David Foster

Miscellaneous Business/Economics/Energy Items

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Apple is going to make Watches and MacBooks in Vietnam.   (More precisely, Apple suppliers will make the products there.   “Make” in this context meaning mostly “assemble”, I think.)   Apple is also planning to produce the iPhone 14 in India, with only about a 2-month lag from its initial production in China.

Intel will be partnering with Brookfield Infrastructure Partners to help pay for factory expansion projects, with Brookfield contributing up to $30 billion.   Most immediately, the money will pay for the expansion of Intel’s Ocotillo manufacturing campus in Chandler, Arizona, with Intel funding 51% and Brookfield funding 49% of the total project cost.   (This is pretty different from BIP’s typical investments, which tend to involve such things as railroads, toll roads, pipelines, and electricity transmission)

A useful overview of planned and in-development fabs, worldwide.

Electricity prices, marginal costs, and the last kilowatt.

Texas has banned BlackRock and several other firms from doing business with the state.

Finland may be facing power outages this winter.   On the other hand, if their Olkiluoto 3 nuclear power plant goes into production at the end of the year, as planned, this should help a lot.   Another plant is planned, taking total nuclear contribution in Finland to 60%.

Also,perhaps a way could be found to harness the power from their PM’s very high-energy dancing.   (If other Western leaders could dance like that, would it somehow influence their minds to adopt more rational energy policies?)

Elsewhere in Europe, skyrocketing energy prices are causing a lot of hardship–and will surely create serious economic pressures as much manufacturing in the affected countries becomes cost-prohibitive)

The Euro is not doing very well versus the dollar.   More here.

Paul Graham:

f you think people have scar tissue, you should see organizations. Each time there’s a disaster, they create a process to prevent future disasters of that type. Eventually they accrete a thick layer of these processes that prevents them from moving. Then they die.

Burnout

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Emmett Shear, at Twitter (@eshear) suggests that Burnout, which he defines as “a particularly modern affliction, feeling simultaneously overwhelmed and paralyzed” is best thought of as a symptom with many different causes–the most important of which are permanent on-call, broken steering, and mission doubt.   ‘Permanent on-call’ is self-explanatory, ‘broken steering’ is the sense that your actions have no impact, ‘mission doubt’ arises when you question whether this work is really worth doing at all…ie, even if the steering was functioning properly, maybe this trip isn’t worthwhile.

It’s a useful formulation.   I’d note that some jobs have always had a permanent on-call aspect; railway workers, for example…see Linda Niemann’s memoir of her experiences on the old Southern Pacific Railroad–no cell phones or even pagers in those days, but there were ‘callers’ who would come to your residence and wake you up when you were needed.   Also sailors.   But on-call jobs are a lot more common today than they were 20 or 30 years ago.

I think the feeling of ‘broken steering’ has also long been present, in the case of large-bureaucracy employees and some manufacturing workers.   An assembly-line worker knows that his task does contribute to the final product..but the connection probably seems pretty remote and abstract when your actual job is to tighten three bolts.

‘Mission’ can be understood in two ways: the purpose of the job in terms of what it produces, and the purpose of the job in terms of income to support yourself and your family.   As the second factor becomes taken for granted, the first surely becomes more important.   (See Maslow)

Very relevant to this topic is Zeynep Ton’s recent book The Good Jobs Strategy.   She discusses the unpredictably-fluctuating employee schedules which are so common in retail..maybe not pure on-call, but close to it…and the disruptive effect these schedules have on an employee’s personal life.   She also talks about time pressures that lead to jobs inevitably being done poorly.   A former Target cashier, for example, said she was under so much pressure to ring up sales as quickly as possible that if a customer bought 10 bottles of Gatoradein two flavorsshe would scan the first one and then hit the quantity key for ten.   The inventory system thought the store had sold 10 lime-flavored Gatorades and no cherry-flavored Gatorades, rather than the mix that had actually just been sold.   She also cites a study of a $10 billion company which found that the system had the right information for only 35% of the products…for the other 65%, the discrepancies between the system inventory balances and the actual quantities available averaged 5 units…a third of the target stocking levels.   In one case, a certain item was continually out of stock, to the frustration of a regular customer.   It turned out that the inventory system thought there were 42 of these on hand, whereas there were actually none.   AND, since this particular store hadn’t sold any units in several weeks (because they didn’t have any to sell), the system automatically reduced the target stocking level for that item!   Situations like this are surely destructive both of sense of mission and of a functioning steering system.

Your thoughts?

Inflation and Society

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Theodore Dalrymple  notes that inflation is more than a purely economic phenomenon…it also has profound social and psychological effects.even  characterological  effects:

For one thing, inflation destroys the very idea of enough, because no one can have any confidence that a monetary income that at present is adequate will not be whittled down to very little in a matter of a few years. Not everyone desires to be rich, but most people desire not to be poor, especially in old age. Unfortunately, when there is inflation, the only way to insure against poverty in old age is either to be in possession of a government-guaranteed index-linked pension (which, however, is a social injustice in itself, and may one day be undermined by statistical manipulation by a government under force of economic circumstances, partly brought about by the very existence of such pensions), or to become much richer than one would otherwise aim or desire to be. And the latter turns financial speculation from a minority into a mass pursuit, either directly or, more usually, by proxy: for  not  to speculate, but rather to place one’s trust in the value of money at a given modest return, is to risk impoverishment. I saw this with my own father: once prosperous, he fell by his aversion to speculation into comparative penury.  

Reminds me of something written by  Sebastian Haffner, who grew up in Germany between the wars. Discussing the great Weimar inflation, he says:

Anyone who had savings in a bank, bonds, or gilts, saw their value disappear overnight. Soon it did not matter whether it ws a penny put away for a rainy day or a vast fortune. everything was obliterated…the cost of living had begun to spiral out of control. ..A pound of potatoes which yesterday had cost fifty thousand marks now cost a hundred thousand. The salary of sixty-five thousand marks brought home the previous Friday was no longer sufficient to buy a packet of cigarettes on Tuesday.

The only people who were able to survive financially were those that bought stocks. (And, of course, were shrewd or lucky enough to buy the right stocks and to sell them at the right times.)

Every minor official, every employee, every shift-worker became a shareholder. Day-to-day purchases were paid for by selling shares. On wage days there was a general stampede to the banks, and share prices shot up like rockets…Sometimes some shares collapsed and thousands of people hurtled towards the abyss. In every shop, every factory, every school, share tips were whispered in one’s ear.

The old and unworldy had the worst of it. Many were driven to begging, many to suicide. The young and quick-witted did well. Overnight they became free, rich, and independent. It was a situation in which mental inertia and reliance on past experience was punished by starvation and death, but rapid appraisal of new situations and speed of reaction was rewarded with sudden, vast riches. The twenty-one-year-old bank director appeared on the scene, and also the sixth-former who earned his living from the stock-market tips of his slighty older friends. He wore Oscar Wilde ties, organized champagne parties, and supported his embarrassed father.

Haffner believes that the great inflationparticularly by the way it destroyed the balance between generations and empowered the inexperienced younghelped pave the way for Naziism.

In August 1923 the dollar-to-mark ratio reached a million, and soon thereafter the number was much higher. Trade was shutting down, and complete social chaos threatened. Various self-appointed saviors appeared: Hausser, in Berlin…Hitler, in Munich, who at the time was just one among many rabble-rousers…Lamberty, in Thuringia, who emphasized folk-dancing, singing, and frolicking.

The inflation was eventually brought under control:

Then a miracle happened. “Small, ugly grey-green notes” appeared, with “One Rentenmark” written on them. The small numbers on these notes belied their value. You could use them to buy goods which had previously cost a billion marks. And, most amazingly, they held their value. Goods which had cost 5 Rentenmarks last week would also generally cost 5 Rentenmarks next week.

But the after-effects of the great inflation lived on.

There are two excellent novels, both by author Hans Fallada, which portray the psychosocial impact of the Weimar inflation and its aftermath

Wolf Among Wolves  is set in the worst period of the inflation.   The protagonist, Wolfgang Pagel, is a well-meaning but rather irresponsible young man trying to make his way in a society with rising social and economic chaos. Can Wolfgang grow up to be a responsible adult?..and can he survive surrounded by wolves without himself  becoming  a wolf?   I reviewed the book  here.

Little Man, What Now?  is set in a somewhat later time period, 1932.   The great inflation of Weimar has come and gone, but the psychological damage as well as the economic damagestill lingers.   Johannes and Emma, known to one another as Sonny and Lammchen, are a likeable young couple who marry when Lammchen unexpectedly becomes pregnant. Their world is not the world of Weimar’s avant-garde artists and writers, or of its risque-to-outright-degenerate cabaret scene. It is far from the world of a young middle-class intellectual like Sebastian Haffner.   Theirs is the world of people at the absolute bottom of anything that could be considered as even lower-middle-class, struggling to hold on by their fingernails.    Here’s my review.    There was also a pretty good American movie made based on the book, review  here

The Weimar inflation was an extreme case, of course, and we are unlikely to see anything nearly as severe.   But, as Dalrymple notes, even less-catastrophic levels of inflation tend to have malign effects.   The Biden administration and the Democratic Congress seem remarkably unconcerned about these effects, or with the socially-destructive effects of so many other parts of their total policy set.

On the other hand, if inflation gets sufficiently bad,  kids can make kites out of currency.   And, if energy prices continue their climb upward, devalued currency could be used for heating fuel.

Humor and Seriousness

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Katherine Boyle is a partner at the VC firm Andreessen Horowitz and she is a thoughtful writer on many topics.   See her post The Case for American Seriousness at Bari Weiss’s substack; also, her posts at her own substack, The Rambler, especially those concerning family, parenting, and technology.

In an interview, she said “The biggest criticism I got from the (American Seriousness) piece, and other times I’ve written about seriousness, is that it doesn’t leave room for frivolity, play or the unseriousness that makes us deeply human. And I empathize with that sentiment, but I don’t think the opposite of seriousness is humor: the opposite of seriousness is irony.”

I agree absolutely that there is no inconsistency between seriousness and humor…quite the contrary, I would say.   Concerning Irony, I’m reminded of something C S Lewis wrote.   The following is from The Screwtape Letters, a book of advice from a senior devil to his protege about how to do the maximum harm to humans:

But Flippancy is the best of all. In the first place it is very economical. Only a clever human can make a real Joke about virtue, or indeed about anything else; any of them can be trained to talk as if virtue were funny. Among flippant people the Joke is always assumed to have been made. No one actually makes it; but every serious subject is discussed in a manner which implies that they have already found a ridiculous side to it. If prolonged, the habit of Flippancy builds up around a man the finest armour-plating against the Enemy that I know, and it is quite free from the dangers that inherent it the other sources of laughter. It is a thousand miles away from joy: it deadens, instead of sharpening, the intellect; and it excites no affection between those who practice it.

Irony, I think, is closely related to the Flippancy about which Lewis’s devil wrote.   Also related to irony is Sarcasm, concerning which Field Marshal Lord Wavell offered some thoughts:

Explosions of temper do not necessarily ruin a general’s reputation or influence with his troops; it is almost expected of them (“the privileged irascibility of senior officers,” someone has written), and it is not always resented, sometimes even admired, except by those immediately concerned.  But sarcasm is always resented and seldom forgiven. (emphasis added)   In the Peninsula the bitter sarcastic tongue of Craufurd, the brilliant but erratic leader of the Light Division, was much more wounding and feared than the more violent outbursts of Picton, a rough, hot-tempered man.

Wavell defined Sarcasm as “being clever at someone else’s expense.”    In his view, sarcasm always offends, and a general (or, presumably, any other officer or individual in a position of authority) should never indulge in it.

I think that in many organizations in America today–perhaps, even, most organizations of any size–fear of Cancellation has reached the point at which easy interaction among people–which includes a certain amount of humor–has been replaced with a kind of fragile pseudo-formality.   This is not good for either innovation or productivity, not to mention its toxic impact on individual lives.

What are your thoughts on humor, seriousness, irony, and sarcasm?

 

The End of Debate?

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Yarelyn Mena, a 29-year-old graduate of CUNY and Fordham University, served as a lawyer for Johnny Depp in the   Depp–Heard    trial.   A high profile case like this represented a big opportunity for a fairly recent graduate, and she apparently did a very good job in her cross-examination of Heard.   Jonathan Turley says of her cross-examination:   “It was considered the turning point of one of the most famous trials in modern history. It is something that should be a matter of great pride for the CUNY community and, not surprisingly, the website did an article on their graduate…It is an extraordinary story for a woman who came with her family from the Dominican Republic. She proceeded to graduate from CUNY and then received her law degree from Fordham University. That is a quintessential American story of achievement that any institution should relish and highlight. She noted in the interview that “(Law) was the first career that I knew of before I even really understood what it was.””

But many students were outraged, and the article was removed from the website with an apology:

We understand the strong negative emotions this article elicited and apologize for publishing the item. We have removed it from our CUNYverse blog. The article was not meant to convey support for Mr. Depp, implicitly or otherwise, or to call into question any allegations that were made by Amber Heard. Domestic violence is a serious issue in our society and we regret any pain this article may have caused.

Turley:   ”

“The “pain” caused by the article was an account of a graduate doing her job as an advocate. We have gotten to the point that people are incapable of recognizing that everyone is entitled to a rigorous legal defense and that the lawyers are fulfilling essential roles in protecting the rule of law.  The only thing that matters is that the lawyer represented someone accused of abuse (even though the  jury clearly found that Heard lied with malice in the trial). Even lawyers defending a client must now be cancelled to protect others from the pain of dealing with a trial on spousal abuse.”

The reaction of the angry students represents a rejection of the whole concept of adversary proceedings in the legal process.   Apparently, a sufficiently-unpopular plaintiff or defendant must not have representation because we know they’re in the wrong…no need to hear evidence, no need to see what the statute books and the precedents actually say.

The class of people displaying this attitude is by no means restricted just to college students and to cowardly administrators.   Two lawyers at the law firm Kirkland & Ellis, who won a major gun-rights case before the Supreme Court, were told that they had to abandon such clients.   According to one of these lawyers:

We were given a stark choice: either withdraw from ongoing representations or withdraw from the firm,” Clement said in a statement. “Anyone who knows us and our views regarding professional responsibility and client loyalty knows there was only one course open to us: We could not abandon ongoing representations just because a client’s position is unpopular in some circles.

Again, one would think that a law firm would be proud to have two of its lawyers win a major Supreme Court case…evidently not.

The attitude that there can only be one view expressed is not limited to law.   The Cancellation of speakers, the suppression of unapproved views by social media…these are all aspects of same basic phenomenon.   It is somewhat similar to the old traditionalist Catholic position that Error has no rights…the number of people claiming that they have the authority to decide what is an “error”, and what is not, is now much larger.

Your thoughts as to causes, and remedies..if any?