765
00:38:59,400 --> 00:39:03,880
Speaker 5: US has been pretty hostile towards attracting investment from you know,

766
00:39:03,920 --> 00:39:06,400
Speaker 5: what is the technology leader in a lot of these spaces,

767
00:39:06,560 --> 00:39:09,840
Speaker 5: China when it comes to solar and batteries especially, and

768
00:39:09,920 --> 00:39:13,040
Speaker 5: so it is pretty hostile towards Chinese battery makers from

769
00:39:13,080 --> 00:39:15,799
Speaker 5: setting up in Virginia sometimes, you.

770
00:39:15,800 --> 00:39:17,320
Speaker 4: Know, including in Michigan.

771
00:39:17,560 --> 00:39:19,399
Speaker 5: And so I think, you know, the US is making

772
00:39:19,400 --> 00:39:21,960
Speaker 5: this beat that it is going to be able to

773
00:39:22,120 --> 00:39:25,280
Speaker 5: be okay in something like batteries by you know, mostly

774
00:39:25,320 --> 00:39:26,920
Speaker 5: working with allies.

775
00:39:26,520 --> 00:39:28,320
Speaker 4: In Japan as well as South Korea.

776
00:39:28,360 --> 00:39:31,040
Speaker 5: And perhaps that is all very fine, but I would

777
00:39:31,040 --> 00:39:33,399
Speaker 5: also encourage it not to be you know, boxing with

778
00:39:33,680 --> 00:39:36,479
Speaker 5: one hand TIEDUS behind. It's back to be a little

779
00:39:36,480 --> 00:39:38,359
Speaker 5: bit more like China and then trying to get as

780
00:39:38,440 --> 00:39:42,280
Speaker 5: much investment as possible solve mitigate these national security problems

781
00:39:42,280 --> 00:39:44,560
Speaker 5: where they exist, but don't really you know, reject for

782
00:39:44,600 --> 00:39:46,439
Speaker 5: an investment from the technology leader.

783
00:39:46,880 --> 00:39:50,000
Speaker 3: So going back to Chips specifically mentioned at the top,

784
00:39:50,160 --> 00:39:53,240
Speaker 3: Tracy and I recently interview two of the top people

785
00:39:53,520 --> 00:39:57,080
Speaker 3: at running the Chips actor, you guys, and it's totally

786
00:39:57,239 --> 00:40:00,719
Speaker 3: sloop timing because like a week before that, colleagues on

787
00:40:00,760 --> 00:40:05,040
Speaker 3: the Bloomberg opinion side, who are like you know, separate wallas,

788
00:40:05,080 --> 00:40:07,839
Speaker 3: like they totally savaged the state of the Chips Act,

789
00:40:07,840 --> 00:40:09,600
Speaker 3: and like, you know a lot of these amputations like

790
00:40:09,600 --> 00:40:12,560
Speaker 3: oh this should becoming like this like progressive Christmas tree

791
00:40:12,719 --> 00:40:18,520
Speaker 3: of like environmental concerns and child child care, et cetera.

792
00:40:18,680 --> 00:40:22,120
Speaker 3: Like outside of like what you see, you know is

793
00:40:22,120 --> 00:40:25,080
Speaker 3: there's sort of like the tensions goals of like create

794
00:40:25,160 --> 00:40:28,560
Speaker 3: jobs versus creat events, sermon conductors. How concerned are you

795
00:40:28,600 --> 00:40:31,600
Speaker 3: about some of these other elements or like how overblown

796
00:40:31,680 --> 00:40:33,279
Speaker 3: or where do you stand on some of the other

797
00:40:33,360 --> 00:40:36,400
Speaker 3: priorities that some are saying or seeping into.

798
00:40:36,239 --> 00:40:36,960
Speaker 2: The Chips Act.

799
00:40:37,680 --> 00:40:39,600
Speaker 6: Yeah, I mean I think one hundred percent that there

800
00:40:39,640 --> 00:40:41,760
Speaker 6: are other priorities that are just direct.

801
00:40:41,760 --> 00:40:44,040
Speaker 2: They're just going to raise costs, like that's what they do.

802
00:40:44,280 --> 00:40:47,880
Speaker 6: Like there's no world in which forcing project labor agreements

803
00:40:48,080 --> 00:40:50,400
Speaker 6: on in the construction of these fabs does the raise costs.

804
00:40:50,920 --> 00:40:52,840
Speaker 6: And you have to acknowledge that that's the problem. You

805
00:40:52,880 --> 00:40:55,200
Speaker 6: got to be realistic about that. So I think that

806
00:40:55,239 --> 00:40:58,240
Speaker 6: they are absolutely intention I want to be too handed

807
00:40:58,239 --> 00:41:00,279
Speaker 6: economists here, and that there's a lot of stuff that

808
00:41:00,320 --> 00:41:02,879
Speaker 6: they that they are doing and saying that I think

809
00:41:03,000 --> 00:41:07,440
Speaker 6: is good there's a there's a recognition, you know, from

810
00:41:07,480 --> 00:41:11,440
Speaker 6: the administration that we are going to need to nest

811
00:41:11,520 --> 00:41:15,960
Speaker 6: semiconductive production within globalization. And there's a realism there and

812
00:41:16,000 --> 00:41:18,759
Speaker 6: a desire to work with allies on this that I

813
00:41:18,760 --> 00:41:21,000
Speaker 6: think is missing from a lot of the other discussion

814
00:41:21,040 --> 00:41:23,200
Speaker 6: around this. So we're not going to make it all

815
00:41:23,600 --> 00:41:27,400
Speaker 6: and globalization is not the enemy here. Globalization is a

816
00:41:27,480 --> 00:41:31,040
Speaker 6: key factor in why Moore's Law has continued over time.

817
00:41:31,160 --> 00:41:33,680
Speaker 6: If we didn't have globalization, More's Law would have been

818
00:41:33,680 --> 00:41:36,520
Speaker 6: dead a long time ago. And so you cannot run

819
00:41:36,560 --> 00:41:39,320
Speaker 6: away from globalization when it comes to semiconductive production. So

820
00:41:39,360 --> 00:41:40,799
Speaker 6: I do want to say that I do think the

821
00:41:40,800 --> 00:41:43,359
Speaker 6: administration has been good on that. It's the other things.

822
00:41:43,360 --> 00:41:45,600
Speaker 6: It's the Christmas tree stuff that I think is a problem.

823
00:41:46,200 --> 00:41:48,480
Speaker 6: On the other hand, everything bagels are delicious.

824
00:41:49,200 --> 00:41:53,280
Speaker 5: I don't order playing bagels myself, and Christmas trees are beautiful.

825
00:41:53,680 --> 00:41:56,680
Speaker 5: I agree without him that, you know, it is really

826
00:41:56,760 --> 00:42:00,759
Speaker 5: difficult to try to make everything here at home. But

827
00:42:00,960 --> 00:42:04,719
Speaker 5: you know, I wonder at what extent that these childcare provisions,

828
00:42:04,719 --> 00:42:09,200
Speaker 5: that these other labor provisions are really you know, going

829
00:42:09,200 --> 00:42:12,960
Speaker 5: to be mostly inconveniences that these companies are going to

830
00:42:13,000 --> 00:42:15,600
Speaker 5: be able to write off that, you know, or whether

831
00:42:15,600 --> 00:42:18,279
Speaker 5: they actually are critical, you know, if they actually are

832
00:42:18,320 --> 00:42:21,080
Speaker 5: crippling may be a little bit too early to tell.

833
00:42:21,560 --> 00:42:23,960
Speaker 5: But I agree with that, and certainly it is pretty difficult,

834
00:42:24,000 --> 00:42:25,560
Speaker 5: which is why I go back to the test I

835
00:42:25,600 --> 00:42:28,080
Speaker 5: laid out at the beginning. We are seeing as already

836
00:42:28,160 --> 00:42:31,279
Speaker 5: huge amounts of investments in the US, but you know,

837
00:42:31,400 --> 00:42:33,279
Speaker 5: is it going to be invested in most of the

838
00:42:33,360 --> 00:42:35,960
Speaker 5: right things? And you know, is there going to be

839
00:42:36,000 --> 00:42:38,600
Speaker 5: some way to you know, have the Is the US

840
00:42:38,719 --> 00:42:41,520
Speaker 5: going to be able to say that these economics are

841
00:42:41,600 --> 00:42:44,480
Speaker 5: going to be pretty self sustaining over the longer run.

842
00:42:45,160 --> 00:42:48,000
Speaker 1: So I just have one last question, sort of a

843
00:42:48,040 --> 00:42:52,560
Speaker 1: classic interview question, which is in ten years time or

844
00:42:53,280 --> 00:42:54,960
Speaker 1: I don't even know if ten years is long enough

845
00:42:54,960 --> 00:42:58,640
Speaker 1: because we're talking about technologies with very very long lead times.

846
00:42:58,680 --> 00:43:01,520
Speaker 1: But okay, so I guess I have two questions. One,

847
00:43:02,160 --> 00:43:04,920
Speaker 1: what time frame do you think is reasonable to judge

848
00:43:04,920 --> 00:43:05,480
Speaker 1: the success?

849
00:43:05,680 --> 00:43:06,280
Speaker 2: Ser verdict?

850
00:43:06,560 --> 00:43:07,080
Speaker 5: Yeah?

851
00:43:07,120 --> 00:43:09,560
Speaker 1: And then two, what are you looking out for? Is

852
00:43:09,560 --> 00:43:12,800
Speaker 1: there something specific where you would wake up in twenty

853
00:43:12,880 --> 00:43:15,600
Speaker 1: or thirty or fifty years time hopefully we're all still

854
00:43:15,640 --> 00:43:18,920
Speaker 1: around and say this has either been a massive success

855
00:43:19,160 --> 00:43:21,200
Speaker 1: or a desperate failure.

856
00:43:22,239 --> 00:43:25,560
Speaker 5: I look forward to getting back into this bowling alley

857
00:43:25,680 --> 00:43:30,240
Speaker 5: in ten years, one decade from now, and decades perfect yes,

858
00:43:30,640 --> 00:43:34,919
Speaker 5: or perhaps many decades. And you know, thinking about where

859
00:43:34,960 --> 00:43:39,520
Speaker 5: we are that you know, ten years is not very

860
00:43:39,560 --> 00:43:45,000
Speaker 5: long of a time, as you say, Tracy, technologically, politically

861
00:43:45,040 --> 00:43:47,640
Speaker 5: that also tends to be not too long of a time.

862
00:43:48,200 --> 00:43:49,040
Speaker 4: For the Chinese.

863
00:43:49,160 --> 00:43:51,600
Speaker 5: That is only two turns of the five year plan,

864
00:43:51,960 --> 00:43:54,480
Speaker 5: and so I think they judge things on a slightly

865
00:43:54,520 --> 00:43:55,480
Speaker 5: longer timescale.

866
00:43:55,560 --> 00:43:58,279
Speaker 4: Let's give it at least three five year plan cycles.

867
00:43:58,719 --> 00:44:01,160
Speaker 5: What I slightly worry about is that, you know, there

868
00:44:01,320 --> 00:44:04,280
Speaker 5: is quite a lot of investment in things like solar

869
00:44:04,320 --> 00:44:08,200
Speaker 5: and batteries and also in semiconductors in the US today.

870
00:44:08,800 --> 00:44:11,160
Speaker 5: What I worry about is that, you know, somehow the

871
00:44:11,520 --> 00:44:16,400
Speaker 5: TSMC facility in Arizona turns a little bit more like

872
00:44:16,440 --> 00:44:19,760
Speaker 5: a showcase factory that doesn't end up, you know, producing

873
00:44:19,800 --> 00:44:22,400
Speaker 5: too much. Then I think the example here is something

874
00:44:22,480 --> 00:44:26,719
Speaker 5: like Apple's mac pro factory in Texas, which doesn't have

875
00:44:26,920 --> 00:44:30,080
Speaker 5: a very high volume. And you know, if after all

876
00:44:30,120 --> 00:44:32,239
Speaker 5: this investment, a lot of firms will fail. I think

877
00:44:32,239 --> 00:44:34,719
Speaker 5: that is certainly going to be the case even two

878
00:44:34,719 --> 00:44:36,719
Speaker 5: three years from now. You know, we take a look back,

879
00:44:37,120 --> 00:44:39,680
Speaker 5: you know, if you know one of the parties points

880
00:44:39,719 --> 00:44:41,719
Speaker 5: out a lot of these failures and says, you know,

881
00:44:41,760 --> 00:44:44,080
Speaker 5: this is why industrial policy cannot work.

882
00:44:44,239 --> 00:44:45,719
Speaker 4: We're getting a lot more celendras.

883
00:44:45,760 --> 00:44:48,640
Speaker 5: They're still talking about these, the cylindro failure of about

884
00:44:48,920 --> 00:44:52,440
Speaker 5: you know, fifteen years ago. Now that you know politically,

885
00:44:52,480 --> 00:44:55,960
Speaker 5: the appetite disappears, continue investing in these sort of things.

886
00:44:56,440 --> 00:44:59,200
Speaker 5: That is something I am a little bit worried about,

887
00:44:59,280 --> 00:45:01,239
Speaker 5: and so therefore I would say that, you know, we

888
00:45:01,320 --> 00:45:03,480
Speaker 5: have to think about these things on the longer time frame.

889
00:45:04,760 --> 00:45:07,879
Speaker 6: Adam, I would say, it depends what we're talking about specifically.

890
00:45:07,880 --> 00:45:11,080
Speaker 6: So if we're talking about advanced semiconductive production, it'd be

891
00:45:11,160 --> 00:45:13,359
Speaker 6: nice to have a little bit more, you know, less

892
00:45:13,400 --> 00:45:18,200
Speaker 6: geographic concentration there, both on shore and you know and friendshort.

893
00:45:19,080 --> 00:45:22,080
Speaker 6: When it comes to you know, mature none chips, I'd

894
00:45:22,080 --> 00:45:24,920
Speaker 6: love to see more direct accounting for here's why we

895
00:45:25,000 --> 00:45:28,440
Speaker 6: need it, and here is how we've improved resiliency. When

896
00:45:28,480 --> 00:45:30,360
Speaker 6: it comes to solar what I'd love to see is

897
00:45:30,360 --> 00:45:33,720
Speaker 6: the cost curve come down. I think that's everything that's everything.

898
00:45:34,160 --> 00:45:37,239
Speaker 6: I don't care about making it here. I don't care

899
00:45:37,239 --> 00:45:39,200
Speaker 6: where we make and I care that the price comes down,

900
00:45:39,400 --> 00:45:41,520
Speaker 6: and I care that people install it. And I think

901
00:45:41,560 --> 00:45:44,799
Speaker 6: that we should think about the technological frontier as being

902
00:45:44,800 --> 00:45:47,920
Speaker 6: something really important here. And Chips, to be fair, is

903
00:45:48,080 --> 00:45:50,239
Speaker 6: spending billions of dollars on R and D too, So

904
00:45:50,280 --> 00:45:52,479
Speaker 6: I'd love to see that some of that money helped

905
00:45:52,520 --> 00:45:54,320
Speaker 6: move the technological frontier forward.

906
00:45:54,680 --> 00:45:57,800
Speaker 3: I think Alan Staffer is here somewhere. He's always posting

907
00:45:57,800 --> 00:46:00,800
Speaker 3: the solar chart and it always looks very chourage that

908
00:46:01,200 --> 00:46:04,400
Speaker 3: line is going down, so that does seem to be happening.

909
00:46:04,600 --> 00:46:06,480
Speaker 3: One last thing and then I want to like open up,

910
00:46:06,520 --> 00:46:08,279
Speaker 3: and then I think we can go to Q and A.

911
00:46:08,400 --> 00:46:11,880
Speaker 3: But Dan, you know, like, I'm really struck by the

912
00:46:11,920 --> 00:46:14,040
Speaker 3: point that you make about it's kind of rare to

913
00:46:14,080 --> 00:46:16,479
Speaker 3: be trying to catch up to a country that both

914
00:46:16,520 --> 00:46:20,200
Speaker 3: is cheaper and more technologically advanced. Like usually maybe there's

915
00:46:20,239 --> 00:46:22,840
Speaker 3: one the other and you exploit the other. Like should

916
00:46:22,880 --> 00:46:26,799
Speaker 3: we be doing things like you know, export discipline and

917
00:46:26,960 --> 00:46:31,839
Speaker 3: subsidizing the companies that can produce here and sell well

918
00:46:31,840 --> 00:46:34,239
Speaker 3: in the global market. Should we be thinking about that

919
00:46:34,280 --> 00:46:36,040
Speaker 3: type of thing for the US or should we be

920
00:46:36,080 --> 00:46:39,160
Speaker 3: thinking about, you know more buyer of last resort things.

921
00:46:39,239 --> 00:46:41,319
Speaker 3: It seems to be a part of the sort of

922
00:46:41,520 --> 00:46:44,200
Speaker 3: when we have had successful like sort of like military

923
00:46:44,280 --> 00:46:49,120
Speaker 3: driven semiconductor policies like back in the Cold War and

924
00:46:49,120 --> 00:46:49,680
Speaker 3: stuff like that.

925
00:46:49,880 --> 00:46:52,840
Speaker 5: Yeah, well, I would love for US firms to have

926
00:46:52,920 --> 00:46:55,320
Speaker 5: export discipline, which is, you know, a lot of the

927
00:46:55,600 --> 00:46:58,840
Speaker 5: strategy for firms in Asia to you know, sell to

928
00:46:58,880 --> 00:47:01,960
Speaker 5: the rich America can market and then you know, get

929
00:47:02,080 --> 00:47:04,960
Speaker 5: the quality of their products, you know, to to to

930
00:47:05,040 --> 00:47:07,120
Speaker 5: raise the quality of their products. The challenge for the

931
00:47:07,239 --> 00:47:10,360
Speaker 5: US is that there is no bigger and more sophisticated market,

932
00:47:10,480 --> 00:47:12,759
Speaker 5: so it's hard to you know, figure out you know,

933
00:47:12,760 --> 00:47:15,560
Speaker 5: who is able to discipline the American firm. And I

934
00:47:15,600 --> 00:47:17,920
Speaker 5: think to add to the point of you know how

935
00:47:18,000 --> 00:47:19,759
Speaker 5: you know, the US is in a bit of a

936
00:47:19,800 --> 00:47:23,000
Speaker 5: tougher position again, I would think, you know, slightly politically.

937
00:47:23,040 --> 00:47:26,200
Speaker 5: The challenges here to go back to the example of Chips.

938
00:47:26,400 --> 00:47:27,600
Speaker 5: You know, whether the Chips.

939
00:47:27,320 --> 00:47:28,000
Speaker 4: Act is working.

940
00:47:28,320 --> 00:47:32,000
Speaker 5: I think about something like TSMC in Taiwan and so

941
00:47:32,160 --> 00:47:36,680
Speaker 5: TSMC is you know by miles and Miles, Taiwan's everyone's

942
00:47:36,719 --> 00:47:40,880
Speaker 5: favorite employer in Taiwan that people engineers in Taiwan would say,

943
00:47:40,960 --> 00:47:43,160
Speaker 5: I would sell my liver to go work for TSMC.

944
00:47:43,600 --> 00:47:45,680
Speaker 5: You know, it's much more difficult to think that people

945
00:47:45,680 --> 00:47:48,560
Speaker 5: would say that of any chip firm over here. You know,

946
00:47:48,640 --> 00:47:52,640
Speaker 5: Taiwan is periodically in a drought. It is a you know,

947
00:47:52,920 --> 00:47:56,560
Speaker 5: an island where they give the fresh water to TSMC

948
00:47:57,040 --> 00:48:00,720
Speaker 5: and make the citizens drink the treated water in a trout.

949
00:48:00,800 --> 00:48:03,520
Speaker 5: They park a lot of these fire trucks outside of

950
00:48:03,560 --> 00:48:06,600
Speaker 5: the facilities of TSMC in order to make sure that

951
00:48:06,719 --> 00:48:10,840
Speaker 5: TSMC has you know, freshwater to produce the chips powering

952
00:48:11,000 --> 00:48:13,719
Speaker 5: our iPhones, and so you know, this is you know,

953
00:48:13,760 --> 00:48:16,840
Speaker 5: that is just a different sort of thing where politically

954
00:48:16,880 --> 00:48:20,279
Speaker 5: also can I is it really easy to imagine that

955
00:48:20,400 --> 00:48:25,239
Speaker 5: TSMC's facilities in Arizona, a fairly try state, is able

956
00:48:25,280 --> 00:48:28,440
Speaker 5: to park a lot of fire trucks outside of TSMC's

957
00:48:28,480 --> 00:48:29,920
Speaker 5: facilities in a trout.

958
00:48:30,200 --> 00:48:31,560
Speaker 4: I wonder we're.

959
00:48:31,360 --> 00:48:34,520
Speaker 3: Going to be doing an episode soon with the Arizona

960
00:48:34,600 --> 00:48:36,799
Speaker 3: lfelfa farmer, so you will be.

961
00:48:36,760 --> 00:48:37,960
Speaker 4: Making the case that we should not.

962
00:48:38,200 --> 00:48:40,200
Speaker 3: You know, they got to get there, they got.

963
00:48:40,080 --> 00:48:42,360
Speaker 1: To get their Yeah, but thank you Dan for leaving

964
00:48:42,400 --> 00:48:45,759
Speaker 1: with us with that wonderful vision of late stage capitalism.

965
00:48:45,560 --> 00:48:47,920
Speaker 3: And thank you to Adam Ozomak for joining us for

966
00:48:48,000 --> 00:48:51,480
Speaker 3: this conversation. We welcomed questions from the audience, and if

967
00:48:51,480 --> 00:48:53,600
Speaker 3: you'd like to hear those, we invite you to be

968
00:48:53,680 --> 00:48:55,880
Speaker 3: on the lookout for live recordings where you can be

969
00:48:55,920 --> 00:48:57,520
Speaker 3: part of our audience in the future.

970
00:49:19,000 --> 00:49:20,960
Speaker 1: Joe, I found that conversation fascinating.

971
00:49:21,360 --> 00:49:21,960
Speaker 6: It was so great.

972
00:49:22,040 --> 00:49:26,360
Speaker 3: I'm so glad. I appreciate both perspectives. I do find

973
00:49:26,440 --> 00:49:30,840
Speaker 3: like I don't know, I really I appreciate both perspectives.

974
00:49:30,840 --> 00:49:33,680
Speaker 3: I like Dam's case for we should do big heavy

975
00:49:33,680 --> 00:49:36,000
Speaker 3: stuff here, right, I guess for.

976
00:49:36,160 --> 00:49:37,960
Speaker 4: But now that was I really enjoyed it.

977
00:49:38,040 --> 00:49:39,840
Speaker 1: One thing that I think is pretty special about the

978
00:49:39,840 --> 00:49:42,239
Speaker 1: discussion is it has to be a first for a

979
00:49:42,239 --> 00:49:45,720
Speaker 1: semiconductor policy discussion in a bowling alley.

980
00:49:45,920 --> 00:49:48,759
Speaker 3: No, and the listeners who are not here, like we're

981
00:49:48,760 --> 00:49:51,200
Speaker 3: on this stage, we're looking out at bowling alley. Well

982
00:49:51,280 --> 00:49:54,560
Speaker 3: gamed the beautiful light fixture in this old building.

983
00:49:55,120 --> 00:49:57,719
Speaker 2: I had the exact same thought. No one is having this.

984
00:49:57,880 --> 00:50:03,520
Speaker 3: Conversation about like the world, so nothing.

985
00:50:03,239 --> 00:50:04,640
Speaker 4: Else an accomplishment.

986
00:50:04,800 --> 00:50:07,120
Speaker 1: No, it's bowling pin America.

987
00:50:07,160 --> 00:50:09,160
Speaker 4: Actually, you know, it's like this is what we were

988
00:50:09,680 --> 00:50:10,040
Speaker 4: We can.

989
00:50:10,000 --> 00:50:12,759
Speaker 1: Draw the line between bowling pins and pin diodes. How

990
00:50:12,800 --> 00:50:16,520
Speaker 1: about all right? Well, this has been another episode of

991
00:50:16,600 --> 00:50:19,560
Speaker 1: the all Bots podcast. I'm Tracy Alloway.

992
00:50:19,200 --> 00:50:22,000
Speaker 3: I'm Joe Wassenthal and big thanks to our guests Dan

993
00:50:22,200 --> 00:50:25,400
Speaker 3: Wong and Adam Osemaga and of course Adam for this

994
00:50:25,560 --> 00:50:27,760
Speaker 3: incredible location where we recorded.

995
00:50:28,719 --> 00:50:31,759
Speaker 1: A massive thank you to the Economic Innovation Group and

996
00:50:31,840 --> 00:50:35,040
Speaker 1: the Institute for Progress for allowing us to be here

997
00:50:35,120 --> 00:50:38,440
Speaker 1: and do this world first of talking semiconductors in bowling

998
00:50:38,440 --> 00:50:43,000
Speaker 1: Ali Terry Toy. You can follow me on Twitter at

999
00:50:43,040 --> 00:50:44,480
Speaker 1: Tracy Alloway and I'm.

1000
00:50:44,360 --> 00:50:47,439
Speaker 3: Joe Wisenthal, and you can follow me on Twitter at

1001
00:50:47,440 --> 00:50:51,000
Speaker 3: the Stalwart. Follow our guests on Twitter, Adam Ozimek He's

1002
00:50:51,080 --> 00:50:55,120
Speaker 3: at Modeled Behavior, and Dan Wong He's at Dan w Wong.

1003
00:50:55,640 --> 00:50:59,680
Speaker 3: Follow our producers Carmen Rodriguez at Carmen Arman and dashall

1004
00:50:59,680 --> 00:51:02,600
Speaker 3: Bennet at dashbot. And check out all of the Bloomberg

1005
00:51:02,640 --> 00:51:06,799
Speaker 3: podcasts under the handle at podcasts, and for more odd

1006
00:51:06,840 --> 00:51:10,120
Speaker 3: Lots content, go to Bloomberg dot com slash odd Lots,

1007
00:51:10,160 --> 00:51:12,759
Speaker 3: where Tracy and I have a blog, we post transcripts

1008
00:51:12,760 --> 00:51:14,960
Speaker 3: and we have a newsletter that comes out every Friday,

1009
00:51:15,160 --> 00:51:18,280
Speaker 3: and for more Odd Lots content, check out our discord.

1010
00:51:18,440 --> 00:51:20,800
Speaker 3: It's really fun people chatting in there twenty four to

1011
00:51:20,840 --> 00:51:22,839
Speaker 3: seven about all of the things we talk about on

1012
00:51:22,880 --> 00:51:26,480
Speaker 3: the show. Check it out at discord dot, gg slash

1013
00:51:26,560 --> 00:51:27,120
Speaker 3: odd Lots.

1014
00:51:27,280 --> 00:51:28,000
Speaker 2: Thanks for listening.