TSMC is having more luck building in Japan than in America | Hacker News Reader

TSMC is having more luck building in Japan than in America

economist.com

192 pointshelsinkiandrew297 comments

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It boils down to

- Labor relations (unions in Arizona pushed back agains Taiwanese workers build the factory)

- Local partners (Denso/Sony and Toyota investing in Japanese project, TSMC on its own in the US)

- Subsidies (Japan delivered on promises, US didn't)

- Ambition (12nm-28nm in Japan, 4nm in US)

It seems the US gov is not very serious about it while Japanese gov surely is. It sounds self-inflicted.

(edit: formatting)

The US government currently is inhabited by one political party whose goal is to hinder US interests in any way possible while complaining that the US doesn’t do enough to bolster said interests.

So yes, part of the government is serious, while another part is serious about doing the opposite, which does produce the intended effect: public perception that the US government is not serious about these things.

What it will take for all political interests to align for the sake of US interests? Probably turning off financial lobbying from shadow money groups.

Says you! I think it’s important for my political party to only a function when it has majority control over the executive, legislative, and judicial branches as well as majority control over provincial governance.

Once we have that we can show our voters how disappointment really feels. It needs to feel so soul crushing we completely implode our party and die out in irrelevance. That’s my thoughts on it anyways.

How dare you suggest a political party should offer some material benefit to its supporters in exchange for their effort and partisanship!

Political influence isn’t going to align if two sides of the country are irrevocably misaligned on some fundamentals (racism, LGBT etc.). There’s no middle ground (mainly LGBT) on these issues so it’s going to have to come down to a pseudo civil war with one side prevailing.

As a gay person, this seems fundamentally wrong to me. There was even more distance among the parties on most LGBT issues 25 years ago, but the ability of the parties to compromise on anything is much, much worse now than it was then.

I also think there is much more "crossover" on LGBT issues than one may believe. Tons of Republicans are pro-gay marriage, and tons of Democrats have real concerns about allowing trans women to compete in women's divisions in sports.

The trans thing is the deal breaker when it comes to the right. We never saw massive resistance to gay anything for the last decade or so.

I think that the right lost the battle over gay rights as general attitudes had become accepting of them over the past 3-5 decades, but they don't want to lose the war so they are digging in over rights for transgender people.

I feel it’s a little more than that. The right have never accepted feminized men and trans is taking it to its furthest conclusion. I genuinely believe the right doesn’t care about manly men fucking each other.

There's definitely middle ground that could be negotiated if the will was there. For example, regarding the T (of LGBT), a liberal stance on people presenting how they want, and making it unlawful to discriminate against them for it. But at the same time, protecting single-sex spaces rather than redefining them in terms of "gender identity", and not punishing others for exercising freedom of speech and belief.

So if Bob wants to call himself Brenda, wear a frock and make-up, and take drugs to grow breasts, then that's fine and he shouldn't be fired from his job for doing so. But this doesn't give him access to women's spaces, and if any of his colleagues don't want to refer to him as "she" then they shouldn't be censured for doing so either.

This stance also protects LGB who may want to organize same-sex groups, such as lesbian speed dating or gay men's saunas, without having individuals of the opposite sex imposing themselves for self-identity reasons.

If the prevailing notion is Bob is playing dress up as a woman I don’t think there would ever be a problem with the right. The left would never agree with that.

I think it depends on which factions of the right and the left. As I understand it, left-wing radical feminists mostly already hold that view. And some on the socially conservative right may still object to Bob/Brenda teaching their children, for example.

However I do believe this position, or one very similar to it, could be enough of a middle-ground compromise to satisfy most people.

That's not what I got from the parent. Besides, everyone is dressing up one way or another depending on the situation. The problem is putting all your identity into it. And conversely also imposing on others that some characteristics you find important in your own belief system should be part of their identity. Extreme left and extreme right both have issues with that.

A serious question: Do you believe that this person https://www.instagram.com/laith_ashley/, who is a transgender man, should be made to stay in women's spaces and use womens' restrooms?

Yes I do. Part of the middle ground compromise on this issue would be for people in general to be more accepting of those who don't conform to traditional gender roles and presentations, such as the masculine-styled woman whose Instagram you linked.

Another potential middle-ground position on this issue is for third spaces to be made available to those individuals who don't feel comfortable in the spaces designated for their sex. For example, India has laws mandating this for their Hijra demographic.

Hijras are firmly men. They’ve been around forever but no one says they are women, just men dressed up as women. They have their own specific niche is society.

That’s how they get us. Divide and conquer. The thing is that it’s really the politicians riling up the vocal members of their base. Surveys of most republicans show that they don’t like the extreme focus on trans people. There’s lots of common ground, if we cut away the ideology, on things like labor rights and jobs. The politicians amp up the rhetoric on LGBTQ issues because it gets people upset, but it’s really not an issue that affects most people’s lives outside of LGBTQ people directly.

How true is this? I thought that being openly racist or anti-gay is a political suicide for both sides of the US political spectrum.

The US government is currently inhabited by one political Duopoly, the RepubliCrats, who cater to the interests of the 0.001%, who keep us divided. It's been that way since at least 1970, if this set of interviews from 1970 is to be believed[1]

[1] https://www.youtube.com/watch?v=oeeA-IU45pc

Amen. Both parties are equally hostile to my freedom and well being. I would love to have another option, but Americans have been brainwashed by the parties in power to think that they are "wasting" their vote if they vote for anyone else. I have voted third party in every election since I turned 18, but as long as that pernicious lie continues to spread nothing will change. It's a dumpster fire and I don't expect it'll ever be fixed in my lifetime.

They are wasting their vote and actively vote against their interests by voting third-party.

This is a well established fact and the main reason why the voting system needs an overhaul to allow for ranked choice or something similar.

Chances of Duopoly parties doing that by their own are 0% - so it has to be the people.

No they’re not. If a third party gets 5% of the vote, they receive federal funding during the next election which could be enough to make them go mainstream. Also every vote is tallied so your vote is more visible when you vote for a 3rd party. Anonymously of course.

I'm honestly not sure which one you're referring to.

Must be the Republicans because they have been trying to strangle government for decades by making it look incompetent so they can point to it and say “see, I told you.”

Republicans have basically 0 to do with any of the reasons the Biden administration is struggling to implement the CHIPS act.

They’re struggling because

a) Industrial policy is hard enough in a federal system without …

b) A federal government inexperienced with implementing industrial policy and …

c) An administration that sees industrial policy as YA avenue to achieve its social objectives, so called “everything bagel liberalism” [1].

I think industrial policy is a terrible idea, so not too distressed to see it trip out of the starting gate.

[1] https://www.nytimes.com/2023/04/02/opinion/democrats-liberal...

The comment we're discussing just mentions “US interests”. So for example providing military support to Ukraine, which the republicans keep blocking, or establishing programs to manage the border, which Biden has proposed and Republicans now oppose because they don’t want that issue relieved before the election, so they can point at how bad Biden is with the border.

Supporting Ukraine isn’t in America’s interest. Stopping bankrolling random foreign wars was one thing republicans finally got right after decades of getting it wrong.

And the border proposal was a fake-out, just like Reagan’s amnesty, which was supposed to be combined with border controls but never was. The goal of the recent border legislation was to make 5,000 illegal crossings a day (5 times higher than under Obama) the “new normal.”

It is absolutely in America's interest. For less than 0.01% of the defense budget, the USA can disarm Russia as a threat for another 50 years, if not forever.

The ROI looks pretty good:

1. Bolster NATO (Sweden and Finland have joined already)

2. Bolster the EU (Ukraine and Turkey gaining membership would be interesting)

3. Revive EU self-interest in not relying on US military and cash. This directly results in less foreign random wars because more parties are stakeholders.

4. Diplomatic leverage against China. They are actively supplying manufacturing capacity for weapons to the Russians.

5. Transparency around for who is supplying who with what regarding weapons and Russia. This makes it easier to sanction people/companies that do things that are Bad For Business globally.

Republicans are completely irrelevant. They have accomplished nothing except skim some cream off Democrat initiatives.

What republicans are making the government in California and New York look incompetent?

The comment I was replying to was more general.

There are lots of examples of Republicans sabotaging government legislation. The most recent case is the immigration deal reached by Senate Democrats and Republicans. They did this to make the current administration look incompetent so they could allow Trump to "win" on the issue next year.

You would have a point if the border deal gave republicans what they wanted but they rejected it anyway. But the border deal is a compromise between Democrats and a minority faction of the Republican Party that wants cheap immigrant labor. It includes things like immediate work permits for illegal border crossers claiming asylum, and enforcement provisions that don’t kick in until 5,000 crossings per month (five times higher than the rate when Obama was President).

Rejecting a compromise bill is in no way “sabotage.” Republicans (probably correctly) perceive that public sentiment about immigration is such that they can hold out for a better deal.

A truer example of “sabotage” would be the immigration compromise under Reagan. There, the parties reached a deal to combine amnesty with stronger border protections. But the second half of that deal never happened.

Regardless, you dodged my point about blue states. If the US government was dysfunctional because of republicans, blue states should be like Denmark—at least within the spheres where the state governments have primacy. Maryland should have world-beating schools, transit, healthcare, compassionate policing, and etc. Almost all of those are domains that are almost exclusively within the province of the states. But as a Maryland resident I can assure you it’s nothing like Denmark. The American inability to operate government effectively and efficiently is a bipartisan issue.

Your reply is disingenuous. The deal was between Senate Republicans and Democrats. They agreed fully. They only people that don't like the deal are the extreme House Republicans and they represent a powerful but minor of Republicans in the House. If you look at everyone in Congress, there is definitely general support for the failed bill. And, the failed bill is a step in the right direction. To say it was a compromise is absurd, unless you want every bill to be perfect when it is voted on. There can always be further refinement of the law, through future legislation.

On your other point about blue states. There are a lot of people who think blue states are much better places to live because of their legal/legislative climates. Ask people in Oklahoma who want IVF.

In general, governing is hard and I'm not about to say that Democrats have perfected it or are even doing it effectively, on an absolute scale. I am saying that the current Republican party is (other's said it here first) a cult with a criminal at the head of the ticket and a bunch of obstructionists in the House and Senate. They care nothing of the rule of law, when it is they who bend it, but they will scream bloody murder if the other side takes a tiny step in that direction.

> The deal was between Senate Republicans and Democrats. They agreed fully.

No it wasn’t. The bill was negotiated by three Senators (Murphy, Sinema, and Lankford). At no point did Senate Republicans as a whole endorse or vote for the bill.

> To say it was a compromise is absurd, unless you want every bill to be perfect when it is voted on.

Bills don’t have to be perfect, but there’s no reason to make major concessions to the other side when public opinion is on your side. Republicans have a historic opportunity to turn down the ratchet on immigration. Why would they blow it on a bill that gives immediate work permits to illegal border crossers?

> There can always be further refinement of the law, through future legislation.

If republicans agreed to make 5,000 illegal crossings a day—five times higher than the level under Obama—the new normal, it would be extremely difficult for them to later turn back that dial.

> There are a lot of people who think blue states are much better places to live because of their legal/legislative climates. Ask people in Oklahoma who want IVF.

In 2021/22, more people moved from California to Texas alone than the total number of IVF births nationwide. The purpose of government is to serve the overarching needs of the whole public: schools, transportation, safety, housing, healthcare, etc. Enacting policies that are arguably beneficial or more compassionate to this or that small minority of the population is not a replacement for good schools, efficient transit, affordable housing, and safe streets.

Europe actually heavily regulates IVF and surrogacy. For example, Germany and Norway ban egg donation. Those countries are still much better governed than any blue state because schools, transit, roads, and safety are far more important to the median person.

The reason the “culture war” rages in US politics is that neither party can offer effective governance to voters. The only way they can differentiate themselves is on this philosophical and moral issues.

Edit: I misread the comment

You read their comment wrong.

>So yes, part of the government is serious, while another part is serious about doing the opposite, which does produce the intended effect: public perception that the US government is not serious about these things.

I disagree with your conclusion. My conclusion is that, yes, the US government really is not serious about these things. It's not just a "public perception", it's reality. It's reality because half the people in that government act this way and make it reality, and because those half the people in government are voted into their positions by half the voters in the population.

>What it will take for all political interests to align for the sake of US interests? Probably turning off financial lobbying from shadow money groups.

Financial lobbying isn't the reason that half the people are voting for a party that works against US's best interests. Those voters really do believe in the people they're voting for, and think that they really can make America like the 1950s again somehow.

You're right. The government is only as serious about this as the people are who elect our leaders.

> Financial lobbying isn't the reason that half the people are voting for a party that works against US's best interests. Those voters really do believe in the people they're voting for, and think that they really can make America like the 1950s again somehow.

If the financial lobbying machine was turned off tomorrow, most of the money for the culture war goes away on mass media.

I do agree said voters think they can "roll back the clock," to to speak, but it is an erroneous belief. 1950s USA had much more of that socialism thing that resulted in technological advancements and super-power-ness.

One thing about the 1950s those people have right is that median income back then was closely tied to productivity, whereas today it just isn't, which is shafting everyone except the ultra wealthy (https://en.wikipedia.org/wiki/Wealth_inequality_in_the_Unite...)

> one political party whose goal is to hinder US interests in any way possible while complaining that the US doesn’t do enough to bolster said interests.

I’m really amused because I genuinely can’t tell which of our useless “parties” you’re referring to!

Relevant meme: https://i.kym-cdn.com/photos/images/original/002/233/325/33a

What states in the US should do is create a special economic zone where foreign companies can have have more freedoms with respect to labor relations initially.

Then slowly convert those special economic zone into a normal commercial zone once critical mass has relocated to that location.

I think the technical prowess w.r.t. semiconductor development and fab building probably exists in the US but its spread across the country in random locations.

I think the issue in Arizona is you have a bunch of non-semiconductor construction companies attempting to bid on very specialized construction projects. As such they include a bunch of overhead in putting together the teams and ramping up on the technology.

No. They shouldn’t.

I can’t think of a worse American policy idea than giving preferential treatment letting companies exploit American workers more aggressively, but only if the owners of the company who will profit from this are not American.

I don’t think the exception would be just for foreign companies. It could be a geography set aside for free trade and no tariffs. This kind of thing worked very well in Shenzhen, Hong Kong, and (the entire country of) Singapore for example.

We don't need to eat the whole pie! We'd still get the taxes, wages, institutional training to develop skilled labor, and onshoring. Let them keep their IP and profit from their evolution.

This is about temporarily allowing companies such as TSMC to bring in their specialized fab building construction companies to get these mega projects built on time instead of insisting on fully local non-specialized labor.

I think the key part of the proposal that you are missing is that it eventually (i.e. after a decade) gets rolled back to a normal economic zone and the special foreign privileges get rolled back.

What you want is just insist that a small contingent of local specialized project teams be allowed to shadow the foreign teams. Its a bit of a marshmallow test for unions.

That kind of thing already exists. It’s trivial for large and well resourced foreign companies to bring in specialized foreign teams to work alongside American workers.

What’s happening here is TSMC just wants to undercut local wages.

There are actually people who have gone in and done real reporting in the situation beyond reading press releases.

https://prospect.org/labor/2023-08-11-econ-commentators-tsmc...

I propose a name for your "special economic zone" could be "Galt's Gulch".

Who is John Galt.

I’m sure the point about labor unions is true in this case, but I did a quick search and it seems labor union participation is even higher in Japan. 17% in the Japan and 10% in the USA.

I think in many ways we do labor unions wrong in the US, and from my cursory knowledge it seems like the Taft-Hartley act has a lot to do with it. That concentrated union power in the leadership which created an opportunity for more corruption, and also weakened certain powers that would make labor struggles more useful. Of course in Japan, they would likely use Japanese workers due to strong nationalist sentiment so this particular issue wouldn’t occur.

I’m only saying this because some will read your comment and take away “labor unions bad”. I suspect that the truth is we aren’t doing labor unions properly here, and also the desire to use Taiwanese workers suggests there is something lacking about the US education system. It is of course reasonable for US workers to want a chance, but we need to make sure they are worthy of that chance. You can leave it up to the market to let people find higher education, but that’s going to leave smaller numbers in the end due to how wealth is distributed in this country. If you want higher numbers of educated workers, more provisions for affordable education are required.

Labor unions in different countries are completely different. For example, China has almost 100% union participation but it isn’t very meaningful. In some countries, unions are merely fronts for organized crime, in Japan and Northern Europe they are more like active partners.

Sure. This reinforces the point that labor unions are not inherently a problem, but the way we do labor unions certainly can be. Most rhetoric I hear in the US is if the former type. I only know bits and pieces but it sounds like perhaps we could learn from how Germany does labor unions (and higher education and healthcare for that matter).

I don't know man, from what I have read the unions were instrumental to getting the former CEO of VW (Herbert Diess) removed. He was dragging the company kicking and screaming into a full EV strategy and I guess he got overpowered because next thing you know he was gone.

Now VW has gone from become a promising EV innovator to a laggard in this race (given what we see in their car tear downs and the reliability of their software). Maybe they were going to end up in this situation but it really seemed like they had a shot because the man at the top was trying.

Do we really want that kind of union? I don't know how we can reconcile the notion that to transition to an emissions free future, we must convert cars to EVs but at the same time, EVs will guarantee a result in job losses.

The empirical evidence consistently shows labor unions reducing productivity. The real problem is that a significant fraction of the population benefits from the economic rent extraction that unions engage in, so they have a strong motivation to argue that have some redeeming quality.

Let’s say it were true that labor unions reduced productivity, but that they also increased quality of life for workers. I often think we need to stop focusing so much on productivity to the detriment of life and human well being. Or stated more directly, it is non obvious to me that reduced productivity is inherently bad.

Productivity growth is the overriding determinant of quality of life over any extended period of time.

Take two countries at the same starting level of per capita GDP, and give one a GDP growth rate of 2%, and the other a rate of 4%, and within 30 years the latter will have twice the per capita GDP of the former.

It's very hard for a country with half the per capita productivity of another country to match their quality of life.

Productivity has gone up while quality of life has gone down over the last half century. Yeah, we can get groceries delivered now but we're never not working or preparing for work. We have worse economic realities and the cost of living is sky rocketing.

Sure doesn't seem like that's holding these days.

Quality of life has seen huge gains according to studies on the matter.

It seems clear that if you achieve increased productivity by ensuring that 90% of the population worked, say, 60 hours a week, with no maternity leave or PTO, no large amount of time to spend outdoors or with loved ones, you could have a productive economy full of miserable people. You can have scenarios where the quality of life is very high for 10% of the people while it is very low for the vast majority.

> It's very hard for a country with half the per capita productivity of another country to match their quality of life.

A very easy thing to say, but unsupported by the facts. According to Wikipedia [1] the GDP per Capita for the USA is roughly double that of France ($80k vs $43k) but according to happiness index levels[2], France is at 97% the happiness of the USA.

Notably France’s culture focuses on time with people, which is free and makes people very happy.

Certainly productivity matters to a point. You can’t be happy if you can’t even eat. But beyond a certain point, grinding for additional productivity, especially when the gains are not going to those workers, does not increase happiness. And in fact it is clear that you can have half the GDP per capita and be just as happy.

I should note that “GDP Is Not a Measure of Human Well-Being” is such a well discussed topic that it is easy to find articles on this point [3] and Wikipedia has a section on this fact. [4]

[1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...

[2] https://www.theglobaleconomy.com/rankings/happiness/

[3] https://hbr.org/2019/10/gdp-is-not-a-measure-of-human-well-b...

[4] https://en.wikipedia.org/wiki/Gross_domestic_product?wprov=s...

>>It seems clear that if you achieve increased productivity by ensuring that 90% of the population worked, say, 60 hours a week, with no maternity leave or PTO, no large amount of time to spend outdoors or with loved ones, you could have a productive economy full of miserable people.

In the absence of mandated benefits, working conditions still improve over time, just not via cookie cutter rules that regiment the employment terms that workers and employers are allowed to reach.

People being miserable is not good for long-term productivity so that is not the outcome we should seek.

But to address your underlying point, you cannot sacrifice everything for productivity, it's true, but giving up mandated collective bargaining — that puts existing employees at an enormous negotiating advantage over outside applicants, while severely limiting basic contract freedom — doesn't seem like it provides any obvious societal advantages, while it does clearly reduce productivity.

>A very easy thing to say, but unsupported by the facts. According to Wikipedia [1] the GDP per Capita for the USA is roughly double that of France ($80k vs $43k) but according to happiness index levels[2], France is at 97% the happiness of the USA.

A "happiness index" doesn't measure quality of life, and can be affected by far more than labor laws and per capita GDP.

There are of course outliers, but there is a strong correlation between per capita GDP and standard of living metrics like life expectancy:

https://www.researchgate.net/figure/Scatterplot-of-life-expe...

Then again on the same example, compare life expectancy in France and the USA, which is 4 years longer in France. Spain is doing even better with a lower GDP. There is correlation, but there are many other factors at play.

Yep, there are outliers, and the US is certainly one of them.

Do you have a link?

I.e. all the Nordic countries have a majority of the population of unionized labor

https://www.statista.com/statistics/1356735/labor-unions-mos...

If you search Google Scholar you can find numerous studies on the impact of unionization. Generally any non-market intervention is found to impede the efficiency of the economy.

As for the Nordic countries, they are a cautionary tale. Singapore now has a huge lead on Norway in per capita GDP, despite the latter having previously been far ahead of the former, and the latter having been one of the largest oil exporters in the world for several decades:

https://ourworldindata.org/grapher/gdp-per-capita-worldbank?...

Sweden similarly has failed to maintain its world leading position in global rankings:

https://iea.org.uk/publications/research/scandinavian-unexce...

That was an interesting read. Thanks for sharing.

Personally I don’t care about a country productivity as much as I care about quality of life but I think that’s an entirely different discussion and it’s much more subjective as quality of life means different things for different people :)

One of the major problems with US unions is a hangover from racism. Can’t remember the USSC decision off the top of my head, but the TL;DR is that there was a railroad union that wasn’t defending African-American members. The USSC essentially said that unions have to defend everyone. The downside to this is that it created an adversarial relationship between unions and management. If Joe Bag O’Donuts is a chucklehead, the US union still has to defend him. This leads to rubber rooms and job banks. In a German union, everyone can agree that Joe needs to go and that’s it.

Source? This sounds too insane to be true!

georgia rail strike of 1909

if you think that's insane, i'd recommend reading "who built america?" vol 1 and "artisans into workers"

Just an FYI, the acronym for the United States Supreme Court is SCOTUS. Supreme Court of the United States. POTUS is the president, as well.

You make a good point, but in the US I do think labor unions have become basically bad. They function more like organized crime than legal representation.

To the extent that this is true, I think the legal structures we have forced them in to, in particular changes due to the Taft-Hartley act, have led to this. For example it is illegal to strike without leadership approval, so the act forced more power in to the hands of leadership, thus making it more like organized crime.

And this is the point. Unions are not inherently bad, but the way we do them is.

To clarify, this wasn't even a spat over unionized labor at the factory, this was about who gets to build the factory.

TSMC wanted to bring some highly specialized labor from Taiwan (who presumably have experience with building this type of facilities) and Arizona Building and Construction Trades Council insisting their local dudes would do the job just fine.

12nm Vs 4nm seems like a big deal

Japan is just better at building stuff. They have very advanced industrial policy which ensures that they have the capacity to manufacture goods and build stuff better than anyone else in the world. Even if the US had a functioning political system, it would still take decades to catch up.

The IRA is a good first step, but it doesn't begin to address the underlying problems in the US economy. If you let the free market decide everything, it will always be more profitable to invest your money in a SAAS company or a suburban strip mall.

The two countries are optimizing for very different things, and are dealing with a very different set of conditions.

Free market, it's valued more somewhere else. Seller sells it there. Simple as.

The US is serious, they are just incompetent.

US labor unions are communists where they are social democrats in Northern Europe and Japan. Extreme antagonists vs coorporating partners.

The simple truth is that due to decades of lack of investment, chronic individualism, poor vocational schooling and inflated university degree costs, US workers cannot compete. They are less competent, less disciplined, less skilled. Some of this is due to no fault of their own, while some of this is also due to the culture. This manifests in every facet of American industrial capacity -- from "toothpick and tissue paper" home construction to most basic manufacturing like injection moulding, where moulds are used far past their serviceing periods to churn out margins.

Americans capable of being productive at TSMC cost too much for TSMC to afford. They can get better paying jobs with better work life balance, easily. Japan has a similarly terrible work culture and is much poorer than the US, like Taiwan, so TSMC has much less cultural mismatch to deal with.

This is a great response that sounds convincing. Right now high IQ hard working americans can choose law, finance, medicine or software for a pretty high ROI.

I think this is less true in other countries, so those capable folk might be more evenly spread throughout various engineering fields.

This is true. My parents wanted a doctor and an engineer. And while my brother and I both got STEM degrees, we ended up in law and finance, because those fields pay way more.

I’m convinced that this is bad for your average American. It’s good for the small slice of the population making high salaries at banks, law firms, advertising companies, etc. But that drives financialization of the economy, which is probably worse for the average worker. It might be better for the median American to cut down those industries and shift the economic mix to industries that create more solid middle class jobs.

> It might be better for the median American to cut down those industries and shift the economic mix to industries that create more solid middle class jobs.

Serious question: How, exactly?

Hopefully some of the large, profitable companies will eventually see it as an existential threat to have such a dependency on a single nation, and subsidize paying high comp for chip engineers and even manufacturing.

This already happens to some degree slightly higher on the stack. For example firmware engineering is not generally a high paying subfield of programming, but at FAANG companies the comp is very high.

Knowledge work by its nature seems to be winner-take-all and not generate well paying jobs for people who aren’t cognitive elites. California and New York are good examples of this—the finance and tech bros with sky-high salaries drive up the price of everything, to a degree that outstrips the modestly higher salaries those industries pay to ordinary workers.

Contrast that with something like oil and gas, or sophisticated manufacturing which needs large numbers of moderately skilled workers. In absolute terms these industries generate less wealth. California’s GSP per capita is more than 25% higher than Texas’s. But middle class people are moving from California to Texas (and Georgia and Tennessee)—not the other way around. Or instead of Texas, consider Germany. I’d posit that it’s better for Germans that the country excels in manufacturing rather than finance or tech.

But returning to my question: As Lenin asked: что делать (what to do)?

What Germany and China do: change our industrial policy to favor manufacturing over tech and finance.

He was riffing on earlier books’ titles.

>we ended up in law and finance, because those fields pay way more.

Compared to STEM research or an EE sure, but is this true compared to say, MD or FAANG software engineer?

(assuming the same level of competence. I don't think every L3 AMZN engineer could hack it as a surgeon or something).

FAANG salaries are roughly comparable. But they further illustrate the problem: Alphabet and Meta are advertising companies, Apple is essentially the Louis Vuitton or Prada of computers, and Netflix makes entertainment. Amazon is the closest thing to a real company, and it is a delivery service for cheap Chinese products. Moreover, the middle-class jobs generated by those companies, outside the engineering teams, are crappy service jobs.

> Apple is essentially the Louis Vuitton or Prada of computers,

The extra utility of LV and Prada products relative to their competitors is zero compared to the extra utility of Apple products, for example due to lower power usage and more longevity.

Also, FAANG is just a catchy acronym for high profit/profit margin earning businesses, that also includes Microsoft and a multitude of other businesses that pay well.

> Also, FAANG is just a catchy acronym for high profit/profit margin earning businesses

Most of those businesses are high profit/profit margin precisely because they target sectors such as finance and advertising that are of questionable social value.

If you hadn't already said you didn't work in tech, this would be the smoking gun that would clue us all in.

Most of us here are aware of AWS being one of the primary profit makers of amazon, and GCP isn't far behind. You missed those very obvious business segment that sort of renders your argument moot.

The fact that between them FAANG has some real businesses doesn’t render moot my point that Google and Meta are advertising companies while Netflix is a movie studio.

> If you hadn't already said you didn't work in tech, this would be the smoking gun that would clue us all in.

Um, you should look up 'rayiner — he's now a lawyer but (from a former life) has better tech credentials than most.

? I certainly couldn't find the 'better tech credentials than most' when I looked him up. Seems like a great lawyer, it wasn't a knock against his intelligence.

Yeah, he seems to have deleted everything from his profile, so I won't identify him further, but he's a pretty high-powered guy (albeit with some views that puzzle me).

One data point that supports your assertion: Japan has 29 lawyers per 100k population. The US has 4,000.

Source for this? The ABA [0] gives a much more believable figure of 1.3 million "active lawyers", which is almost exactly 400 per 100k. So I suspect you are off by an order of magnitude, but perhaps you have a different way of counting lawyers.

[0] https://www.abalegalprofile.com/demographics.html

Maybe the GP added an extra zero by accident, but 29 vs. 400 is still a huge difference, more than an order of magnitude.

Agree. Nitpicking just one important things. A small % of US workers can compete. That's why we see best-in-class companies born in US.

But mass workers... NO. So you are correct.

Why does this not apply to software?

Because a spark of genius is better than rote diligence in software.

Say what you want about Americans, but few of them are wickedly clever and intelligent at the same time.

What’s the difference?

Hmm, i’m speculating but I’m thinking even the entry level software engineer has a lot of room to possibly fuck something up. Even if your architect/staff engineer comes up with a fantastic system, there’s still the possibility of the jr engineer screwing up their tiny piece and implementing a 2^n solution and then the whole system crumbles.

Conversely, there’s room for (constrained) creativity from the bottom level as well.

This sounds quite different than say, chip manufacturing where I imagine there’s more or a binary “you did the thing” or “you didn’t”. However I have very little insight into the process so I’m likely over simplifying.

intelligence is broad cognitive capability, while cleverness is more about being quick and inventive in solving problems or handling situations

A small number of 10x engineers can make world-beating software. Meanwhile, for most other engineering and manufacturing fields, you need a large number of skilled (but not genius-level) workers working in careful coordination and giving it 110% over a sustained period of time.

It's not so simple. There were previous articles posted on here months ago basically saying that the building standards are much higher in the United States in terms of permits and certifications and that is what is slowing things down. Sectors are heavily regulated in the United States which comes with a very high price tag, however, they are often done for the right reasons.

If American workers are expected to follow the rules but other countries have less strict rules with different tradeoffs, maybe the regulations need to be examined.

Is there any evidence that the standards are actually higher and not just more expensive, time consuming,.and bureaucratic?

Both things can be true. I’m sure there are ways to streamline the bureaucracy. But if you ignore Chesterton’s fence you get Superfund sites dotting the landscape. The rules exist for reasons.

Rules always exist for a reason but as often as not the reason is to justify the existence of bureaucratic gatekeepers and not the actual stated reason for the rule.

Unless there is a lower incidence of workplace accidents and environmental contamination at US facilities as compared to equivalent Japanese facilities then the additional rules are pure dead weight loss. And I have not seen any evidence that our factories are any safer or cleaner than Japan's.

Some rules are put in place to prevent situations that are extremely unlikely to occur in the first place, but are more catastrophic when they happen. Trying to compare incident rates would not account for how well rounded a system of rules really is. I would suggest that the best course of action would be to follow the advice of our fellow countrymen who drafted these rules, then ask other countries to follow it if they want to sale products in our country.

Why would I trust the rules made by my own government if I can see that other more productive countries are building things better and faster than us?

> Rules always exist for a reason but as often as not the reason is to justify the existence of bureaucratic gatekeepers and not the actual stated reason for the rule.

No, that’s merely a reflection of your anarchistic and misanthropic worldview. Most people would not agree at all that “most rules” serve only to justify gatekeepers.

You are free to jump the fence and fall into the gorilla exhibit if you want but there is still a very good reason the rule exists. And the fact that you apparently see such rules as a “minority” speaks more to you than anything.

Here is one the articles I was referencing.

https://www.theguardian.com/business/2023/aug/28/phoenix-mic...

When I read through it again it I realized many problems seem similar to common issues in software projects.

I think if TW standards is good enough to build 3nm chips on an earth quake zone, it's good enough for US. We're talking about building leading edge semi conductor not housing, which granted TW is hilariously bad at.

Apparently that is not what the regulations say? I don't think us employees / employers are able to go against the regulations without legal consequences.

I'm more addressing the point that US building regulations (when it comes to fabs) has "higher standards" vs just being more onerous. Which your second sentence in original point addressed but I missed.

"for the right reason"

When companies have a choice to build in other countries then import product into the US, they will do that cost benefit analysis. If a country overly regulates and industry, it will just be made elsewhere.

When politicians pass laws that just cause jobs to be outsourced so they can say they are doing "the right thing" but not attempt to force other countries to follow, all you are doing is virtue signalling and killing jobs.

That's the key thing -- not expecting other countries to follow the standard we set. At times it is also even the same values. It's absurd that we don't do this.

You don’t have to let imports flow into the country without assessing costs to that as well. These are all policy choices.

That’s protectionism and it makes us all poorer.

No, it doesn’t. Like any policy that affects a complex adaptive system it has winners and losers and elements of unpredictability.

Don’t worry I actually have a degree in economics, you don’t have to explain why you think that.

Doesn’t mean it’s a model that corresponds with reality, or that dictates policy choices.

A lot of those regulations also boil down to individualism and inability to balance social needs against individual desires. In the US, major infrastructure project that could serve hundreds of thousands of people can be held up by a handful of individuals whose property might be affected by the project. This sort of individual consideration is baked into most of our regulatory frameworks.

The right reason is a preference, i.e. some in our state think the right reason is to prevent building so that manufacturing is done in other countries.

It’s important to differentiate between standards and regulation. It’s entirely possible that the US has far higher bureaucratic red tape to navigate that increases costs and time but doesn’t actually produce superior quality products.

Having dealt with standards and regulations in the US the problem isn't so much the regulations as the people enforcing them are adversarial. And they don't care about the costs they are imposing. I've also heard trades in the US behave in adversarial ways towards each other that would get them banned from future work anywhere else.

Tidbit: The biggest driver of cost overruns is delays in construction. Adversarial permitting, trades, and the courts allowing disinterested parties to delay projects drives this in the US.

Recent one I saw. 2000 sqft vacant lot filled with trash and weeds remains undeveloped because it would take years to get the variances and permits to build on it.

Those regulations are paid in blood, and we aren't going to accept any different.

All of them?

You betchya

That's a cool story, but not true in all of Arizona. I built in Arizona and without code inspections or anyone checking I follow regulations. They probably just tried to build in a fascist shithole like Maricopa or Pima county where people with such deranged regulatory thinking congregate for their mental illness self support group.

In my county we figured out that ' paid for in blood' was bullshit invented by corrupt inspectors and contractors and we voted to eliminate it. Draw a rectangle on a map and after that it's green light.

At a previous job, planning regulations forced a mid 5 figure expense for a dumpster enclosure[0] complete with roof and handicapped access. You know, in case someone in a wheel chair or on crutches needs to pull a dumpster out for collection.

Whose blood wrote that regulation?

[0]Next to grandfathered buildings who just chain their dumpsters to the alleyway, of course.

What do you mean by paid in blood? Who's blood?

Probably not so much "higher" as "onerous"

From what I understood Japan has pretty strict rules and is also heavily regulated. Are you sure building standards are higher in the US than in Japan?

I think US construction (and other industries) being permit heavy is just to screw the little man, and artificially inflate the cost with only big companies being able to navigate the expensive and byzantine bureaucratic processes. I could list a million examples, but first, let me ask you: Would you consider someone a good software dev because he has a lot of permits and certifications, and promises to build software according to some international ISO standard? Thought so. The same applies to buildings.

I remember one guy's blog post, who described his life as a do-everything contractor, who did septic tank installations. What he needed for the job was a shovel and a truck to carry the tanks to the site.

Then came the regulators, and essentially made his job illegal. He had to apply for a permit, submit plans, conduct a survey, and need a crew of specialists with expensive equipment to carry out his job. Basically turned what would be a nice one or two man job with a nice margin into a whole expensive ordeal, which only big companies could do. The irony was that said big companies employed hordes of unskilled and underpaid rubes who they worked to the bone.

American companies are higher up on the value chain. Fabless chip companies are more profitable than ones with fabs.

Until there’s an embargo or…a blockade. There’s probably value in sacrificing some profit for a hedge.

Building houses out of wood isn't necessarily a bad thing. It may be a bad thing in Florida due to termites and the fact that reinforced concrete can better resist hurricane force winds, but in California it's a good thing because wood can flex in a potential earthquake.

We have civil engineers making skyscrapers that can withstand earthquakes made out of steel and concrete and mass dampers. Wood can flex in a potential earthquake, that's true, they used that in Japan centuries ago, but we've got better materials and technology today. We build houses out of wood because it's cheap, not because it's any good. Noise travels through wood way too well and that makes urban living a nightmare. As we try to cram more people together, we need to build things out of materials that are better so that you can't hear your neighbors coughing at night through your shared wall.

>Wood can flex in a potential earthquake, that's true, they used that in Japan centuries ago, but we've got better materials and technology today. We build houses out of wood because it's cheap, not because it's any good.

Here in Japan, houses are made out of wood, despite what you may have heard. They're not made of "better materials", though I'm quite sure they're constructed much better than stick-built houses in the US. Homes are only made of concrete and steel when they're larger, multi-unit buildings; the 3-floor single-family homes are all wood. For smaller structures, it's a great material; that's why temples and shrines built centuries ago are still standing today despite all the earthquakes. The main problem are just termites and fire, but fire is a problem with steel and concrete structures too.

>Noise travels through wood way too well and that makes urban living a nightmare.

Not a problem in a single-family home. And the thing that makes noise a problem is a lack of insulation between units, not the framing material.

people in single-family homes are still quite sensitive to gasoline powered leaf blowers starting at 7am, motorcycles with straight pipes, and cars with ridiculous sound systems, though those may be more of a problem with US culture than in Japan. Fair point that you can just use more insulation, but the problem is, again, cost, so it doesn't happen unless it has to, eg Minnesota winters, but that's for temperature. Sound reduction is a nice benefit and not why they're spending the money.

>people in single-family homes are still quite sensitive to gasoline powered leaf blowers starting at 7am, motorcycles with straight pipes, and cars with ridiculous sound systems, though those may be more of a problem with US culture than in Japan.

Those things aren't problems in Japan, those are problems with US culture. One big reason I moved to Japan was so I didn't have to be a multi-millionaire to get away from those things and many other similar problems with US culture.

Anyway, the point is that your prior post incorrectly implied that Japan does not have wood houses, which cannot be farther from the truth. Almost all the single-family homes here are wood.

Ah. Not sure how you read that I said that there were no wood houses in Japan, but thanks for the correction :)

>Wood can flex in a potential earthquake, that's true, they used that in Japan centuries ago, but we've got better materials and technology today.

This line seems to imply that modern, new houses in Japan are not made of wood any more. They are. In fact, wood is being used for more and larger stuff, both in Japan and in other countries, because it's flexible and more eco-friendly than steel and concrete. Of course, wood has its weaknesses (like termites) that have to be dealt with using proper engineering practices, but so does reinforced concrete, as seen in the big condo collapse in Miami not that long ago.

That said, 10+ story buildings are probably still going to be made of reinforced concrete for the foreseeable future, and Japan has far better construction and maintenance standards than the US for tall buildings, which is why seaside buildings don't randomly collapse here, despite the frequent earthquakes.

As opposed to Japan? US workers are pretty famous for being hyper-productive and highly skilled...

American workers by any objective measure are at the absolute top for skills and productivity.

Have you considered the idea that this story is being turned into anti-union propaganda?

The US doesn't want domestic chip production, it wants chip production that's not at risk of the Chinese. As a very reliable partner, Japan works fine for this purpose.

Exactly. Along with South Korea. Which is why I find it strange US insist it has to be on US soil. When I dont see how they could compete without at least a yearly $10B subsidies.

Anything within 30minutes of PRC theatre missile range doesn't add any geopolitical security to US semi supply chain. Further extending semi supply chain to SKR/JP if anything is potentially worse than TW because US provides them with security guarantee, in region where US is weakest relative to PRC, making them even more enticing targets along with US security infra in those countries. The maximally secure supply chain one is on CONUS, and not because it can't be hit, but due to escalation risk of targetting CONUS.

The US doesn't want new domestic anything. We have made it nearly impossible to build housing, transmission lines, power plants, factories, etc. It seems like the only thing we still know how to do and also want to do is roads.

>It seems like the only thing we still know how to do and also want to do is roads.

And military equipment.

We can’t even make enough shells for Ukraine.

Because NATO war plans depend on air power instead of getting bogged down in artillery duels.

Boy is NATO going to have egg of their face then if they can't secure air superiority. Something something no plan survives contact with the enemy.

It's my belief NATO could easily secure air superiority in any conflict where they commit forces entirely.

Instead in Ukraine we have a proxy war where NATO countries are hesitant and reluctant to over commit.

If the 'meta' stays the same, so to speak, I would agree. But that said it's hardly unfathomable that there is a step change in the effectiveness of AA weapons in the near future. Drones, missiles, and sensors are all getting better and better and so far there hasn't been a real hard need to push for anti air drones in active conflicts (vs. anti tank and anti human).

NATO countries excluding US depleted air munitions within month in Libya: https://www.washingtonpost.com/world/nato-runs-short-on-some...

Also, artillery shells is much cheaper way to deliver precise and fast strikes in urban environment compared to running aircrafts, so maybe such plans are not effective if this is really the plans.

Take a look at the invasion of Iraq during Desert Storm and realize this isn't as big of a deal as one might think.

NATO doctrine assumes we will have air superiority and has very few considerations for scenarios where that isn't the case.

"Can't", no. It all hangs on the U.S. at the moment, which could absolutely make enough shells for Ukraine if the funding authorization comes through. What's holding that up is politics, not limits in productive capacity.

https://www.wikihow.com/Make-a-Gun-Barrel

Sorry, khikhil, zrada was baked in from the start. Link related.

We absolutely can if the government allocates the funds to help Ukraine which is cheap as hell compared to 10s of trillions of dollar for WW3 in Europe in a few years as we neglect NATO but are finally forced to. when Putin inevitably overplays his hand and attacks a NATO country because we will be ramping up for real.

A direct consequence of how the West treats real estate as an investment.

People bet 10 x their yearly income on a property, and then they will do anything in their power to make that value rise, or at least not fall: NIMBYism. They will block any effort that potentially lowers the value of their property.

And I don't think you can blame them, as we can't expect them to voluntarily lose a lot of money.

> direct consequence of how the West treats real estate as an investment

It's a direct consequence of NEPA privatising environmental review together with our lack of tort reform.

Yes.

People bet a much bigger multiple in Asian countries. US real estate is cheap.

Not to mention, the incredible 30 year fixed mortgage.

I don't think this is true in Japan?

https://cheaphousesjapan.com/house-prices-in-japan/

Not in Japan they don’t. Housing, outside of central Tokyo, is a depreciating asset (and even sometimes is there). Japan also has fixed rate mortgages that are currently offered at a lower interest rate than in the US.

I'm not sure if this is still the case but for quite a while house prices in Japan seemed to be basically just the land value. It was expected that the first thing you'd do after buying a 20-30 year old house was to demolish it and build your own. And since population growth in Japan has flatlined and gone negative it's not a big surprise to me that they don't have a ton of demand for new land/housing.

This is still mostly the case for single family homes. There is some uptick in resale of “used” homes built since the 2000s, as construction standards have improved dramatically since then, relative to prior years.

For additional context, there is very lax enforcement of home building standards for anything single family, both to encourage new construction and because the general principle is it will be torn down in 20-30 years, so why bother. This is of course also leads to a bit of a vicious cycle (which some see as wasteful) where it’s safer to tear down and build new because who knows how whatever you’re buying was built.

You are spot on.

I have been living in Japan for the last 5 years, and the construction quality is absolutely abysmal here. Thermal and noise insulation is almost non-existant (very funny here in Aomori), and the overall layout of the cities and the houses is a complete mess.

I read recently that the government passed a new law forcing higher construction quality standards, but let's see what happens...

>And since population growth in Japan has flatlined and gone negative it's not a big surprise to me that they don't have a ton of demand for new land/housing.

This is a myth. There's tons of demand for housing in Tokyo, and other large cities. There's no demand in small, remote towns, and the population is moving from rural areas to the big cities, plus there's more immigration, so demand hasn't fallen.

Some Asian countries, perhaps. In Japan, real estate is a (in)famously bad investment. Lots of real estate actually loses value over time, more like a vehicle in the US.

Japan, where the economy has been flat and the population has been falling for a while now is perhaps not a great counter example.

Oddly enough, according to this: https://resources.realestate.co.jp/living/how-affordable-is-... homes in the US are still more affordable than those in Japan.

I only did a quick search and clicked on the first result, btw, so take that with a boulder of salt.

30 year fixed mortgages are actually not as good of an idea as you'd think.

I actually spent a significant part of my early career working with real estate economists.

A bunch of economists I know actually lost money fixing their mortgages in 2008. They fixed at too high a rate and weren't prepared for the low interest rates environment.

Did they know that they could refinance as rates drop?

Yea, if you owned a home and didn't refinance when rates dropped below 3% you were crazy.

For comparison to Japan, "Flat 35" loan is widely available. Even "Flat 50" is a thing.

And weapons.

> It seems like the only thing we still know how to do and also want to do is roads

Except it's usually done in a more expensive and slower way than in other advanced economies

We can't pump out lawyers and laws like we do and expect regulatory related delays/costs to actually decrease.

>It seems like the only thing we still know how to do and also want to do is roads.

And maybe not.

>But the Texas Department of Transportation says converting paved roads to gravel is the only safe plan it can afford.

https://www.texastribune.org/2013/08/19/conversion-of-roads-...

> Omaha’s Answer to Costly Potholes? Go Back to Gravel Roads

https://www.nytimes.com/2017/03/07/us/omahas-answer-to-costl...

A pretty sad trend that keeps on growing.

America has lost the ability to build and maintain. It's slowly deconstructing and dismantling itself.

That's not a problem with building, tons of people in the US know how to lay down asphalt and make concrete because its a very local industry (the materials are too heavy to be economical long distance). It's a problem with white flight and the post-war suburban expansion that way overbuilt the supporting road system without considering how much it would cost to maintain in the future.

Now as more and more of the deferred maintenance bills come due, they have to make the hard decisions they should have made a long time ago.

People have been warning for decades that a multi-trillion dollar bill will come due for aggressive suburban expansion into SFH neighborhoods and car based policies. And now that we see that bill showing up it seems that many want to blame the wrong thing so they can maintain their current lifestyle at a low tax rate.

USA has never been able to maintain, we rely on constant expansion to increase taxes and then the Federal Gov't comes out and pays for the road repairs because the states would need to charge at least twice as much tax as they currently do.

> As a very reliable partner, Japan works fine for this purpose.

It is pretty close to China, so in case of a war, it is not exactly great location (from US point of view).

And you know, natural disasters.

Usa definitely not immune, but it's been seen how Japan getting hit with disaster affected the tech industry in past years.

Production if anything spread out of Japan as a result.

Japans gain. There are already a bunch of local businesses setting up their own factories nearby to service it. This is going to be bigger for Kumamoto than Kumamon.

Japan isn’t as threatened as Taiwan, but is still liable to earthquakes, tsunamis, and is uncomfortably close to both North Korea and Russia.

>uncomfortably close to both North Korea and Russia

North Korea has a main beef with South Korea and is full of starving people equipped with WW2 tech has no airforce and some nukes with questionable functionality, while Russia can't even move past Eastern Ukraine with all its power let alone venture into other areas.

How are they a threat to other nations?

> nukes with questionable functionality

They seem to have ballistic missiles and they don't need to be particularly accurate to hit somewhere in Tokyo.

North Korea is currently involved in a proxy war in Europe, so it can't be that short on resources.

All tgey have decades worth of production of artillery shells for Soviet guns, AK-style rifkes and ammo for those. Stockpiles, basically. And even those will run out. And before that happens, North Korea will slow down deliveries to Russia, after all the massive ammount of conventional guns pointed at Seoul are one of North Koreas trumo cards.

They are not really involved, as in active participation. They are sinply selling their outdated goods, which further proves for weak and poor they are.

It’s also not a proxy war

They dont need to conquer the country, they just need to damage the factory.

(Only tiny bit relevant Russia allegedly blew up ammo depo in Czech republic in 2014 https://en.m.wikipedia.org/wiki/2014_Vrbětice_ammunition_war...)

North Korea has a major beef with Japan. They’re still holding a grudge over being occupied in WW2.

Interestingly a bunch of NK’s aging infrastructure was supposedly built by the Japanese.

> The US doesn't want domestic chip production

Wasn't the entire point of the CHIPS Act to "authorize roughly $280 billion in new funding to boost domestic research and manufacturing of semiconductors in the United States, for which it appropriates $52.7 billion" including "$39 billion in subsidies for chip manufacturing on U.S. soil"?

https://en.wikipedia.org/wiki/CHIPS_and_Science_Act

edit: I see -- The point of the article is that Congress's goal has been hindered "on the ground" by conflicts with construction unions, negotiations over profit-sharing with the US government, and environmental regulations that slow construction.

> Wasn't the entire point of the CHIPS Act to

America has a huge number of interests. CHIPS is well announced but it's separate and apart from most of those interests.

CHIPS is what we say we want.

It's a subsidy to prop up critical defense manufacturing. It will be of little benefit for consumer goods. It makes no sense to give Micron a new fab in the midst of layoffs with no prospect for future growth. It makes a lot more sense considering that Boise is an easier target for China than Syracuse.

Japan is likely potential target for China after Taiwan is captured. I think there will be some false starts but we have to get back to making top of the line semiconductors in the States or we're going to really regret it in the future.

I just got back from vacation in Japan. It’s completely unsurprising that American mid-skill workers are worse at cooperating on delicate large scale manufacturing than Japanese ones. The culture and habits of a country’s population makes a difference, and the coarsening of Americans has been quite apparent to me over the last 30 years. I bet this delta between US and Japanese workers wouldn’t have existed in 1960.

What? Really? You think the gap between 1960s American workers and Japanese workers was smaller?

It was still wide then but even wider now.

Especially with the US social media trend of anti-work and quiet-quitting

> the coarsening of Americans has been quite apparent to me over the last 30 years

sorry, the what of Americans?

I know! Who has ever thought of Americans as a particularly refined bunch? I know that we don’t think of ourselves that way.

How old are you? When my family came to northern Virginia in 1989, it was quite polished, conformist, and orderly. The George H.W. Bush East-coast WASP culture still dominated. The current generation of “think for yourself” “don’t let anyone tell you what to do” kids was percolating through the education system, but they were not yet running anything.

You can still see pockets of this. I was in Salt Lake City a couple of years ago and it was amazing. I was also in Iowa, and the older folks were pretty orderly, but you can see among the younger folks that southern redneck culture has been spreading.

Salt Lake City/Utah is rapidly losing that culture as well.

> It’s completely unsurprising that American mid-skill workers are worse at cooperating on delicate large scale manufacturing than Japanese ones.

Watch the 1986 movie "Gung Ho" starring Michael Keaton, about a Japanese car company opening a fab in the US. It's amazingly witty and funny.

The gist is that Japanese workers (and Asians in general) are expected to sacrifice their personal life for the good of the company with all the downsides that incurs for them, while American workers want to do the bare minimum at work and also expect to be paid significantly more than workers in Asia (duh!).

In the globalized world of today (let alone the 1980's), manufacturing is a race to the bottom in terms of cost where you need to squeeze your labor as much as you can to keep costs down, and high income countries like the US, can't compete, nor do they want to because they have better options to pump up their GDP, like printing USD.

So why do we keep discussing this over and over again? Working in factories competing with Asia kinda sucks for the 21 century wealthy westerner so they don't want to do it like in Asia, which is what it takes to keep prices low and consumers happy. So opening factories under these conditions seems like you're setting yourself for failure form the start.

> So why do we keep discussing this over and over again? Working in factories competing with Asia kinda sucks for the 21 century wealthy westerner so they don't want to do it like in Asia, which is what it takes to keep prices low and consumers happy

What’s the alternative for your average American? They don’t want to work like Asians in a factory, but they also don’t want the dead-end service jobs that are the alternative in an economy where the real productive work is done overseas.

Going into finance/tech or blue collar jobs if you don't want to go into debt. Have you seen how much plumbers/electricians/handymen earn? You don't need a university degree to earn good money.

You would also enjoy "American Factory" (2019). It's a documentary about a Chinese company taking over an old General Motors factory and hiring Americans to work there.

Maybe it's not just the wage cap.

There is plenty of semiconductor industry in the US but it's differently specialized and they compete for the same pool of engineers. Nvidia, AMD or Broadcom don't have fabs, but they hire engineers from the same pipeline as fab companies.

It's few years since I was hiring EE majors in the US, but it felt that skilled people with EE master's are harder and harder to find every year. I think USC and CMU are the only ones that produce quantity and quality. MIT, Stanford, and Berkley produce quality but not quantity.

Caltech?

If I remember correctly Caltech is in the quality over quantity group as well. Something like 100 - 150 graduates per year.

Here is some data:

CHIPPING AWAY ASSESSING AND ADDRESSING THE LABOR MARKET GAP FACING THE U.S. SEMICONDUCTOR INDUSTRY https://www.semiconductors.org/wp-content/uploads/2023/07/SI...

>67,000, or 58%, of new jobs across manufacturing and design will risk going unfilled by 2030.

Another nugget from Fig 6: More than half of the MS graduates in semiconductor-related engineering fields are foreign and 80% of foreign Master’s leave the U.S.

People in the US keep asking "Should I go to college?" and "Who needs calculus?"

> It's few years since I was hiring EE majors in the US, but it felt that skilled people with EE master's are harder and harder to find every year.

Semiconductor pay is dogshit compared to software. And everything is going to be in the office at whatever crap city has the fab--no remote work for you.

Any EE smart enough to be good at stuff for a fab is smart enough to GTFO to software.

The solution: cough up some damn cash.

I have to use my microscope to go hunt for the world's tiniest violin when I hear companies complaining about hiring EEs.

I got my degree in EE many years ago, and quickly came to the same conclusion, and moved from hardware to software and never went back. Hardware has long been a terrible career field in the US, and anyone smart moved into some kind of software-related job.

Also, your "crap city" bit is an important factor too. WhoTF wants to live in Phoenix AZ? The fabs are usually located in rather lousy places, whereas software jobs usually give you far more choices for places to live. There's software jobs virtually everywhere these days.

I wonder if these schools produce such top talent because of their excellent education, or is it merely the fact that they only accept highly conscientious geniuses who would've succeded otherwise.

>I bet this delta between US and Japanese workers wouldn’t have existed in 1960.

There was a larger delta then because US workers were much more skilled than Japanese ones in 1960

But Japan has a collapsing population due to said work ethic, which is a far more serious problem in the long run.

So does America.

We've disguised it with massive immigration.

I agreen that also in America the population is collapsing, but I don't believe it is because of the work ethic.

Has the Japanese work ethic gotten more intense since 1950, when their birth rate was well over three children per woman?

I suspect the proximate cause of the drop is the hysteria about overpopulation that gripped all Asian countries in the 1960-1990s. The governments there raised two generations of people socialized to believe that having too many kids was bad for the country.

Japan and Korea never had anything as barbaric as China’s one-child policy, but the government heavily propagandized population control during the second half of the 20th century. They imposed taxes on families with more than two kids, heavily promoted abortion and sterilization, etc.

Japan has the highest fertility rate in asia

Not even close. One, Asia is a big place and includes countries like Pakistan with 3.56 fertility rate, and two, if you meant East Asia, North Korea has 1.8 tfr to Japan's 1.3.

Asia consists of several more countries than China, Japan, and the Koreas.

It's not true, but losing the least still means you're a loser. At current demographic rates Japan's population is set to drop by 40% in the next 40 years.

>The UN forecasts that Japan’s total population could plummet to 104.9 million by 2050, possibly even as low as 87 million by 2060;

Every developed country has a dismal birth rate. Birth rate and level of development are closely related in pretty much every country, and the causes are probably broadly similar. Last I checked Germany was worse than Japan, yet nobody is saying it's because Germans are working themselves to death.

This is the current culture, but culture can change.

There may come a time when a new way of thinking will spread, causing this trend to reverse.

In 1960, the perception of consumer goods quality was entirely the opposite between US and Japan than it is today. "Made in Japan" was considered the same as "Made in China" today.

Yeah. On the broader level, look at the transit system of Tokyo. So many different companies cooperating so closely and making investments for the public benefit. Unfathomable in the US.

https://archive.ph/PtzWL

The US is pretty good for a bunch of stuff. I'm hoping to one day also be a rent extractor. Like, all I have to be is a local organization somewhere and I can pull out some fictional required environmental review studies (waivable if you use our existing studies for $1.5 m) or required local community input (also waivable if you've used our org for outreach) or required hiring from my labour union. The US Gov supplies from a large pool of money. You just need a tiny fraction of that and you can parasitize to great personal wealth.

Lots of sucker W-2 employees working while you can be a millionaire off other people's wealth. A startup that industrializes this process could do it to every project in the US and easily become a few billion. The hard part is concealing the relationship between the diverse entities, and watching out for the existing guys pulling this scam.

I have definitely seen an LLM for government grants startup fundraising

If labour relations are a problem in American then there's no way they are expanding into Europe.

TSMC is already expanding in the EU, specifically in Dresden, Germany. Because EU skilled labor is much cheaper than US skilled labor and in some aspects US unions are more powerful than unions in EU. That's why the EU is already full of semi fabs and other kinds of factories.

Worker's rights are not an issue when labor is 30% of what they would have to pay in the US for the same skill/talent. US skilled workers don't have it any worse than EU skilled workers, often way better. This isn't flipping burgers at McD's where you have no bargaining power and need unions and labor regulations to protect you.

And you need a lot of skilled people to operate a heavily automated semi fab: PLC programmers, opticians, physicists, material scientists, contractors, HVAC, electricians, plumbers, construction workers, Q/A, etc and irrespectable of workers rights, all those have much lower bargaining power for high wages in the EU than in the US, due to market supply/demand.

Otherwise there would be no investments in the EU and nobody would be making stuff here at all.

30%? You think they pay 30 percent US wages?

You might be thinking of two very different things - in the US wages are higher but social benefits that employers pay for are lower. In the EU you might pay a lot more per worker than his wage since you pay much higher taxes.

Over the past 10 years the us dollar has gained in strength a lot compared to other countries. Perhaps if we want to bring this stuff back into the country the currency needs to be devalued. I assume it will be naturally devalued over time, even compared to other countries, considering the national debt.

A friend of mine is a phd post-doc in the EU doing some fancy research I don't comprehend with lasers that has applications in the semi industry. He's paid about 40k Euros. His peers form the US he meets at conferences working in the same field make upwards of six figures, over 3 times as much, for the same work. So yes, I'd say my math was about right on the money.

If you wanna hire skilled workers in the US it'll cost you 2-3x more than in EU, taxes and all included.

Healthcare being outrageously expensive in the US and being borne largely by employers doesn’t seem to help either. Ironically, I see it as a negative for the employees as well since it forces them to be dependent on their employer in the event of a medical situation.

Which is more expensive for an employer? US healthcare or EU workers' rights that include 25+ paid vacation days, unlimited paid sick leave, difficult to fire, etc while American workers don't, but get bigger wages instead?

I don't know the exact answer, but what I'm trying to say is that there's no free lunch for employers in either location, but I'm pretty sure they do their homework on this and they know the exact answer when they decided to open up shop somewhere.

If I had to guess, I’d keep my finger down on US healthcare because it’s just so expensive. When you don’t pay your employees that much, sick time isn’t as expensive either, and US workers in the actual industries we’re talking about tend to get at least decent treatment (for the time being at least); it’s the wage-slave, burger-flippers and laborers we’ve deemed as truly disposable.

Sure, but we're not talking about burger flippers at McDs here.

Those definitely cost more and have better working conditions in the UE than the US, but that's OK for McD, because the burgers flipped in the EU by the costlier workforce don't get exported worldwide, but get consumed locally and therefore all this is reflected in local prices for local consumers which have no competition from imports from abroad.

But when we talk about skilled workforce for the semi industry and the products being fungible and exported worldwide, the equation can start to flip.

Another fair point, but I would think the semi industry (at least the segment that TSMC plays in) would be about the most advanced, least fungible good in the history of the world; they can literally only be made by that company. It’s somewhat akin to commercial airliners - despite Boeing occasionally forgetting to fasten the doors to the fuselage, they have no shortage of orders because there are only two companies that can build these planes, with I think much of the assembly done in the US or EU. Essentially these things sit at the very apex of the world’s current manufacturing capability.

>at least the segment that TSMC plays in) would be about the most advanced, least fungible good in the history of the world; they can literally only be made by that company

Not really. The margins Nvidia earns designing their chips are far higher than what TSMC earn fibbing them. TSMC actually has coemption. Samsung are only one node behind which is just enough to drive price competition down. Meanwhile Nvidia has no competition. You wanna be where Nvidia is, not where TSMC is.

OF course, this might change in the future either way.

Not negating your anecdotal evidence but this is not even a fair comparison. Is 40k post-tax? Where does your friend in the EU live? Germany? Or Italy? Dresden or Torino? Where do his US peers live? Arizona? Or LA? Worlds of difference. Is it 3 figures but below $150k? Also, salary is _not_ the only cost of having an employee. In the US actual employee costs vary between 1.5x and 2x salary. What is the equivalent in the EU?

The average salary for public researchers in France (only PhDs) is 47 k€ per year. Most PhDs end up in public research, as the private research sector is very small.

This is gross salary, on which you need to deduce social contributions (social security, retirement, unemployment insurance, and others) and usually reduces by 20% the gross salary. Then you get to pay income taxes in this net salary, which is around 10% of the net salary.

Note that sick leave is not paid by the employer, but by social security (the employer can complement). Social security here is the public healthcare and retirement system.

I am a software developer, I've relocated from US to France within the same company, and was paid 3 times less in the same role. As the private sector has extra contributions before gross pay, I estimate the employer cost is around 2 to 2.5 times lower in my case in France than in the US.

It is now also easier to fire people in France (probable the same in other EU countries) due to recent changes in employment law.

Each EU country is going to have a slightly different pay structure, but that gives you some comparison basis.

So overall I think the 2-3x ratio in skilled worker cost in EU vs US is a good estimate.

no way in hell a postdoc in the US is making 6 figures. Postdoc salaries are typically 40-60k

Depends on the EU country. Phd students earn more than 40k during their studies in NL, and a starter salary for a phd is 80k or so. Add the social security contributions on top, it's closer to 100k Euros for the employer.

40k would be high for Greece ir Portugal though. I guess it's the same for US, depends where you are

The more worker’s rights the less work?

Sectoral bargaining agreements are less problematic wage-wise than employer unions.

http://web.archive.org/web/20240225085540/https://www.econom...

If it moves, tax it.

If it keeps on moving, regulate it.

If it stops moving, subsidize it.

- Ronald Reagan

holy shit what a misquote. For anyone that wants the whole quote:

> Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

Even that expanded quote doesn't entirely make it clear he was criticizing the government

Here's the entire thing

https://www.reaganlibrary.gov/archives/speech/remarks-state-...

It's Ronald Reagan though. Should be clear to most with a very elementary understanding of US politics what he's saying.

Most people wouldn’t really have that understanding.

Who else other than government has the power to tax, regulate, and subsidize tho? I don't think it's much of a leap that it's a negative criticism on government bureaucracy.

Since Reagan was head of the government it would be easy to draw the conclusion he was saying "this is what we do" (we the government with him as the head). That would not be a criticism. IMO, to know it was a criticism requires more context.

Yeah it's completely obvious what the context is.

The government taxed and regulated this and other industries to the point where industry moved overseas. Only now they're seeing the peril of that overreach, and are trying to subsidize it to bring it back. Only, they're so inept that they're forcing the use of their cronies (the unions, etc) to get the work done, and, in comparison to Japan, it's a disaster.

The quote is on target.

Knowing the US modus operandi this was all a ploy to bleed TSMC while their own indigenous fab company (Intel) catches up.

That seems like an incredibly stupid idea if you know that Intel themselves messed up their leadership position in this field and you can't just magically steal the secrets to success here.

So TSMC are getting paid by the Japanese government to build the fab, some local big tech-related companies have also invested and partnered, and Japanese workers are less 'truculent' aka more easily coerced, than Americans.

I mean, companies should weigh the frictions of doing business in different regions, but it can't be the only consideration when it comes to global policy on where things are made and why.`

China's missiles can Taiwan, they can hit Japan just as easily.

Some elementary geopolitics may disagree with you.

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