Subsidies With a Side of Chips

A preview of last night’s 60 Minutes profile of Commerce Secretary Gina Raimondo.

The complete segment can be seen here:

https://www.cbsnews.com/news/commerce-secretary-gina-raimondo-on-us-microchip-production-blocking-of-sales-to-china-russia-60-minutes-transcript/

Will Intel use its $8.5 billion from the Chips and Science Act to do anything more than cover the company’s $7 billion loss in chip fabrication?

https://www.cnbc.com/2024/04/03/intel-drops-almost-8percent-after-chipmaker-reports-hefty-loss-in-foundry-business.html

I’ve become cynical about government industrial policy. The reason why is the risk of picking winners — and losers — in a targeted market. Which happened with the HITECH Act of 2009 and hospital information system software. Epic Systems was the big winner, with its database vendor, Intersystems, also benefiting.

… And in This Corner

From 1971, before unemployment turned inflation into stagflation, it’s the towering John Kenneth Galbraith vs. the diminutive Milton Friedman. What economists seemed to miss at that time was everywhere around them. The peak of the Baby Boom generation was coming of age.

In his questioning of Galbraith, William A. Rusher, a William F. Buckley cohort, comes off as a major prick. Galbraith was wrong about the effectiveness of wage and price controls, which was the subject of my senior thesis for my BA in Economics. He was right about the effect of the deadly embrace between labor and big business on inflation. Galbraith also saw the possibility of inflation increasing despite rising unemployment, in defiance of the Phillips Curve.

Rusher obviously favored Friedman, who curiously discounted organized labor as an inflationary factor. It’s very interesting that 2% inflation was considered the ideal target even 50 years ago. Without saying he agreed with Galbraith about the Phillips Curve, Friedman correctly pointed out that low inflation isn’t necessarily inconsistent with full employment.

Jury Pool Fool

If I were a prospective juror in Trump’s trial over falsifying financial records to cover up his hush money to Stormy Daniels, could I be impartial? This is what I would say, when questioned by the lawyers.

Trump said in 2016 that he could shoot somebody on 5th Avenue and not lose any voters. Based on that, I can see how the hush money might have been more about keeping Melania from learning about the affair.

Ted Talk – 3

When new hires seemed ready, they would go on a site visit with either myself or an experienced member of the group. The idea was the new person would participate in the technical work of a live field installation, and then conduct the training sessions with assistance from the experienced staffer.

The closer the customer was to the office the better, to keep travel expenses for two as low as possible. There were quite a few local customers back then, and those were ideal.

I preferred to trust an experienced member of the group, rather than going myself. It encouraged teamwork, while giving staffers who showed potential an opportunity to take a supervisory role.

The timeframe I’m talking about, by the way, was 1987, at the peak of the minicomputer era. In those days, an installation typically took an entire workweek, including travel. Leaving on a Monday and returning that Friday was the norm, with the more distant destinations requiring Sunday departures. Toronto? Leave Boston on a Monday morning. Seattle? Leave Sunday.

My group was always first in the installation schedule to go onsite at a customer. After the training visit a new staffer would fly solo and work alone. We were a System group, and we very rarely traveled with someone from an Application group in the company. This is an important point in Ted’s story, as will be explained later.

The upshot was that Ted did all right on his training visit. He managed the software installation and testing with minimal supervision, and he was a natural at conducting the training sessions. My boss and I were pleased with our new hire, and I forgot about my “little warning bell.”

The Posturing Gadfly

I watched another one of the Firing Line videos, made available on YouTube by the Hoover Institution Library. Only one month before Nixon resigned the presidency, William F. Buckley, Jr. sat with Bob Woodward and Carl Bernstein, who were promoting their book, All the President’s Men.

In hindsight, Buckley strikes me as a rather unimpressive pundit and debater. As I saw in the way he handled John Kenneth Galbraith, Buckley would bring up irrelevant and arcane ‘whataboutisms,” or he’d change the subject outright, or he’d resort to small personal digs. With Woodward and Bernstein he fell flat and clearly had trouble when attempting to articulate some inchoate thoughts.

In my post about the American Masters profile of Buckley, I said the only domestic major issue of his time that he got right was Watergate. Now I see that Buckley actually gave Nixon the benefit of the doubt right up to the end. All he really did was accept the inevitability of Nixon falling on his sword.

Woodward and Bernstein were very impressive on Firing Line. While remaining respectful of William F. Buckley, Jr., they held an unwavering advantage over him from the start. They masterfully handled Buckley’s various attempts at redirecting the interview onto irrelevant tangents. Buckley even brought up that favorite right-wing wet dream of Dick Cheney and Antonin Scalia, of the necessity to torture someone who has threatened to blow up a city with a nuclear weapon. Bernstein quickly and directly put the conversation back on track, while Woodward strategically played up to Buckley with some cleverly tailored flattery. Their way of working together can be seen in the famous movie adaptation with Dustin Hoffman and Robert Redford.

To Buckley’s credit, once he finally realized he was outmatched he mostly listened to Woodward and Bernstein. Perhaps it was because of the timeliness of the subject, or maybe Buckley allowed himself to consider the pair his journalist peers, at least for the moment. It’s revealed they turned down Buckley’s first request for a visit, and they almost rejected his second request.

We’re approaching the 50th anniversary of Tricky Dick going down the drain by flying away in a helicopter. Anyone who wants to be reminded of just how good Woodward and Bernstein were at their jobs, or for anyone who doubts their significance in what happened fifty years ago, this is a must-see hour.

As before, I am linking rather than embedding, because of the disclaimers at the start of the video. Clicking the picture will take you there. If the Hoover Institution were serious about their copyright claim, they would not allow their videos to be embedded.

Those Jobs Ain’t Comin’ Back

Bruce Springsteen recorded “My Hometown” in 1983. By the time I heard the song, I had seen for myself what he was singing about.

I was familiar with the harmful competitive effect shopping malls had upon downtown storefronts in the 70’s. What I saw on in the 80’s, during my business travels to Ohio and Illinois, were formerly thriving company towns struggling with unemployment. I was reminded of the textile mill towns back home that had been devastated by the mills moving to Southern states.

What happened to the once mighty American steel industry, that declined so rapidly in the 80’s? Were foreign governments dumping steel on the market for less than the cost of production? Or were foreign competitors making steel more efficiently, while American steel manufacturers had failed to innovate?

There’s a comment at the end of the podcast, about the steel industry showing up in pop culture. Big Steel’s influence extended all the way to a galaxy far, far away.