> It’s adding another 1.6 gigawatts (GW) of solar module manufacturing capacity at its Brookshire factory, bringing the site’s total to 3.2 GW. The company didn’t indicate a timescale for when the capacity increase would be complete. The move is part of its strategy to reinforce its “larger strategy of de-risking its global footprint.”
> The company first announced it would open the Texas factory in December 2023, its first footprint in the US. Its original plan was to have an initial capacity to manufacture 3 GW of solar modules annually by the end of 2024.
Sounds like PR trying to spin delays in planned investments as “doubling their investment”.
Basically they were supposed to be up to 3GW in Dec 2024, didn’t make it by then, and are now trying to spin the delayed capacity as new capacity.
So just we’re clear, there are countries where U.S. citizens have no rights or very limited.
So you’re perfectly fine with these countries, for example, executing US citizens without due process if they visit those countries right, because the standard you apparently want to hold the government to is basically the bare minimum rights an individual has vis a vis that government.
Also, you overestimate the rights US citizens have as well. Under Obama, for example, the government targeted a U.S. citizen for assassination. After Trump 1 the SC essentially said everything the President does is legal.
There is absolutely no reason that the President couldn’t completely target a U.S. citizen for assassination for no reason other than they didn’t like the color of their hair, and by your standard you’re absolutely fine with that.
Unfortunately this article begins by poisoning the well with the Greek example, and I kept reading hoping the author would either explain why despite the major difference between the Greece and US situations there are still lessons to be learnt, but the article doesn’t even mention the difference.
The #1 difference, which at the very least has to be explained if you don’t even consider it relevant, is that Greece couldn’t print Euros whereas the U.S. does print dollars.
The fact that they could write the entire article without even mentioning this difference frankly makes it suspect to say the least.
But there are so many other issues.
- The author keeps treating currency as debt. And while it’s true at some level, currency is not debt. Because currency can be created. Borrowing in your own currency means you can simply print more currency if you need to.
This isn’t a good thing, because your currency would plummet in value and you wouldn’t be able to buy anything from abroad, but that’s what these tariffs are trying to do anyways! The tariffs are realizing the possible but not likely worst case scenario from the future now, in the most obnoxious way that alienates allies and makes the country immediately poorer for no good reason.
- China is buying assets. Trillions of dollars worth. And yet we don’t see those trillions of dollars worth of property and U.S. assets owned by the Chinese government? Why is that? Where is the massive purchase of U.S. assets by foreign governments the author threatens will happen?
There isn’t any such thing because the assets the Chinese are buying is the US dollar. This is where reserve currency status comes in. The author links to an article about the reserve currency supposedly not being all it’s cracked up to be (and one can have that discussion), but never even addresses what it means to be the reserve currency.
What it means is that perceived U.S. governmental and financial stability and the belief that the U.S. would honor its debts, makes the U.S. dollar valuable in and of itself.
China and India, under normal circumstances, are much more likely to trade with each other in USD than they are either in Rupees or Yuan. That’s what it means to be the reserve currency.
But neither of them can print USD so they have to buy USD, which has an intrinsic utility value in itself. This is what funds American “consumption” (we will get back to this as well). The assets China is buying is quite literally the U.S. dollar and not a future promise to buy assets in the future.
The problem, however, is that recent U.S. govt actions are destroying that trust and stability underlying the intrinsic value of the USD, at which point it will indeed become an IOU. But that is a decision the current U.S. government is making that no other country wants them to make. Destroying this will lead to a real destruction of trillions of dollars worth of actual U.S. assets, because that trust has real value.
- The author insists the U.S. is using the products flowing into it for “consumption” not “investment”. And yet the U.S. GDP, which represents productive output, keeps increasing faster than most other western and developed nations. How is all this consumption translating into actual productive growth? US productivity growth has also far outpaced other similar nations, even those that we supposedly consider “investment” nations such as Germany.
The reality is that the U.S. is just “consuming” is romantic nonsense which somehow ignores non physical production (ie services) even though arguably this is even more important today. Think about the latest exemption that the U.S. just applied on electronics. That’s over 20% of Chinese exports to the U.S. It basically falls under “consumption”, but smartphones and laptops are the basis of trillions of dollars of productive output. Without this “consumption” the US would have a GDP that would be a fraction of the size it is today.
But we can go even further. How about household appliances? The fact that nearly every US home has a dishwasher and washing machine and dryer means far more Americans are able to work further increasing productive US output than without this “consumption”.
The idea that “investment” is somehow superior to “consumption” is suspect to say the least. Both investment and consumption can be bad. The famous Alaskan “bridge to nowhere” was investment, but it was worth far less than a parent buying a cheap Chinese produced toy for their child, and the positive impact that had on the parents and kids.
The whole point of free market capitalism is that individuals can usually make better choices than an overbearing government for what is and isn’t a better use of their money.
This can be corrupted. So Americans spend way too much money on eating junk food, meat, dairy, consuming drugs, etc. but all of those are largely homegrown goods and a result of “investment” creating huge industries pushing these products on Americans.
There is bad consumption and bad investment and good consumption and good investment (defined purely in terms of productivity).
I can go on with other issues with the article, but this is already way too long, and I actually don’t disagree with the end. The U.S. government needs to reduce its massive deficits not because it means it will have to sell assets in the future. Unless this administration completely destroys the U.S. governments credibility this won’t be a problem. No, the problem is the distortionary effects of that deficit domestically. And we can see that with the concentration of wealth it’s leading to causing American industries to compete not by selling better products or being more productive, but by buying the U.S. government to cut their taxes, to redirect government spending towards themselves, and to keep out competitors.
Fortunately solving this problem will help with the deficit as well. Go back to the tax levels before the trillion dollar tax cuts on the wealthiest and to reduce the deficit with barely any impact on actual productive activity.
One thing I don't quite understand in all of these discussions is why there seems to be a fundamental disagreement about the importance of the dollar at the core of them. Maybe we really just don't know that much about how global trade works historically? I guess there just is a fundamental disagreement at the hear of macro econ about this?
It seems to me like being the country that everyone else relies on to facilitate trade is an incredible thing that you'd never want to give up. And yet that's where we are, and what the disagreement is about. In the past few years there's been a lot of talk about BRICS and how it might undermine the reserve status of USD. Other countries appear to envy this position.
I've read some of the Hudson Bay Capital piece[0] on this, the article linked in the post describing why reserve status isn't great, I guess I'm just going to have to read it in full to get a better understanding of the other side.
"But we can go even further. How about household appliances? The fact that nearly every US home has a dishwasher and washing machine and dryer means far more Americans are able to work further increasing productive US output than without this “consumption”."
So what is the US currently producing? Software yes... and then?*
I know you produce other things as well, but from a growth perspective.. Whats driving your GDP?
There are significant logistics here. How many batteries should be stocked in any one place.
Batteries are large. So you’re also talking about a lot of space.
At the same time you still need to build out the electric capacity to charge those batteries.
The number of batteries you would need would need to be some multiple of the actual number of cars sold. So if there are 300 cars sold, you probably need something like 1200-1500 batteries in the same city just so a car doesn’t have to travel unreasonable distances to do a swap.
The multiple is probably higher and it gets much worse spread out over the entire country/world. Thats burdening each car sale with multiples costs of the most expensive component in the car.
It’s mechanical, so there are likely to be more breakdowns and other issues.
Battery replacement requires changing the car design and leads to a design that’s almost certainly much less protected from the elements or requires the addition of expensive protection, both in terms of the cost of the additional protection and the weight of the protection.
People tend to treat replaceable batteries poorly.
Battery replacement is just not a good choice relative to the much simpler ability to pump in electricity.
>Too many companies, especially in the EV space (Tesla is awful at this) will announce tech years in advance and often not even deliver.
Isnt it deliberate to generate Osbourne effect? For example Toyota with its "solid state really coming in soon" while company has no EV plans whatsoever.
It's true that Toyota has at least 1 semi-successful, moderately well reviewed EV, the bZ4X. It's not a "compliance car", trust Toyota, honest!.
It's also true that Toyota lags others on it's line-up of EVs, especially considering their early leadership on hybrids such as the Prius. Some would even say that Toyota don't want to push EVs too hard, lest they eat into their business with hybrids.
It's also also true that press releases saying "solid state really coming in soon" are a thing that Toyota does a lot. Actual shipping products with those solid state batteries, not so much. The bZ4X does not have a solid state battery.
> It's also true that Toyota lags others on it's line-up of EVs
They’ve got a great hybrid lineup though. I suspect that if you broke down car manufacturers by “average MPG/MPGe of all the miles driven by 2025 models sold” that Toyota would be looking pretty good against all but the EV-only manufacturers.
There’s a bigger environmental gain from converting a Tundra driver to a Rav4 Prime driver than there is from converting a Prius driver to a bZ4X driver.
I think Toyota never really believed in EVs and said as much. But I assume if they say they have a solid state battery on the way it'll turn up some time. I've owned three Toyotas and always found them quite reliable, both the cars and the company.
Sounds like PR trying to spin delays in planned investments as “doubling their investment”.
Basically they were supposed to be up to 3GW in Dec 2024, didn’t make it by then, and are now trying to spin the delayed capacity as new capacity.
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