The Semiconductor Supply Chain

I want to commend to your attention what I think is a very good article by Akhil Thadani and Gregory C. Allen at the Center for Strategic and International Studies which they describe as a “map” of the semiconductor supply chain. Here’s their conclusion:

As it stands, technological and economic limitations have evolved a semiconductor supply chain that is incredibly complex and specialized. Despite consistent efforts, no government has been able to achieve true self-sufficiency in semiconductor manufacturing to date. To successfully fortify the United States’ position along the supply chain and mitigate risk, U.S. policy should aim to grow a healthy and resilient semiconductor ecosystem in which allies and partners continue to play a key role. The Department of Commerce has already stated that this is a key prong of the CHIPS Act implementation strategy. Carried out by the CHIPS office in the Department of Commerce, coordinating investment and incentive programs, promoting knowledge exchanges and collaboration, and facilitating cross-border commerce are all high-priority objectives for CHIPS Act implementation.[44] Continued dialogue with key allies, particularly in the Indo-Pacific, is important to minimize duplicative investments, grow the comparative strengths of each country’s domestic industry, and de-risk key dependencies.

In my view it would be prudent for the U. S. to rely a lot more on Canada and Mexico and a lot less on Taiwan, Japan, and South Korea.

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Another World

The editors of the Wall Street Journal remark on what transpired here in Chicago over the weekend:

The shootings occurred even as the mayor visited neighborhoods with a plea to keep the city safe. He favors what he calls a “holistic” approach to fighting crime, which means funding community groups. “Poverty didn’t go away over the weekend,” Mr. Johnson said. “Communities have been disinvested in and traumatized” and “you are seeing the manifestation of that trauma.”

Yes, he actually said that, which goes a long way to explaining why gunmen patrol the streets with impunity. Does the mayor have a date when he thinks poverty will vanish, the “trauma” will ease, and the shootings stop? Is the July 4 weekend too soon, or will it be Labor Day?

His comments reflect the other-worldly nature of Chicago progressives, for whom Mr. Johnson is now the chief spokesman. He campaigned on hiring 200 new police detectives, but in the city’s current state he’ll need 2,000 and a revival of tough anti-crime policies to stop the carnage in the streets. Morale at the Chicago Police Department is flagging and there’s no permanent superintendent.

Then again, Chicagoans elected Mr. Johnson in April knowing all this. Crime was the biggest issue, and voters apparently opted for “holistic” crime fighting as opposed to actually fighting crime. How do you like it?

A couple of observations. First, “disinvestment” is a consequence of crime as well as, per the mayor, a cause of it. Contrary to the mayor, I happen to think it is mostly a consequence. I would add that small businesses have been driven from Chicago, presumably with the best of intentions, as Chicago tried to attract major retailers. Every Walmart store displaces scores of small, individually owned and operated stores. Then when Walmart leaves because “shrinkage” (as it’s called in the trade) is eating up any prospective profits, that leaves a desert. Another factor is that by simply crossing the street you can pay less. That’s what happens when you have the highest sales tax in the state. I suspect that the mayor will find attracting new small businesses with ties to the community a greater challenge than dealing with the forces that are pushing them out.

Second, I think he’s trying to shoehorn the emiseration thesis out of the situation on the South and West Sides. Lots of luck with that. The empirical evidence is in the opposite direction.

Third, he might want to consider the possibility that young people on the South and West Sides are killing each other a) because they can and b) because they don’t believe there will be consequences for whatever they do.

Finally, 18% of Chicago’s registered voters voted for Mr. Johnson. Don’t blame the rest of us.

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Thiessen’s “America First” Case

In his Washington Post column Mark Thiessen presents what he refers to as an “America First” case for U. S. support for the Ukraine in its war with Russia. Here are his ten points:

  1. Russian victory would embolden our enemies
  2. A Ukrainian victory will help deter China
  3. Defeating Putin would weaken the Sino-Russian partnership
  4. Support for Ukraine will restore the Reagan Doctrine
  5. Victory will save the U.S. billions
  6. A proving ground for new weapons
  7. Arming Ukraine is revitalizing our defense industrial base
  8. The Russian invasion has strengthened U.S. alliances
  9. Victory helps prevent nuclear proliferation
  10. Victory in Ukraine is achievable

I’m not his target audience—Republicans are. However, to understand my issues with his argument, let’s first define our terms. “Victory for Ukraine”, as defined by the Ukrainian government and augmented by me to add the obvious, means:

  1. Withdrawal of Russia from all Ukrainian territory as defined by its pre-2014 borders.
  2. Cessation of hostilities within those borders including by Russian ethnic separatists and Ukrainian nationalists.
  3. Enough of the Ukrainian population remains within those borders to maintain civil society.

while “victory for Russia”, as defined by the Russian government, means that Russia continues to hold Crimea and the Donbas and Ukraine does not join NATO.

I would submit that victory for Ukraine is not achievable and I don’t honestly know whether victory for Russia is, either. At least 20% and possibly as much as 30% of Ukraine’s population has already left the country. Frankly, I doubt that most will return. The total numbers of those killed are at least .3% of the population and continue to mount. I don’t know what percentage of the population must die before Ukraine loses cohesion.

The question then becomes is preventing Russia from outright victory an objective sufficient for U. S. interests? I don’t think so but I cannot speak for the audience Mr. Thiessen is addressing.

On his other bullet points I think that the likely outcome in which neither Ukraine nor Russia actually prevails in their own terms fails to satisfy any of his points 1-9.

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Contrasts

These three articles provide such contrasting views of events I thought I should link to all of them.

First, there’s Walter Russell Mead’s column in the Wall Street Journal. In his view Russia’s war in Ukraine provides the United States with an opportunity:

Helping Ukraine is not a charity project to be undertaken out of sentiment. Nor is it a strategic distraction that weakens our hand in the Indo-Pacific. In his blindness and folly, Vladimir Putin has handed the U.S. a golden opportunity. We should seize it with both hands.

Next up is Marwan Bishara’s take at Al Jazeera which, as you will note, is in sharp contrast with Dr. Mead’s:

As the war drags on with no end in sight, it is important to address US President Joe Biden’s – and his Western allies’ – miscalculations in Ukraine as well. These, unsurprisingly, mirror Russia’s own failures, as both leaders prove incapable of learning the lessons of imperial hubris.

From the start, Biden took the moral high ground, framing the conflict in Ukraine as a global one between democracy and autocracy, between respect for international law and national sovereignty and the scourge of Russian aggression. Yet, he pleaded with world autocrats to join the crusade and disregarded America’s own illegal wars.

He underestimated the power of Russian nationalism and rejected Moscow’s fears of NATO expansion towards its borders as baseless excuses for Russian imperialism.

In the months leading up to the war, Biden undermined efforts to implement the Minsk agreements signed in 2014 and 2015 to end the conflict in the Donbas region. They were meant to pave the way for the creation of two autonomous Russian areas in eastern Ukraine and stave off the expansion of Russian intervention in the country.

Both Ukraine and Russia had signed on, but France and Germany, which helped conclude and refine these agreements, failed to push hard enough for their implementation. Despite having much to lose from a devastating European war, European powers did little to stop the escalation.

Biden also underestimated Russia’s military endurance, betting on Ukrainians defeating it just as the Afghans defeated the Soviet Union with help from the United States.

But for Moscow, Ukraine is far more important and strategic than Afghanistan, considering its shared history and geographic proximity. From Putin’s perspective, Ukraine is vital for Russia’s national security and his regime’s survival. Clearly, he would rather have it destroyed than see it join a Western alliance.

Finally, there’s Daniel Davis’s piece at 19FortyFive:

Put simply, Ukraine doesn’t have the personnel or industrial capacity to replace their lost men and equipment in comparison to the Russians. Moreover, Russia has been learning from its many tactical mistakes and evidence suggests they are improving tactically while simultaneously expanding their industrial capacity. Even bigger than the dearth of ammunition and equipment for Ukraine, however, is the number of trained and experienced personnel they’ve lost. Many of those skilled troops and leaders simply cannot be replaced in the span of mere months.

Ukraine is now faced with a world-class dilemma: should they use their last offensive capacity in a last gasp of hoping they inflict a grave wound on the Russians defending in the occupied territories or preserve them in case Russia launches a summer offensive of their own? There are serious risks with either course of action. I assess there is currently no likely path for Ukraine to achieve a military victory. Continuing to fight in that hope may perversely result in them losing even more territory.

I have no idea of which of these views if any to believe. Ukraine cannot be an asset for the U. S. as Dr. Mead avers if it is defeated on the battlefield. Simple as that. Indeed, rather than being an asset Ukraine could become a permanent liability.

The reports of drone and missile attacks by Russia and Ukraine do little to clear things up.

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Last Night’s Dinner


Last night’s dinner turned out particularly well so I thought I’d put a picture of it here.

Smoked baby back ribs
Sea island red peas
Rice
Green salad

I started smoking the ribs when I rose yesterday morning at 6:00am and they were done by 4:30pm. I kept them warm in the oven until we were ready for dinner. The sea island red peas were very good—they were sweeter than I expected them to be.

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Memorial Day, 2023

After more than 20 years posting at The Glittering Eye, I’ve expressed pretty much all of my thoughts about Memorial Day. I think that Monday holidays dilute the meaning of national holidays, reducing their role in incorporating the actual events they were originally intended to commemorate into the common culture. As you must surely know, Memorial Day originally was a day of remembrance of the Civil War dead, particularly those who died serving the Union Army.

The last members of my direct line of ancestors to have served in war served in the Union Army during the Civil War. My great-great-grandfather Wagner participated in some of the fiercest actions in the war. He survived the war but he died young of tuberculosis which I suspect he contracted while serving.

My great-great-grandfather Flanagan also served in the Union Army during the Civil War as did my great-great-grandfather McCoy. I’m not sure about my great-great-grandfather Schneider. He, too, died young of tuberculosis but I don’t know whether he served in the war or not. My great-great-grandfather Schuler did not arrive from Switzerland until shortly after the war.

My mom’s Uncle Ed was one of the lucky few who served in World War II, the Korean War, and the Vietnam War. He had a specialty the Navy greatly needed. My wife’s father and uncles served in the Navy in World War II. All survived the war.

The single thing we can do to honor those died in the service of our country most is to ensure that no more American soldiers are killed or maimed in wars that do not make us a bit safer or more secure. We’ve had a lot of those lately: Iraq, Afghanistan after about 2002, and Libya, just to name a few.

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Non-Demonized Memorial Day Tally

So far twelve Chicagoans have been killed this Memorial Day weekend. The long weekend is only half over and we’ve already equaled the number killed in 2022.

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Shakeup in California Homeowners Insurance

This strikes me as a story worth more attention than it’s receiving. State Farm Insurance, which writes more homeowners insurance policies than any other company in California (it’s also the largest in the U. S.), has announced it will accept no new homeowners insurance policies. Ashley Capoot reports at CNBC:

State Farm General Insurance Company on Friday announced that it will stop accepting new homeowners insurance applications in California, citing “rapidly growing” catastrophe risks like wildfires, “historic increases” in construction costs and a challenging reinsurance market.

“We take seriously our responsibility to manage risk,” the company said in a release.

State Farm said it will stop accepting new business, personal lines property and casualty insurance applications starting Saturday. The new policy will not impact personal auto insurance, according to the release. State Farm’s independent contractor agents will also continue to serve existing customers.

This move has some serious implications including probably increasing the cost of homeowners insurance in the Golden State and discouraging selling your home to upgrade or downgrade.

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Spelunking

Well, House Speaker Kevin McCarthy and President Joe Biden have reached a tentative agreement on the debt limit. Far-right Republicans are already castigating the deal as “caving in”. I suspect we will start hearing complaints from progrssive Democrats along the same lines. Now comes the difficult chore of getting something to pass both houses of Congress. Moira Warburton, Katharine Jackson, and Gram Slattery report at Reuters:

WASHINGTON, May 28 (Reuters) – After tough negotiations to reach a tentative deal with the White House on the U.S. borrowing limit, the next challenge for House Speaker Kevin McCarthy is pushing it through the House, where hardline Republicans are already threatening to sink it.

As Democratic and Republican negotiators iron out the final details of an agreement to suspend the federal government’s $31.4 trillion debt ceiling in coming days, McCarthy may be forced to do some behind-the-scenes wrangling.

“We’re going to try” to stop it from passing the House, Representative Chip Roy, a prominent member of the hardline House Freedom Caucus, said on Twitter. House and Senate Republicans were critical of the deal’s time frame and emerging terms.

A failure by Congress to deal with its self-imposed debt ceiling before June 5 could trigger a default that would shake financial markets and send the United States into a deep recession.

Republicans control the House 222-213, while Democrats control the Senate 51-49. These margins mean that moderates from both sides will have to support the bill, as any compromise will almost definitely lose the support of the far left and far right wings of each party.

For the last 50 years or so both political parties have been drifting away from being the “big tent”, catch-all parties they have always been to being programmatic parties. This contretemps illustrates the hazards of that transition. Over the next few days we’ll see just how strong a speaker, majority leader, and president we have. I suspect the answer is “not very”.

BTW although I’ve read dozens, maybe hundreds of complaints about the debt limit, I haven’t read one credible explanation of why the Congress preferred it a century ago when they created it to fund World War I.

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What Won’t Reduce the Odds

I wanted to call your attention to Seth Cropsey’s post at TheMessenger because, although I agree with some of his bullet points, I found the premises of his piece gobsmackingly, shockingly wrongheaded.

Here are his bullet points:

  • Show political commitment to a lengthy Eurasian war
  • Freeze ship retirements
  • Accelerate the distribution of naval and air basing networks
  • Expand air-naval logistics
  • Be prepared to strike Chinese mainland targets

Although I think we can, indeed, reduce the likelihood of a war between China and the United States, I don’t think that those measures, severally or in combination, will accomplish that.

The misconception under which Mr. Cropsey is operating is that some things are deterrable while others aren’t. You cannot deter a country from pursuing their core interests. Period. They will pursue them regardless of what we do. Furthermore, we don’t get to dictate to them what their core interests are.

Here’s my alternative list, starting with the most important.

  • Stop assuming that China and the U. S. are headed towards an inevitable war
  • Stop encouraging Taiwanese independence
  • Produce a lot more of what we consume
  • Reduce our dependence on Taiwan
  • Reduce our dependence on China
  • If we use military force anywhere it should be dispositive. We should accomplish our objective.

There are others but that’s a start. I could explain why those are so necessary but I think it’s pretty obvious.

A war between the U. S. and China would benefit no one. We should stop pretending it’s an acceptable idea.

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