Tag Archives: Congress Watch

New US Semi Fab: Reality or Illusion?

Official talks on construction and operation of a new TSMC semiconductor chip manufacturing fab the in U.S. is promising but riddled with political and technical intrigue.
By John Blyler – Will the news of a new semiconductor fab on U.S. soil be a boost to the economy and technological stability or is it merely a fanciful political scheme? To answer that question, let’s start with the news that has created so much discussion in the electronics space.

Recently, the Taiwan Semiconductor Manufacturing Company (TSMC) announced its intention to build and operate an advanced 5nm semiconductor fab in the U.S. state of Arizona. TSMC, headquartered in Taiwan, is the largest chip manufacturer in the world. The company currently operates a fab in Camas, Washington and design centers in both Austin, Texas and San Jose, California. The Arizona facility would be TSMC’s second manufacturing site in the United States.

The new manufacturing plant would be supported with funds from Arizona and the U.S. government. The fab will have a 20,000 wafer-per-month capacity, create over 1,600 jobs directly and thousands more indirectly, explained the company in a press statement.

This by TSMC is welcomed in the U.S. but not without controversy. Shortly after the announcement of the new fab, the U.S. Department of Commerce announced new restrictions on TSMC’s second-largest customer, HiSilicon of China – which is fully owned by Huawei. Some industry experts feel that the two events are related to the issue of U.S. export control.

Here’s where the political side of the TSMC fab announcement begins to emerge. Huawei, already part of the US trade war with China, was recently placed under new and more stringent export control. On May 19, the Commerce Department issued new rules to more fully close off Huawei’s access to the semiconductor chips it needs to build cellphones and 5G infrastructure. This could conceivably block China’s big telecommunications company from entering the much desired global 5G mobile network space. more>

China after November

By Basil A. Coronakis – The war between the US and China that started shortly after the election of Donald Trump in 2016 and has since continue at relatively low intensity w

There is no doubt, of course, that it will continue at even stronger pace after the election, regardless of who the winner is, whether it is the remains of the Democratic party or of the Republicans. Indeed, Trump has brought the US’ relations with China to a point of no return. And regardless whether he will or not win a second term, the Sino-American war will not stop.

American society has been intelligently brain-washed by the Trump Administration into holding China responsible for the Wuhan Virus pandemic, and the more lives it costs in the United States, the more Americans will hold China responsible. As this is, for ordinary Americans, a matter of life or death, their anger and hatred for China will continue to grow in parallel with the pandemic effects.

It would be far fetched to speculate that Trump has handled the pandemic in the way to have exactly this effect, but there is no doubt that he maximized it as an excellent detergent for brain-washing the people of Main Street.

Americans are convinced that China is responsible for the pandemic, which is true, but to communicate this sort of truth efficiently, and to engage the entire population of the United States, was a victorious tactical maneuver in the New Cold War against China.

Now all Americans are psychologically engaged against China and this is the bond that the next president will be forced to continue the war against China. If he does not, he will certainly be accused for high treason, an accusation which regardless of what the impact is on his presidency, will carry on in the historical record.

For China, this war is a win-win situation because if Beijing loses, it will be completely isolated from the rest of the world and will have no external influences, which means no dangers, thus leaving the Communist regime with eternal power. For China’s Communists, isolation is the best-case scenario as they will maintain power and extend their totalitarian rule to all aspects of life by eliminating any potential threat to their grip on power, all of which will be done pretty easily as the Chinese people have never sensed freedom or democracy, and they are trained to work for a handful of rice under the shadow of the Great Helmsman. more>

America’s new civil war (II)

By Basil A. Coronakis – A chaos theory that claims a butterfly in Manhattan may generate a tornado in China.

That’s the theory, but in practice the tiny virus that was either purposely or accidentally dripped from China’s Wuhan Institute of Virology has created world-wide chaos, and we are just at the beginning. Our society has just entered into a large-scale evolution, seemingly far from a final settlement. How far that end is, nobody can seriously predict. Nor can they imagine exactly how it will end as the process is taking on the shape a major social confrontation. Everybody is taking positions against everybody else, and everyone will end to be on its own.

At present, very few people understand what kind of situation the world is getting to. The general panic caused by the virus was just the excuse to trigger a large-scale evolution, which for the time being remains under the radar, due to the fact that it is only the very beginning. The reasons can be summarized by the unbridgeable social gaps generated by periods of prolonged austerity, extended overregulation, the ever-increasing politically uncontrolled powers of administration and a scarcity of true political leaders.

When coupled with an unreasonable and prolonged lockdown, which added unemployment and misery to an already toxic mix, you have the perfect recipe for a social uprising.

Presently, three players affect the socio-political making of our times – the United States, China, and Russia. The European Union, although an integral part of the West, is leaderless and acts more like an unhappy player with no real role in a play where the first act is being staged across the Atlantic.

The United States is in civil war and one intelligent exercise would be to figure out what title future historians will give to this hopefully short, chapter in their history. more>

The Looming Bank Collapse

The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.
By Frank Partnoy – The reforms were well intentioned, but, as we’ll see, they haven’t kept the banks from falling back into old, bad habits. After the housing crisis, subprime CDOs naturally fell out of favor. Demand shifted to a similar—and similarly risky—instrument, one that even has a similar name: the CLO, or collateralized loan obligation. A CLO walks and talks like a CDO, but in place of loans made to home buyers are loans made to businesses—specifically, troubled businesses. CLOs bundle together so-called leveraged loans, the subprime mortgages of the corporate world. These are loans made to companies that have maxed out their borrowing and can no longer sell bonds directly to investors or qualify for a traditional bank loan. There are more than $1 trillion worth of leveraged loans currently outstanding. The majority are held in CLOs.

Despite their obvious resemblance to the villain of the last crash, CLOs have been praised by Federal Reserve Chair Jerome Powell and Treasury Secretary Steven Mnuchin for moving the risk of leveraged loans outside the banking system. Like former Fed Chair Alan Greenspan, who downplayed the risks posed by subprime mortgages, Powell and Mnuchin have downplayed any trouble CLOs could pose for banks, arguing that the risk is contained within the CLOs themselves.

Banks do not publicly report which CLOs they hold, so we can’t know precisely which leveraged loans a given institution might be exposed to. But all you have to do is look at a list of leveraged borrowers to see the potential for trouble. Among the dozens of companies Fitch added to its list of “loans of concern” in April were AMC Entertainment, Bob’s Discount Furniture, California Pizza Kitchen, the Container Store, Lands’ End, Men’s Wearhouse, and Party City. These are all companies hard hit by the sort of belt-tightening that accompanies a conventional downturn.

Under current conditions, the outlook for leveraged loans in a range of industries is truly grim. Companies such as AMC (nearly $2 billion of debt spread across 224 CLOs) and Party City ($719 million of debt in 183 CLOs) were in dire straits before social distancing. Now moviegoing and party-throwing are paused indefinitely—and may never come back to their pre-pandemic levels.

Meanwhile, loan defaults are already happening. There were more in April than ever before. Several experts told me they expect more record-breaking months this summer. It will only get worse from there. more>

What’s the Difference Between Today’s US Space Force and the Reagan Era Star Wars?

By John Blyler – The U.S. Space Force is being brought to life with federal funding and contractor rockets and electronics. This might be a good time to remember the lesson’s learned from the earlier Reagon era Strategic Defense Initiative (SDI) program.

First, let’s check out what’s behind the Space Force. A few years back, President Trump floated the idea of a space force as a new branch of the military. The Pentagon was quick to remind the president that a space force already existed in the armed services, mainly under the purview of the Air Force. No matter, the White House believed a new initiative was needed especially in light of the tensions and trade war with China. Dominance in space was the rallying call.

For those of us working in the defense industry in the 1980s and 90s, this all seemed eerily reminiscent of the famous “Star Wars” program initiated by former US President Ronald Reagan during the Cold War era. Officially known as the Strategic Defense Initiative (SDI), the program focused mainly around a space-based anti-missile system aimed at protecting US from potential preemptive military strikes from the former Soviet Union.

At the time, the main components of the SDI were considered technologically impossible – i.e., anti-ballistic missiles including lasers and electromagnetic weapons. While there were some successes, the program failed to meet its loftier technical goals.

Now let’s fast forward to today. While many dangers persist in the world, it’s not clear that the most imminent threat is from space. For example, it would be far easier and less costly to launch a cyberattack against an enemy’s infrastructures, steal technology IP, rig an election process or upset financial markets than to dominate in space. Regardless, the race to create a space force has been awakened and – more importantly – funded. more>

What will it take to stand up again together? Start with accountablity

By Nancy Gibbs – Our nation is not healthy enough to handle this much pain. A cascade of crises has brought us to our knees and to the streets: a pandemic that locked us down and ravaged the population, especially communities of color; an economic convulsion that flattened small businesses and hurled 40 million people out of work; and the three horrific killings of unarmed black Americans during this spring of despair.

What will it take to end the pain, to stand up again together? Let’s start with accountability — an end to the impunity that defines our age.

The 21st century has been generous beyond belief to those who came to the table already set up for success. I count myself among them. We can shelter in place, take a hit to our routines and even our savings, and expect to recover. The pandemic has exposed how willing we as a nation are to send disproportionately black and brown “essential” workers out to do their jobs whether or not it is safe.

It has exposed the breathtaking speed with which our leaders will write trillion-dollar checks to protect corporate interests and shield financial markets. And it revealed the willingness of rich and comfortable companies to take as much as they can get. more>

Updates from Chicago Booth

Think you’re not racist?
Research uncovers our secret prejudices, and ways to overcome them
By Alice G. Walton – It has been 50 years since the Civil Rights Act outlawed discrimination based on race, color, religion, sex, or national origin. The landmark legislation marked the end of the era of legalized racism. Now some affirmative action programs, created to encourage and promote diversity and the presence of underrepresented minorities, are being rolled back.

However, while overt racism may be on the wane in the US, research suggests it remains just below the surface. Very few people would admit to being biased, yet there’s strong evidence that biases continue, often under the level of our expression and of our awareness.

Ten years ago Marianne Betrand, Chris P. Dialynas Distinguished Service Professor of Economics at Chicago Booth, and Sendhil Mullainathan, then at MIT, published a famous study entitled, “Are Emily and Greg More Employable Than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination,” in which 5,000 fictitious resumes were sent in response to 1,300 job postings in Chicago and Boston. The resumes were either “high quality” or “low quality,” varying in the typical things that set resumes apart—job and internship experiences, academic institutions, and languages spoken. Then, the team randomly assigned either a “white-sounding” name, such as Emily Walsh, or an “African American–sounding” name, such as Lakisha Washington, to each resume.

The results were unambiguous. White-sounding applicants got 50% more callbacks than African American–sounding candidates. This didn’t seem to be a matter of how common the names were or the apparent social status of the applicant, but simply a function of what the names suggested about the race of the fictional applicants.

Even more disturbingly, white applicants with higher-quality resumes had a strong advantage over their African American peers. The authors suggest that this makes it less enticing for African Americans to develop high-quality resumes, which makes hiring discrimination part of a destructive cycle. more> [VIDEO]

Related>

China in the Firing Line

By Clare Goldsberry – A two-hour webinar held by the Alliance of American Manufacturing last Thursday provided a forum for four members of Congress along with a business owner, a representative from the United Steelworkers, and the President and CEO of the National Council of Textile Organizations to talk about bringing manufacturing back to the United States.

“Crisis Brings Consensus: Prioritizing U.S. Industrial Policy in a COVID-19 World” began with a Q&A moderated by Josh Rogin featuring Marco Rubio (R-FL) and Josh Hawley (R-MO). Rubio noted that the increased push to bring back manufacturing and the need to change U.S. policies regarding trade with China is not “unique to a pandemic,” which has exposed vulnerabilities in the supply chain across several industries.

“This issue needs more than anger at China,” said Rubio. “While the Chinese Communist Party’s efforts to dominate the world in key sectors are evident, we’ve allowed them to do this. We need a strategy, then tactics to put in place the strategy to bring back U.S. manufacturing.” That would include developing incentives for companies to return their manufacturing to the United States.

Hawley began his remarks by noting that we live in a very different world today than we did after WWII. “The economic order is very different, and we need to address the rise of imperialist China,” he said. “We need very serious reform to address this different world and different [economic] system.” Hawley is not in favor of abolishing the WTO, while that issue has been raised by some. “I would rather ‘fix’ it than ‘nix’ it,” he added.

Hawley, who said he’s heard more about bringing U.S. manufacturing back home in the past four months than in the 14 months he’s been in Congress, does not approve of isolationism. “We are a trading nation and will continue to be, but we need reforms such as dispute resolution, which is a mess,” he stated. “We need an American economy that is strong and a strong American worker. Manufacturing is vitally important to the future of the United States. We need to bring back our supply chains.” more>

The Coronavirus Crisis in the U.S. Is a Failure of Democracy

By David Litt – It’s become commonplace to refer to COVID-19 as “the worst public health crisis of our lifetimes.” But what has cost the United States so many lives and jobs during the pandemic is not, at root, a failure of public health. It’s a failure of democracy.

Despite our political polarization, and in the face of an unprecedented threat, the American people have been in remarkable agreement about what they expect from their government. From the time the virus was discovered, our scientists and public health officials urged aggressive action and put forward plans to save lives. Poll after poll has shown that a clear majority of Americans trust want our leaders to heed the experts’ advice. Yet that hasn’t happened. We were far too slow to implement social-distancing guidelines – a delay epidemiologists found is responsible for 90% of U.S. coronavirus deaths – and now we’re acting far too quickly to reopen the economy.

In other words, with lives on the line, our elected leaders are ignoring the people’s will, and Americans are dying as a result. In our shining city on a hill – the global model for representative government – how could this possibly happen? more>

The Last Time Democracy Almost Died

By Jill Lepore – American democracy, too, staggered, weakened by corruption, monopoly, apathy, inequality, political violence, hucksterism, racial injustice, unemployment, even starvation. “We do not distrust the future of essential democracy,” F.D.R. said in his first Inaugural Address, telling Americans that the only thing they had to fear was fear itself. But there was more to be afraid of, including Americans’ own declining faith in self-government.

“American democracy,” as a matter of history, is democracy with an asterisk, the symbol A-Rod’s name would need if he were ever inducted into the Hall of Fame. Not until the 1964 Civil Rights Act and the 1965 Voting Rights Act can the United States be said to have met the basic conditions for political equality requisite in a democracy. All the same, measured not against its past but against its contemporaries, American democracy in the twenty-first century is withering. The Democracy Index rates a hundred and sixty-seven countries, every year, on a scale that ranges from “full democracy” to “authoritarian regime.”

In 2006, the U.S. was a “full democracy,” the seventeenth most democratic nation in the world.

In 2016, the index for the first time rated the United States a “flawed democracy,” and since then American democracy has gotten only more flawed. True, the United States still doesn’t have a Rome or a Berlin to march on. That hasn’t saved the nation from misinformation, tribalization, domestic terrorism, human-rights abuses, political intolerance, social-media mob rule, white nationalism, a criminal President, the nobbling of Congress, a corrupt Presidential Administration, assaults on the press, crippling polarization, the undermining of elections, and an epistemological chaos that is the only air that totalitarianism can breathe.

Nothing so sharpens one’s appreciation for democracy as bearing witness to its demolition. Mussolini called Italy and Germany “the greatest and soundest democracies which exist in the world today,” and Hitler liked to say that, with Nazi Germany, he had achieved a “beautiful democracy,” prompting the American political columnist Dorothy Thompson to remark of the Fascist state, “If it is going to call itself democratic we had better find another word for what we have and what we want.” In the nineteen-thirties, Americans didn’t find another word. But they did work to decide what they wanted, and to imagine and to build it.

Thompson, who had been a foreign correspondent in Germany and Austria and had interviewed the Führer, said, in a column that reached eight million readers, “Be sure you know what you prepare to defend.”

It’s a paradox of democracy that the best way to defend it is to attack it, to ask more of it, by way of criticism, protest, and dissent. more>