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Comment by mr_toad | Hacker News Reader

Crucial to the automotive industry -> crucial to their campaign funds.

Crucial as in $100 of silicon enables a $30,000 dollar sale for auto instead of $3,000 for a computer

And yet, the majority of the auto industry decided they should cancel their chip orders as soon as the pandemic hit because it might be an economic downturn.

Apple alone spends more money on semiconductors than the ENTIRE auto industry. They played stupid games and won stupid prizes with this chip shortage.

Their margins are much tighter than Apple’s. This outcome is far better than having a ton of unsold stock depreciating in dealer yards. That quickly leads to bankruptcy as it did in ‘08.

Limiting their downside risk was the right call given the information.

So now the auto manufacturers know they don't need to worry the next time it looks like there will be a downturn. They can cancel orders and if they turn out to be wrong just get on the phone to their favourite politician.

Maybe more like: next time there’s a downturn, keep the orders if they can afford to. Having the chips on hand when the market picks up again could be a great investment, since they’ll be able to produce vehicles when their competitors can’t. Or they can sell some of the chips they’re holding to their competitors (at the going market rate).

and then what? TSMC falls over itself because oh no, Merkel sent a letter, full focus on automotive chips? I doubt that has very much influence in how production is balanced.

But which provides more value to the economy over time? That such a large percentage of the economy was able to stop driving and work from home does say a lot about the value of computers today.

The iPad Pro with the trackpad keyboard is indeed more of a content consumption device than the typical office PC, but it's also more of a work creation device than the typical office PC, particularly if its user ever has to do work from a different chair.

> But which provides more value to the economy over time?

Probably the thing that's not another iPad (e.g. the luxury content consumption device).

A) iPad costs 350$, it's not luxury by any means

B) iPad can be used for work, studying and much more, not only consumption

But they are selling >10x the amount of phones, which are largely supporting a more important supply chain.

Phones are only really relevant for one of those countries, and even there the actual manufacturing is outsourced to Asia.

If politicians are incentivized to protect jobs that’s a good thing, no?

I’m of the mind it is terrible.

How well did Wisconsin’s deal with FoxConn go? Politicians gave up something in the 7 figures per job that was ostensibly created on that project, but the state went into debt to do lots of the infra and the properties sit idle.

The F-35 is a defense project, but more than that, it is an unkillable jobs program distributed throughout nearly every Congressional district.

Politicians cite jobs created as if every “job” held equal weight. In fact, we have lost lots of salary jobs with benefits in the past decade, mostly replaced with independent contractor hours. Politicians don’t care because they are optimizing for the metric most commonly looked at.

Also, it creates a perverse incentive where no politician feels like they can ignore the bad metric because it is the good sound byte (a la “tough on crime” rhetoric when being consistent on crime is far more effective). Instead of working on healthier long term goals, they work on junk food goals.

depends - what if they favor a small industry over larger ones? (in the US the quintessential example is the coal industry vs. almost any other because of the insane way the government is elected)

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