24 ms·

The US appears to be fully in the grips of centralized economic autarky. A tiny coterie of industrialists who have the President's ear decide how to allocate a

by rchaud 2y ago

The US appears to be fully in the grips of centralized economic autarky. A tiny coterie of industrialists who have the President's ear decide how to allocate a gigantic amount of capital for their pet projects while the state raises tariffs and implements bans to protect them from competition. Didn't go well for South America in the 60s and 70s but perhaps, as economists are prone to saying, "this time will be different".

jeffy29 2y ago
And it never is.
deleted 2y ago
[deleted]
whimsicalism 2y ago
this is private capital. yes, we are in an era of big projects and big capital deployment. is that synonymous with centralized autarky? i don’t agree
- i_love_retros 2y ago
  What does it have to do with Trump then? Why was he involved?
  - umeshunni 2y ago
    He love the publicity and most people won't realize that he doesn't have anything to do with this.
    - aylmao 2y ago
      AI very much has to do with the state. It's an arms race between China and the USA, per many [4]. And China doesn't seem to be behind any longer [1]. It's not only Trump. Before leaving Biden already ordered the DoE and the DoD to lease sites for data centers and energy generation. The only reason we don't see a "Department of AI" or a "National AI Agency" is due to how the military industrial complex works, and a lot of lobbying I'm sure. [1] https://www.scmp.com/tech/policy/article/3295662/beijing-meeting-puts-spotlight-chinas-new-face-ai-deepseek-founder-liang-wenfeng https://www.scmp.com/tech/policy/article/3295662/beijing-mee... [2] https://www.insideglobaltech.com/2025/01/20/biden-administration-releases-executive-order-on-ai-infrastructure/ https://www.insideglobaltech.com/2025/01/20/biden-administra... [3] https://www.utilitydive.com/news/biden-doe-dod-lease-sites-ai-data-centers-clean-energy/737257/ https://www.utilitydive.com/news/biden-doe-dod-lease-sites-a... [4] https://www.technologyreview.com/2025/01/21/1110269/there-can-be-no-winners-in-a-us-china-ai-arms-race/ https://www.technologyreview.com/2025/01/21/1110269/there-ca...
    - FrustratedMonky 2y ago
      Funny how he said he did this, but then right during the press conference they mention the data centers already under construction from Biden time frame.
  - rchaud 2y ago
    Because $500b is not a number anybody will commit to without significant assurances regarding tax breaks, access to labour, security etc which can only be provided by the state. Musk cannot ban Chinese autos from the US market, but the government can. Same goes for Tiktok, Zuck cannot force Americans not to use it. AI is the next battlefield and further bans will be coming down the line to make sure the investment is protected.
    - api 2y ago
      Musk could also work to make Tesla more competitive with BYD in the mainstream American car market instead of making Tesla double and then triple down on a weird niche product like the Cybertruck that will never appeal to many people. Tesla had a huge lead in EV tech that they seem to be squandering by not addressing boring stuff like build quality, giving BYD plenty of time to catch up. Their whole product line is starting to look stagnant. Keeping BYD out won't help if all the other car makers also catch up. If BYD pulls far enough ahead they could just create a US division and make cars here like Toyota and Nissan do. Nissan is on the ropes, so maybe BYD could just buy them and make that their US brand and get all their factories and supply chains. If Tesla kept iterating on the Model 3, released the Model E, and Musk stayed out of divisive politics that alienate customers, Tesla had a chance to own the mainstream of the US auto market for the next 50 years. I'd say that's gone now.
      - ethbr1 2y ago
        Person who was right a few times, despite others naysaying, assumes they're right on new things, especially as they get older... That's certainly not a thing that's ever happened before. /s
        api 2y ago
        Yeah, I am reminded of Linus Pauling thinking vitamin C cured everything. Success is dangerous.
        ethbr1 2y ago
  - JumpCrisscross 2y ago
    > What does it have to do with Trump then? Why was he involved? One of the broken parts of the American system is permitting. Trump can sidestep that by letting this be built on federal land. That, in turn, unlocks investment. Beyond that, DoD and DoE are massive buyers of compute. Seeding the venture with purchase agreements from them de-risks the project further. Finally, by Trump putting his name to it he assigns it his bully pulpit's prestige. (Though that doesn't appear to have carried over to Musk, who's already taking pot shots at it.)
- lenerdenator 2y ago
  This is an amount that would be a meaningful change to most US states' gross annual economic output that we're talking about, and a few people control it. Sounds pretty centralized to me. The fact that a handful of individuals have half a trillion dollars to throw at something that may or may not work while working people can pay the price of a decent used car each year, every year to their health insurance company only to have claims denied is insane.
  - whimsicalism 2y ago
    Free movement of capital and the ability to identify promising projects and allocate our resources there are why our society is prosperous and why we are able to devote more resources towards healthcare than any society that has ever come before us. This money is managed by small amounts of people but it is aggregated from millions of investors, most of these are public companies. The US spends over 10x that amount on healthcare each year.
    - lenerdenator 2y ago
      Is that why I, and a lot of other people my age, have a lower standard of living than my parents did at the same point in their lives? The "free movement of capital" only ever seems to move the capital one direction: up to the people who needed the labor of others to reach such wealth.
      - whimsicalism 2y ago
        The large majority of people do not have a lower standard of living than their parents at the same age. My dad’s family could not even afford shoes for him and he lived in Europe. I am sorry that you feel you are downwardly mobile, but you should not assume your experience generalizes.
        lenerdenator 2y ago
        Mine lived in America. Where the story in the article is taking place. This is, in fact, a generalized experience: [0] [0]https://www.pewresearch.org/social-trends/2019/02/14/millennial-life-how-young-adulthood-today-compares-with-prior-generations-2/ https://www.pewresearch.org/social-trends/2019/02/14/millenn...
- rchaud 2y ago
  And where do you think the socialists of the 60s got hard currency to import machinery from? Borrowing from non-state lenders.
  - whimsicalism 2y ago
    borrowing from non-state lenders is neither a necessary nor sufficient condition for ‘autarky’ and your reasoning seems to just be since it happened in South America in the 60s it must be part of the economic mismanagement that occurred there. i agree that our protectionist policies are bad and autarkic in nature
  - FrustratedMonky 2y ago
    Like every other country. You exchange good or services for currencies from the other countries, and then you can use that currency to buy things from anybody that would take that currency. There is nothing saying a socialist country can't produce goods and services, and sell them.
- FrustratedMonky 2y ago
  Is this word being used correctly? au·tar·ky /ˈôˌtärkē/ noun economic independence or self-sufficiency. "rural community autarchy is a Utopian dream" a country, state, or society which is economically independent. plural noun: autarkies; plural noun: autarchies
  - maxlin 2y ago
    that's what I thought
  - boredhedgehog 2y ago
    But which word did he mean instead? It seems it should a synonym for "coterie".
stronglikedan 2y ago
It will be different (and as another commentor pointed out, it probably always has been), because the adults are back it charge, thankfully.
- knowaveragejoe 2y ago
  Tariffs, mass deportations, rescinding anything the predecessor did because of your personal egotism. None of these are the behavior of adults, and you know better.
boringg 2y ago
Apples to oranges comparison. The problem set is completely different regarding your doom example of South America.
- rchaud 2y ago
  How? the problem is the same: a need for rapid industrial development to grow the economy. The solutions are the same: government picks winners, which is how an upstart like OpenAI can be paired with a dinosaur like Oracle. The latter's CEO of course being a long time friend of Trump.
  - JumpCrisscross 2y ago
    > the problem is the same: a need for rapid industrial development to grow the economy This is first-mover industrial development being funded by private actors looking out for a return on their investments. South America saw nothing similar--it was duplicating others' industrialisation with state capital (often borrowed from overseas) while spending massively on handouts.
ahmeneeroe-v2 2y ago
Private capital. That detail seems to derail your whole comment.
- aylmao 2y ago
  How so? Does this capital being private ensure "this time will be different"?
  - Parfait__ 2y ago
    They should be free to decide how to spend their money?
  - JumpCrisscross 2y ago
    > Does this capital being private ensure "this time will be different"? South America didn't have a mix of domestic and foreign investors deploying massive quantities of private money into capital assets in the 60s and 70s. They had governments borrowing to fund their citizens' consumption. Massive difference on multiple levels.
    - aylmao 2y ago
      > They had governments borrowing to fund their citizens' consumption. The problem here being that it was money spent that was never earned back, and money that eventually had to be paid back, right? This can also happen with private capital. 2008 was a bust caused by private banks, for example. AI hasn't proven to be profitable yet [1], and I'm not sure it'll makes a difference, for the success of projects like this, wether the money is coming from government or not. In fact, if the 2008 bank bail-out, auto industry bail-out, the Silicon Valley bank prop-up, and other such actions by the US government are considered [2], if this turns out to be a bubble it will be taxpayers who end up fronting the bill. [1] https://www.cbc.ca/news/business/ai-generative-business-money-revenue-1.7264014 https://www.cbc.ca/news/business/ai-generative-business-mone... [2] https://www.investopedia.com/articles/economics/08/government-financial-bailout.asp#toc-the-savings-and-loan-bailout-of-1989 https://www.investopedia.com/articles/economics/08/governmen...
jncfhnb 2y ago
The effectiveness of policies is influenced by your starting position. South America is relatively poor. The United States is the best positioned country in the world by a long shot.
briandear 2y ago
Tariffs are a negotiating tactic. Read Art of the Deal and that outlines how Trump negotiates.
- rchaud 2y ago
  So is being delinquent on debts apparently.
newsclues 2y ago
Compared to China?
deleted 2y ago
[deleted]

by rchaud 2y ago

jeffy29 2y ago

And it never is.

deleted 2y ago

[deleted]

whimsicalism 2y ago

this is private capital. yes, we are in an era of big projects and big capital deployment. is that synonymous with centralized autarky? i don’t agree

i_love_retros 2y ago
What does it have to do with Trump then? Why was he involved?
- umeshunni 2y ago
  He love the publicity and most people won't realize that he doesn't have anything to do with this.
  - aylmao 2y ago
    AI very much has to do with the state. It's an arms race between China and the USA, per many [4]. And China doesn't seem to be behind any longer [1]. It's not only Trump. Before leaving Biden already ordered the DoE and the DoD to lease sites for data centers and energy generation. The only reason we don't see a "Department of AI" or a "National AI Agency" is due to how the military industrial complex works, and a lot of lobbying I'm sure. [1] https://www.scmp.com/tech/policy/article/3295662/beijing-meeting-puts-spotlight-chinas-new-face-ai-deepseek-founder-liang-wenfeng https://www.scmp.com/tech/policy/article/3295662/beijing-mee... [2] https://www.insideglobaltech.com/2025/01/20/biden-administration-releases-executive-order-on-ai-infrastructure/ https://www.insideglobaltech.com/2025/01/20/biden-administra... [3] https://www.utilitydive.com/news/biden-doe-dod-lease-sites-ai-data-centers-clean-energy/737257/ https://www.utilitydive.com/news/biden-doe-dod-lease-sites-a... [4] https://www.technologyreview.com/2025/01/21/1110269/there-can-be-no-winners-in-a-us-china-ai-arms-race/ https://www.technologyreview.com/2025/01/21/1110269/there-ca...
  - FrustratedMonky 2y ago
    Funny how he said he did this, but then right during the press conference they mention the data centers already under construction from Biden time frame.
- rchaud 2y ago
  Because $500b is not a number anybody will commit to without significant assurances regarding tax breaks, access to labour, security etc which can only be provided by the state. Musk cannot ban Chinese autos from the US market, but the government can. Same goes for Tiktok, Zuck cannot force Americans not to use it. AI is the next battlefield and further bans will be coming down the line to make sure the investment is protected.
  - api 2y ago
    Musk could also work to make Tesla more competitive with BYD in the mainstream American car market instead of making Tesla double and then triple down on a weird niche product like the Cybertruck that will never appeal to many people. Tesla had a huge lead in EV tech that they seem to be squandering by not addressing boring stuff like build quality, giving BYD plenty of time to catch up. Their whole product line is starting to look stagnant. Keeping BYD out won't help if all the other car makers also catch up. If BYD pulls far enough ahead they could just create a US division and make cars here like Toyota and Nissan do. Nissan is on the ropes, so maybe BYD could just buy them and make that their US brand and get all their factories and supply chains. If Tesla kept iterating on the Model 3, released the Model E, and Musk stayed out of divisive politics that alienate customers, Tesla had a chance to own the mainstream of the US auto market for the next 50 years. I'd say that's gone now.
    - ethbr1 2y ago
      Person who was right a few times, despite others naysaying, assumes they're right on new things, especially as they get older... That's certainly not a thing that's ever happened before. /s
      - api 2y ago
        Yeah, I am reminded of Linus Pauling thinking vitamin C cured everything. Success is dangerous.
        ethbr1 2y ago
- JumpCrisscross 2y ago
  > What does it have to do with Trump then? Why was he involved? One of the broken parts of the American system is permitting. Trump can sidestep that by letting this be built on federal land. That, in turn, unlocks investment. Beyond that, DoD and DoE are massive buyers of compute. Seeding the venture with purchase agreements from them de-risks the project further. Finally, by Trump putting his name to it he assigns it his bully pulpit's prestige. (Though that doesn't appear to have carried over to Musk, who's already taking pot shots at it.)
lenerdenator 2y ago
This is an amount that would be a meaningful change to most US states' gross annual economic output that we're talking about, and a few people control it. Sounds pretty centralized to me. The fact that a handful of individuals have half a trillion dollars to throw at something that may or may not work while working people can pay the price of a decent used car each year, every year to their health insurance company only to have claims denied is insane.
- whimsicalism 2y ago
  Free movement of capital and the ability to identify promising projects and allocate our resources there are why our society is prosperous and why we are able to devote more resources towards healthcare than any society that has ever come before us. This money is managed by small amounts of people but it is aggregated from millions of investors, most of these are public companies. The US spends over 10x that amount on healthcare each year.
  - lenerdenator 2y ago
    Is that why I, and a lot of other people my age, have a lower standard of living than my parents did at the same point in their lives? The "free movement of capital" only ever seems to move the capital one direction: up to the people who needed the labor of others to reach such wealth.
    - whimsicalism 2y ago
      The large majority of people do not have a lower standard of living than their parents at the same age. My dad’s family could not even afford shoes for him and he lived in Europe. I am sorry that you feel you are downwardly mobile, but you should not assume your experience generalizes.
      - lenerdenator 2y ago
        Mine lived in America. Where the story in the article is taking place. This is, in fact, a generalized experience: [0] [0]https://www.pewresearch.org/social-trends/2019/02/14/millennial-life-how-young-adulthood-today-compares-with-prior-generations-2/ https://www.pewresearch.org/social-trends/2019/02/14/millenn...
rchaud 2y ago
And where do you think the socialists of the 60s got hard currency to import machinery from? Borrowing from non-state lenders.
- whimsicalism 2y ago
  borrowing from non-state lenders is neither a necessary nor sufficient condition for ‘autarky’ and your reasoning seems to just be since it happened in South America in the 60s it must be part of the economic mismanagement that occurred there. i agree that our protectionist policies are bad and autarkic in nature
- FrustratedMonky 2y ago
  Like every other country. You exchange good or services for currencies from the other countries, and then you can use that currency to buy things from anybody that would take that currency. There is nothing saying a socialist country can't produce goods and services, and sell them.
FrustratedMonky 2y ago
Is this word being used correctly? au·tar·ky /ˈôˌtärkē/ noun economic independence or self-sufficiency. "rural community autarchy is a Utopian dream" a country, state, or society which is economically independent. plural noun: autarkies; plural noun: autarchies
- maxlin 2y ago
  that's what I thought
- boredhedgehog 2y ago
  But which word did he mean instead? It seems it should a synonym for "coterie".

stronglikedan 2y ago

It will be different (and as another commentor pointed out, it probably always has been), because the adults are back it charge, thankfully.

knowaveragejoe 2y ago
Tariffs, mass deportations, rescinding anything the predecessor did because of your personal egotism. None of these are the behavior of adults, and you know better.

boringg 2y ago

Apples to oranges comparison. The problem set is completely different regarding your doom example of South America.

rchaud 2y ago
How? the problem is the same: a need for rapid industrial development to grow the economy. The solutions are the same: government picks winners, which is how an upstart like OpenAI can be paired with a dinosaur like Oracle. The latter's CEO of course being a long time friend of Trump.
- JumpCrisscross 2y ago
  > the problem is the same: a need for rapid industrial development to grow the economy This is first-mover industrial development being funded by private actors looking out for a return on their investments. South America saw nothing similar--it was duplicating others' industrialisation with state capital (often borrowed from overseas) while spending massively on handouts.

ahmeneeroe-v2 2y ago

Private capital. That detail seems to derail your whole comment.

aylmao 2y ago
How so? Does this capital being private ensure "this time will be different"?
- Parfait__ 2y ago
  They should be free to decide how to spend their money?
- JumpCrisscross 2y ago
  > Does this capital being private ensure "this time will be different"? South America didn't have a mix of domestic and foreign investors deploying massive quantities of private money into capital assets in the 60s and 70s. They had governments borrowing to fund their citizens' consumption. Massive difference on multiple levels.
  - aylmao 2y ago
    > They had governments borrowing to fund their citizens' consumption. The problem here being that it was money spent that was never earned back, and money that eventually had to be paid back, right? This can also happen with private capital. 2008 was a bust caused by private banks, for example. AI hasn't proven to be profitable yet [1], and I'm not sure it'll makes a difference, for the success of projects like this, wether the money is coming from government or not. In fact, if the 2008 bank bail-out, auto industry bail-out, the Silicon Valley bank prop-up, and other such actions by the US government are considered [2], if this turns out to be a bubble it will be taxpayers who end up fronting the bill. [1] https://www.cbc.ca/news/business/ai-generative-business-money-revenue-1.7264014 https://www.cbc.ca/news/business/ai-generative-business-mone... [2] https://www.investopedia.com/articles/economics/08/government-financial-bailout.asp#toc-the-savings-and-loan-bailout-of-1989 https://www.investopedia.com/articles/economics/08/governmen...

jncfhnb 2y ago

The effectiveness of policies is influenced by your starting position. South America is relatively poor. The United States is the best positioned country in the world by a long shot.

briandear 2y ago

Tariffs are a negotiating tactic. Read Art of the Deal and that outlines how Trump negotiates.

rchaud 2y ago
So is being delinquent on debts apparently.

newsclues 2y ago

Compared to China?

deleted 2y ago

[deleted]