U.S. senators propose 25% tax credit for semiconductor manufacturing
reuters.com
reuters.com
In WW2 after examining the components from aircraft kills, german wing spars would often survive. It was discovered that Germany used unique forged alloy wing spars to achieve their excellent aircraft performance, perplexing allied engineers. These wing spars' strength and weight is critical to the structural properties of modern air frames. Without them, jet air craft like the f-15 would have been impossible.
Machining these advanced alloy parts proved difficult, expensive, error prone, and impossible to manufacture but a die forged alloy wing spar was stronger, lighter, cheaper and beyond the industrial capability of every allied nation. We did not have the metallurgical technology to create such a large forged alloy wing spar in 1945.
After the war, the US and Soviets recovered designs for the extremely large press assemblies required for advanced air frames. In the 1950s, a huge national program was geared up to create absolutely massive Heavy Press machines. The Soviets had a massive 30,000lb press for these parts, and we created a couple of monstrous 50,000lb machines[1] that are still in operation today. These things are older than we are and still out there cranking out air frame parts today for modern air frames in 2021.
Without this kind of national investment in this kind of unique manufacturing, we would be unable to fly without importing 747 parts from wherever they could be created.
[0] https://en.wikipedia.org/wiki/Heavy_Press_Program [1] https://www.youtube.com/watch?v=iZ50nZU3oG8
https://www.forgemag.com/articles/84706-invisible-strength-f...
The conclusion about the inability of the market to develop alternative or similar manufacturing techniques isn't established by observing that the state did.
The alternative to forging the wing spars is to create a sub assembly from a dozen or more smaller components. The fasteners, drilling, and overlapping joints create a mechanically weaker, larger, and heavier assembly with worse material properties than a one-piece forged part.
In addition, assembling a wing spar from a dozen parts creates wasted materials from additional steps in the process (machining, forging, drilling, riveting a dozen parts) which takes much more time, requires skilled technicians, and decreases tolerances in the resulting assembly.
Machining titanium has different and worse metallurgical properties than a single forged part. You can heat treat the forged titanium part which has totally uniform mechanical properties, where in an assembly each part might have different inclusions and defects that are much harder to control for in process. This aids QC as well, as you can just X-ray the forged titanium part once.
So yes, they did, but its much more than that. The forged wing spars improve dozens of manufacturing, QC and engineering problems in addition to the material savings. Even without that, the forged parts are still a prerequisite for modern air frames.
EDIT: sorry, I didn't notice your edit. It may be that the market would provide these Heavy Press machines, and I mean the DoD partnered with ALCOA and other existing experts to build and run the presses, and the private market owned and profited from them, but in 1945 there wasn't a market for this except to the Air Force. That's why the DoD funded it. I'm sure the market could have also invested the absurd dollar sums, I mean the things are still used today, what was the total ROI on the Iron Giant presses... its incalculable.
But I'm almost certain today's globalized manufacturing would do what they are doing now: Make them in Taiwan, China, developing nations, and ship them across the ocean. The point is that the Air Force recognized the value of making the wing spars in country, so you can't bomb, flood, or capture the presses. We should definitely be able to crank out i7's on our continent, I don't care how.
Agreed. I'd add that the export of dollars is related to central bank policy.
Its mind blowing how much that the post war era is still affecting current affairs.
Where the petrodollar required somewhat incoherent rationales for war, a supranational carbon credit regime would offer somewhat more self-coherent rationales.
It isn't difficult to imagine how it might play out.
"Nation X's refusal to honestly participate in the carbon credit system is a crime against the Earth. Sanctions have been insufficient. The global coalition must act militarily to protect the Earth from..."
Regardless, I'm not sure there is a practical way to get the US back on track to where markets are more free and investment in domestic industry isn't distorted. A 25% tax credit or outright government funded or perhaps an initially nationalized industry? The difference is only in degree.
I support most any kind of national policy. Industrial, agricultural, transportation, education, etc.
Sure, use markets, incentives, competition.
Use some combo:
- private & public orgs
- private & public capital & finance
- top down & bottom up organizations, ranging from risk minimizing to hail mary.
Basically, whatever basket of strategies works.
But mostly I simply support directed, sustained investment in ourselves and our future.
But who chooses the investment? While I'm not anti-tax, I generally think the aggregated intelligence of the free market makes the best decisions, in most cases.
Throwing good money after bad makes me grumpy. So we need feedback loops, post mortems, etc.
Currently, every bit of legislation requires a fiscal note. Expected costs, projected impact, ROI, etc.
We'd all benefit if society worked harder to do the obvious followup steps.
Because it consumes resources that are needed elsewhere, such as for healthcare, education, etc. Because it centralizes power in politicians and in large corporations. Because it's not freedom.
> we need feedback loops, post mortems, etc.
Agreed, but let's not expect people to suddenly start doing those things.
What garage startup will succeed if money is distributed by the fiat of powerful rather than by a merit-based market (and yes, we can improve the meritocracy).
No single approach results in the 'best' decisions, and I'm not sure what the "global economy" and the "United States' represents in this case - both are very large collections of various people and interests.
The U.S. does have a very strong emphasis on freedom, you know, and has done very well with the free market and free trade - no country, in aggregate, has gotten richer following any system in the history of the world. Truly.
I'm open to improvements that distribute benefits better, but what do you suggest would work better?
There are a lot of scenarios where selfish behavior is rational for the individual but only permissible for a minority but if literally everyone does the selfish behavior everyone loses more than if they had done nothing.
If there was we could have avoided WW2 and a lot of other wars.
The owner of the machine can effectively charge all customers the marginal cost to build a new machine in perpetuity as a natural monopoly.
Odds are Semi is heading in the same direction where it doesn't make sense to build new fabs except for national security reasons, and whoever controls the massive fab can charge the marginal cost of building a new one to each of their customers indefinitely.
Maybe it doesn't make sense for private parties, since it clearly makes sense for nations to not rely of adversaries for their supply chains.
I would also argue that it your ability to rely on a competitor that is critical to your supply chain depends on which laws that prevent anti-competive practices are present in the relevant jurisdictions.
Investments aren't financed by customers, they're financed by investors.
I reckon in today's money-printing world it's easy to get even $1bn if you can credibly say to the investors that you can charge each customer 90% of the full investment (hell, even for 10% it's still a great business!)
It's a bad deal for investors to race to the bottom with an existing market player in a commodity business. It only makes financial sense for customers who dislike the marginal rate or feel there is a security need requiring their own supply chain.
The only way to break out of this would be a technical invention which allowed lower capacity production or technical innovation obviating the need for the monopoly. In the case of an industrial press this is a less likely outcome due to the physics of the machine and the intended application.
The major problem the US, and the West, face right now is that its more profitable to speculate on financial and real estate assets than it is to actually produce anything.
In 20201 in Sydney and Vancouver for example, the average house price has increased more per day than the average daily salary for a worker...
The other issue is that the West (particularly the Anglosphere) is intent on importing as many low-cost workers as possible, from countries with poor records of innovation, who then bring their own problems such as caste favoritism and high in-group preferences.
The simplest solution would probably be to import Taiwanese engineers en-masse, and formally create new chipset companies (which are not Intel), which it seems only China is really doing.
A direct policy approach could be for the USA to offer anyone with a university degree or trade skill and under the age of 40, from non-oil countries with a HDI of over .85 the ability to permanently migrate to the USA for a nominal fee:
https://en.wikipedia.org/wiki/List_of_countries_by_Human_Dev...
And at the same time, deporting all illegal immigrants (to free up housing) and building walls along the southern border - the shortage of cheap labour will encourage automation and innovation.
How about putting some reins on the real estate and trading markets instead of “getting better immigrants”? Sounds a little bit more logical.
Can you elaborate what deep prejudice you got from that comment?
Building a wall is just a dumb move regardless.
And as I said before, the southern border is mostly made up. People crossed it for thousands of years without some crappy wall in the way. They will continue to cross it even with a wall.
What are you in favor of, then?
A border wall is an ecological tragedy.
Do you also deport citizens who are not a “net benefit”? Would be the logical thing to do.
No, I do not want citizens deported; they are citizens. However, we should be extremely selective with immigrants.
These people are responding to demand for cheap labor and trying to better themselves. The real way to address this is severe criminal punishments for their employers.
It is surprising that helping your neighbors not become a threat to the US through voluntary means is not on the table.
Finding them requires a level of police state that it's unclear the US will tolerate, even if you promise them it will only be applied to non white people. It would start with mandatory ID and work up from there.
What is important is manufacturing culture. Without that one can clone a factory, but it will not help with the next generational process.
And it is known how to build such culture in relatively short time frame, culture. Just look at Japan, South Korea or Taiwan.
Japan, SK and Taiwan are the kinds of places where you could convince a lot of people to 'do this and that for the good of the country' - especially since they were flat on their backs and rebuilding from nothing, at the same time facing existential external powers.
'Post-War' was a quasi-authoritarian national strategy almost as much as the actual war or preparation for it was.
In North America especially, we live in a 'Safe Bubble' we don't really have the sense of existential angst that a place like Korea might have, what with a direct record of thousands of years of war and tumult from any number of neighbours which still exist today.
Even in W. Europe the living memory of that stuff seems rather fargone.
Indeed. To expand on that, there is an economist Richard Werner [1] who has studied that process in depth.
The TLDR is that new money/credit creation needs to be allocated primarily toward production and innovation, vs consumption or asset speculation (the three things money can be allocated toward).
In post-WWII Japan this process was called "Window Guidance" [2], an informal system by which the BoJ directed the banking system to fund industrial development.
The Asian Tigers and then China all copied the model in their development program too, so it's clearly portable, but interestingly remains informal. You would think an effective model like this would be formalized into law at some point.
[1]:https://professorwerner.org/; https://www.researchgate.net/profile/Richard-Werner
[2]:http://princesoftheyen.com/central-bank-money-creation/ (scroll down to Window Guidance section).
"MITI'S SUCCESSES AND FAILURES IN CONTROLLING JAPAN'S TECHNOLOGY IMPORTS" https://www.jstor.org/stable/43294946
There's a cool documentary called "The Engines That Came In From The Cold" (available on youtube[1]) and if you have a Netflix subscription, I recommend the documentary "Cosmodrome" (2008)[2] which is about the history of the Soviet space program and these engines.
I'm sure you're aware that the US Space program has been reliant on ex-Soviet heavy lift vehicles for decades more or less. Especially, since the Space Shuttle program was canned, if it weren't for SpaceX, the Russian lift would be the only bus on the route, aside from NRO launches and other um..stuff
Indeed, the Soviets had a completely parallel semiconductor and electronics industry as well. I don't know for certain but it was undoubtedly lagging western developments by a large margin. Nonetheless, the Soviets had some very interesting developments of their own, such as the Kola superdeep borehole. It is all terribly fascinating.
[0] https://sputniknews.com/russia/201704081052440303-russia-roc...
Well except for SpaceX’s reusable rockets which are the future.
Im sure there will be some use for current Soviet rockets in the future but unless they come out with something to compete with Elon’s they are going to be left behind.
I don't disagree with you either, it's another example of how misplaced development priorities can look like winning big until the handkerchief reveals a fat, dead rabbit.
edit: the rabbit stinks, too.
These numbers are from 2-3 years ago, total launch cost is 4 billion rubles, while the cost of a Soyuz FG is 0.9 billion rubles. So the rocket is actually less than 25% of the cost of the launch, which is why Soyuz will for the foreseeable future be more efficient at its task than any rocket, reusable or not (!!!)
So as a product intended to fulfill a task, the Soyuz is actually the result of much better engineering decisions and really engineering and manufacturing in general than anything else. Because it's performance here is launch reliability, where it's #1 and can launch in conditions the SpaceX craft can't, as well as cost, where it is still lower and will be lower than anything else for over 50 years.
Since I was a boy, I had wondered why we hadn't improved our launch vehicles, I saw new cars and planes and electronics and whatnot produced every year, but I often wondered why the Space Shuttle was still the thing we used "to go into space".
I learned about RAMJET/SCRAMJET, doted on Star Trek warp drives and fantasized about teleportation, I kind of never questioned that rocket lift technology might have just reached some newtonian limits. I've certainly never considered the total cost of launches and the reliability or weather considerations.
A 25% cost reduction from vehicle recovery sounds great, but I've read "Eccentric Orbits" and am now considering there are many additional factors in these programs. I don't know very much about launch economics, especially since there is clearly much to consider. Thanks for the perspective.
Q: Why has space technology remained fairly stagnant?
A: Because the economic demand to fund improvements hasn't existed.
We look at the market and say "But all those satellites! Surely they could pay for it." But that's underestimating (a) the cost of development (HUGE! And there's a low-quantity of launches to amortize over) & (b) the value of incremental improvement (negligible, as most current customers aren't cost sensitive).
That's SpaceX's real genius. Reusability isn't a competitive advantage unless it coincides with increased demand. Demand which they themselves seeded via the StarLink constellation.
The Raptor engines are better, but they haven't flown a mission yet.
But the killer feature of Soviet rockets is really their cost. They are much cheaper than anything else due to much cheaper design and engineering for their performance. The Merlin engine is much much more difficult to manufacture than the NK-33 and much more expensive.
This leads to a situation where it's much cheaper to build and entire Soyuz, throw it away, and build another one, than to use a reused Falcon rocket to put people into the ISS, per person.
The Soyuz, even when you throw it away, is so cheap that IIRC most of the cost is from operational expenses and not actually purchasing the craft.
Even with more advanced nickel based "superalloys" the US has still been unable to build a closed cycle kerolox engine.
The Soviets were willing to put large amounts of effort towards scientific advancements and exploration with little obvious profit motive on the other side, and it spooked the US into funding fantastic levels of basic scientific research.
It's interesting to see the percent of federal spending on basic research has fallen off a cliff since 1989: https://www.gspublishing.com/content/research/en/reports/202...
The lion's share is by business now, which is more likely to invest in things that have more obvious immediate profit avenues.
But this is a great opportunity to observe some of the engineering challenges with these advanced manufacturing techniques.
Tesla Model S and X were constructed with alloy control arms (Tesla calls them 'fore links') which sometimes did not meet specifications, resulting in catastrophic failures[0] termed "Wompy Wheel" in the press.
I don't know if they are extruded or forged, I think they are extrusions but I haven't had a really close look. One thing that I've noticed about the failures is that the control arms have what appear to me to be unusually large rubber bushings. I don't know what conclusions can be drawn from that observation, but there it is. I would speculate that the largeish bushings provide improved ride quality. On another note, Tesla wheels were kind of weirdly large, with uncommon tire specs.
I've had the opportunity to examine some more resent Tesla suspension components and they appear quite resilient. However, YMMV, I am not an X-Ray.
[0] https://www.motorbiscuit.com/this-is-bad-whompy-wheel-syndro...
No. There is a gigantic machine in China, its name is Shenzen. Its magic is that you can find any part and people who can rebuild them differently.
This is the entire “valley” that USA should bring back home. USA should bring back the construction of the Macbooks, phones, servers and routers, and the entire ecosystem of tinkering that comes with it. This is the backbone of USA’s national security.
We just have to acknowledge that having local industries means having poverty and dirty waste disposal at home instead of 9000km away. Which is not necessarily a bad thing either, so we can innovate on efforts.
Whichever ones are essential to national security.
The ability to manufacture local, trusted hardware is important for military purposes, just like the ability to manufacture high-performance aircraft parts was and is important in the case that overseas suppliers are hostile or cut off.
https://federallabs.org/labs/defense-microelectronics-activi...
Has Shenzen become a startup hub? What large startups have come out of it?
But 1) subsidies are what we would call a 'distortion' and those should be dealt with, possibly with anti-dumping tariffs;
2) There is such a thing as 'strategic investment' in key industries where the bar is very high and $10M from a VC won't help. This is where we need coordinated leadership.
3) There are other ways of 'building stuff'. Automation, AI etc. present opportunities for creating substitutes for those value chains.
In particular, I think what the DARPA should push for is a robotic 'pair of hands' - i.e. a very easily programable set of very nimble robotic hands with accompanying vision, that can be made to do specific tasks within parameters i.e. 'pick up that part, add this other part' and handle most of the weird things that can go wrong.
4) In germs of geopolitics ... it may be more ideal to push for more diversity in sourcing and to help develop India, Malaysia, Mexico etc. towards doing at least more of those things. That's hard though.
We will have lost our knowledge and it'll take decades to recover, if we can recover at all.
The billionaires will escape unscathed.
I agree with point 4. If we had distributed supply chain then things may work better longer term but I am amazed that businesses still look to offshore everything without looking at the long term prospects of their workers and communities.
Now the reason for that is that behind every hour of work of an average westerner there's a lot more capital helping, and more educational capital too. But if developing countries do get closer, then inevitably prices will start rising.
Not all industries can benefit so much from added capital. Those that can, and the service economy, are done in developped countries. Those that can't, are done in developing countries. If the two equalize, then the inequality in labour hours will equalize and westerners will either have to work more or consume less of products that are made in developing countries.
There is no natural force driving it.
You could argue the trade imbalance in which money flows a little bit more in one direction, but that can actually go on so long as the 'Richer Nations' are growing the economic base and expanding the money supply in serviceable terms.
But what's hidden in the obvious discussion of which direction money is flowing in trade ... is the direction that surplus is flowing. The economic surplus is pretty much on the side of the more powerful countries. Everyone benefits, but the rich nations benefit more.
Almost all of the corporate value (i.e. net profits) in the iPhone is realized in the US. The consumer surpluses are also vast but they are distributed to whoever actually buys an iPhone.
As long as trade isn't too imbalanced and much of the actual cash can be returned to 'Rich Nations' by sale of services etc., and, those net consumer/industrial surpluses remain big ... the equilibrium of 'poor countries doing labour and rich countries doing services' can go on essentially forever.
The factors that will change are:
1) China is going 'up market' and will provide more advanced things.
2) The Rest of the World will start to provide competitive labour - and more importantly - be vehicles of consumption as well making rich export markets for everyone.
3) AI will probably affect production in fairly significant ways. Robots with a little bit of dexterity and AI might very well be able to do some tricky assembly ... can you imagine that they could actually lay out, fold and cut fabric? And then sew together pieces? I can see that happening.
Finally, I would say it's definitely not good to look at all of this as a 'zero sum' game, and ultimately wealth is only relative anyhow.
If we ignore the geostrategic and social issues about power, and 'liberal democracy' etc. - there's every opportunity for a lot of poor nations to move up the ladder very quickly (already happening) and for rich countries to stay rich. As those nations 'catch up' their rate of acceleration slows down somewhat as it's rather difficult to 'get ahead' let alone 'stay ahead' for long. I don't even think China will ever actually 'get ahead' - they are, per capita, still quite poor on the whole and their growth is slowing.
As cultural values start to shift, the very measures we use for 'Purchasing Power Parity' start to shift as well. For example, how do we put a price on clean air, vacation, basic freedoms? And from a less secular but still hugely relevant perspective - living among one's culture, with one's 'people', the architecture, the view from your office/home, the lovely bike path to work, the gardens, the local bier garden where you see your friends, the local football team etc. etc.. People already to value those things a lot (see: Europe) they just don't directly factor into our equations. Over the next few decades we're going to rely less heavily on GDP and more on other measures.
It doesn't need to become exactly equal. The gap just needs to shorten. And it does, at exponential speeds.
Already the average GDP in the West is only twice the worldwide average, this only shrinks every year.
Honestly, anyone who falls for a paradox of competition deserves it.
They are reproducible if we have the political will.
Same for the film industry. Piracy is common consumption, law has had no power in this billion dollar industry, and yet this industry is striving. I say, companies should be allowed to protect their films with the DRM they want, but once the film is in the open, the law shouldn’t try to protect it from being copied. So you’d just pay to be among the first to see the movie, in a good quality, and the rest of peer-to-peer would be legal.
IP law and patents is a weird contraption, making very little money compared to what it costs, and a major risk to any innovating company. IP law is a major drag on our industry, that’s not even respected by our real competitors.
The theory is: Nobody will invent anything if they don't have a monopoly on the idea. As if without patents, someone would have a great idea and say "I'm not going to invent this thing and become a millionaire, because someone else might copy it cheaply and become a bigger millionaire! Nope, rather just keep stocking shelves!"
-You cannot get skilled labor to work for less than competing unskilled work
- Welfare and benefits erase the savings.
You just make it prohibitably expensive to deal with your foreign competition, subsidize it, or some combination.
Then by using financial regulations to require loans which expand quantity of legal tender in circulation to be issued on security of the replacement cost of tangible industrial capital, structures, plant, and equipment values rather than on security of the present value of future property rents.
Then by replacing regressive sales, consumption, and payroll tax with a distributive ground rent tax on property owners.
Promoting industrial development through regressive taxes and wage suppression is only the aristocratic form of industrialization pursued by right-wing governments when they are unwilling to eliminate after tax ground rents and non-industrial super profits enjoyed by the rich.
When you say “ Then by using financial regulations to require loans which expand quantity of legal tender in circulation to be issued on security of the replacement cost of tangible industrial capital, structures, plant, and equipment values rather than on security of the present value of future property rents.”
This is interesting to imagine, but how? (Sorry if it’s a stupid-obvious question, but I am earnest in asking it. Perhaps I am stupid tonight.) I could certainly see regulation to kill the “future rents/superprofits industry” but not quite sure how to require loans for ... call it the future-tangible-industry-industry? Also sorry this question is formulated in such a round about way.
Gleeful aside: Me thinks the status quo elite would not like it. ;)
Finally; I am happy to do research -> how might you suggest I google my way into this viewpoint most directly?
I ask the same question too, because when people speculate on computing:
> security of the present value of future property rents
often
> replacement cost of tangible industrial capital, structures, plant, and equipment values
Are often included included in the models because often this is the collateral that can actually have a liquid market value in the event of liquidation, but this is also subject to market conditions at the time this needs to be liquidated and the cost of actually liquidating.
Not to mention it would lower loan values since other non tangibles are often considered (IP, investor sentiment on corporate managers executing any given strategy, market conditions, etc).
It was the simple desire of “solving it with taxes” which was the root of a despicable trend that has mechanically “exported” poverty to where it can’t be seen, because we couldn’t sustain the sight, for about 60 years now. It’s a sin and a bane.
Taxes (eg tariffs against countries that produce goods efficiently) only extract private value to put it in public hands, which politicians use to favouritize groups they like (or military projects they like, concerning US). It doesn’t make companies innovate in average - only the side that receives the taxes innovates somewhat, and based on non-market incentives, rather political ones. France is full of those non-performing startups that end up 4th on the market, if that is what you aim for, so France doesn’t have technological sovereignty.
At least if we accepted poverty in the USA in exchange for bringing industry back home, those workers would be poor but work in a safe environment.
Kids can be taught otherwise. And a minority of the rich can be told to stfu by the masses, or enjoy working in the coal shovel jobs.
We pretend there’s a meritocracy lifting these folks up, but it’s been argued well it’s nothing more than network effects and really just seeing no upside to being egalitarian while the masses sit around being apathetic political agents.
And believing you’re going to achieve perfect sovereignty is non-sense. It’s a shared planet. Nation state politics worked fine when technology and access to the world were control by monarchs.
Not enough old people are going to be around to confirm their common sense awareness of these heavily distributed “truths”.
The social narrative will be whatever the political engaged make it.
Avoiding political engagement all but insures this.
Nobody's stopping anyone from opening up a factory that pays people $7/hour in the US.
Since bringing industry back home is so important, are you ready to go work in it for those kinds of wages?
It's easy to demand that other people accept poverty. It's hard to explain why market actors would be willing to work for low wages in a high-COL country.
So then either you have to 'force' people to take Shenzen-laborer level wages in the US, or the costs of manufacturing in the US will be higher than in Shenzen.
Cleaning yourself of this "moral guilt" is selfish as hell.
For ICs:
Design, Fabs and Packaging should all be looked at from a national security standpoint. IMHO it needs to be viable to compete with foreign fabs. Whether that looks like subsidies, tax breaks/credits, or guaranteed minimum volumes... Those each are different policy decisions that have pros and cons.
We also need to consider the larger electronics manufacturing supply chain:
PCB manufacturing, contract manufacturing, pick and place/automation, etc. are all extremely important and should have similar thought put into it. Today it isn't reasonable for most people to do a significant electronic manufacturing run in the US because we essentially pushed it all overseas in the 80s and 90's. There just simply aren't enough CMs and PCB houses to do large runs in the US and its the same chicken and egg problem that you have with IC fabs: You can't do it in the US because there isn't enough volume to get good pricing and there isn't a decent pricing because the PCB houses are focused on low volume runs.
Ironically, when we pushed all that stuff overseas, the major reasons were because of costs (primarily) and environmental impact. At the time, many electronics had a non-insignificant amount of hand assembly and it was stupid cheap for labor in China. Coupled with the fact that companies in China just did not give a fuck about the environment, there were literally no downsides.
Today, things have changed a ton. First, almost everything is surface mount and is well suited to automated pick and place machines. Second, PCBs have become easier to manufacture/design and there are new technologies that could make this even better. Third, with things like ROHS and all the lead free/environmental requirements, many of the advantages of going to a country that doesn't care about the environment isn't as beneficial, because the requirements are for the end products, not the process.
It really wouldn't take a massive amount of government encouragement to really bring back most of this stuff, I think though there is the big issue that there just aren't that many direct jobs created. Most of the money is going to get sunk into machines that make things and sure, there will be people who mind the machines, but you just don't need that many people for these automated processes. Lets just say that spending $50 million on roads produces a lot more jobs than spending $50m in a PCB house. The flip side is that while the $50m on a road might help transport several billion dollars worth of goods over its lifetime, a PCB house focusing on specific types of PCBs could/will enable companies generate billions of dollars worth of profits on the goods manufactured.
So right now China consumes most of the world's semiconductors but only produces a modest fraction of them. China is going through a whole of society effort to expand its semiconductor sector in order to not be dependent on anything the US can cut off via sanctions. China will expand its semiconductor sector, regardless whether it is economical feasible, because it is a matter of national security.
The countries that are going to be hurt by these US semiconductor subsidies are going be Taiwan, South Korea, Japan ... not China.
I believe the thinking is to shore up the supply chain so that the US is in a stronger negotiating situation if relations with china deteriorate to the point where the threats are less implicit.
There is also a significant "America First" mentality that wants to boost our economy, no matter what it costs our allies.
Edit: Any major military conflict would come at a large economic cost to both sides (which is why I agree it is pretty unlikely.) However there is an element of negotiating strength that comes when the economic costs to your side is relatively lower than the economic costs to the opposing side.
Isn't that the same justification for U.S. re-shoring of semiconductor manufacturing? Tighter control over security and not being vulnerable to some conflict in the pacific endangering everything from automobiles to cloud services. Today, everything relies on some chip so domestic production reduces vulnerability to fragile global supply chains. Covid-19 highlighted that vulnerability so I think both the private and public sectors in the US are looking to do more of all sorts of production at home.
I think I may agree here, and it gets complicated -- fast.
I suspect you might be referring to larger parts like CPUs, but you should take this excellent opportunity to investigate china's semi industry a bit. China has a very interesting local manufacturing economy of parts and suppliers that is mostly invisible to outside observers.
It's fascinating that in China, there is a totally divergent supply chain to support the cheap consumer electronics industry. Granted, it isn't CPUs. However, they sure are cranking out semis, its just that they never leave China but for inside of another product. The datasheets are all in Chinese, they aren't exported, they serve to support China's unique manufacturing culture.
Here's a previous submission that delves into this: The “terrible” 3 cent MCU – a short survey of sub $0.10 microcontrollers https://news.ycombinator.com/item?id=20686727
You can also check out Dave from EEVblog's 3-cent microcontroller[0] video about the same series of dirt cheap micros.
I was refering to the various statistics you can find on this, and I think they count by monetary value. Because the US, Taiwan, and South Korea sits on the expensive high-value add stuff, they weigh the most.
China has been entering the industry from the lower end, but now after the tech war, they are forced into the higher end, even if it is not economical viable. So together with this made-in-america policy, traditional allies like South Korea and Taiwan are being squeezed.
I personally believe that the tech war will deescalate drastically at some point, but if this continues we are going to end up with a complete parallel world of semiconductors all in Chinese.
There's probably going to be a kind of sweet spot that develops for fab performance, it may very well be the case that most things don't need a 75nm node process, and it will be possible to squeeze a ton of value out between 100-500.
The 10-cent mcu surely doesn't need great RF and thermal performance. In my mind, the largest problem is where the integrators and product manufacturers are and not whether we can churn out silicon in the US.
Wouldn't it simply help bootstrap domestic production and make the economics more attractive?
Sure, they've got SMIC, and they have some decent semiconductor processes, but they're pretty far behind the state of the art. With US ramping up competition, and continuing the pressure that prevents China from gaining access to cutting edge lithography machines, it's really hurting them.
If TSMC can finally start to build some fabs in the US, I don't think it will hurt Taiwan much. There's not much space for more than 3 cutting edge foundry companies, but there's definitely space for TSMC/Taiwan to have some of their fabs outside Taiwan, and doesn't hurt them more than it hurts Intel/US to have some outside the US.
Some Global Foundries foundries wouldn't hurt them much either, since Global Foundries is specialising on low power, and is a bit orthogonal to TSMC/Samsung.
South Korea's semi industry evolves largely around the heavily-commodified memory chip production and two SK companies, Samsung/SK Hynix combined, supply about 75% of global memory chip needs. Samsung is South Korea's only foundry business there and their global market share is only about at 15% -- while it's a "growth" business for Samsung, the memory business is still their bread-and-butter. The company also has a $15-B plant in Austin, TX and it looks like they are going to expand that plant by throwing another $17B. Further, in addition to Samsung's announcement to invest $110 in logic chip business (which includes their foundry plant in Austin, TX) last year, the South Korean gov't unveiled $450B investment plan to boost the country's high-tech competitiveness. So it doesn't seem like this particular proposal in the US is going to necessarily divert resources or investment from SK (again, the foundries business is a "growing" business), or "hurt" South Korea. Trump/Biden's chip war on China has been a boon to SK's semiconductur industry otherwise -- it eliminated potential threat from China's "Made-In-China-2025," (announced in 2015) and scared off US companies such as Apple from throwing more money at Chinese companies, though Apple is still fighting hard to protect their supply-chain in China and maintain the quo. All in all, this is reminscient of Reagan's war on Japan in the 80's -- and it's likely to enhance South Korea's chance of further gaining more significant share of the global logic chip manufacturing business.
Likewise for TSMC. Sure, Trump's arm-twisting eventually forced TMSC to open foundries in the US, but the Taiwanese gov't has always had heavy handed, direct approach to managing their domestic chip business, from the founding of TSMC in the late 80's to what it is today (ie, direct investment and tax subsidies). Both Samsung and TSMC routinely spends $10B-$30B in capex every year and I don't think that 25% tax credit is going to significantly change the current state of semi-manufacturing for either countries.
Japan is no longer the semi manufacturing giant it once was. While they still maintain presence in manufacturing equipment and electro chemical business, they are nowhere as significant as Taiwan and SK counterparts.
At least in Taiwan earlier this spring was facing a drought which came close to impacting semiconductor production.
I've seen several articles[1] mentioning that the current Taiwanese semiconductor shortage has a lot to do with water rationing due to drought. Do semiconductor manufacturers in Taiwan not recycle water like semiconductor manufacturers in Phoenix?
[1] https://www.wsj.com/articles/the-chip-shortage-is-bad-taiwan...
Source: https://www.cnbc.com/2021/06/04/why-intel-tsmc-are -building-water-dependent-chip-plants-in-arizona.html
Feel free to burn this comment to the ground, but is this really the level of HN reader nowadays? Can't even notice a spurious space...
Currently COVID poses a larger threat to semiconductor production as multiple COVID clusters are detected in packaging/testing plants.
There's nothing meaningful congress can do to order states to be friendly to business.
Taxes are the front end transaction of investment, in education, infrastructure, courts, support for workers and families, etc. Those things are very business friendly. Low tax areas, which lack this investment, don't have a great history with businesses.
It's just about a joke anywhere else I've seen. Such as annual fees just to maintain an LLC. As if you're not already paying a high effective tax rate.
The cost of living and cost of doing business doesn't make much sense in other major metros. Unfortunately, so many people are coming here that it's raising our COL, too.
Wow, you encompass a lot of very successful communities and businesses with that statement.
> Such as annual fees just to maintain an LLC.
I don't know what you mean exactly, but I've never heard a businessperson complain about such fees.
You're already paying taxes. You're already paying insurance. You're already taking on risk. There should be absolutely no friction to take on risk and start an enterprise. Leave that friction to all the other places that make sense like taking out a loan, building your brand, establishing a network.
And yet, if you wanted to expand to other countries, you have to pay sometimes thousands of dollars annually just to exist as a foreign corporate entity. It's nonsense. It's just a money grab for certain regions. As if you paying those contractors or employees isn't directly injecting capital into those economies.
So that being said, there's little to no difference between these individuals complaining about non-commercial fees, and commercial fees.
Fees are fees. And these ones don't make any sense.
Too often incentives are locked behind a bunch of paperwork and hoops which require up front capital to take advantage of. Which creates a market for third parties to benefit from by charging for these services, instead of founders benefiting directly.
A great example of a horrible incentives program that results in this is SR&ED in Canada. I guess you could argue it employs a bunch of service providers to assemble SR&ED claims... so jobs?
You also pay at least $600 to incorporate in Canada and most often employ a lawyer to do it for you ($1,200+). Seems pretty counter intuitive if your goal is to promote startups and small business.
I generally think it's a human rights violation that law is so impenetrable to the people who are supposed to follow it, but it's especially obvious in this case that murkiness helps literally no one.
In theory, a business receives very many services from government, such as entire systems of infrastructure (which itself is composed of systems of transport, energy, etc.) and law. The fees are a fantastic deal.
Many argue for paying less taxes but we might want to look closely at where we live and consider whether our locality is truly well resourced in all walks of life. Has all infrastructure been built and maintained to perfection? If yes, then maybe it is worth arguing for reducing fees/taxes but I don't know that this utopia exists yet.
Then explain all of the people living and doing business in other metros out west? Must have made sense for them...
Except cost is important. Especially when you're a small business. When you see that cost of living and cost of maintaining is business is higher than you'd like, you're free to say, "No thanks," which is what plenty of businesses out here did.
US Govt should invest (by whatever means) and then retain some reasonable ownership.
Direct action with direct results. Moot the whole taxation culture wars food fight.
Edit: aka sovereign wealth funds. Sorry, brain cramp, forgot the phrase.
Govt routinely provides seed capital, grants, financing, patents, and other perks. Which then attracts private interests.
Often jump starting entire sectors, creating new markets.
Do you think we'd be enjoying solar boom today were it not for public investment?
> Do you think we'd be enjoying solar boom today were it not for public investment?
This is somewhat awkward because it also wouldn't be where it's at today without cheap Chinese panels, and I doubt US tax subsidies would have been enough to make up for China's manufacturing expertise.
There has never been a time when the US or any other major nation wanted free trade, and that includes China today (which similarly lies every time it says the words "free trade" and pretends to be in favor of it; trade with China is anything but free of heavy restrictions). All major economies want carefully restricted trade, controlled trade, and there are no exceptions. There will never be exceptions.
If you hear the US say it wants free trade, understand that it's always a lie that you are hearing. The same with any nation that claims they want free trade (while negotiating trade restricting agreements). It is that simple. What is really being said is: we think we can get one up on you through a trade agreement that favors us more than it favors you, or at the very least we think we can craft the terms in such a way that we both gain something while some other external parties lose out (which is what eg NAFTA/USMCA accomplishes, external parties lose, the parties to the agreement gain by restricting trade in a manner favorable to the people inside the trade agreement). USMCA is an aggressive trade restriction agreement, not a free trade agreement (they like to throw around phrases like "free trade agreement" to continue the con).
The purpose of allowing China into the WTO was for the big globalist corporations to go in and feast on what was believed to be an epic consumer & manufacturing opportunity, that was the sole purpose of it. And it's the sole reason Bill Clinton was tasked with making it happen by his moneyed masters, the people that de facto control him and everyone else like him in politics. It almost entirely blew up in their faces, rather hilariously. McDonald's? They don't even own their own restaurants in China today. Disney? It doesn't even own the majority of its own park in China today. The globalist parasites are getting what they deserve re China. It's one of the few times where I'll applaud China - they made something of their nation and have built up extraordinary household wealth - rather than allowing themselves to be forever fleeced by parasites and allowing the gains to all be expropriated back to some other shore. If China had allowed things to go any other way, the parasites would have abandoned China when convenient politically (eg today), and would have left China for dead economically, without a care in the world for the fleecing that went on or the wasteland left behind. Instead, China made itself self-sustainable by heavily restricting what the parasites could do, it kept plenty of the profits onshore and they used that capital to build up their nation.
More seriously, find a low-performance niche application and make chips on old technology for it. Differentiate yourself on the basis of being easy for your customers to work with, a natural advantage for US-based companies. Then you only need several dozen million dollars.
Some electric car companies have not had trouble tapping into capital markets. Even Transmeta, a fabless IC maker, could tap $275m in 2000.
If you were a super talented engineering firm with the ability to spend $2b on a fab, you could tap finance for it.
> More seriously, find a low-performance niche application and make chips on old technology for it.
This seems like the opposite of any winning strategy, and the opposite of what the government should subsidize. TSMC is so successfully because it relentlessly focuses on performance chips. If you are enjoying American subsidies it better be for the cutting edge, what the hell else are we paying for?
> Differentiate yourself on the basis of being easy for your customers to work with
The only customer that matters is Apple, and your only competition is Samsung and TSMC. Everyone else is using "foreign chip manufacturers" as a way to launder low Chinese labor costs, not because there is inadequate supply or poor competition in specifically semiconductor manufacturing.
Perhaps that's what people want - a manufacturing hub, i.e., assembly of chips, not the chips themselves. I don't know if that's super important.
And it's really more talent in process engineering that you need, not in the physics of chip building. We already know what has to be done to make transistors. It's the how to do it at scale and with high enough yield that's impressively difficult.
A project like this would a) let them use far more of their training than coding ever would and b) it is for a good cause, effectively a peaceful version of the Manhattan project.
Are chips for industrial equipment or cars? When you say cutting edge I think desktop / phone / servers.
On the other hand, tax credits can be (but arent guaranteed to be). That is, if a tax credit incentivizes creating jobs that would not have existed (in the US) otherwise, those jobs end up also stimulating other economic activity. Tax incentives at the state level tend to be closer to zero sum (or a net loss) if the jobs would have been created anyway, or when thr incentives aren't strictly tied to quantifiable completion metrics like factory completion, number of positions filled, etc. (Much ado about Foxconn in Wisconsin, etc)
The fact that governments try to do Keynesian by making manufacturing jobs in 2021 kills me. We're decades past the point where those sectors were sufficiently unproductive to benefit the workers as they did in the glory days. Boost demand directly (UBI), keep an ey on imports, and let private capital fend for itself.
This doesn't make sense to me. There wouldn't be labor to empower if the tax credit was one of the factors that determined whether the plant would be opened here or not.
Zero-sum would imply that, were the tax credits not handed out, the revenue would instead go to some other program- except that in this scenario, there is no revenue without it.
Sure, we could get into a trade war with the rest of the world by taxing or banning imports, but that would definitely leave everyone worse off.
Think owners vs non-owners. The non-owners don't cease to exist if they are unemployed (or underemployed). We live in a world with massive material surplus, so the idea that we can't afford these people's basic needs without the plant is just wrong.
From that perspective, if the government is propping up businesses without propping up a weak labor market (either by more demand or fewer working hours), it's perpetuating system where employers have too much leverage.
> Zero-sum...
Right now the US federal government is uniquely capable of running deficits. I'm not worried but zero-sum in that sense.
> Sure, we could get into a trade war with the rest of the world by taxing or banning imports, but that would definitely leave everyone worse off.
Yeah I don't want trade war, I want race to the top. Higher wages, fewer working hours, etc.
I'd love if the Occulus headset didn't require me to associate a facebook account and send telemetry to Zuck's servers.
Perhaps we should invest more in people who will create competitive businesses, such as in education.
The right way to do this stuff is raze wages in Taiwan and Korea. Supply side subsidy race to the bottom when we have an aggregate demand issue is stupid.
What does this refer to? Did someone suggest that?
> The right way to do this stuff is raze wages in Taiwan and Korea.
Is it a wage issue? Also, if we education and train American workers, maybe they can have higher paying (and physically and mentally better) jobs than manufacturing.
I mean the original propose. Hopefully it's not just Intel and TSMC getting the tax break?
> Is it a wage issue?
Yes, see
https://news.ycombinator.com/item?id=26996090
https://phenomenalworld.org/interviews/trade-wars-are-class-...
https://newleftreview.org/issues/ii125/articles/aaron-benana...
The last is a critique of the book, but one that disagrees about wages being too low in the exporting countries.
> Also, if we educat[e] and train American workers, maybe they can have higher paying (and physically and mentally better) jobs than manufacturing.
Also, manufacturing is fairly automated for quite some times now. Boosting manufacturing to create jobs no longer makes sense, as much as the nostalgics wish it would.
I don't think education is the problem here. The last 10 years were a credentials rat race because the labor maket was too slack. That does cause a "skills are going to waste, degrading education" problem, but that's very different.
If we can't boost demand enough without more environment destruction, then we must to cut working hours. (And we should do that anyways.) Either of those will create a genuine need for skills to increase productivity, not just to have the best résumé.
I believe people in the HN demographic perceive a credentials rat race (and perception may or may not be accurate, of course), but my understanding is that for most of the population, higher education became less affordable. Also, I read several times that businesses needed more skilled workers than they could find; in SV, good programmers have a lot of economic power, as one example.
If everyone gets a degree then a large percentage of them were not neccessary to begin with.
I don't see how that necessarily follows. For example, we might say 'if everyone becomes literate, than a large percentage of literacy wasn't necessary in the first place'. Why not?
Credential wars are the obvious conclusion reached by the paradox of competition.
People get a degree to get ahead in the line, not because the degree is actually necessary. It can turn out to be a waste of time and thereby a net negative if everyone does it.
That's certainly not true. Since ~1930, the population in the U.S. has approximately tripled, and the average income has increased approximately 10 times (IIRC).
Income is not a pie that is divided up into smaller and smaller pieces. That's not how economics works at all. In fact, each new person produces more than they consume (otherwise, nobody would pay them), and they increase demand for goods, which increase demand for production.
> People get a degree to get ahead in the line, not because the degree is actually necessary.
What is the basis for that? I got a degree because it was both necessary, and because I wanted to understand the world better and have the best thinking skills I could get.
The ILO is part of the United Nations. At one time, it was important. Not any more.
Also, low-cost products benefit consumers. It's odd that we are so focused on protecting (generally) wealthy owners of companies, by taking money from consumers. It also reduces the overall efficiency of the economy, but supporting inefficient use of resources.
Finally, I want U.S. to have higher-paying, higher-skilled jobs, not the jobs of 50-100 years ago.
MHO: The problem is that capital can move much faster and farther than labor. A factory can be moved from British Columbia to Cambodia much more quickly than the workers in BC can find a new job. Regulate that: Requires more notice depending on local availability of jobs, for example, and investment in training and moving costs. Invest heavily in education for the worker's kids, so they have a future regardless. Provide generous workers comp and healthcare, so workers can survive the upheavals.
What could the government ask for in return? Perhaps an assurance that the fab will give priority of at least 10% of its output, including its most modern process, to foundry service with reasonable and non-discriminatory pricing for at least twenty years.
Perhaps there are other ways the government could ensure these fabs will be used in ways that are beneficial to all local electronics manufacturers and not just the one company that owns the fab?
(It's possible these details might be in the actual bill already; the article doesn't say.)
Presumably the plants won't exist without this subsidy, so it's a win win if it incentivizes creation of plants.
The government isn't paying anybody anything, if I understand it correctly.
I'm not against it, but if this helps people, why aren't we doing it for everyone?
https://www.thebalance.com/farm-subsidies-4173885
The US got sued by Brazil for it.
https://en.wikipedia.org/wiki/Brazil%E2%80%93United_States_c...
Globalization failed.
We need a more open immigration policy so we can compete, it's a fact that Americans are having less children, this will be critical in coming decades.
25% tax credit should be for ALL manufacturing where the plant is in the USA, and employees are citizens, or legal residents of the USA. This would help with better paying jobs locally, and they should require all companies that take the credit must have either a union or meet a basic common good standard like: Pension/401k, Healthcare, Minimum Wage of $22/hour, etc.
My bestfriend's dad worked at GM in the 80s on the factory line he got a pension, he got benefits and he made like $20+ per hour.
That same job would be competing with McDonald's employees today.
To the extent that business was confident those measures would remain in place, the 'free market price' (heavy quotations) may be enough to provide for material investment.
Germany does about 35% the manufacturing output of China, with a mere 6% of China's population.
The US + Canada, as of 2018-2019, had a greater combined manufacturing output than China, with a mere 25% of the population of China.
North America + Europe still manufacture more than Asia does in terms of dollar value output. Asia produces more total widgets (of lower total value).
Germany is the per capita manufacturing king (and they also have been running the largest trade surplus). Poland has the highest percentage of its workforce employed in manufacturing globally.
The trend prior to the pandemic was for China's manufacturing position to erode due to their loss of the previously significant cost advantages they had (most everybody else had become far more competitive on manufacturing costs as incomes and operating costs in China had soared). The pandemic threw those trends into flux, we'll see how it shakes out this decade yet.
[1] https://www.brookings.edu/research/global-manufacturing-scor...
If you can make, say, a screwdriver in the US for $2/unit, you can make 50 in China for the same cost. But if the US makes 1 million and one screwdrivers and China makes 50 million, then technically the US has higher manufacturing output since the dollar total is higher.
Of course it's in absolute dollar terms and I pointed that out in the comment repeatedly to pre-empt retort comments that would inevitably attempt to focus incorrectly on that. I also pointed out that Asia produces more units for the same reason, to pre-empt the need to waste time on someone posing that attempted retort.
It's the exact opposite of useless. You just tried to pretend that high-value manufacturing is useless by claiming that low-value high-volume manufacturing is what matters. Be sure to let Germany and Japan know that their high-value manufacturing is useless. It doesn't even warrant a serious rebuttal it's so clearly wrong. Japan is just off the coast of China and yet China has been entirely unable to take their high-value manufacturing position away from them despite the past several decades of trying.
If China were so impossible to compete with as you're claiming, their share of global manufacturing would not have stagnated for years prior to the pandemic. They have lost their ability to easily undercut everyone else on a cost + quality ratio. In fact leading up to the pandemic they were losing manufacturing on a cost + quality ratio to other regional competitors.
That's why Samsung was able to relocate half of their smartphone manufacturing to Vietnam. Vietnam was able to undercut China on a cost + quality basis. There is nothing special about what China does such that no other nations can replicate it (whether Vietnam, Indonesia, the Philippines, Mexico, India, et al.).
> If you can make, say, a screwdriver in the US for $2/unit, you can make 50 in China for the same cost. But if the US makes 1 million and one screwdrivers and China makes 50 million, then technically the US has higher manufacturing output since the dollar total is higher.
That's an entirely fake premise you're staging (and I don't mean the specific example you gave, the wider premise is fake). In instances where there's an enormous cost imbalance, the US offshores low value manufacturing, such that the US isn't going to manufacture $50 screwdrivers when they can be made at 85%-95% the same quality for $1 or $2 in China. That's what the manufacturing flight to China was all about 10-30 years in the past. You're merely providing support for my core point: the US, Europe and Japan dominate high-value manufacturing (which is where the high dollar manufacturing totals derive from), not high cost screwdriver manufacturing. Germany isn't generating its $700 billion in manufacturing output through the manufacture of $50 screwdrivers (or the equivalent) when they can outsource that to Eastern Europe or China for a dollar. Nobody does that today or can afford to do that today, given it's a hyper competitive global economy.
The US-China trade imbalance overwhelmingly consists of low-value high-volume widgets. That huge wall of imports largely consists of $1 screwdrivers. The same exact situation exists across Europe as well. Where China can undercut on cost + quality, they have; if they could take any and all manufacturing so easily, they would have (they can't).
China is rapidly losing its textile crown as another example of your premise being incorrect. Precisely because they're not always able to compete effectively on cost + quality and are susceptible to being undercut as their labor costs will persistently climb. Textiles are gradually fleeing China for better cost + quality ratios (which is exactly what happened to the US across the 20th century as textiles fled from US shores and went to Asia, due to a weakening cost + quality proposition centered on labor costs).
Via Google you'll find a large number of business stories covering China's eroding textile dominance going back across the past decade, as other competitors with superior cost + quality ratios take their market share -
2018: "China’s once-booming textile and clothing industry faces tough times"
"China’s market share by value in the global textile and clothing industry fell from 38.6 per cent in 2015 to 35.8 per cent in 2016, with a downward trend in major apparel importing regions such as the US, European Union and Japan."
"Since 2014, exports of Chinese textiles and clothing have declined sharply from about US$236 billion in 2014 to US$206 billion in 2016, according to the World Trade Organisation.
"Chinese customs data showed exports of clothes and accessories fell by 0.4 per cent last year from 2016, while textiles exports saw annual growth of 4.5 per cent last year."
"Meanwhile, labour costs in China have been rising steadily. The minimum wage in the southern boomtown of Shenzhen is now about US$336 per month – more than double the rate in some Southeast Asian countries."
https://www.scmp.com/news/china/economy/article/2143938/chin...
China turns high value manufacturing into cheap manufacturing. That's why virtually every high tech component is manufactured in China. Japan is currently worried that China may snag the auto market from them once they start exporting their tech.
>China is rapidly losing its textile crown as another example of your premise being incorrect.
Textiles are the lowest skilled, cheapest manufacturing in the world. No country cares when that industry goes outside of its borders because the loss of the textile industry is a sign that the country has developed into a more advanced economy. Once/if countries like Bangladesh develop ahead of other countries, they'll dump textile manufacturing as well.
As someone in the manufacturing industry, it's very easy to avoid American components or equipment. I don't even try to avoid it--there just isn't anything unless I'm actively looking for it and willing to pay extra for something that is, frankly, not any better quality. Meanwhile, it is absolutely, and I mean this with no exaggeration, impossible to avoid buying components from China. Whether it be PLCs, cables, plastics, anything--everything has China's hands in it to some extent. And from a cost perspective, it's incredibly cheap, so even trying to actively avoid it, someone is using some component because they're still undercutting Vietnam and other countries.
Vietnam is best at cheap assembly costs. When we go to factories there, they're still using significant amounts of Chinese components and equipment.
We can't really compete with free trade because of a high cost of living, so we subsidize (including some items that we export like crops). These subsidies require the government to borrow, usually from other countries that are our competitors. It seems like were screwed either way - pull out of free trade and trade deficit tends to increase, or subsidise and pay those competitors interest on the subsidies, or pull out of subsidies and we will become uncompetitive.
And this isn't a radical idea. Both right-wing and left-wing publications (such as The Washington Post) have proposed it.
> The Washington Post) have proposed it.
Leaving aside the idea that a paper owned by the world's richest man (with unrealized billions in gains) is neutral on the topic of taxation can you cite this?
It's not that double-taxation is bad but people are claiming that corporate profits aren't taxed or are taxed at very low rates (I've heard people use numbers like 5%) and so need to be taxed more on general fairness grounds. Pointing out that they are already taxed negates that argument.
In general, all "fairness" arguments (this tax is "bad") to taxation are quite awful, because they tend to be made by people who have no idea of what the actual incidence of taxation is. (Really most fairness arguments of any kind are awful and suffer from similar problems about people not understanding the consequences of their proposals and thus not being qualified to decide on what is fair and what is not).
For example the same people enthusiastically argue for taxes on corporations but not sales taxes, when these have the same incidendence and thus are the same tax. The difference is primarily one of shifting the burden of who fills out the paperwork and a lot of marketing.
And that tendency to view taxation on grounds of fairness (e.g. emotion) rather than economic concerns (the ultimate cost of the tax) is what opens the door to massive tweaks of the tax code by various lobbyists. A simpler tax code that treated all sources of income in the same way and did not distinguish between expenditures would be a much better system than we have now. No tax deductions for any purpose and no separate treatment of wage or capital income, or inheritance income, etc. Just put it all into one pile and apply the tax rate for that pile. Similarly consolidate all corporate and sales taxes together into a single VAT that does not distinguish by industry or product type.
Then if the government wants to give money for fab construction (a foolish policy, IMO) they can do that directly. It would be great if we had taboos against tweaking the tax code entirely.
However, I also think we need a land tax, and part of that land tax includes the economic land of intellectual property.
IP is one of the biggest roadblocks for new entrants to the space, which greatly limits expansion of production capacity. This is also very true for things like pharmaceuticals in the developing world. There's a tradeoff to be made between allowing the creators of new economic land to charge rent for the land, and the need to reduce that rent in order to improve economic efficiency.
Why would you assume that they'll just sit around and be conquered?
Hong Kong didn't have a military - and even if they did - they share a border with China.
It wouldn't exactly be a walk in the park for China to get airplanes over Taiwan or to land boats for an invasion.
And if they tried, I can't see the world blaming Taiwan for blowing up the Three Gorges Dam - which for China would be literally catastrophic.
Is it being an "emotional" issue more correct than it being an issue of (1) educational indoctrination, (2) explicit media based propaganda, and (3) lack of access to opposing view points? Clearly there is some systemic explanation for people's emotions.
If the Chinese government preached the values of "do unto others as you would have done to you" rather than "we must right the wrongs of the century of embarrassment" would we see this being an "emotional issue." If the issue of Taiwan were cast in the light of "if you were Taiwanese, how would you feel about China?" do you think it would still be an "unstoppable irrational force"? If the Chinese government preached values like tolerance and diversity, do you think the Chinese people would have the stomach for dominating another people?
China, rightfully, was angered by colonial transgression against it, but then wishes to be a colonial power itself, committing the very same evils it faced against less powerful countries. By Chinese standards, it appears that might makes right, so should the world not exercise might against and colonize China, an action that is right under Chinese morality? Or is it a matter of Han Supremacy, where the moral system is built upon the idea of Han superiority and rules for other nations that don't apply to China itself.
How should I feel empathy for "the Chinese people" when from the outside it appears that they wish to dominate another people?
This is where you are mistaken, thinking that the characteristics of Chinese people have anything to do with the behavior of the Chinese government.
Edit: it appears that the sentence I was quoting was removed from the parent comment.
There is no Han supremacy in China, ethnic is not a big topic in China except for the large minor ethnic groups. There are City Supremacy maybe, people from big cities look down on small cities for example.
People view Chinese in through racism eyes would see things differently. I remember that the Chinese university was labeled as colonial power, and people went to street and protect the establish of a division of Chinese university with labels saying "we don't want to be Chinese colony". There is NYC division in Shanghai, and there are no Chinese people protesting being a US colony. Most brands in big mall in China are western brands. It is okay for people to learn English but learning Chinese is surrendering to Chinese colony power. I only see racism in these stories, nothing more.
That's a negotiating position portrayed by China, the same simplistic one used by lots of people: 'I'm so emotional that you'll just have to back down.'
The risk is that having lit the fire of nationalism among their population (as many people are doing), the resulting forest fire can be hard to contain.
That's not true at all. The first island chain blocks the Chinese military from unfettered access to the Pacific. Taiwan is the only part of that chain the CCP can potentially occupy. If they do and put PLAN bases there, then they gain a portal to the Pacific. It's extremely strategically valuable to them.
At best, it'd be a drawn out Afghanistan with a diplomatic sanction frenzy worldwide. China would be painted by global media outlets as evil if they took a total war approach. They'd have to do it like Russia with Crimea or Milosevic in Yugoslavia with paramilitary groups. Everyday the Taiwanese identify less Chinese making it that much harder.
The only thing that will make them do it is if the US and EU are in a weak state and can't be bothered with policing that. Like another depression and global war elsewhere.
Cook didn’t take Trump as a threat enough to justify diversifying his supply chain much, he isn’t losing any sleep about Taiwans upcoming annex.
If that were the case then neither would they be reigning in Japan, Vietnam, the Philippines, South Korea, and India. All Chinese strategic adversaries right on their doorstep. India alone could shut down oil shipments to China that all have to sail close by. Japan’s navy is stronger than China’s and they have formidable air defenses. China might just spark a regional war which they probably wouldn’t win. I hope they’re not suicidal enough to test this though.
They don’t care about the people there one bit.
When they control most of the world in the future, they can just rewrite history and nobody will know. Classic move.
You can be damn sure that an American politician would use that as rhetoric to bring jobs back. I can assure you republicans would leap for this opportunity. It would be the best PR they could ever get.
Is that why there are so many bases and troops in South Korea and Japan? Any invasion of either of those two countries would likely trigger an instant war with the US.
The U.S. barely had standing armies for either of those wars and a highly no-involvement mindset that came directly from the sentiments of the American population.
Flash forward to today. Why do you think the U.S. has ~ a dozen aircraft carriers if not to defend its interests?
The U.S. would absolutely go to war with China over Taiwan. For better or worse. Ground troops? Highly unlikely. Air and naval assets? Yea no doubt about that.
The U.S. interactions with the Soviet Union are interesting but it’s just not quite the same. Had the Soviet Union attacked, directly, a key U.S. ally then the U.S. might have simply retaliated with nuclear weapons. Not worth the risk. There isn’t a sense that this is how a war with China would progress. A lot has changed.
But overall, there won’t be a war unless something catastrophic happens to Chinese leadership (like they get a real Hitler type of figure), because they’re not stupid and the status quo works fine for everyone, despite the rhetoric.
But the U.S. won’t defend Taiwan because China has nukes? Ok how about China won’t attack Taiwan because the U.S. has nukes?
And you’re severely oversimplifying the entire interaction. China has geographic advantage to do what exactly? Fly planes to Taiwan? Not with U.S. forces nearby. Land troops? Good luck with that. Bombard the island with ships? Well that’s why the U.S. fleet is there.
Fortunately all of this is saber rattling. Nobody not China, Taiwan, or the U.S. cares to change the status quo. The U.S. gets to maintain Taiwan as is. The CCP has a boogeyman they can use. And Taiwan gets to do business with everyone.
The US is done with interfering in Asian conflicts over communism. China knows it too and they're gonna make a move while the whole of the US's industry is there still. The US solely supplies Taiwan to keep them technologically up to date so that they can mount a reasonable defense. But with almost all 1st world nations universally not acknowledging Taiwan's sovereignty, you'll be hard pressed to see any bureaucrat NOT turning a blind eye but sending out a measly sanction and move some manufacturing home.
America is a very, very stubborn country. We spent like a trillion dollars and killed hundreds of thousands of people b/c of Osama Bin Laden over the course of a 20-year war and absolutely brutal insurgency. But I'm expected to believe that the United States wouldn't have the appetite for a conventional war? The one that all of its military might is built for? That the U.S. would not defend an ally and undue all trust in all alliances on the global stage? NATO is gone, in this scenario. The E.U. starts building up military forces b/c they can't trust that the U.S. will defend against Russian aggression. Etc.
There are a lot of cascading effects that are very bad for the U.S. and global stability compared to just buying stuff from other countries temporarily and checking Chinese aggression here.
On the other hand, the U.S. has a high potential for smashing Chinese forces in a quick and intense war. It's a gamble I think U.S. leadership is willing to take.
I don't see either side backing down. And China loses out in longer-term wars. So why bother when you can just keep things as they are and rattle sabers instead while trading with each other?
Why would the Taiwanese not fight against an invasion of their country? Are they just wasting money buying missiles and planes to defend their island against China for no reason?
I think you just have a slant here and aren’t thinking about how these forces might interact. Comparing the invasion of Taiwan by China in 2021 to U.S. war in Vietnam is very confusing. Maybe you’re trying to make me angry by saying the U.S. lost the war? I mean they did “lose the war” in the sense of “why are we killing all of these people again? Let’s go home and stuff.”. But who cares anymore? This isn’t sports where we are keeping a score.
It doesn't have a marital culture. It isn't large. It doesn't have especially rugged or inhospitable terrain. It doesn't have religious fundamentalism. It doesn't have a bottom-heavy population pyramid full of young men willing to fight a decades-long insurgency.
There's not going to be a Taiwanese insurgency after the deed is done. If China takes control of Taipei, the game is over. We need to help Taiwan before it gets to that point.
The PRC has asserted their claim over Taiwan for half a century at this point. The PRC is China and Taiwan has been a part of China for over 100 years. Taiwan is still a government in exile as far as diplomacy is concerned.
Why exactly do we need to get involved? You do realize that it's a declaration of war? How many Americans eligible for the draft do you think right now are going to voluntarily sign up for a fight against China? Especially if it's just for the defense of some small nation like Taiwan? Nobody would be pro draft for what would be another Vietnam but instead is an actual fight against China.
It's not just a matter of "We should." It's very easy for you to say that when you or your children aren't going to fight the Chinese in a war that we most definitely do not need to be involved in.
I think this is not factually accurate. In the last 100 years, Taiwan and Mainland China have been controlled by the same government only between 1945-1949.
China (Qing Dynasty) controlled Taiwan for ~220 years before losing it to Japan. Japan ruled Taiwan for ~50 years. RoC ruled both Taiwan and the mainland for ~5 years before losing the mainland in the revolution. (Edit: RoC has not ruled the mainland for ~60 years, which is almost twice as it ruled the mainland.)
I think you are correct that no draft would be instituted. We have plenty of military assests that certain people would love to justify the maintenance of so there would absolutely some fighting by US personel on behalf od Taiwan, regardless of how smart or winnable that war would be.
If China is serious Taiwan will be encircled with s-400's in little islands(artificial or otherwise) surrounding it before the first shot is ever fired, at which point the conclusion is already a forgone tale.
When it does happen the rest of the world(by which i mean the U.S) will be pre-occupied with domestic issues, cyber space issues and possibly another pandemic.
Not to mention the backdrop of the fact that the U.S launching missiles to China might trigger the MAD doctrine of Russia because missiles heading in that general direction might as well be heading to Russia, or be assumed to be as much.
>“Russia will perceive any ballistic missile launched at its territory as a nuclear attack that warrants a nuclear retaliation” - Russian military chief warned last year after round of reforms
Ergo the U.S president at that time will leave Taiwan out to dry instead of risking World War 3.
We're living in interesting times.
I don't think (or atleast I hope not) the US would use nuclear weapons to defend Taiwan, but I have a hard time believing that the US wouldn't offer atleast token military resistance. At the very least, the US has a lot of standing to lose with it's many allies accross the globe that would make leaving Taiwan out to dry very costly.
>“Russia will perceive any ballistic missile launched at its territory as a nuclear attack
and based on recent historical data in ukraine, it's not beyond the states course of action to not do anything of consequential note, and instead opting for token gestures.
Past: Mao had the chance to conquer Taiwan, however, the causalties appeared him as too high, hence, this "goal" was never persuaded.
Present: Despite some very loud hardliners wishing for the Chinese invasion of Taiwan, there is currently no indication that China is preparing for it:
"Milley added that he thought China had little intention to take Taiwan by force: There’s no reason to do it militarily, and they know that. So, I think the probability is probably low, in the immediate, near-term future."
"The PLA currently lacks the required amphibious lift, logistics, and materiel for a robust cross-Strait invasion and shows no urgency to achieve it,” Andrew Erickson, a professor at the US Naval War College"
"https://www.ft.com/content/f68c3fdf-5f3b-4cd3-9fcf-03b7a19ea...
I know it is boring for many that wish the evil China to do something really evil. But this won't happen, it seems.
Honest question.
Do US citizens honestly think National Defence os a top priority above all else? If so, why?
The reason I ask is because its quite rare to find any other democratic country, barring Israel, that mentions national defence in almost every discussion about most things
Consider the Cold War (which really wasn't that long ago) where there was a real possibility of the destruction of the country, or 9/11 where the country banded together to fight a perceived threat. Keeping the United States as a top world power is obviously going to be of interest to Americans, and national defense is a part of that.
Ultimately, being able to guarantee that you can defend yourself ensures you can seek out your other values in life, whatever they might be. In fact, I'd argue that many countries have the privilege to not even think about their national defense too much because they rely on American military guarantees for protecting their borders and trade.
Americans certainly do quibble about the size and scale of the American military machine and its role in the world though. This is a very frequent topic of discussion in political discussions with a number of friends.
That's part of the problem - Representatives get elected every 2 years so they have a short term mindset.
But, the government isn't the only player here. U.S. Corporations hold some amount of responsibility for moving production overseas.
Corporations have even a shorter mindset - they need quarterly numbers to look good for Wall Street, so they don't think much past 3 months!
Govt has become increasingly risk adverse. Any proactive misstep is ruthlessly pilliored. So we're left with cycles of neglect, crisis, and oversteer.
Just one example: Michael Lewis' latest book Premonition details how the CDC went from proactive to hyper risk adverse. And we've just seen how that played out.
Further there is a large amount of political power that is openly hostile to manufacturing believing the US should move beyond manufacturing as it is seen as "dirty" and not viable instead they put their stock in the "service" and "information" economies which have yet to prove their viability absent a strong mfg base.
In the short term given all the news about chip shortages being a national security and economic security issue many politicians will look the other way for a small concession to a critical industry but still remain openly hostile to manufacturing in general
This removes the distortionary effects of taxation on corporations, but maintains tax revenues in a somewhat progressive structure.
There's also the fact that corporations are only made possible in the first places because of the infrastructure and services provided by the government, and those must be paid for. If we moved to a model where companies were responsible to building and maintaining the proportion. Of infrastructure resources they used then indirect funding of such things via taxes would be required as much.
Valid point, but are there other ways to incentivize companies to reinvest profits without the incentive being tax avoidance?
I would be a proponent of 0% tax on small-ish corporations, perhaps with profits under $1 million (or maybe $5-10 million), so that small businesses who can’t afford an army of accountants to hide profits are brought up to a slightly more level playing field with bigger corps.
>find even more creative ways to give it to themselves
This is not a good argument.
That is not a good rebuttal, it ads nothing to the conversation except to say "I disagree" in a slightly more adversarial tone.
It need more explanation: Is it a bad argument because you think giving it to themselves is okay?
Or is it a bad argument because you don't think that would happen?
If it's the later, recent events show you're incorrect: corporate tax reductions were used in stock buybacks that significantly benefited upper management by selling their own stock back into the stock price increases.
And clearly R&D was not incentivised under those tax reductions. Also R&D is a long term investment. There's no reason to believe the short term thinking that often governs corporate decisions wouldn't also win out here. Companies that try value R&D would continue, and those using it simply to avoid taxes would reduce or stop investing in it.
This is simply not true. The investment equilibrium would change in favor of less investment in _lower_ return expenditures. Corporate managers would likely distribute more capital, which would then be reallocated efficiently in the market. The only hitch here is that the government would likely collect higher tax receipts, and thus lower total investment. But that's an argument for lowering the tax rate on investment income, not creating bad incentives for corporate managers to spend money with a lower marginal rate of return than their core business.
>There's also the fact that corporations are only made possible in the first places because of the infrastructure and services provided by the government, and those must be paid for.
Corporations pay property taxes, use taxes and payroll taxes already (e.g. truckers pay gas taxes, and that's reflected in retain prices etc). And since the proposal is for revenue neutrality, the delta revenue is still collected on the distribution end.
>Of infrastructure resources they used then indirect funding of such things via taxes would be required as much.
You can simply look at the budget. The vast majority of government spending is on income transfers, administrative expenses for social programs and jobs programs (the largest of which is bombing people in foreign countries). A very tiny sliver is infrastructure that corporations use. And as pointed out above, most of that can be paid for via use taxes they already pay.
The use taxes you're referring to are mostly going to state-level entities and state infrastructure. They're not going to pay for the federal resources, and I mentioned services, not just infrastructure. Heck, the amount of resources they use in government legal services, courts etc alone are significant costs that companies pay practically nothing but miniscule filing fees to use. Further, even those state level taxes are often minimal in the race to the bottom of states giving massive tax cuts that negate much of the revenue for the sources you mention.
As for annual spending on infrastructure: yes, that is at least partially right and is exactly why we have an infrastructure crisis in the country with aging facilities, bridges, etc and no money to pay for it. Whatever companies are paying in use taxes, it's certainly not enough to keep pace with our needs. Are you an advocate for use taxes, or was that just a rhetorical device? Because if you really believe they are appropriately paying use tax, and given the infrastructure crisis, you should be all for increases to those use taxes.
With limited liability.
That doesn't change anything about why corporations should be taxed, unless you also believe that individual people should not be taxed either. Because after all the company is only people so it should be taxed because it's people that we tax. To break it down into pieces:
1) Corporation are made up of people.
2) The money those people receive directly from the company is taxed
3) The money received by the company is also received by people because the company is, after all, only a group of people.
4) Since money held by the company is also just people's money, and people's money is taxed, the company's money should be also be taxed.
Why should money received by an individual be taxed but when it's pooled & received by a group of people it remains untaxed?
I actually know the next response in this chain: If it's taxed at the corporate level and then given to individual people who are also taxed, it has been double taxed. There's an easy solution to that: The company shouldn't hold on to the money long enough to have it taxed. Keep giving it back to people, pay higher salaries, or invest in R&D.
In that way, it's not even a tax on profits as much as it's a penalty for keeping the money stagnant. By keeping it stagnant you keep it from contributing further to the economy and from receiving enough taxes from individual taxation to pay for all of the infrastructure & other services provided by the government.
Comparing nominal corporate tax rates between the US and other companies is nearly useless. As things stand now, for every dollar in corporate tax collected the US people pay about $18.
Nominal corporate tax rates have pretty much zero to do with manufacturing moving overseas. That was always about lowering labor and other operating costs.
https://www.washingtonpost.com/us-policy/2021/06/05/g7-tax-u...
I completely agree on capex, but changes there mean literally nothing for large multinationals that already pay close to zero taxes already. For me though, running a (very small) business on the side, I took advantage of that myself to make a few big ticket purchases (relative to the scale of the business)
Other governmental regulations including environmental regulations are far more impactful then raw labor rates, or taxation
Even some of the manufacturing that is not directly impacted by these regulation will move as they want shorter supply chains, so if key core components move, often times the final consumer goods those components go into will move as well. The inverse is also true, if something causes finished goods to off source the manufacturing of the components in the item move with it
And use market pricing mechanisms? To what end? An efficient market? You madman! How will we be able to consolidate our power and command hefty campaign contributions if we cannot pick winners and losers, rewarding our supporters while meting out punishment to those who dare oppose us?
If we go down this road, moreover, we might then have to admit that, besides taxes, our regulations and our multi-decade environmental reviews are there to cause problems, not just to solve them — that safety, pollution, justice, are all well and good themselves, but even more importantly, they are tools for us to express political favor and disfavor, to bend society to our will, and our advantage.
No. We must feed the machine. Shakedowns today, shakedowns tomorrow; shakedowns forever.
Should be done with orbits to prevent space debris.
The trouble is it seems impossible to turn certain externalities into property. It would require hard thinking and innovation. And just like regulations, it would lag behind industry and miss unknowns (lead, micro plastics).
Furthermore American tax policy w.r.t foreign profits is a rounding error when it comes to building up semiconductor manufacturing infrastructure.
No American company is happy they have to go to China or Taiwan to tape out a new design. There simply isn't the infrastructure to do it affordably on this side of the Pacific, unless it has critical technologies that cannot be offshored for fear of industrial espionage.
Will american factory workers work the same way ? Will you proudly join a factory and start building stuff, at the cost of your health?
The solution, long term, can only come from China changing their mindset somehow, and then the next few places taking over the gap (I suppose Africa one day will wake up, India is starting a bit)
Also, even if America start pulling out, this doesn't make their products automatically superior. Taiwan especially showed they can outpace in execution, maybe in design and even if the US stop buying there, now Taiwan itself can compete and lead where the US will follow: is it better to be independent on bad design or co dependent on good ones ?
It's also rather specialized labor.
This is an incredibly important point, and one that I wish would come up more often. The reason that the US tax code is such a cluster@%&$ is because we insist (for reasons of politics) on conducting our fiscal policy almost entirely through the tax code, rather than just, you know, spending money directly on the stuff we want to invest in.
A lower tax rate for corporations altogether would also incentivize the relocation of noncrucial capability. Limiting the incentive to critical capability is less expensive.
How has Congress pushed American manufacturing overseas...?
Manufacturing has moved overseas simply because labor is cheaper abroad. Congress didn't have to push anything. It's just natural economics at work.
At most you could say Congress has been part of reducing tarriffs and promoting free trade, which makes everybody involved wealthier. But that's no "push". It's just letting the free market do its job.
There was a theory that US firms would sell higher end goods and services to developing nations who did the manufacturing. Treaties were made with countries that occasionally had asymmetric tariffs in favor of the developing nations (Columbia had such a deal) based on this theory.
While debatable, the belief now is that the majority of those service jobs were actually worse than the old manufacturing jobs which provided stable 9-5 employment, benefits, and a career path. There is further concern that trading partners who took up the manufacturing side of things are now developing and exporting the supposedly advanced services and technology companies the "knowledge economy" was meant to provide (e.g. TikTok). In the case of some industries like semiconductor manufacturing it's also posing existential national security questions.
Do you have some sources you can point me to? I've studied economics and history quite a lot and have never heard of the idea that Congress intended to migrate manufacturing jobs to service jobs, or that the US would intentionally give another country an advantage in order to achieve this. What is the name of the Columbia deal you're referring to? And is there any specific time period or administration you're describing? Or economists whose views provided the theoretical underpinning of why shifting from manufacturing to services would be desirable national policy?
Has a good 5 paragraph summary of US Trade policy and its intentions from the 1980s to present. I've found the Perot, Bush, Clinton presidential debate of 1992 to be the most insightful as to the the state of public discourse on trade intentions at the end of the cold war. The topic of one-way trade deals featured prominently in this debate, the proposed solution that Clinton pitched was the "Knowledge Economy".
https://www.youtube.com/watch?v=eg7-QJrJZV0
For the Columbia free trade deal, this source provides useful context on the outstanding tariff levels prior to the most recent Free Trade deal.
> Before the U.S.-Colombia FTA entered into force, the U.S. average tariff on Colombian goods was 3%, while Colombia's average tariff on U.S. goods was 12.5%. Prior to the agreement, about 90% of U.S. imports from Colombia came into the country duty-free under trade preference programs or through normal trade relations.
https://www.everycrsreport.com/reports/RL34470.html#:~:text=....
Across all those sources, though, I can't find anything indicating that deindustrialization was a goal.
Even the Wikipedia article which has a whole section on it seems to present it as a side effect, while Clinton's talk about the "knowledge economy" is framed as it being an area of economic opportunity.
And I found the debate transcript [1] (it was a famous one for the "giant sucking sound"!) -- and Bush is arguing for increased exports (which means greater US manufacturing), while Clinton is explicitly arguing that other countries need to be as open to trade as we are.
So if anything, Bush appears to be pro-manufacturing, and Clinton is against one-way trade deals.
And your Colombia example would show that then -- if it was a one-way trade deal, it's to benefit American manufacturers rather than consumers.
So I still don't see where a shifting employment away from manufacturing was a goal anywhere. Is there something else I'm missing?
[1] https://www.nytimes.com/1992/10/16/us/the-1992-campaign-tran...
It wasn't "Congress" behind the push to outsource everything to the point where many once mighty American corporations have become little more than a veneer of supply-chain specialists, the C-level suite and their finance finaglers. This was done deliberately and systematically by corporate leadership and driven by greed. I suppose some might attribute the root-cause to the rise of neoliberalism and the globalization of the economy. Whatever it was, it took decades to unfold and it will take decades to reverse (if that's even possible).
Congress won't be able to fix this mess by giving away a few freebies to rich, powerful, and profoundly self-interested corporations. They'll take the money, of course, in whatever form it's given. What they do with that money is literally "their business" and it's not going to serve anyone's interest other than the shareholders.
It's like adding extra code as opposed to changing code within a spaghetti codebase.
Make no mistake, politics is a giant spaghetti codebase no politician really understands.
You're assuming it's true that manufacturing has moved overseas because of tax rates. Remember that it used to be blamed on labor costs.
All those arguments suit the arguers, who don't want to pay taxes or wages. There are many reasons, including that Americans can have better paying jobs than what they did 50 years ago.
Another issue is that Americans have to pay for things, and if the corporate tax rates are lowered (they are already pretty low), then other people have to pay a greater share. Who?
The added taxes from people working in the US more than makes up for the loss in corporate tax. Further, we can then export the goods and make a buck on that.
I really don’t get what our gov is doing besides trying to do the worst job possible.
The US government makes zero dollars on exports. And there's no reason to believe that the people working in the US would make up for corporate tax dollars. That logic is frequently thrown around to justify large corporate tax breaks but to the best of my knowledge, no review of the results has shown it to be true.
The companies that make the exports pay taxes. Their employees pay taxes.
Except this thread is about doing away with those taxes because somehow "exports" make up for it.
> Their employees pay taxes.
Yes, they do. And this person suggests cutting corporate taxes by 5% for every 25% of the the employees located in the US. Do those additional employee dollars pay for the corporate tax cut?
The larger corporations and associated financial elite aren't complaining about the current status quo. In fact, by most accounts, it's all working quite well for them.
Based on your observation perhaps the better question is: Who exactly is the gov working for? But perhaps just having to ask that means we already know the answer?
So create many minimum wage US jobs, and highly paid jobs elsewhere.
Nice!
So what's left? Move the rich back into the tax system? You can't, the money you let them keep turns out to be a pretty effective tool for preventing that. Or the next natural step, take money from that schmuck working a 60 hour week in starbucks and hand it over to the world's most profitable companies so they fulfill some ill thought out requirements.
Or just fund the tax collectors, so they can go after the bigguns in court. The richest usually wins a legal fight.
Gotta give Intel a lifeline because the longtime strategy of in-house design+manufacturing no longer works when you lost the manufacturing edge, when you missed the transitions to mobile and GPU, and when you are stuck with the same crappy designs for the one market you dominate: server.
Sure they’re loosing some ground, but I see no indicators they’re at risk of a near-term bankruptcy...
If second place wasn't fatal for TSMC, AMD, or ARM, perhaps it won't be for Intel either?
AMD divested their manufacturing capability in order to compete.
The question I think isn't whether Intel will be around - they will - but what will their business look like in 5-10 years time.
why and how? Intel still have a good share of x86 market.
Apple's M1 was the first shot across the bow, and I believe AMD has an ARM-like architecture in development as well.
Also, I'd like to say that M1 is at 5nm fabrication - which is not an advantage of ARM. I'm sure x86 will get there eventually.
https://www.notebookcheck.net/Apple-MacBook-Air-2020-M1-Entr...
You're right about the process node. AMD's new laptop chips are on 7nm and they compare more favorably than Intel's. x86 isn't dead yet, but the trend is still not in its favor:
https://images.anandtech.com/doci/16226/perf-trajectory.png
1065G7: https://www.cpubenchmark.net/cpu.php?cpu=Intel+Core+i7-1065G...
M1: https://www.cpubenchmark.net/cpu.php?cpu=Apple+M1+8+Core+320...
9880H: https://www.cpubenchmark.net/cpu.php?cpu=Intel+Core+i9-9880H...
It's powering the laptops and desktops of the most valuable tech company in the world and outperforming even the best predictions from a year ago.
More seriously, companies like AWS have developed ARM-based chips in-house, and they seem to be very good (cheaper, faster than x86 equivalents) for specific workloads. That will certainly help with adoption, but i sincerely doubt x86 will stop being the dominant architecture. Maybe the consumer market will see a significant shift towards ARM. But not the real money maker, datacenter.
Furthermore, ARM is only big in the consumer markets as a part of SoC designs, which are bad for a variety of reasons, notably, limited upgrade possibilities. For example, i cannot go to an Internet store within my country and purchase an ARM-compatible motherboard and buy an ARM CPU separately. As for Apple's M1 offering - i think it's a good start to demonstrate the feasibility of ARM, but i'd say that ARM will most likely remain popular mostly for phones and tablets.
I'd bet on maybe another 20-40 years as the timeframe for ARM to replace x86 and for the latter to become irrelevant.
I just got an M1 iMac this week. So far I haven't found any of my old x86 stuff that won't run. I'm positive that such software exists, but nothing I use on a regular basis.
While I haven't done any formal benchmarks, most of it feels faster under emulation than it did on my previous iMac (which, to be fair, was a few years old).
I feel like there's more to Apple's success, in part because of them having full control over the whole ecosystem, from the hardware, to the OS, to the languages that they'd like to support within their platform. Doing that for near-arbitrary hardware (e.g. everything for server hardware, to regular workstations, to budget off-brand laptops) would be far less likely to succeed on such a scale.
Unless everyone ditches Windows in favour for other OSes that would play nicely with ARM, or unless Windows manages to make leaps in regards to emulation technology, i don't see ARM going mainstream for the kind of personal computing that people do on their PCs (as opposed to mobile devices, where ARM clearly dominates).
Plus, there's an argument to be made that we shouldn't even need emulation in the first place, just software that's sufficiently portable to be compiled for a new target, or written in a platform-agnostic enough way that it can be easily ported over to a new architecture.
Then get read to be surprised. X86 ain't going nowhere in the next 5 years.