155 Comments

Very good piece and I think it goes well with the 'mass transit should aim to maximize ridership' argument. I've often thought one of the reasons our brick and mortar state and civil infrastructure struggles compared to other developed countries isn't just about taxes/willingness to pay for it. It's that our politics seems to ensure that a public service or subsidy is never just about its first order purpose. Like unionized jobs and diversity and environmental justice (whatever that is) are all well and good but at the end of the day the purpose of trash service is to collect the trash and put it in a landfill.

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A good example of this is the California High Speed Rail project. It is delivering 'high quality jobs', and as a by product will also deliver a high speed train service from San Buttphuck to Los Tubbleweedo.

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Every Californian felt this comment in our bones.

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Adam Ozimek has a great line about this: "If public goods matter, then public costs matter."

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Mar 13, 2023·edited Mar 13, 2023

In particular, "transit-oriented development" was the tail wagging the dog of transit planning in many cities for a couple decades, and now I never really hear about it any more. Lots of ridiculous decisions routing billion dollar trains by developable open fields and parking lots rather than, you know, where riders already are.

I suspect that it has something to do with "build the train where the people are" being a less compelling conference presentation than one with a bunch of pretty watercolor renderings of hypothetical new apartment buildings (to be built with further public subsidy and two parking spaces per unit).

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You also run into the issue wherein running the train where people are will inevitably engender many angry people. the farm fields can't file CEQA appeals or claim that microvibrations will kill elementary school kids, but the residents of Beverly Hills very much will.

My bigger grip with TOD is when cities (1) don't actually do the development so it just becomes parking lot oriented transit or (2) do not try to capture the wealth generated by finishing the train and maximizing the use of land next to the stations. BART realized they were sitting on some of the most expensive undeveloped land in the country like 10 years ago and has finally started putting towers on their bay area station parking lots, but for like 40 years they just let that money rot.

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Trash should be recycled! Landfill is only a last resort

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My brain kinda wants to read this as a joke, but maybe not. As far as I can tell, almost nothing, as far as consumer level trash, actually makes any kind of sense to recycle. Well operated, presorted, aluminum and maybe glass recycling programs maybe offer a marginal operating return.

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Corrugated cardboard is also profitable to recycle (at least in my city) except the city government refuses to roll back single stream recycling so 90% gets contaminated and then landfilled. The city now asks people to take corrugated cardboard to the recycling center and deposit it in a cardboard only container. I don’t know anyone who actually does it though.

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Is anything recycled? I thought we were just dumping recyclables in China until they closed a few years ago.

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founding

Plastic, yes. But cardboard, glass, and metals have been valuable enough to actually recycle.

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According to the EPA, about half of US trash is not sent to landfill. About a quarter is recycled and the rest is composted, burned in waste-to-energy plants, or used as feed.

https://www.epa.gov/facts-and-figures-about-materials-waste-and-recycling/national-overview-facts-and-figures-materials

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deletedMar 13, 2023·edited Mar 13, 2023
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Call me crazy, but I think that the party that wants government to do more stuff, should be the same one that makes sure it delivers that stuff efficiently.

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Maybe make CA work first then we'll talk

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That's certainly part of it.

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Progressives seem to be making a habit of trying to backdoor their policy preferences. This is an example, climate change via COVID relief was another. It seems a very dangerous tactic, which could discredit government action altogether and to some degree even the rule of law.

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founding

Student loan forgiveness is another one. As is the expansion of "prosecutorial discretion" that just stops enforcing laws ranging from the important (DACA) to the trivial (public transit fare evasion). These things chip away at the foundations of society and they worry me.

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This is very much a case of presentism. American politicians have always attempted to back door policies they can’t pass openly, since 1789.

And you Brits were at it a century earlier, you precocious parliamentarians, you!

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Mar 13, 2023·edited Mar 13, 2023

>"Congress' dysfunctional legislative stagnation?" Semiconductor subsidies isn't like DACA, where Congress hasn't done anything. Congress actually appropriated money for semiconductor manufacturing. Should Congress have been more specific about the qualifications for subsidies so the Biden administration couldn't write them? Yes. But Congress actually did something to address an urgent need. They just didn't do what the Groups want.

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founding

Congress did do something on DACA (and immigration in total): They considered it, debated it, and decided not to pass a new law.

Obama didn't like that outcome, so he unilaterally decided not to enforce existing law in violation of his Constitutional duty to "take care that the laws be faithfully executed."

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Mar 13, 2023·edited Mar 13, 2023

Executive enforcement priorities are nothing new. The U.S. Attorney's Office for the Southern District of New York has long been the country's premier financial crime enforcer, but in part because of its heavy investment in financial capabilities, it basically doesn't prosecute child porn, unlike most USAOs. (The state picks up the slack in theory.) That's not a partisan prioritization, but it's a significant prioritization nonetheless.

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founding

What Obama did went far, far beyond "enforcement priorities" though.

There was a Rose Garden signing ceremony, and application process, a new infrastructure to administer. It was heralded with language such as "if Congress won't act, I will". Calling it merely deciding on enforcement priorities is the definition of a motte-and-bailey fallacy.

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It's the unitary executive in action; but in any case, I was referring more to "progressive prosecutors" than DACA. You can argue that they're prioritizing the wrong crimes, but what they're doing isn't categorically different from what lots of prosecutors do. All DAs are politicians.

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Mar 13, 2023·edited Mar 13, 2023

You lose me on that last sentence. The filibuster itself is a phenomena of the electoral incentive to NOT ever vote on anything. The reason they can get away with it is the progressive era SCOTUS' boundless deference to legislative delegation and the administrative state. The solution is for SCOTUS to stop letting elected officials use the bureaucrats and the courts as a smoke screen. Then the filibuster recedes or disappears as it's electoral utility diminishes.

"Help us Justice Gorsuch, you're our only hope." ~ Princess Leia

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I'm with Coffin on this one. If you got rid of the filibuster tomorrow it would help on the margins of legislative dysfunction, but within a few years we would all realize it was a symptom not the disease. I don't see how you can look at WHY the filibuster exists (51 senators won't agree to get rid of it) and conclude anything else.

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The more I keep hearing about additional strings being attached to CHIPS Act funding, the more convinced I become that this will ultimately be seen as a failed policy. The critics will be proven right in their argument that the US government is an inefficient and ineffective capital allocator.

The US already has massive structural disadvantages in chip manufacturing. I’ve repeatedly seen this Dec 2022 WSJ article about TSMC’s struggles to create an Arizona plant [1] cited as proof that we’ve largely lost the capacity to build and operate these facilities.

> High costs, lack of trained personnel and unexpected construction snags are among the issues cited by Taiwan Semiconductor Manufacturing Co. as it rushes to get the north Phoenix factory ready to start production in December 2023.

> TSMC executives have said it isn’t easy to recreate in America the manufacturing ecosystem they have built over decades in Taiwan, drawing on local engineering talent and a network of suppliers including many in East Asia. Mr. Chang said the cost of making chips in Arizona may be at least 50% higher than in Taiwan.

> [TSMC in letter to the Commerce Department listed six problems that have emerged], including federal regulatory requirements, “unexpected work developments” during construction and additional site preparation, all of which it said raised costs.

So further increasing the cost and regulatory burden on deploying CHIPS funds only further exacerbates our structural deficits in chips manufacturing. If anything we should’ve gone the opposite direction in removing regulatory hurdles. Eg, exempted them from NEPA review and immigration quotas. Rather than chaining them to overly-expensive domestically sourced materials, equipment, and labor, the firms should be incentivized to make economically rational decisions regardless of the source (excluding China dependencies).

Hence, I worry that in 10 years we’ll all look back on the CHIPS Act as accomplishing little at a high expense, and thereby proof that the US government shouldn’t take an active role in industrial interventions.

[1] https://www.wsj.com/articles/tsmcs-arizona-chip-plant-awaiting-biden-visit-faces-birthing-pains-11670236129

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There's a major semiconductor manufacturer here in Boise, but it still caused the state's senators to vote against the CHIPS Act due to complains about "$200 billion dollars in unrelated spending". Maybe I should have paid more attention to that.

https://boisedev.com/news/2022/07/26/idaho-micron-chips-2/

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The funny thing is, those of us who have worked and operated in jurisdictions with a ton of industrial policy money up for grabs *immediately* recognized that piece for what it was: a plea for subsidy slops!

There’s a time-honored tradition of saying “your jurisdiction sucks at X, because of Y and Z (both overstated by an order of magnitude), so to keep doing business here you need to subsidize us to cover those failings.”

In China, that’s getting a couple people in the Investment Bureau to uncritically accept your figures and write a memo that they fire off asking the county or city government to give you land usage rights for free or give you a tax subsidy. In the US it’s convincing an uncritical WSJ reporter to splash how horrible things are across the front page for every Senator to see and feel pressured by.

Amusing how various people have to take turns pretending to fail to understand this when their ideological leanings require it.

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Samsung isn't having a difficult running their two plants in Texas. They are building them out very fast.

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Intel has been losing ground to TSMC for nearly a decade. Intel is even using TSMC to manufacture some chips as it struggles to reorganize itself. [1]

Intel is now in a do-or-die attempt to separate its design and manufacturing, hoping that its manufacturing arm will eventually become competitive with TSMC for outside customers. [2] Should that fail, it will go the way of AMD and rely entirely on TSMC for future production. Just like AMD’s Global Foundry spinout, Intel’s manufacturing division will be sold so that it can focus on lower-margin, older generation architectures to extract some value while it slowly wound down.

The tech analyst Ben Thompson has been following Intel’s struggle and warning about its inevitable slow decline since 2013. [3] His Jan 2022 article, “The Intel Split”, covers a bit of the history about how Intel became complacent, notably its miss of mobile. Mobile chip architecture has matured and is now moving into the datacenter (Intel’s cherished turf) due to superior energy efficiency and lower costs. Thompson goes on to describe the necessary gamble that Intel is taking in separating design and manufacturing, as well as the risks involved.

And now Intel’s recent earnings show that its revenue and margins are dropping faster than they forecast. [4] Hence its runway to complete this reorganization is shortening. In contrast, the fabless AMD’s recent earnings and forecasts are improving. [5] So it won’t be long before investors demand that Intel exit manufacturing if it can’t soon demonstrate some success in their reorganization strategy.

[1] https://www.eetimes.com/intel-will-rely-on-tsmc-for-its-rebound/

[2] https://www.wsj.com/articles/intel-ceo-pushes-to-further-separate-chip-design-production-arms-11665523857

[3] https://stratechery.com/2013/the-intel-opportunity/

[4] https://www.bloomberg.com/news/articles/2023-01-26/intel-tumbles-after-forecast-suggests-its-comeback-is-far-off

[5] https://www.bloomberg.com/news/articles/2023-01-31/amd-gives-robust-forecast-helped-by-gains-in-server-market

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Intel has been losing ground to TSMC because of a series of terrible management decisions surrounding lithography processes and their investment in David’s current employer. It has fuck-all to do with their ability to build and operate a fab.

And it looks as if they’re going to claw back from it in the end.

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I never claimed anything close to “there simply being NO competency at fab-building in America.” Instead, I simply explained the US’s structural disadvantages in this industry relative to Taiwan as highlighted by TSMC’s struggles and costs in building manufacturing facilities in Arizona. It is foolish for us to further burden our public investment in our domestic industry for superfluous secondary political wins.

And higher costs, lower profits matters. It will limit both the results of public funds and the extent to which private funds crowd in. If all we get out of the CHIPS Act is a few exorbitantly expensive to build and unprofitable fabs, then it will be seen as a waste.

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The single biggest structural disadvantage is that the US is not, unlike Taiwan, the ROK, Germany, or Japan, in the business of surreptitiously transferring 4-6% of GDP to producers in the name of “export competitiveness.” Let alone the PRC’s 10% figure.

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It’s there in the desert! People should stop reading the Journal and go visit a plant!

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Yeah I literally just drove by one when I was seeing family. This all seems a little bit academic regarding “industrial policy” rather than what is actually happening.

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Agreed

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Biden is a big sloppy coalition-friendly guy running a big sloppy coalition of a party. It's part of why he's the right man for the job right now.

So when a whole queue of allies comes through the Oval Office saying, "we want to do this and this, plus this and this, along with this and this, etc.," he's going to smile and say, "go get 'em!". He likes to play Santa, and passing the IRA gave him a very deep sack.

So, you may be right on the merits, but asking him to prioritize is going to go against his grain. Asking him to throw unions to the wolves, or kids or women-owned businesses, is asking him to stop being Joey from Scranton.

You're probably better off addressing this appeal to his consiglieri, like Zients, or Brainard, or Raimondo. Maybe if you name-check them in your piece it'll get on their desks.

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founding

Matt, seeing the actual functioning of progressive government: "I found this all a bit surprising." Really?

Some of us find none of this surprising. When someone tells you what they believe, you should believe them. Just read through the first-day actions and the rationale provided by the Biden Administration[1]. Biden did not campaign as a pragmatic, neoliberal centrist and he hasn't governed as one either. I still remember Matt being "surprised" at how Biden moved LEFT after securing the nomination. I guess hope springs eternal for some.

The only part of the government not yet taken over by the wackos is the part that worked effectively to avoid a coordinated bank run. Nice job by Janet Yellen, the Fed, et al. If the Bernie / Warren wing of the part gets control of the financial side of the party, then God help us all.

[1]. https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/20/fact-sheet-president-elect-bidens-day-one-executive-actions-deliver-relief-for-families-across-america-amid-converging-crises/

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I find it vaguely hilarious that you look back at the Biden admin thus far and see "taken over by the wackos." There is stuff I agree with in their policy and stuff I don't, but if you look at this policy regime and conclude, "yep, definitely taken over by the wackos," I genuinely think that you have hit a point where your ideological priors are hampering perspective. Even the CHIPS Act stuff, while irritating, is being done in ways that I could make a case for. Good policy? Not really, in my opinion. But "taken over by the wackos?" Give me a break.

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founding

Yours is a disagreement but without examples.

Matt's article shows how the implementation of laudable goals is being hamstrung by what I affectionately call "the wackos". HSR is dead in this country for another 20+ years because of how those same groups have hobbled the California project with delays and huge cost overruns. I predict similar failures as the climate spending approved by Congress works its way through the captured bureaucracy.

A wise commenter said recently: "If you will the end, then you have to will the means". Well, Congress has willed the end through legislation and (some) compromise. I think the evidence is clear that the Biden Administration is more concerned with checking all the coalition boxes -- unions, racial equity, endless environmental reviews, forgiving student loans, etc -- than with effective execution.

I believe ineffective execution -- not the filibuster, not lobbyists, not Republicans -- is the biggest impediment to progressive goals. So anything that pushes back against those who bring their pet causes to every single government action deserve to be called wackos.

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Yes - nobody but Democrats are to blame for the HSR debacle in California.

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founding

Democrats control all parts of the State Government in California. Every executive branch position. Dominate the legislature, and have for decades. In current legislature, they outnumber Republicans by 94-26. In no way is the situation around this government project the responsibility of anyone else.

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I don't know if you thought I was being sarcastic, but I genuinely agreed with your comment.

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founding

Sorry about that. I mistakenly assumed sarcasm.

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Mar 13, 2023·edited Mar 13, 2023

See I agree with the "taken over by wackos" take. The wackos are the ones who are happy to get behind this kind of incoherent, "there are no trade offs", magical thinking version of reality. There are plenty of hard ideologues that I aggressively disagree with, who are not wackos. "Not wackos" understand that they have to call for trade offs that advance their values, and that a hodge podge of misaligned bullshit like this is in no one's interest over time.

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If you want technocratic governance you need precise technocratic legislation. Any time you give broad implementation power to administrative bureaucrats myopic capture is inevitable.

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And, it's important to emphasize, this does NOT mean that every member of Congress has to be a technocratic whiz.

They just need a deeper, more competent bench of Congressional staffers who have the expertise and the ability work hand in glove with agency experts to draft good legislative language.

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Mar 13, 2023·edited Mar 13, 2023

Yep. It's not even like I think the administrative state should disappear or something. I basically just think administrative rules changes should require a congressional vote. Especially when they're trying to effectively hang entire new regulatory programs on like, a single sentence fragment of a single subsection of some bill that passed in 1972 or whatever.

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Mar 13, 2023·edited Mar 13, 2023

Biden ordered all federal agencies to implement DEI policies and training that "coordinate the implementation of equity initiatives and ensure that their respective agencies are delivering equitable outcomes for the American people." And he is attempting to implement similar policies in the private sector via ESG investing rules for retirement plans (that Congress just repealed). Are you sure the wackos aren't heavily involved?

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founding

Was someone trying to *mandate* ESG rules? I thought they were trying to *allow* them?

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Biden repealed a Trump regulation that heavily discouraged ESG investments in retirement accounts for the sake of ESG. But if Biden's regulations take effect, social pressure, combined with the fact that investment firms charge higher fees for ESG investments, will lead to ESG being the norm rather than just an option.

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Oh no! The government is getting out of the way and creating a free market? Regulate them!

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I'm not in favor of the government duping people into paying higher investment fees or encouraging fiduciaries to skirt their legal obligations chasing a social fad, but you do you.

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I found it surprising for the simple reason that the bill was passed with the support of 17 Republican senators (if I'm counting correctly). Evidently those senators weren't expecting the executive branch to attach so many strings; if they were, they would have written the law differently! If the people who wrote the law were surprised, I think we're allowed to be surprised too. (Hopefully, going forwards, these type of laws will be written to restrict such executive action.)

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I don't have an original take here. This is all just a predictably text book example of what happens when the state creates barriers to productivity in the name of funneling backdoor subsidies to favored labor constituents. Stuff doesn't get produced to the detriment of everyone not getting the hand out. There's literally no legitimacy to this type of market interference.

The only rationale at all for allowing this kind of bill is the national security one that happens to go, "If we are making these vital defense components in country then we don't have to worry about the CCP bombing Taiwan back to the stone age.", But if that's the point, the point is to make the chips, everything else is graft.

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An angle of this that's underrated is public investment and proactive shaping of our national *digital infrastructure*- not just doing stuff with an obvious hardware connection, like broadband, but finding a way to support ongoing, world-leading digitization of banking, healthcare, education, etc. Sustained American economic vitality and equitable prosperity depends on having strong digital foundations in all the sectors that matter. We certainly can't tackle moonshot issues like breakthroughs in fighting cancer or creating a "self-driving wallet" that democratizes smart financial management without the world's best digital infrastructure. This is why we do things like pour money into promoting adoption of electronic health records and the health internet. Sure, the market can do it; but for many issues, there's too high a social cost to waiting, or there are market failures. The US also has a dangerous level of path dependence / stickiness in outdated "good enough not to be a burning platform but objectively weak by 2023 standards" technology stacks underpinning a wide variety of critical national domains such as banking and payments —in part ironically because we were so prosperous early relative to other nations. This has long allowed other countries to leapfrog our digital infrastructure and continue to lap us regularly in notable cases like instant/real time payments or digital identity. We can't stay the center of breakthroughs and ensure breakthroughs target the most urgent social priorities without a much harder look at "digital industrial policy" across policy domains.

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It's true that we can now look abroad for models of the future and find it being done better in various ways. Just like with building metro systems, we'd be wise to outsource.

In this case, we could hire Estonia as our IT department and make real improvements.

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Estonia's place in the digital modernization imaginarium is quite something!

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"Imaginarium" sounds like you think it's unrealistic hype?

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I haven't looked as closely as I'm sure many in digital government have in the U.S. and can't offer an educated evaluation. I'm just fascinated by which case studies or particular research papers break through to become commonly cited / memes, vs. which don't.

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Estonian, Finnish and Hungarian are all members of the same linguistic group, the Uralic language family. Is there some way for the rest of NATO to encourage more cultural interchange among Finland, Estonia and Hungary, in the hope that some of the good habits and influences of the Finns and Estonians will rub off on the Hungarians and shore up Hungary's commitment to the democratic Western alliance?

Also, most of the other speakers of Uralic languages are in Russian-occupied parts of Siberia, so having a more self-conscious Uralic language group identity that's anchored in the prosperous West could be helpful in finding a wedge to drive into Russia and splinter it apart by encouraging Uralic separatism within the remnants of the Russian Empire.

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"This is why we do things like pour money into promoting adoption of electronic health records and the health internet"

Does anyone actually think this was done well?

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It's of course easy, from the sidelines, to criticize and identify ways our electronic health records policy could be done better (there's much room for improvement yet to come!). But the basic real-world answer to your question is, better late than never, and it's too soon to say.

The electronic health record interoperability and anti-blocking rules just went into effect last year, and the market is only just beginning to digest the transformative potential of these rules. They should be cemented into place with legislation by Congress ratifying the agency rules, to prevent backsliding by future administrations or legal challenges, but it's a pretty good start.

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founding

The Obama administration spent $27B on electronic health records in the 2009 "stimulus" bill. This didn't just start last year.

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Yes, but the culminating cap on EHR policy -- the anti-blocking rules that make EHR interoperability meaningful, not just tinkering around the edges, or a siloed patchwork of competing, proprietary, "closed garden" health record systems, just (finally) took effect last year. Without strong anti-blocking enforcement and meaningful interoperability standards, the full potential of EHR technology will not be realized.

https://www.ahima.org/news-publications/trending-topics/information-blocking/

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I suspect there will come a day when people will be shocked by the idea that medical records *weren't* always digitized. Now one can always criticize the government for how they do it and being more efficient/effective is always to be desired, but I would hate for anyone to look closely at how efficiently/effectively I manage my own household.

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"A new report from the National Academy of Medicine is revealing – on an average, nurses and doctors spend 50 percent of their workday treating the screen, not the patient, and the increased work burden associated with EMRs is one of the factors for physician burnout.[10] A study of emergency room doctors revealed that putting information into the computer consumed more of their time than any other activity. Using a “click” of the computer mouse as the standard of measure, a doctor needed to make 6 clicks of the mouse to order an aspirin, 8 clicks to get a chest x-ray, 15 clicks to provide a prescription, etc., Over 40% of a typical 10-hour emergency room shift was devoted to data entry and 4,000 clicks of the computer mouse.[11] Immense information on EMR results in high (data) noise to (clinical) signals ratio. "

https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7043175/#ref10

Have they actually been shown to do anything other than improve ability to bill?

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Okay...compared to what? How much paperwork were nurses and doctors doing in the pre-digital era? It's not as though there was no administrative work that needed to be done in medicine before 2009.

And as a patient, I like being able to log into a website and view test results, make appointments, and send my doctor messages. It's convenient.

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It's a huge time suck compared to the pre-digital era.

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You can digitize records all you want, but HIPAA prevents easily sharing them between hospitals and other physican practices.

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That's not true at all. HIPAA permits sharing without restriction for treatment, payment and operations. The government gave the carrots in the teens and as Allan said now we are seeing some sticks. Progress is stop and go at times but very, very real.

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My software friends who worked on medical record digitization tell me HIPAA was a pain in their ass and eventually led them to abandon their project.

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founding
Mar 13, 2023·edited Mar 13, 2023

This is true. If you have records on your laptop, and it is subsequently lost or stolen, then you and your company have a big legal problem on your hands. Requires lots and lots of security protocols -- similar to having a security clearance.

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Progressives: Detach health care from employment!

Progressives: Attach child care to employment!

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One thousand workers died building the Erie Canal. That seems tragic until you remember that, in 1819, the median European worker was undernourished. The European grain abundance which the Erie canal inaugurated saved far more than a thousand lives. Of course, it’s natural to want both safe canal construction and European grain abundance. If a 3% increase in construction costs could have saved 500 workers, that would probably have been worth it. The problem with visionary projects is you never know exactly where the cost tipping point is at which the whole project collapses. The California Pacific very nearly went bankrupt building the transcontinental railroad, a smallish increase in costs might very well have delayed the transcontinental railroad a decade. Recently, California’s high speed rail project really did collapse under the weight of costs. I strongly suspect many tunneling projects could be built much more cheaply at the cost of a couple dozen lives, eg the second avenue subway line and a new tunnel under the Hudson.

The good news is many young men want to take physical risks to build wealth and status. A healthy society finds productive, pro-social outlets for that impulse. Let the boys build!

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Mar 13, 2023·edited Mar 13, 2023

I think the argument against your last paragraph is that young men - and workers generally - are systematically incapable of evaluating risk in a way that would allow them to perform a rational cost-benefit analysis even in principle.

Usually people have made various reliance commitments to a job before they see what it's actually like "on the ground" and a determination not to lose one's job (notwithstanding CBA) plus the lack of awareness of actual working conditions and risks ex ante can really fuck with labor markets - in turn, I think this is why it's probably good on net that OSHA exists: notwithstanding a lot of low-hanging fruit in industrial safety, there's reason to believe that it wasn't being picked (part of this, no doubt, is a combination of dead men telling no tales and the fact that due to the very high practical information costs about safety culture on top of reliance / transaction costs as well as humans just being bad at evaluating risks, we have attenuated market signals with the only real "stick" enforcement mechanism is private suits against an employer by the injured or their estate, which is a crapshoot at best and expensive no matter what for the plaintiff and/or their attorney. I presume we'd agree that civil litigation is better than nothing, but it's *very* far from perfect.).

Likewise it's easy to envision a situation in which the lack of safety measures is a negligible cost to an employer but still not worth doing because the perceived alternative to a worker considering the job is unemployment due to a labor glut[1] even though the implementation of the measure would obviously be a huge surplus-generator under any reasonable figure for the dollar value of a human life. (Although the last point is highly contingent on the ratio of capital to labor in general and local labor market mobility as well.).

I'm not saying that I don't think risk aversion may have gone too far, but it's also true that the Triangle Shirtwaist fire (and the 2012 Dhaka fire), tens of thousand of Turks living (and dying) in inadequately earthquake-proofed buildings, phossy jaw , demands to lick radium paintbrushes, the asbestos litigation crisis, black lung disease, and the constant pressure by employers to improve productivity metrics by hook or by crook are all actual things rather than fantasies. The Turkish tragedy in particular is suggestive of a combination of systematic CBA failures in a way that warrants government coercion (the absence of which in the form of waivers by Erdogan seems to have been a contributing problem): it's not clear the many residents were aware of the inadequate construction standards, it's not necessarily true that they had a lot of great short-term alternatives to having a roof over their heads, even if they *did* have this information we'd expect many of them to over-discount the risk because that's what humans do, and yet in retrospect it seems manifest that whatever the marginal cost to earthquake-proofing construction, it probably pencils out at very low numbers of deaths for virtually any kind of construction using, e.g., a $10mm value of human life.

[1] This seems like it probably accounts for a lot of the early 20th Century craziness. One of the insane things I took away from the ACX Book Review of "Down and Out in Paris and London" is this notion that England was overrun with roving bands of able-bodied men living on charity. Talk about too much labor relative to capital!

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Using a $10M value for a human life in Turkey is off the charts high. The average salary in Turkey is under $500 USD a month. $10M represents a workers wages for 168 years. The figure should never be greater than 35 or 40 years of average wages in the affected industry- what a person makes in a lifetime

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I would put the value of an American worker at maybe $2.5M. Turkish workers a fraction of that. It’s totally the case that the riskiest work should gravitate towards the poorest places-- it is optimal for risks to be taken by those with the most to gain and least to lose

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I'm using $10mm as the value that I recall Mankiw indicating people appeared to place on their own lives based on revealed preference to estimate surplus here, rather than wage-income. While I suppose we *could* use wage income as the value of a human life, I would submit that that also puts us in the position of having to come up with some kind of epcicyle to explain why Americans shouldn't be allowed to hunt Turks for sport for a price of $240k or so (or various other variations on that theme that we can stipulate everyone would find extremely distasteful and probably not endorse as a policy matter).

Separately, you seem to be one of the most hardcore-utilitarian posters on here, particularly evident when it comes to criminal justice issues. Isn't the idea of non (or at least very low) differences in between-person moral patiency essential to that worldview? That seems difficult to square with a policy stance that measures such patiency in nominal dollar-output.

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the closest thing to utility black holes i’ve seen in the actual world are down’s syndrome babies and other people with serious congenital conditions. huge investments of resources can create very little happiness. spread that money out over a bunch of healthy working stiffs and you could create many more hedons

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I think a lot of people who have children or other family members with genetic differences from the norm would disagree with you on this.

And if you're going to go around labeling people as "utility black holes" that society should pull the plug on, there are plenty of with normal genetics who would just as easily qualify.

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i think i’m being consistent. the life of a healthy, american worker is worth more than the life of a starvling in the developing world because he is likely to experience more pleasure and less pain and to do if for more years

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Do you think average preference satisfaction / hedonic potential or repugnant-conclusion-style total hedonic potential is the relevant metric to maximize?

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all hedons are equally desirable does not mean all lives are equally valuable. it means lives will range in value according to hedonic potential

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Mar 13, 2023·edited Mar 13, 2023

Okay, so I think a potential difference here is that you're conceptualizing these deaths or injuries as forgone potential positive hedons, whereas I think they're more in the vein of negative hedons subject to loss-avoidance in a way that would (for a utilitarian) generally be considered patient-invariant (i.e., a Turk's stubbed toe creates as many negative hedons as an American's).

I *think* the case more negative-preference-avoidance as the source of the $10mm is somewhat stronger (although it could well be country-variant. I believe the estimate was for Americans and life has certainly been held much cheaper in other times and places) which would suggest a similar precautionary calculus adjusted for the value of human of life in Turkey, although if you naively assume 10mm for both countries using your numbers for wage-income (which to be honest I think leaves out a lot - interpersonal utility comparisons are famously the Achilles heel of utilitarianism - but at least is numerically tractable) you'd still have a -12.5mm vs. a -10.25 mm comparison that would likely favor just building safer buildings.

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“I strongly suspect many tunneling projects could be built much more cheaply at the cost of a couple dozen lives.”

Your suspicions are flat-out wrong, with basically no empirical support at all, but it *is* telling that the literal first button you reach for is “end workplace safety measures,” rather than “fix contracting modes,” “realign design consultant incentives,“ “enhance eminent domain powers,” or “reduce adversarial legalism in project planning.”

When each of those things has an impact an order of magnitude larger than that of workplace safety regulation.

I and others with vastly more industry knowledge than you have told you this repeatedly.

But you don’t want to admit that the single best thing we could do for construction productivity would be to follow Shakespeare’s original admonition, rather than applying it to construction workers, so you don’t listen.

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In the $1920s, a 7.8 mile mainline tunnel was built in snowbound wilderness in washington state for $14 million. That’s basically $250 million today, or the cost of a couple freeway interchanges. A naive observer would expect that tunnel boring machines would reduce cost. Yet tunneling has become massively more expensive. We need to build things again. Get your facts straight!

https://www.historylink.org/file/10705

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GASP. Really? We need to build things? Like I haven't devoted vast amounts of discussion to the topic of project delivery here and elsewhere?

I'm getting to the point where I simply disbelieve that you're a lawyer at all. You seem not to understand that correlation does not equal causation, the concept of a confounding factor, the word multivariate, or literally anything else that should go into the making of a successful case. And thus I've yet to see you actually do anything that could even charitably be described as "making a case" in comments here.

Mostly you just regard the lives of people who don't have desk jobs as expendable in the name of covering for your innate intellectual laziness and incomprehension, and when people who have subject matter expertise call you out on it you deflect and cite simplistic examples with no attempt to prove their relevance.

Prove your original contention that "many tunneling projects could be built much more cheaply at the cost of a couple dozen lives," or at least have the decency to sit down and stop revealing how profoundly ignorant you are every time you open your damned mouth.

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this is just sloppy reasoning. i reject causation on strong, determinist grounds. correlation is all there is and it matters. deeply

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Intellectual laziness it is.

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To restate more explicitly what I said above, killing all the lawyers would *absolutely* improve project timelines by a vastly larger margin than allowing the construction workers to be maimed and killed in droves.

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Having a high brow piece about industrial policy is great. But I can’t get over my shock of the revelation in the first paragraph: it’s the official policy of the federal government to mandate that companies work only with people of a certain sex and skin color ?! How on earth is that constitutional? Who suggested this and how were they not laughed out of the room (or better yet , fired)? Why is racism so mainstream now that MY can mention this incidentally as a matter of fact and not even have this be a central point in his piece?

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It's not a mandate that they work only with women and minority owned contractors, it's a mandate that they try to work with some women and minority contractors.

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Mar 13, 2023·edited Mar 13, 2023

That’s a difference in degree. It still gives advantage (or disadvantage) based on race and sex. Such policies shouldn’t exist. I hope that in the short term the court strikes it down but that in the longer term the country will reach the point that such ideas are beyond the pale and not a single politician will dare suggest them, much less having the WH implement them. It’s the kind of stuff that will mortify our grandkids. How are people so blind to the absurdity ? To the sheer affront to human dignity and basic principles of good governance when the government asks you your sex or race to determine if your business is eligible for a subsidy?

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Mar 13, 2023·edited Mar 14, 2023

THPacis, why do you hate lesbian disabled veterans so much? /s

Seriously though, during the 18 months I was a federal contractor, I saw this dysfunction firsthand. My contracting company had grown slightly too large to qualify for the re-compete of an Operations Center staffing contract as a "small business" (<$30M), and when we heard that the contract had in fact been awarded to a basically non-existent disabled veteran, minority owned small business (with a totally generic website template that had zero contact information), we expected to either be let go or rehired by said small business. In fact, my company was simply hired as a sub-contractor, and our pay wasn't even cut, so as far as we could tell, this "small business" that won the sole-source contract (which appeared to be two women working from a residential address), literally forwarded invoices from our company (and presumably collected a profit).

Also, although I never worked for them, it's always seemed odd to me how so many of the contractors at my current office are perpetually cycling from one Alaskan Native Corporation to another (Alutiiq, Olgoonik, Tatitlek etc), even though no one (nor any of the work) has even the slightest connection to Alaska.

EDIT: Apparently sole source awards to ANCs cannot be protested, which explains a lot...

https://www.alutiiq.com/our-contracting-benefits/

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I'm in a heavy DoD town, and literally (I mean literally) every machine shop that does work for govt has a female figurehead so they have a chance of winning contracts.

Most double or triple down with minority, veteran, and/or disabled, too.

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Where is scotus on all this ?!

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Mar 13, 2023·edited Mar 13, 2023

Hopefully the current court will get to it.

Because aside from the racist and sexist issues*, I doubt it is even achieving the results they want.

At those machine shops, not a single woman is to be found regularly, except maybe in a secretary/receptionist role.

Even the nominal owners are usually just the wives of the men who run the shop.

*If you give preference to all women, and to all minorities, it is de facto just a penalty for white men.

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Mar 13, 2023·edited Mar 13, 2023

To play devil's advocate: because hundreds of years of American history has shown that people tend to hire other people who are like them (i.e. look like them or culturally have the same background), and that there literally is no other way that people who are not considered "the old boys" can break into the club unless some governing authority clumsily forces it down their throat?

Just look at the NFL. The Indianapolis Colts just this past season hired a white guy with literally no coaching experience on any level to be their head coach over the multitude of experienced non-whites who have toiled for years in the league. Even with the Rooney Rule implemented, the NFL (and frankly nearly all the sports leagues) are very stubborn about this.

I have no other point than, as a government, you kinda have to try ham-fisted, even symbolical, diversification attempts. It literally will not happen on its own, and entire demographics of people will be excluded from just about all sectors of the economy.

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P.S.

Beyond the question of principle and constitutionality , think also about how corrupting it is for the economy. Surely it will encourage endless fronts of fake ownerships etc to meet the arbitrary criteria ?

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This horse left the barn decades ago. It's how, e.g., all DoD contracts are competed.

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That’s horrifying. Is this not being litigated?

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This happens all the time but no one ever strings together the individual stories into a larger narrative for the obvious reasons.

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Seems like the economic impact might be significant. Probably a very worthwhile study that will be conducted someday (assuming the data can be gathered somehow).

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I also find these types of things crazy, but they're not new. See for example the Randolph–Sheppard Act https://en.wikipedia.org/wiki/Randolph%E2%80%93Sheppard_Act (Short version: companies owned by blind people in practice run all the vending facilities on Federal property.)

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Congrats on getting the new essay on my doorstep at 6a, despite the time-change.

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So this gets at some of my core dubiousness of Matt's technocratic neoliberal shill positioning. Specifically the technocracy.

I think it's fairly easy to say, in the abstract, "The government should encourage this thing," here semiconductor manufacturing investment, and have that look like a pretty attractive idea compared to just, "We should keep our hands off and let markets do their work."

But when you have the government getting heavily involved in the details of specifics of the economy, you steadily increase your reliance on the government making good decisions and having a functional bureaucracy. Not just *now*, when the policy is made, but for years to come. Perhaps forever, or at least until the next time you have a big clearing-of-the-tables of government policy. Does anyone want to look me straight in the eye and say that they have a great deal of confidence in the government's ability to make tons of good decisions at the detail level?

I feel like if you look at industrial policy success stories with the long view, this seems like a key weakness. Japan is my primary example: they created a manufacturing industry based on heavy government involvement with their manufacturing, but after a decade or so of success, they seemed pretty unable to react well to the rise of cheaper manufacturing regimes, the technological shift to information-age systems, and indeed they more recently dropped the ball on electric vehicles. I don't know as much about Korea, and China seems like it's too soon to say whether their recent troubles presage a real collapse in the success of their industrial policy or not.

With all three of those countries, you can plausibly say, "Hey, look, yes there are places where they grew hidebound and bureaucratic, but they made such big strides from here to there that it was clearly worth it." But the US isn't 1950s Japan or 1980s Korea or China (nor are we 1880s USA). We're bigger and messier and much, much richer. It seems like that's a situation where it'll be hard to ram through some clear-eyed good decisions, pick up the wins, and get a big improvement in our economy and living standards, and more likely to emphasize the downsides of yet more rulemaking and some random bureaucrat somewhere making bad decisions that then redound throughout the economy.

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I think if you look at the spectacular wealth creation in South Korea over the past few decades, it would be hard to say that their industrial policy could ever be considered a failure even if they face some economic headwinds in the near future.

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Sure! And i think you can make similar arguments for Japan and China.

But our higher base wealth means that we aren't going to double our GDP with industrial policy, but we still get the lingering dependence on ongoing good decision making.

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And while the idea and execution of industrial policy were excellent back in the day for these countries, that doesn't mean the same playbook will work well indefinitely.

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I think Pettis and Klein more or less have the right of it, here. Any "development state" or "industrial policy" mode of rapid development can work because there are underlying structural flaws in an economy which have made it poor, most especially around its ability to accumulate capital and absorb it productively. A disciplined program of export-oriented industrial investment can change that, give a developing nation an avenue through which to invest in productive capacity, and provide a host of second-order benefits throughout the economic sectors which were not direct recipients. A metaphorical jump-start, as often described.

However, that rapid development tends to work in a simplistic manner through a number of fixed channels which are able to solve only the original set of problems at which they were aimed. Two trends combine to make this a very self-limiting principle: first, as the economy develops and becomes more sophisticated, the private sector and capital markets become better at their jobs, more able to absorb capital and turn it to productive ends, better at allocating labor and determining which industries benefit from outside consolidation. Second, the necessarily limited channels through which public-sector "guided development" can work means that each channel gets "carved into the bedrock," so to speak, with vast vested interests growing up around it to siphon a bit off and to try to dictate where they go.

When it comes time, as in Japan in the early-to-mid 1980's, to admit that the public policy channels which dictate the flow of investment and productive capital are no longer able to outperform their private counterparts, that is basically impossible because every economic policymaker knows and trusts them, and does not understand or trust private capital markets, and because most of the private sector interests who should be dealing with or running private capital markets have instead set themselves in the "channel-adjacent ecosystem" and optimized themselves to extract capital from it.

Moreover, the state has trained itself to live or die by "export competitiveness," and that innate training lingers long past the point where it's useful. Even today we see this in all of Japan, Korea, and now China. The path forward is well understood to be a Fordist model whereby the citizenry receives enough of the fruits of their labor to be able to sustain a consumer economy without requiring a large trade surplus to dispose of goods which can't be sold at home. Yet none are able to implement it because they're still, simultaneously, wedded to the idea that their prosperity is contingent on their "competitiveness," and the main means by which they can enhance that after labor costs converge with the developed world is to take tax receipts and deficit spending and hand it back over to producers in the form of preferential tax treatment, outright subsidy, or production-oriented infrastructure.

You see it most explicitly in China's current "Dual Circulation" policy, which somehow purports to claim that domestic consumption (internal circulation) and export competitiveness (external circulation) are not directly opposed to one another and can somehow both be enhanced simultaneously. Thus we end up in a situation where China is siphoning off as much of 10% of GDP from workers and handing it to producers to keep costs low, then calling this "supply-side reform" aimed at enhancing worker pay and well-being.

They literally cannot come to grips with how to shift the development state towards provisioning social welfare and security, cleaning up the environment, improving schools and healthcare, and building a more sustainable model in which workers both can and want to buy the things they build, and feel able to both have kids and be prepared for their post-work lives.

The US is far from perfect at any of these things, but it works a hell of a lot better than any of Japan, Korea, Taiwan, the PRC, or... Germany or the Netherlands.

Industrial policy in the world's leading economy is, as you note, a necessary evil in a handful of strategic sectors for which we simply cannot afford to rely solely on foreign imports from unstable regions of the planet. We should not be making a habit of it.

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Putting aside some of the abstraction here, how do the uninitiated think you create high paying blue collar work, primarily for men? Well, through explicit wage floors (Davis Bacon) and union consultations (project labor agreements). When people valorize a certain type of opportunity for solid blue collar work this is actually what they mean even if they don’t know it.

What I do know - and is abundantly evident - is Joe Biden does think this is important and thus has been the lodestar of all elements of his public policy from ARP to the present (and throughout his long and publicity researchable career). He in fact doesn’t believe that just getting money out the door is the sole criterion which is why his staff, from the most liberal to the supposedly most “neoliberal shill turn” types, reflect this at every turn.

When people bray endlessly about how working in the “trades” is good or that being an electrician is a “great” job for non college grads, they mean the rules that joe Biden is following here.

The rest is the requirements on ceo pay and childcare, I think are not great ideas and actually don’t reflect 50 years of Joe Bidens career. But structuring the employment market of the provision of public money is a hallmark of joe Bidens work that is admirable even if it appears technically inelegant to a very online policy class.

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Maybe Joe Biden does not have a clue about the differences and nuances of these arguments

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In all honesty what would it take to make progressives prioritize?

I’ve often said some version of this take that descriptively I’m very progressive. I think the Omni crisis is sort of a correct take and the prescriptive steps they have for it are all a lot of word salad because there’s no command and control to it all but a kind of weird hive mind of academics and activists.

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If the CHIPS act (and all the other stuff) has so many strings attached that nobody uses them: then we spent months on bills which accomplished nothing. In business there's a saying that you can have: a low price, great service, or fast delivery. Pick two because you're never going to get three. While the same isn't EXACTLY true here: Biden is trying to foster unions, please the Progressive activists who think the sky is falling on everything, everywhere all the time, and make America compete with China. I'd tell the President: pick two (and I know who loses out in my calculus).

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