Leadership – Page 8 – The Wrongologist

Can Biden’s Union Roots Help Him In 2024?

The Daily Escape:

Red Mountain, San Juan Mountains, CO – September 2023 photo by Daniel Forster Photography

The “the biggest auto strike in generations” got under way last week, with 150,000 US autoworkers, including employees at Ford, Stellantis and General Motors walking off the job after contract negotiations failed to reach a deal. This strike, coupled with the likely government shutdown at the end of the month, will precipitate a very dangerous moment for the Biden administration.

From The Guardian:

“The United Auto Workers (UAW) union says workers have never been fully compensated for the sacrifices they made after the 2008-09 financial crisis, when they agreed to a raft of cuts to save the industry. The carmakers received huge bailouts and soon returned to record profits.”

The WaPo had a good article asking workers why they are striking. Most cited inflation and fairness:

“We’re not making enough money” said Petrun Williams, a 58 year-old Ford repairman. “People should be able to buy their own houses, but right now it’s not possible.”

This is going to be a difficult problem to tackle, because GM, Ford, and Stellantis are wildly inefficient giant bureaucracies with cost structures optimized to make $75,000 trucks, and their move into Electric Vehicles will take a lot of money and time before it pays off.

But the Biden administration isn’t necessarily helping: (Brackets by Wrongo)

“…Biden…is in a tough spot with the United Auto Workers….Through its industrial policies,…[Biden]…is giving away billions to automakers through production tax credits and loans, while supporting the transition to electric vehicles through consumer rebates and funds for charging infrastructure. Biden has promised that those incentives will lead not only to carbon emissions reductions but also good-paying union jobs.”

But the UAW leadership isn’t buying it. As the UAW goes on strike, their members don’t necessarily support Biden, but that doesn’t necessarily mean they support Trump either. Politico asked striking members if Biden had done enough to prevent the strike. They talked to Garry Quirk, the president of the local UAW union in Kokomo, IA:

“I don’t know what he’s done…Ask him. I don’t think he knows what he’s done. Seriously. I’m not trying to be mean.”

Quirk wasn’t freelancing: Fain and the union haven’t yet endorsed Biden’s reelection, throwing into doubt Biden’s standing in autoworker-heavy communities. But Politico reported that Biden had spoken that day with UAW president Shawn Fain and auto company CEOs. The chair of Biden’s Council of Economic Advisers said this week that Biden had been very much engaged.

But his efforts didn’t resonate with union member Denny Butler:

“Historically, man, if you didn’t vote Democrat years ago, and you were in the union, sometimes you got your ass kicked…I’m telling you what, the Democratic Party is not what it was 20, 30 years ago.”

So this is another Politico story about Obama voters becoming Trump voters and not looking back.

What Biden is fighting is the sense that the Democratic Party has not been truly on the side of union workers for a long time. It is true that today the Democrats are more on the side of unions. Neoliberalism is not nearly as powerful in the Democratic Party as it was during Obama’s time, or earlier.

But perceptions can be sticky. Clinton, Carter, and Obama (especially in the first term) all promoted corporate policies over the unions. Workers got screwed as factories closed, and no one offered much to workers beyond retraining programs that they didn’t want, and for the most part, didn’t lead to better jobs.

If you said that Republicans (including Mitt Romney) were no better, you’re correct. But today’s Republican Party offers a way to channel anger and resentment. Union members can opt for the GOP path even if the GOP doesn’t have the union’s interests in mind.

Despite Obama (and Biden) saving autoworker jobs through the 2009 auto bailout, they did little to hold the auto companies accountable. They allowed the expansion of two-tiered wage rates that the union is still fighting during the current strike.

The perception is that the UAW shrank and sacrificed, while the auto industry leadership got richer. Biden absolutely cares about unions, but he’s fighting against decades of belief that the Democrats aren’t what they used to be.

And no matter what Biden does, it’s going to be hard to get by that perception. There’s a mixture of anger and nostalgia that sticks in the minds of people who don’t really pay attention to the details of politics. Let’s take a look at the price of cars over the last ten years:

The Big Three automakers reported $21 billion in profits in just the first six months of 2023. Despite these enormous gains, the companies have cried poverty in response to union demands for wage increases that would make up for decades of pay stagnation. Worse, during the last year, the Big Three automakers have authorized $5 billion in stock buybacks, effectively giving those dollars to shareholders instead of to autoworkers.

The Economist had an excellent observation (paywalled):

“Late last year I took a trip…in a shiny new vehicle, Ford’s electric F-150. The car is in some ways an avatar for today’s Democratic Party. Joe Biden’s administration likes things that are made in America by union labor. It also wants to speed up the transition away from fossil fuels. The F-150 car ticks both boxes. It is also a high-end item that markets itself as a vehicle for working Americans.”

“That’s a bit like the Democratic Party too…with each passing election Democrats lose votes among actual working-class Americans and gain them with college-educated ones (some of whom can actually afford a $75,000 truck).”

“When we talked to a…UAW…representative near Detroit, it became clear the unionized workers are lukewarm on the green transition. Electric vehicles are less labor-intensive than cars powered by internal combustion, which is bad for the UAW members. In fact that is one reason why the union went on strike today. College-educated liberals, on the other hand, like electric vehicles a lot.”

Apparently union members see the problem much more clearly than the Biden Administration.

There could be a settlement reached between the unions and the companies at any moment, but it feels like this will be a protracted situation: If the UAW workers get the 40% pay increase they are asking for, they probably would learn to accept electric vehicles. Don’t hold your breath.

Biden’s relationship with America’s unions is deep and personal, but the next few months are really about his political strategy. And they’re an example of how the Democrats are always trying to balance competing aims.

Time to wake up America! Will Biden continue pursuing his environmental policies and risk losing even more support among working-class Americans? Or will he pump the brakes on environmentalism and alienate upscale Democrats? Biden won only 33% of white, non-college voters in 2020, so maybe that’s where his opportunity to expand his base in 2024 lies. But does Biden really have a path to take back more non-college voters?

To help you wake up, watch and listen to a recent version of the union anthem “Solidarity Forever”, written by Ralph Chaplin in 1915. Although it was written for the Industrial Workers of the World (IWW), the AFL–CIO have adopted the song as their own. Here it is sung in the Wisconsin capitol building in September 2011, by demonstrators who opposed then Governor Scott Walker’s “Wisconsin Budget Repair bill.”

The bill proposed to alleviate the state’s budget shortfall by taking away the ability of public sector unions to bargain collectively over pensions and health care, as well as ending automatic union dues collection by the state. Walker stated that without the cuts, thousands of state workers would have to be laid off. After two days of arrests for “holding signs” on the first floor of the Wisconsin State Capitol, the Solidarity Sing Along took to the rotunda in joyful defiance:

The law passed and remains in effect today.

Musk Is A Putin Pawn

The Daily Escape:

Organ Pipe Cactus National Monument, AZ – September 2023 photo by Bob Miller

Back in the 1950s, lefties were often called “fellow travelers” with Communists or the Soviet Union by Republicans.

Here’s a thought experiment: Elon Musk owns Starlink. He helped Ukraine take on the Russians using his constellation of satellites and transmit/receive terminals on the ground. When SpaceX started providing Starlink internet service to Ukraine after Russia’s invasion, it created a lifeline for the country when its communications systems had largely been knocked out.

Musk got great PR for helping America’s plucky little friend in their war against the Russian invaders. But as the war ground on, Kyiv began to fear that Musk was becoming increasingly ambivalent toward assisting them. Then, just as they are on the verge of a decisive blow that might shape the direction of the war, he turned off the network, thereby saving the Russian fleet from a Ukrainian sneak attack. From the WaPo:

“The armed submarine drones were poised to attack the Russian fleet….[but] the drones lost connectivity and washed ashore harmlessly.”

Ukrainian and American officials instantly scrambled to get service restored, appealing to Musk directly. After it was too late to continue the mission, Musk eventually agreed. His reasoning for torpedoing Ukraine’s torpedo mission has been well-reported over the past few days. According to the WaPo, Musk had second thoughts:

“How am I in this war? Musk asked….Starlink was not meant to be involved in wars. It was so people can watch Netflix and chill and get online for school and do peaceful things, not drone strikes.”

Later, when the Sevastopol operation was to begin, Musk remembers this:

“There was an emergency request from government authorities to activate Starlink all the way to Sevastopol. The obvious intent being to sink most of the Russian fleet at anchor….If I had agreed to their request, then SpaceX would be explicitly complicit in a major act of war and conflict escalation.”

Musk says he was afraid of being responsible for a Russian nuclear escalation. Moscow had publicly stoked such fears throughout the Ukraine war, but Western intelligence agencies say there’s no sign they were or are serious. There is zero evidence that tactical nuclear weapons were being prepped for use.

Nothing like what Musk feared happened.

From Timothy Snyder:

“The voiced concern is that Russia could “escalate.” This argument is a triumph of Russian propaganda. None of Ukraine’s strikes across borders has done anything except reduce Russian capacity. None has led Russia to do things it was not already doing. The notion of “escalation” in this setting is a misunderstanding. In trying to undo Russian logistics, Ukraine is trying to end the war.”

It’s curious that according to Ronan Farrow in a New Yorker article, around this time, Musk held conversations with Vladimir Putin (Musk denies speaking to Putin) – which seems to have had an effect on Musk’s change of position regarding Ukraine.

So this is the thought experiment: Is Musk naïve, or has he become a fellow traveler with Putin? He seems to have not only bought Moscow’s propaganda about nuclear escalation but acted on it. In either case, his “I was for helping Ukraine before I was against it” is a moral failure, and it’s a crime of providing material assistance to ours and Ukraine’s enemy.

He’s a fellow traveler.

We’ll never know if the war has been extended because the Sevastopol attack was aborted. We do know that since then, thousands of Ukrainians have died, and $ billions of Ukrainian assets have been destroyed.

This is a reminder of how Musk has amassed enormous influence through his dizzying pace of innovation that has left his competitors in the dust. It has also left governments (like our own), tip-toeing in their relationships with SpaceX in particular.

Wrongo thinks that US policymakers were happy to tolerate Musk’s early involvement in Ukraine because it saved money and solved an immediate tactical communications problem. But how wise was that in hindsight? There are reasons why diplomacy and international relations are left to elected governments in the West, and not put in the hands of one tech bro.

Rightwing Republicans have been pushing privatization without regulation for decades. Now that Musk has done just that with satellites and SpaceX, politicians and the mainstream media are shocked to find that the Ultra-Wealthy entrepreneurs don’t really believe in democracy.

Who could have known?

And think about it: Russia under Putin started this war. We’re involved because our national security interests in Europe are under attack by the Russian Federation. That constitutes a war, whether we choose to recognize it or not. Musk’s inaction must be viewed through that lens.

Our forces are not engaging in combat with Russian forces; that’s Russian propaganda. But we have history vs. Russia: We fought against Russian fighter pilots in the Korean war. They had advisors on the ground in Vietnam. We fought a Wagner force in Syria when they attacked our troops.

And Wagner isn’t a rogue mercenary organization. They are an irregular Russian force operating outside the norms of international law.

Musk and quite a few House Republicans need to understand the true nature of this war. We didn’t attack Russia. NATO didn’t attack Russia. And Ukraine didn’t attack Russia. Russia attacked Ukraine with a full scale invasion.

While Putin and his thugs are guilty of aggression, many Americans are guilty of being naïve. They fail to understand what failing in this fight will mean.

Whew! That’s enough for this week, it’s time for our Saturday Soother, where we try to find a place of calm and then gather ourselves for another week of polycrisis without end.

We’re aerating the lawns on the fields of Wrong, but only overseeding a small portion of it, since a 50 lb. bag of quality grass seed costs $225 vs. the $75 it was in the before times. Whip Inflation Now!

We’re likely to have thunderstorms for the next few days. So grab a chair by a large south-facing window and watch and listen to Playing For Change’s version of the Grateful Dead’s “Ripple”. It features the Dead’s drummer Bill Kreutzmann along with a host of performers, including the late Jimmy Buffett and David Crosby. Jerry Garcia lent his slide guitar to CSN’s “Teach Your Children” years ago, and Crosby returns the favor here. Time to listen to some feel-good music.

Robert Hunter wrote this song for the Dead in 1970. He was inducted into the Rock and Roll Hall of Fame with the Grateful Dead in 1994 and is the only non-performer to be inducted as a member of a band. Hunter was a lyricist:

Two Writers Who Speak To What America Needs

The Daily Escape:

Wukoki, Wupatli National Monument, AZ – September 2023 photo by David Erickson

September is underway, and we’re about to have a negotiation about government spending. But that doesn’t mean that the news this month will be any less stupid than last month’s. Also, as the Republican presidential candidates demonstrate every day, we don’t actually know whether the GOP is a dying Party or, the rising single Party of an authoritarian state.

Unless and until the traditional press presents these as the stakes, it is very unclear which it’ll end up being. With this as an introduction, Wrongo wants to introduce two writers who are attempting to break through our chain of bad policies and the bad ideology that threatens our democracy.

First, from Wesley Lowery in the Columbia Journalism Review:

“We find ourselves in a perilous moment. Democracy is under withering assault. Technological advances have empowered propagandists to profit through discontent and disinformation. A coordinated, fifty-year campaign waged by one of our major political parties to denigrate the media and call objective reality into question has reached its logical conclusion: we occupy a nation in which a sizable portion of the public cannot reliably tell fact from fiction. The rise of a powerful nativist movement has provided a test not only of American multiracial democracy, but also of the institutions sworn to protect it.”

Lowery is a Pulitzer Prize-winning reporter. He goes on to say:

“In 2020, I argued that the press had often failed this test by engaging in performative neutrality, paint-by-the-numbers balance, and thoughtless deference to government officials. Too many news organizations were as concerned with projecting impartiality as they were with actually achieving it, prioritizing the perception of their virtue in the minds of a hopelessly polarized audience…”

Lowery also says that news organizations often rely on euphemisms instead of clarity in clear cases of racism (“racially charged,” “racially tinged”) and acts of government violence (“officer-involved shooting”). He says that these editorial decisions are not only journalistic failings, but also moral ones:

“…when the weight of the evidence is clear, it is wrong to conceal the truth. Justified as “objectivity,” they are in fact its distortion.”

Lowery concludes by saying:

“It’s time to set aside silly word games and to rise to the urgent test presented by this moment.”

Second, Bob Lord is a tax attorney and associate fellow at the Institute for Policy Studies. He also serves a senior advisor on tax policy for Patriotic Millionaires. At Inequality.org, he proposes a graduated wealth tax on the rich:

“The United States is experiencing a level of wealth inequality not seen since the original Gilded Age. This yawning gap between rich and poor has unfolded right out in the open, in full public view and with the support of both political parties.

A malignant class of modern robber barons has amassed unthinkably large fortunes. These wealthy have catastrophically impacted our politics. They have weaponized their wealth to co-opt, corrupt, and choke off representative democracy. They have purchased members of Congress and justices of the Supreme Court. They have manipulated their newfound political power to amass ever-larger fortunes.”

Biden’s Plan To Cut Drug Prices

The Daily Escape:

Mars on left, Earth on right – image by alofeed

The Biden administration released its list of 10 prescription medicines that will be subject to the first-ever price negotiations by Medicare. This is a big deal because Medicare covers 66 million older Americans, people who routinely take very expensive drugs.

Until recently it was illegal for Medicare to negotiate prices with drug companies. But the Inflation Reduction Act (IRA), passed last August, gives Medicare that power. It also forces companies to pay a rebate to Medicare if their drug prices rise faster than inflation. The Congressional Budget Office estimates that price-capping measures will reduce Medicare expenses (and the federal deficit) by $96 billion by 2031.

The list includes drugs for diabetes, arthritis, and Crohn’s disease, and could sharply lower medical costs for patients. Reuters says that the US Centers for Medicare & Medicaid Services (CMS) spent $50.5 billion between June 1, 2022 and May 31, 2023 on these 10 drugs. That was about 20% of the total cost of drugs in the Medicare prescription drug program known as Part D.

The WaPo had an opinion piece by David Goldhill, CEO of SesameCare.com, a digital marketplace for discounted health services: (brackets and emphasis by Wrongo)

“The pharmaceutical industry earns almost 50% of its worldwide revenue here [the US], as do medical information-technology firms. [Medical] Device makers earn 40% of their money in the US. And this understates things, because US revenue is generated from higher prices, so margins are greater. If the US accounts for half of a company’s revenue, it probably contributes at least 75% of its profits.”

This has always been the business plan for Big Pharma: Make your money in the US and take whatever scraps of profit you can get in other markets.

That market subsidy is paid by American taxpayers generally (through the funding of Medicare) and by US pill-takers specifically when they pay higher co-pay prices for the drugs that help with their chronic conditions. The Economist points out that prescription medicines in America cost two to three times more on average than in other wealthy countries:

The blue dots are the price paid in the US for brand name drugs. The grey dots are prices paid in the various countries for all US drugs sold in those countries. The comparison of brand name to generics shows how much greater the cost is to an American. It also follows that US patients’ out-of-pocket expenses, (the slice of drug costs not covered by insurance), are among the highest in the world.

It’s understandable why Biden’s move to start negotiations on some of the most expensive drugs has been fiercely opposed by the pharmaceutical industry. Essentially, high US drugs costs underwrite what amounts to a subsidy for buyers of the same drug sold when it’s outside the US.

Many of the Big Pharma have jumped on the legal bandwagon, challenging price-setting provisions in the IRA. More from the Economist:

“Since the law’s passage over 50 companies have blamed the IRA in earnings calls for clouding their prospects.”

A quick primer on drugs. Most medicines are either small-molecule drugs or large-molecule drugs. The former are the kind of pills that line our medicine cabinets. Large-molecule drugs, (also called biologics), are more complex and must be injected. The IRA grants biologics 13 years of pricing freedom after a drug is approved, while small-molecule drugs get only nine years post-approval before they must face Medicare’s bean counters. The industry estimates that small-molecule brands could lose between 25% and 40% in overall revenue due to the earlier cap on prices.

PhRMA, the pharma Industry’s lobbyist argues (and Republicans back them) that high US prices reflect the high cost of drug development. The pharmaceutical manufacturers are, of course, suing to stop the price negotiations. They say that allowing the government to negotiate lower bulk prices for drugs will stifle innovation, and will cut funds for research.

One thing that Big Pharma wants to avoid showing us is that they rely on smaller, more agile biotech firms for ideas. Between 2015 and 2021, 65% of the 138 new drugs launched by Big Pharma originated mostly from smaller firms. So, while innovation isn’t totally gone from the big firms, what they’re mostly doing is marketing the intellectual property of small pharmaceutical firms.

It didn’t take long for Republicans to jump on the decision to allow Medicare to negotiate drug prices. From Politico:

“Piggybacking on the pharmaceutical industry’s strategy, Republicans are working to persuade Americans that the Biden plan will stifle innovation and lead to price controls.”

Politico quotes Joel White, a Republican health care strategist:

“The price control is a huge departure from where we have been as a country….It gets politicians and bureaucrats right into your medicine cabinet.”

Politico says that the GOP effort to reframe the drug price debate may hurt them, since they plan largely to run on inflation, while the Biden plan will lower drug prices. Also they quote a new poll from the Kaiser Family Foundation (KFF) that shows 58% of independent voters trust Democrats to lower drug costs compared with 39% of Republicans.

Our politicians and pundits have bleated at us for years about being an “exceptional nation” – but what we really are is exceptionally gullible. As long as the large healthcare and pharmaceutical companies insist on standing between American consumers and their health needs, maximizing their profit will always come first.

We also continue to elect leaders who lobby for keeping corporations unleashed so that they can make as much profit as possible, while saying that the “market” will decide where the public good is prioritized. This keeps us hopelessly mired in a grossly expensive, and often ineffective healthcare system.

We continue to let ourselves be convinced by corporations and our politicians that reforming healthcare is impossible. That the solutions and methodologies used by other developed nations are substandard, and/or somehow immoral.

The Hill reported that the 14 leading US drug companies paid out more in stock buybacks and dividends from 2016 to 2020 than they spent on research and development. Those firms spent $577 billion from 2016 to 2020 on stock buybacks and dividends, $56 billion more than the $521 billion they spent on R&D. So, it’s oblivious how Big Pharma could easily fund their R&D with lower drugs prices.

It is also useful to remember that America has more healthcare billionaires AND healthcare bankruptcies than any other country. Those two things are inextricably linked.

As long as the pharmaceutical companies can maximize profits by buying politicians rather than by charging higher prices in other countries – the American people are the ones who will continue to get screwed.

Henry Kissinger’s Reputation

The Daily Escape:

Sunset, Flaming Gorge Reservoir Recreation Area, UT – August 2023 photo by Doreen Lawrence. The Gorge is the largest reservoir on the Green River.

Welcome to your Monday wakeup call! Wrongo has lived a long life, but he’s still 20 years younger than Henry Kissinger. Kissinger turned 100 in May. When Wrongo was in his late teens, he was protesting against the war in Vietnam. At that point, Kissinger was already a foreign policy advisor to the failed presidential campaigns of Nelson Rockefeller.

He would go on to become Nixon’s national security adviser and Secretary of State, a crucial figure overseeing the conflicts in Vietnam, Cambodia and Laos, that many say included war crimes. Kissinger was never indicted, but Anthony Bourdain wrote the following about Kissinger in his 2001 book “A Cook’s Tour”:

“Once you’ve been to Cambodia, you’ll never stop wanting to beat Henry Kissinger to death with your bare hands. You will never again be able to open a newspaper and read about that treacherous, prevaricating, murderous scumbag sitting down for a nice chat with Charlie Rose or attending some black-tie affair for a new glossy magazine without choking. Witness what Henry did in Cambodia—the fruits of his genius for statesmanship—and you will never understand why he’s not sitting in the dock at The Hague next to Milošević. While Henry continues to nibble nori rolls and remaki at A-list parties, Cambodia, the neutral nation he secretly and illegally bombed, invaded, undermined, and then threw to the dogs, is still trying to raise itself up on its one remaining leg.”

But unlike other possible US war criminals like Reagan and Nixon, Kissinger has never needed to rehabilitate his reputation. As Rebecca Gordon says:

“….despite his murderous rap sheet, the media and political establishment has always fawned over him.”

Kissinger is remembered for his initiative to open diplomatic relations between the US and China in 1972, though full normalization of relations with China would not occur until 1979.

Kissinger’s second innovation was inventing the for-profit third act of a public service career. Before him, former foreign policy principals usually wrote a memoir, gave the occasional foreign policy speech, and maybe became head of a nonprofit.

But Kissinger pioneered a for-profit third act in 1982 when he and Brent Scowcroft founded Kissinger Associates (with the help of a loan from the international banking firm of E.M. Warburg, Pincus) to offer advisory services to corporate clients. Kissinger’s prime selling point was that he had access to the corridors of power, not only in Washington, but in Beijing and Moscow.

Wrongo started out being a fanboy, having read Kissinger’s 1957 book “Nuclear Weapons and Foreign Policy” while in high school. It criticized the Eisenhower Administration’s “massive retaliation” nuclear doctrine. It also caused much controversy at the time by proposing the use of tactical nuclear weapons on a regular basis to win wars. Once Wrongo was running a tactical nuclear missile base in the mid-1960s, he was no longer a fan.

Wrongo met Kissinger in the mid-1980s at an event hosted by David Rockefeller at his Pocantico Hills estate. HK was walking his dog, a particularly obstreperous Golden Retriever. Wrongo asked “What’s the dog’s name?” Kissinger replied: “Madman”. Could there be a more perfect name for a Kissinger family pet?

Kissinger provided advice, both formal and informal, to every president from Eisenhower to Trump (though apparently, not yet to Biden). His fingers are all over the foreign policies of both major Parties. And in all those years, no “serious” American news outlet ever reminded the world of Kissinger’s long history of bloody intervention in other countries.

In fact, as his hundredth birthday approached, he was fawned over in an interview with PBS NewsHour anchor Judy Woodruff. From Rebecca Gordon:

“Fortunately, other institutions have not been so deferential. In preparation for Kissinger’s 100th, the National Security Archive, a center of investigative journalism, assembled a dossier of some of its most important holdings on his legacy.”

A third thing that Kissinger is associated with is the use of the concept of “Realpolitik” in foreign policy. It means conducting diplomatic policies based primarily on considerations of the reality on the ground, rather than strictly following ideology or moral and ethical premises.

Realpolitik has come to mean something quite different in the US: It is associated not with “what is” but with “what ought to be” on the ground. In Kissinger’s realpolitik, actions are good only when they sustain and advance American strategic power. Any concern for human beings that stand in the way, or for the law and the Constitution, are not legitimate.

Reshoring The Semiconductor Industry: The Chips Act

The Daily Escape:

Sunset in Yarmouth Port, Cape Cod, MA – July 2023 photo by Cynthia Maciaga

The semiconductor industry is big, complex, and important. Semiconductors are also an important test case for America’s ability to revive its domestic manufacturing base. There’s a lot riding on Biden’s Chips Act that became law one year ago. It is a $50 billion package of subsidies, tax credits and other sweeteners designed to bring advanced chipmaking back to America.

As a result, Taiwan Semiconductor Manufacturing Company (TSMC) is investing $40 billion in Arizona. Samsung is investing $17 billion in Texas. Intel, America’s biggest chipmaker, will spend $40 billion on four semiconductor fabrication plants, or “fabs” in semiconductor parlance, in Arizona and Ohio. Both Democrats and Republicans regard it as a bipartisan legislative triumph.

But, finding highly skilled labor is key to the Act’s success. While America still has world-class semiconductor researchers and designers, we no longer have the kind of skilled labor that turns silicon wafers into electronic circuits. Chief Investment Officer magazine quotes Joseph Quinlan of Bank of America (BOA):

“America’s manufacturing renaissance could either be delayed or derailed by mounting structural headwinds….The US will have graduated only 108,000 technicians (who operate, maintain and fix electronic gear) by 2030, but demand is for 130,000 by then….Similarly, the nation will have produced 42,000 engineers and 21,000 computer scientists at that point, yet will need 69,000 and 34,000, respectively.”

BOA says that the other shortfall is construction workers. Construction of US factories has climbed 80% from a year ago, yet the nation has 374,000 unfilled construction jobs. We’re already seeing the problem. From the Economist:

“…The first of TSMC‘s factories was due to start production next year. But in July it announced that the launch would be put back to 2025 because it could not find enough workers with the expertise to install equipment at such a high-tech facility.”

The problem is during the delicate final phase of installing the most high-end equipment. Mark Liu, TSMC’s chair, said in a July earnings call:

“…there is an insufficient amount of skilled workers with those specialized expertise required for equipment installation in a semiconductor-grade facility.”

As a result, TSMC is sending skilled workers from Taiwan to teach Americans how to do the job. The Commerce Department forecasts that about 100,000 workers may be needed for the construction of these new fabs in the US.

The chip market breaks down into “leading edge” chips, followed by “advanced” chips and “trailing edge” chips, sorted from the smallest chips to the largest. The Economist says that by 2025, American chip factories expect to be churning out 18% of the world’s leading-edge chips (see chart below):

This seems highly optimistic if we can’t get these new plants built or staff them. Leading-edge fabs that are built in America will take longer to build and will be smaller than those in Asia. In China and Taiwan, companies can build out a new fab in 650 days. In America, the average construction time is expected to be 900 days, or 40% longer. Construction costs, therefore, can be 40% more in America than in Asia.

Regarding size, in Arizona, TSMC plans to make 50,000 wafers a month—equivalent to two “mega-fabs”, as the company calls them. In Taiwan, TSMC operates four “giga-fabs”, each producing at least 100,000 wafers a month. Size matters: The more chips a fab makes, the lower the unit cost.

More from the Economist: (emphasis by Wrongo)

“America will produce enough cutting-edge chips to meet only about a third of domestic demand. Apple will keep sourcing high-end processors for its iPhones from Taiwan.”

Overcapacity is a possible threat. The Economist says that in 2019, China made one fifth of “trailing-edge” chips, which go into everything from washing machines to cars and aircraft. But by 2025 it will produce more than a third of them. It’s possible that excess supply from China will put downward pressure on prices. In the long run, this could hurt higher-cost American fabs.

So, while there has been substantial progress in just a year, the US isn’t going to undo 20+ years of offshoring chip manufacturing in the next 24 months. The Commerce Department says it wants companies to collaborate on building up a construction workforce, so that workers trained for one project can move on to other fabs that are being built. In this respect, TSMC’s plan to import Taiwanese trainers is less of a bug than a feature, part of the process of helping to build knowledge.

Once the fabs are built, they’ll need technicians to operate them. Such workers have historically required two years of training at a community college or a vocational school. But companies and educators are experimenting with much shorter courses. Columbus State Community College in Ohio, where Intel is building two fabs, is offering a one-year program. The aim is for students to be job ready for Intel as their fabs come online.

But, will these companies be willing to put candidates with one year’s training anywhere near the multi-million-dollar machinery inside their fabs?

The fabs also need engineers to run them. Universities near some of the fabs under construction, including Arizona State and Ohio State, have expanded their offerings of semiconductor courses as part of degrees in engineering and physical sciences. Leading the charge is Purdue University in Indiana: last year it launched a semiconductor degree program for both undergraduates and graduates.

And the flow of students seems encouraging. Intel expected 100 registrants for its quick-start courses, but 900 showed up. At Purdue enrollment has also been very strong. Handshake, a job platform for recent graduates, reported that applications for full-time jobs at semiconductor companies were up by 79% compared with last year, versus 19% in other sectors.

Returning to having a strong, vibrant high tech manufacturing industry in the US is good, both strategically and economically. But for the immediate future, it remains a gamble: We’re saying that the economic reasoning for moving manufacturing offshore in the past still exists. But it’s important enough strategically that we (and these profit-seeking corporations) will somehow underwrite the cost disadvantages.

Relearning basic skills such as cutting wafers into chips and packaging them in hard plastic casings will take time. The welcome news for these new fabs is that colleges and universities see an opportunity in helping train the new labor force.

But we will still be dependent on other countries. We do not have a secure domestic supply of lithium, nickel, graphite and other minerals needed to expand production of solar panels, wind turbines, semiconductors and electric vehicles. BOA points out that American imports of lithium-ion batteries from China more than doubled in 2022, to $9 billion.

So, while there’s lots going on that may someday be positive, China represents a potentially dangerous choke point given that US-Sino bilateral relations are at a decade’s low. We’re depending on them to continue providing much of the materials crucial to our new manufacturing capacity, while we’re in the middle of a serious rift with them.

Reshoring manufacturing, especially high value manufacturing is America’s dream. But it will take unprecedented cooperation between the government, multinational firms and our higher education system to make it happen.

Have we reached peak MAGA?

The Daily Escape:

Glacier Park Lodge, Glacier NP, MT – August 2023 photo by Jack Bell Photography

Wrongo’s Magic 8 Ball says “yes”. Let’s start with the Ohio Republicans failing to pass a state constitutional amendment that would have required a 60% supermajority to amend their constitution instead of a simple majority. That means the GOP failed to make it more difficult to enshrine abortion as a right in the state.

Ohioans voted 57% against the amendment. It followed similar unexpected defeats in Kansas and Michigan, along with losing the Supreme Court race in Wisconsin. These are Republican losses in very conservative places. From the WaPo: (emphasis by Wrongo)

“A review of six statewide votes since last year, including Ohio’s, shows that in 500 of 510 counties, access to abortion outperformed President Biden’s 2020 results….Across those counties, including a lot of deep-red ones, the margin of support for abortion access topped Biden’s 2020 margin by an average of 26 points, a significant shift to the left….Of the 510 counties included in the analysis, only two counties that voted for Biden in 2020 also opposed access to abortion. Among Trump-voting counties, 81 supported that access.”

These local MAGA stalwarts are getting their clocks cleaned on culture war issues. Republicans have repeatedly shown that their abortion agenda and their authoritarian agenda are really one and the same. And this week’s sweeping pro-choice victory in red Ohio shows once again that a majority of voters find both of those linked agendas repulsive. Politico quotes a national Republican operative:

“It has become quite difficult to rely on state parties….Because people who are involved for the right reasons…are pushed out, and now you’re stuck dealing with fringe characters who don’t know how to win elections, can’t be trusted to manage resources, and play with people’s worst instincts.”

In the Ohio aftermath, it seems that Republican politicians are still thinking that women in America will forget about abortion rights by the time 2024 rolls around. But it turns out most normal people don’t care much for sex-obsessed Republicans peeping through their bedroom keyholes.

And there are other problems for state-level Republican Parties. The National Review reported that in four key states, the state Republican parties are collapsing, either by going broke and devolving into infighting:

“Even worse for the GOP, these aren’t just any states — Arizona, Colorado, Michigan, and Minnesota all rank as either key swing states or once-purple states that would be tantalizing targets in a good year.”

More: (brackets and parenthesis by Wrongo)

“If Republicans [lose]….the 2024 elections…(which would be their fourth straight loss)….a key factor will be the replacement of competent, boring, regular state-party officials with…blustering nutjobs who have little or no interest in the basics of successfully managing a state party or the basic blocking and tackling involved in helping GOP candidates win elections.”

Back to Politico:

“Michigan’s Republican party is broke. Minnesota’s was, until recently, down to $53.81 in the bank. And in Colorado, the GOP is facing eviction from its office this month because it can’t make rent. Around the nation, state Republican party apparatuses — once bastions of competency that helped produce statehouse takeovers — have become shells of their former machines amid infighting and a lack of organization.”

OTOH, there will be plenty of Republican money flowing into these states in 2024 general election via Super PACs. That will largely be directed at turning out Republicans in support of their presidential candidate, but it will also help down ballot Republicans as well.

Democrats see an opening in some swing states and are redoubling their efforts to win more state legislative races, but the national Republicans has given some help to local parties.

In June, the Minnesota State Party received a $160,000 transfer from Protect the House 2024, a fundraising committee backed by House Speaker Kevin McCarthy. Other state parties critical to the fight for the House including Pennsylvania, California and New York also got six-figure checks from the McCarthy-controlled fundraising operation in June.

The conservative youth PAC Turning Point USA has announced it’s expanding efforts in Arizona, Wisconsin and Georgia ahead of 2024. Turning Point plans to spend $108 million in those three states and says it has recruited 3,000 state party precinct leaders around the nation since 2020. They will use this group to influence state parties to replace traditional local GOP leadership.

Finally, two Republicans made moves to join Republican Senate primaries in which they aren’t wanted. In each case, the candidate could win the party’s nomination, but would almost certainly get beaten by a more moderate Democrat in the general election. Toxic cloud Kari Lake appears to be joining the Arizona race, and in Montana, Rep. Matt Rosendale wants to run against Democrat John Tester. Rosendale lost to Tester by 3 points in 2018. The state GOP’s choice is retired Navy SEAL Tim Sheehy.

All of this should be good for Democrats, but as always, turnout will decide the 2024 election. As long as Republicans keep serving up pretend culture war issues that are unpopular with voters, it looks like Dems will do better in 2024 than recent polling predicts.

Happy Saturday! It’s time for our Saturday Soother. Here in the northeast, we’re having temperate weather, with scattered showers later. So quickly grab tall glass of lemonade and a chair outdoors in the shade. Now spend a few minutes thinking about Robbie Robertson of The Band who died last Wednesday. Somehow, this one hurts Wrongo a little more than the deaths of most musical contemporaries. The big irony is Robertson is categorized in “Americana” music despite having been born and raised in Canada.

Wrongo has previously featured Robertson and The Band six times. Here are two tunes to watch. First, a reworking of The Band’s classic tune, “The Weight” written by Robertson and remade in 2019 for the 50^th anniversary of the song.

It was produced by the charity, Playing For Change and features musicians performing together across 5 continents, led by Robertson and Ringo Starr. The musicians are incredible, but whoever mixed and edited the video deserved a Grammy. The shift between vocalists and locations feels seamless. The sound is nicely balanced, and the editor also gives each musician a sufficient share of the limelight. Take a load off and turn it up. Trust Wrongo, you won’t be disappointed:

Second, here’s one from the 1978 epic “The Last Waltz” a documentary film by Martin Scorsese capturing The Band’s last performance. Watch and listen to “Further On Up The Road“, first recorded by Bobby “Blue” Bland. That’s Levon Helm on drums and Robbie Robertson on guitar along with Eric Clapton. A little known fact is that Clapton asked to join The Band in 1968. They said no:

In these two videos, we see Robertson as a young man playing alongside Clapton. And we also see him fifty years later as a 76 year old, reprising a song he had written in 1968. Thanks Robbie!

We’re In Hot Water

The Daily Escape:

Harbor Seals hauling out on a buoy in Petersburg, AK. Wrongo and Ms. Right were passing by in a zodiac – July 2023 photo via the cruise line

It seems like it’s going to stay hot for a long while, and nobody wants to do anything about it. Temperatures are rising both on land and at sea, with climate experts ringing alarm bells about unprecedented sea surface temperatures:

“The National Oceanic and Atmospheric Administration (NOAA) in late June warned that half of the world’s oceans may experience marine heat wave conditions by September.”

And it’s hitting close to home:

“Not only is Florida sizzling in record-crushing heat, but the ocean waters that surround it are scorching, as well. The unprecedented ocean warmth around the state — connected to historically warm oceans worldwide — is further intensifying its heat wave and stressing coral reefs, with conditions that could end up strengthening hurricanes.”

The NYT reported that the water temperature around Florida hit 90° yesterday.

And while it’s possible to score cheap political points on their governor DeSantis who would rather fight with Mickey Mouse and whatever “Woke” means this week while ignoring climate change, Wrongo won’t stoop to that. He’s sure that Floridians love their governor’s priorities. Just last week, as insurance companies were pulling out of Florida, DeSantis was saying not to worry, the insurers will return to Florida after the hurricane season.

As Pogo said many years ago: “We have met the enemy and he is us.”

Primarily, the enemy is the Republican politician who continues to vote against efforts to bring the world’s CO2 levels under some semblance of control. The fixes to climate change that will have the most impact involve changes in public policy that will never happen as long as Republicans hold enough votes to block them.

But the big idea is that we’re not going back to where we were heat-wise, no matter what we do to cut further CO2 emissions. As NYT journalist Jeff Goodell said on NPR: (brackets by Wrongo)

“We are moving into a different world, and we need to grasp that idea….the planet is heating up…because we’re putting CO2 into the atmosphere…..It is essentially permanent when we put it [CO2] up there….And the warming will not stop until we stop emitting CO2 and burning fossil fuels….And even if we stop [adding more] CO2, we are stuck with that warming planet for a very long time.”

So, even if at this moment we made huge changes, we would always be on this part of the temperature scale, unless we figure out how to take quite a bit of that CO2 out of the atmosphere.

A few red state legislatures are considering following South Carolina’s lead and simply banning all mention of global warming or climate change in official documents or state-funded research. They think the only real way to deal with the climate problem is to ignore it.

Worse, nobody has a good model for what happens when all that warm water sits and gets warmer. Some meteorologists have pointed out that if the Caribbean got hot enough, it could spawn a continuous series of Category 5 hurricanes, say, once a week from May to October.

Which would resolve the problem of insuring Florida’s oceanfront properties pretty quickly.

It’s becoming evident that we live in a world designed for a climate that no longer exists. What’s really sobering is that the climate that now exists won’t resemble the one that will exist a generation from now.

How our societies and political systems deal with this is the central question of the 21st century.

Wrongo and Ms. Right moved back to New England from California partly because of climate. We were concerned about how scarce water would become in Los Angeles, and we knew that Connecticut would have more water for longer. This week, several of our roads and bridges closed because we had too much rain, causing the Housatonic River to overflow its banks.

This shows that there are no longer any places that can be marked safe from climate change. It has become impossible to predict the future climate/weather anywhere based on the past. And we’re still not coming to terms with just how hot and dangerous things are becoming. Or how fast it’s happening.

Let’s close the week with a wake up tune. Here’s “The Effects of Climate Change on Densely Populated Areas” by People Under The Stairs, a hip hop group from LA formed in 1997:

Sample Lyric:

Hundred degrees at midnight for the third day in a row
Nobody sleepin’ well and I can feel the tension growin’
LA wth rollin’ brownouts, rollin’ papers and rollin’ sixties
Heat exhaustion increasing caution across the city
Some people hit the mall, they’re tryin’ to stay cool
Some people call the cops; “there’s black children in the pool”
Everybody’s lookin’ sideways, we’re ragin’ on the highways
I hate it, I’m tryin’ to stay hydrated and faded but my way Is blocked
By road construction like a scene from “Falling Down”
Cops, they tryin’ to function but it seems they takin’ down us
Brown people at will People get hot and then killed
As the sun begins to set it’s hotter, no-one can chill
Everybody’s windows open there’s not a moment of silence
Alcohol heatin’ frustration that’s increasing domestic violence
9-1-1 is overwhelmed, homie, guess you on your own
The hills are still on fire, I recommend you stay at home

July 4, 2023

The Daily Escape:

Kilauea Caldera showing a blackened lava lake, Hawaii Volcanoes NP – June 2023 photo by J. Wei for the NPS

Kilauea stopped erupting on June 19, but the threat of another eruption is always present. That could be a metaphor for America in 2023: We could erupt at any moment.

The 1960s were an optimistic time. There were demonstrations for civil rights and against the Vietnam War. There was police violence against the demonstrators, and assassinations of JFK and MLK. But a throughline of those times was a belief that righteous change was possible.

Wrongo graduated from Georgetown in 1966. His specialty was American colonial history. Those also were times of optimism, and there also were factions and different priorities and beliefs throughout the land.

Back in the 18^th century, we overcame our differences, declared our independence, and formed a nation.

Now, 247 years after our revolution, it seems that staying united is difficult, if not impossible. Today, facts are fungible, and so is the truth. As Wrongo stated in his last column, about one third of Americans fail to vote. They are apathetic because they can’t see what would change if they did vote.

Having one third of Americans regularly fail to vote has surrendered control over our politics and our courts to a minority, mostly a few at the top, supported by some people in the middle, and enabled by the apathy of most of the rest of us.

Worse, most of those in today’s controlling minority are extremists. They have exploited the imperfections in our system to impose a return to the social mores and politics of an earlier time.

The best example of this is the string of far-Right decisions handed down in 2022 by the Supreme (Extreme) Court. From Slate’s Mark Joseph Stern:

“Consider the issues that SCOTUS has resolved….The constitutional right to abortion: gone. States’ ability to limit guns in public: gone….Effective constraints around separation of church and state: gone. The bar on prayer in public schools: gone. Effective enforcement of Miranda warnings: gone. The ability to sue violent border agents: gone. The Environmental Protection Agency’s authority to regulate greenhouse gases at power plants: gone.”

Vast areas of law that took decades to establish were overturned in a year.

And in 2023, the Court’s reactionary majority has continued to overturn more of the American social order. Those rulings: ending affirmative action, preventing the forgiveness of student loans and an egregious decision on gay rights, show that the Court has lost any sense of judicial restraint.

The Court is no longer “calling balls and strikes” as Chief Justice John Roberts famously said. In fact, there could be a highlight reel of umpire John Roberts’ blown calls. It’s clear that the Extreme Court wants to go further, and given today’s politics, there’s zero risk of the other two branches of government agreeing to override their decisions.

So, on this Fourth of July weekend, let’s hit pause. Let’s take time to reflect on how our founders were able to weave a message that united many factions against a common enemy. It should be very clear that at this point that the common enemy to unite against is the partisan power of a partisan minority.

Real power no longer lies with the People or with their politicians, it resides in the Supreme Court. The antiquated and undemocratic elements of our government: the Electoral College, lifetime tenure for Supreme Court justices and the malapportionment of the Senate, would require Constitutional amendments to fix. But we’re too divided to amend the Constitution.

Imagine attempting to fix the Senate’s malapportionment by getting a Constitutional amendment through that same malapportioned Senate.

But there may be reason for optimism in the fact that the two of this term’s negative rulings related to college students (admissions and debt relief). Those issues will motivate young voters in 2024.

Here are some numbers that give some cause for optimism about younger voters helping to change our politics:

Voters 47 and younger will be in the majority beginning in 2028.
Younger voters have historically voted in significantly higher numbers for Democrats.
Young women, especially young Hispanics and young African Americans are substantially higher voters for Democrats.
Fifty-five percent of white male voters under 45 voted Democratic in 2022, as did 52% of younger white females.

Here are a few other facts that should make us optimistic going forward:

Abortion was youth’s #1 issue in 2022.
Mid-term voter turnout for people under 29 was 23%, lower than 2018 (28%), but much higher than in 2014 (13%).
Michigan had the highest youth turnout in the country (37%).
Two swing states, Michigan and Pennsylvania, were among the four states to have the highest youth turnout in 2022.

To help you reflect on how we might take back control, let’s listen to Neil Diamond’s “Coming to America” performed at the Greek Theater in Los Angles in 2012.

There are many versions of this tune on YouTube, but this one makes the point that virtually all of us are descended from immigrants, in this case, Diamond’s grandmother, who immigrated from Kyiv:

Where Is The GOP’s War Of Words Taking Them?

The Daily Escape:

Rain, White Sands NP – June 2023 photo by Dawood Afzal

(Wrongo and Ms. Right want to give healing thoughts and condolences to John & Janis S., who have just experienced a terrible loss.)

The NYT reported on Trump’s speech in Columbus, GA, where he was pretty chatty about the US government and the DOJ indictment:

“Either the Communists win and destroy America, or we destroy the Communists…”

He was referring to Democrats. He railed against “globalists,” “warmongers” in government and “the sick political class that hates our country.” Trump also described the DOJ as:

“…a sick nest of people that needs to be cleaned out immediately,”

He called the special counsel, Jack Smith, “deranged” and “openly a Trump hater.” He then went on to say, “This is the final battle”. And by that, he doesn’t mean the final court case against him. All of this was said in a speech to several thousand people and delegates of the Georgia Republican Party who met in a brick building that was once a Civil War ironworks that manufactured mortars, guns and cannons for the Confederate Army.

Trump calling his Democratic opponents “Communists and “Marxists” isn’t connected to today’s politics. the number of either in the US is vanishingly small. It barely makes sense, but in today’s GOP, it really doesn’t have to make sense. Trump and the GOP would never actually articulate what it is they’re opposing. That would make explicit that they’re really against America becoming more of what it is: An increasingly pluralistic and multi-ethnic country.

But many on the Right are deliberately going much further. The NYT reported that in Georgia, failed Arizona gubernatorial candidate Kari Lake, said:

“I have a message tonight for Merrick Garland and Jack Smith and Joe Biden….If you want to get to President Trump, you are going to have go through me, and you are going to have to go through 75 million Americans just like me. And I’m going to tell you, most of us are card-carrying members of the NRA”

Well, that’s a threat. The same NYT article says:

“In social media posts and public remarks, close allies of…Trump…including a member of Congress…have portrayed the indictment as an act of war, called for retribution and highlighted the fact that much of his base carries weapons.”

And all of these threats against Democrats, LGBTQ+ people, the FBI and the DOJ are more than rhetoric. They’re step one in a process known as stochastic terrorism. The idea is that a person or group are demonized, and violent actions against them are suggested by a leader with a large following:

The leader doesn’t ask or arrange for a specific person to carry out the violence, but they know in advance that somewhere among their followers are people who will.
And it only takes one.
The leader accomplishes their goal of violence without formally arranging for it.
There isn’t any paper trail, or phone records, or texts, or secret payments that could eventually show up in a court of law.

But the intent is clear even if, by design, there’s no direct accountability.

Wrongo saw a quote attributed to Anand Giridharadas:

“…Donald Trump…has clearly decided that his movement, and the Republican Party that he leads, is going to be the movement of resentment against the future. It is going to be a movement of people who don’t want to live in the future.”

Trump represents people who are in a state of constant rage at the thought that the world is changing in ways they hate and can’t actually stop. The horrible part of their dilemma is that no time that actually existed is a time that they want to live in.

Trump will try to “blanket the zone” with constant misinformation that may make it difficult to empanel a south Florida jury. It will be very difficult to find prospective jurors who say truthfully that they haven’t heard about the indictments and/or formulated an idea about it.

The best way to beat back the misinformation being spread by Republicans and MAGA sympathizers is to televise the trial. Take the trial away from social media pundits and let the MAGAverse see their hero squirm, bluster, and lie with their own eyes. They’ll see his complete lack of a legitimate defense unfolding in real time. Of course, that would take a judge other than Aileen Cannon to preside.

Let’s close with a tune that’s not among the normal music flavor here at the Wrongologist. It makes the point that some Americans don’t want to live in America if it’s going to change. It shows that you don’t have to wear MAGA to be MAGA. It doesn’t mention anything overtly political, but it could be a theme song for Trump’s campaign:

The Wrongologist

Geopolitics, Power and Political Economy

Category: Leadership

Musk Is A Putin Pawn

Two Writers Who Speak To What America Needs

Henry Kissinger’s Reputation

Reshoring The Semiconductor Industry: The Chips Act

Have we reached peak MAGA?

We’re In Hot Water

July 4, 2023

Where Is The GOP’s War Of Words Taking Them?