4 ms·

They tried cutting taxes like crazy since Reagan and it's been a complete and utter bust.

rsj_hn 6y ago
This is when people get all confused by the difference between "necessary" and "sufficient". You need a lot more than lower taxes to make a business-friendly environment, and in some sense these are fungible. Businesses can pay more taxes in order to get other advantages, like more flexible labor policy, more skilled workers, or more stable regulations. People don't realize that stability of regulations is much more important than the specific content. You don't want some demagogue adding huge costs to you because you don't payoff some politically connected group, and the moment any business gets successful, lots of politically connected groups appear at their door demanding payoffs. The specific problem with chip manufacturing is that this is a dirty business requiring lots of chemicals and lots of water. There is simply no way anything like that can happen in Western Europe now. You will have millions of sanctimonious kids with nothing more meaningful in their lives than marching with signs about saving the ground, etc, and then angry politicians will get on soapboxes and denounce the greedy-ground-polluters in order to win elections, and so Europe will continue to buy their chips from factories located in East Asia or America, where there are jurisdictions in which people have other things to give their life meaning. Manufacturing has been pouring into East Asia not because asians are better at manufacturing, but because they value it enough to make systematic efforts to attract and promote it. It's about values and worldviews much more than a simple thing like tax rates (although East Asia has reasonable business tax rates, they have phenomenally cheap credit for manufacturers, good infrastructure, and very stable regulations.)
- obscoth 6y ago
  Yeah, why aren’t we destroying the environment in Europe more? This is a great question. Kids these days have it too easy. They barely get any lead in their water.
  - rsj_hn 6y ago
    lol, "destroying the environment". News flash: shifting the environmental costs to China is not "saving the environment", it is just outsourcing the environmental damage to somewhere else, where more likely than not worse damage will occur than if the factory was located in Europe. If there was a general call to not use chips, it would be a different matter. But this is about personal sanctimony, not environmental impact. Moreover the environment is not some fragile thing that is "destroyed" by a chip plant. So here, too, there is a lack of understanding about what is happening so that people can make claims of personal righteousness (and the "environment" is just a place-holder that can and is swapped out for other concerns that yield more self-righteousness credits per unit effort at the drop of a hat).
    - obscoth 6y ago
      Obviously I don’t want industrial chemicals in China’s groundwater, either. You aren’t actually interested in good faith discussion, but you do seem to enjoy being angry, so keep doing that I guess.
  - totalZero 6y ago
    We have the technology to deal with those byproducts. It just costs money and takes energy.
    - nobodyandproud 6y ago
      Then one answer is to impose tariffs on end services and products, on nations that don’t meet the same environmental concerns. The tariffs should match the cost of said overhead.
      - rsj_hn 6y ago
        Couldn't agree more. that would be a consistent position to hold as it wouldn't cause a net harm by driving manufacturing to places with terrible environmental records. It wouldn't be as good as sponsoring research and capital investment to create cleaner manufacturing processes, which would actually improve the situation. The combination of rigid environmental/labor practices in the developed world with an equally fanatical devotion to unfettered cross-border capitol flows and 'trade' is systematically immiserating the West and leading to massive net environmental damage even though both of these goals: cosmopolitanism and environmentalism, are individually the darlings of western elites.
- detaro 6y ago
  Somehow none of that has happened with the existing fabs here, so why would it suddenly be an issue?
  - rsj_hn 6y ago
    I don't know where you live or what you mean by "here", but there is a reason no new chip fab is going to be built in California but they are building them in Arizona. The US has a federal system where states have a lot of control over things like environmental regulations, water usage, etc.
    - detaro 6y ago
      Western Europe, where fabs "can't happen". Nobody is complaining about the existing fabs, they really are not worse than other industry, and they get the high-tech/future bonus. No "millions of sanctimonious kids with nothing more meaningful in their lives than marching with signs" as you like to call them against that.
      - rsj_hn 6y ago
        I am not saying that fabs can't happen because of something in Europeans' DNA. I am saying they can't happen because of the current political climate. Thus we are talking about obstacles to building new fabs in this thread. Existing fabs are a sunk cost -- the environmental approvals have already been granted, the political battles already waged, etc. In terms of existing fabs, there is a single modern fab in Crolles, France and a few (3?) in Germany. I think that's it for Europe - 4 fabs that can do 300mm. Then you have a bunch of 200mm built in the 80s. Of course there is Ireland, but that's a fundamentally different situation -- Ireland exists as a type of corporate welcome mat and shouldn't be categorized with "europe" when you are talking about business climate/regulations.

This is when people get all confused by the difference between "necessary" and "sufficient". You need a lot more than lower taxes to make a business-friendly environment, and in some sense these are fungible. Businesses can pay more taxes in order to get other advantages, like more flexible labor policy, more skilled workers, or more stable regulations. People don't realize that stability of regulations is much more important than the specific content. You don't want some demagogue adding huge costs to you because you don't payoff some politically connected group, and the moment any business gets successful, lots of politically connected groups appear at their door demanding payoffs. The specific problem with chip manufacturing is that this is a dirty business requiring lots of chemicals and lots of water. There is simply no way anything like that can happen in Western Europe now. You will have millions of sanctimonious kids with nothing more meaningful in their lives than marching with signs about saving the ground, etc, and then angry politicians will get on soapboxes and denounce the greedy-ground-polluters in order to win elections, and so Europe will continue to buy their chips from factories located in East Asia or America, where there are jurisdictions in which people have other things to give their life meaning. Manufacturing has been pouring into East Asia not because asians are better at manufacturing, but because they value it enough to make systematic efforts to attract and promote it. It's about values and worldviews much more than a simple thing like tax rates (although East Asia has reasonable business tax rates, they have phenomenally cheap credit for manufacturers, good infrastructure, and very stable regulations.)

obscoth 6y ago
Yeah, why aren’t we destroying the environment in Europe more? This is a great question. Kids these days have it too easy. They barely get any lead in their water.
- rsj_hn 6y ago
  lol, "destroying the environment". News flash: shifting the environmental costs to China is not "saving the environment", it is just outsourcing the environmental damage to somewhere else, where more likely than not worse damage will occur than if the factory was located in Europe. If there was a general call to not use chips, it would be a different matter. But this is about personal sanctimony, not environmental impact. Moreover the environment is not some fragile thing that is "destroyed" by a chip plant. So here, too, there is a lack of understanding about what is happening so that people can make claims of personal righteousness (and the "environment" is just a place-holder that can and is swapped out for other concerns that yield more self-righteousness credits per unit effort at the drop of a hat).
  - obscoth 6y ago
    Obviously I don’t want industrial chemicals in China’s groundwater, either. You aren’t actually interested in good faith discussion, but you do seem to enjoy being angry, so keep doing that I guess.
- totalZero 6y ago
  We have the technology to deal with those byproducts. It just costs money and takes energy.
  - nobodyandproud 6y ago
    Then one answer is to impose tariffs on end services and products, on nations that don’t meet the same environmental concerns. The tariffs should match the cost of said overhead.
    - rsj_hn 6y ago
      Couldn't agree more. that would be a consistent position to hold as it wouldn't cause a net harm by driving manufacturing to places with terrible environmental records. It wouldn't be as good as sponsoring research and capital investment to create cleaner manufacturing processes, which would actually improve the situation. The combination of rigid environmental/labor practices in the developed world with an equally fanatical devotion to unfettered cross-border capitol flows and 'trade' is systematically immiserating the West and leading to massive net environmental damage even though both of these goals: cosmopolitanism and environmentalism, are individually the darlings of western elites.
detaro 6y ago
Somehow none of that has happened with the existing fabs here, so why would it suddenly be an issue?
- rsj_hn 6y ago
  I don't know where you live or what you mean by "here", but there is a reason no new chip fab is going to be built in California but they are building them in Arizona. The US has a federal system where states have a lot of control over things like environmental regulations, water usage, etc.
  - detaro 6y ago
    Western Europe, where fabs "can't happen". Nobody is complaining about the existing fabs, they really are not worse than other industry, and they get the high-tech/future bonus. No "millions of sanctimonious kids with nothing more meaningful in their lives than marching with signs" as you like to call them against that.
    - rsj_hn 6y ago
      I am not saying that fabs can't happen because of something in Europeans' DNA. I am saying they can't happen because of the current political climate. Thus we are talking about obstacles to building new fabs in this thread. Existing fabs are a sunk cost -- the environmental approvals have already been granted, the political battles already waged, etc. In terms of existing fabs, there is a single modern fab in Crolles, France and a few (3?) in Germany. I think that's it for Europe - 4 fabs that can do 300mm. Then you have a bunch of 200mm built in the 80s. Of course there is Ireland, but that's a fundamentally different situation -- Ireland exists as a type of corporate welcome mat and shouldn't be categorized with "europe" when you are talking about business climate/regulations.