I wanted to take this opportunity to thank you, not just for your informative posts but for a convention you use in your writing that I rarely see nowadays (actually, I think you're the only person, apart from me, that I've noticed using it): before you use an Abbreviation/Acronym (A/A) you do what I just did, expand it and introduce the A/A in parentheses. I don't know if it's mainly American posts on politics, but I find it really irritating when I have to repeatedly interrupt my reading to look up an A/A, so much so that I've got a easily accessible note with all the ones I've come across that's got about 130 entries so far. I realize that the whole purpose of A/As is to avoid repeatedly writing relatively lengthy phrases, but the key word there is ‘repeatedly’. It's really just common courtesy not to assume that everyone reading knows what your A/As mean. So thank you for having the courtesy of explaining your A/As 😊.
The question of overregulation producing economic stagnation is an interesting one. This dynamic has been shown in a number of cases. We have seen this most recently in the case of Argentina. At the turn of the last century, Argentina in 1900 was a nation of enormous wealth and opportunity. It's annual economic growth was very high, buoyed up by heavy demand for its products by other countries. But it became increasingly mired in political instability. It had no less than seven military coups in the 20th century. One of these resulted in the overthrow of any pretense of a democratic government in the fascism of Juan Peron. The military junta government eventually collapsed in the wake of its severe military defeat by Britain in the 1982 Falklands War.
And all this time, Argentina was strangling itself in ever-greater government control of everything. All this as government spending was bankrupting the country. In recent years, Argentina has been bankrupt at least twice when it defaulted on its debt obligations.
The treatment for this has been simple and ruthless. The new president Javier Millei has embarked on a programme of drastically shrinking the size and activity of government. He has eliminated half the government ministries and reduced the civil service by more than 1/3rd. For this first time in decades, Argentina has an international credit rating. For the first time in decades, Argentina has stabilized its currency and is experiencing real economic growth.
Unless European nations and the EU go through this process of shrinking the size of government and pruning back government obligations, they will not escape the morass of ineffectiveness and ballooning debt and deficit. There's a very simple, blunt statement summarizing the problem.
Energy can be solved. But let's entertain the idea that AI is the real winner takes all. Once AI develops AI, it becomes compute time to further itself. Semiconductors are the foundation for AI. The manufacturer (TSMC) and the fabless company (Nvidia, AMD, ...) making these chips own the key to the AI exponential. ESMC (EU throwing away a few billion for 12/16nm old node) will be competed to death by China bc it will come online only in a few years. We have no 7nm. 5nm, 4nm, 2nm manufacturing capabilities in the EU, by the time the AI develops AI, EU will not get any cutting edge chips and we have no ability to manufacture ourselves. We don't even have the fabless product companies with deep pockets in TRAINING hardware (we do have some inference but they might be wiped out by todays Nvidia DIGITS launch). Poland is like Portugal, ideal for low cost outsourcing software which is the first thing that gets replaced by AI. Without taking into account the today's LLM advances, Amazon and others have reportedly already done 25% of sw development with AI. Even if they lie about it and it is very simple tasks, we really don't understand how bad it is for the EU future. I wish it was different, but trying out these newer models (even the Qwen CN open source ones, the code they write is becoming so good with independent agents writing unit testing which will make the code much much better. We will be able to build power plants and supply energy but if we are talking 2040, the EU will be out of all jobs due to AI. Don't take my word for it, try the models and generate websites, apps, via these online AI suppliers (they cost money but make it super easy). Devin dot ai, even though really simple and with issues, will become stable, for 500$ you will have a full fledged sw resource fully automated. Teams of $6000 dollar cost a year devs is what is gonna destroy the EU. (cost of inference is going down almost weekly now). Like the industrial revolution, most people mock outliers but will be confronted with a lot of cognitive dissonance why they are suddenly out of a job. Let's see how it plays out, but let this be my prediction. I predicted India's rise in semiconductors in 2019 (even Indians laughed at this), the rise of AMD and the downfall of Intel, all in the same year. Intel was still mighty and dangerous (black lists, paying pundits a lot of money to praise their sub par products). Very unpopular takes is my thing. And I have skin in the game (kids and a subcontractor company in semi).
I would recommend watching the recent debate between James Krellenstein and Ted Nordhaus on Decouple Media on the merits of large traditional light water reactors and new non light water advanced designs. If you believe in James K's view that in the short to medium term building large light water reactors is the way to go and agree with both Ted and James that the US lacks the institutional capacity to do this unlike Europe including the UK then one might reasonable conclude advantage Europe in the sphere of nuclear energy.
I personally am even more in camp of James than James is and have no problem with the US building the same institutional capacities that the UK is building for example with the financing agreements for Hinckley C and Sizewell C but I also acknowledge that I am literally one of the only American nuclear advocates that supports this(James K doesn't even share this view). More importantly a lot of the Silicon Valley VC types who have recently been becoming extremely pro nuclear have no desire to go down this road.
I would argue that with the Sizewell C project Britain as hard as it is to believe is actually somewhat ahead of the US in constructing new nuclear. Remember in the US Vogtle is now finished and at the moment there is no follow on AP1000 project to Vogtle while Britain actually has a strategy to keep building EPR's. In all likelihood the next AP1000s will be built in Poland and other parts of Europe.
Another comment I will make is that in terms of construction time Sizewell B was actually a fairly successful project undertaken long after the US and many other countries had completely stopped building new nuclear. Sizewell B was constructed in roughly 5 years from 1991 to 1996. At that point the last new nuclear power plant in the US had last started construction in 1978. Sizewell B was also the first PWR built in the UK. What makes Sizewell B unsuccessful (and to be clear there is a good chance Sizewell B will operate for 100 years so success is a relative term) is there was basically a 10-year period of lawsuits and paperwork leading up to the plant's groundbreaking. BTW, this is actually a pretty good time frame compared to the fifth and largest air terminal at Heathrow Airport(Terminal 5) which spent almost 25 years in various planning and legal disputes before any construction ever started.
**Interesting video below from the construction period of Sizewell B.
Energiewende was touted by some as the biggest example of the 'entrepreneurial state' and 'industrial policy', and frequently 'renewables' and 'clean energy' are alleged to create jobs ...by ...spending. In fact any substantial spending creates some immediate jobs. Keynes said you can stimulate an economy by burying a large amount of cash in a gold mine, the digging will spur economy. This is true only in the sense that in a large economy there is a delay between the spending and the eventual results of either a higher sustained market or debt crisis. One thing energiewende shows is that substantial expenditure divorced from underlying economic need and efficient provision of the need, will eventually crash economy. Investment priorities need constant grounding and adjustment in market signals. Deregulation is needed to amplify the market signal within financial capital and production capital, and competent state economic bodies need to leverage market mechanisms wherever possible and develop professional competent institutions where they arent possible. The competition between different approaches of EU states is likely very helpful to rapidly discover and share competency and grow state capacity. Cultivating the engines of emerging high productivity economy is important, so are specific strategies aimed to accelerate the left behind, obsoleting sectors into new markets and higher productivity. 'Laissez Faire Modernization', where creative destruction is assumed inevitable and gradual diffusion of higher productivity systems is left to sort at its own pace, is politically fraught, as the nativist victories everywhere indicate. Draghi's spending isnt enough, spending (state institutions) must become smarter on along many lines - software, automation, commercialization, education, infrastructure, supply chain, outsourcing, opening trade, growing foreign economies. Oh, and dont drift into a war for parochial politics that doubles energy prices and retards integration of the EU and Russian science and commerce. EU will rebound and advance, but not without increasing state capacity and shedding US dependency.
Governments do not create wealth. At best they create the conditions for wealth creation. But simply their existence has a large cost. The European Union is a layer of government added on to the existing national governments of the various member states. It serves no purpose except to redistribute wealth among its member nations. It provides no service of any significance other than that. It provides nothing in the way of physical security.
And it return for all that nothingness, it extracts membership fees from its assorted nations. As the EU is an unelected body, it is a perfect example of taxation without representation, i.e. tyranny.
I wanted to take this opportunity to thank you, not just for your informative posts but for a convention you use in your writing that I rarely see nowadays (actually, I think you're the only person, apart from me, that I've noticed using it): before you use an Abbreviation/Acronym (A/A) you do what I just did, expand it and introduce the A/A in parentheses. I don't know if it's mainly American posts on politics, but I find it really irritating when I have to repeatedly interrupt my reading to look up an A/A, so much so that I've got a easily accessible note with all the ones I've come across that's got about 130 entries so far. I realize that the whole purpose of A/As is to avoid repeatedly writing relatively lengthy phrases, but the key word there is ‘repeatedly’. It's really just common courtesy not to assume that everyone reading knows what your A/As mean. So thank you for having the courtesy of explaining your A/As 😊.
The question of overregulation producing economic stagnation is an interesting one. This dynamic has been shown in a number of cases. We have seen this most recently in the case of Argentina. At the turn of the last century, Argentina in 1900 was a nation of enormous wealth and opportunity. It's annual economic growth was very high, buoyed up by heavy demand for its products by other countries. But it became increasingly mired in political instability. It had no less than seven military coups in the 20th century. One of these resulted in the overthrow of any pretense of a democratic government in the fascism of Juan Peron. The military junta government eventually collapsed in the wake of its severe military defeat by Britain in the 1982 Falklands War.
And all this time, Argentina was strangling itself in ever-greater government control of everything. All this as government spending was bankrupting the country. In recent years, Argentina has been bankrupt at least twice when it defaulted on its debt obligations.
The treatment for this has been simple and ruthless. The new president Javier Millei has embarked on a programme of drastically shrinking the size and activity of government. He has eliminated half the government ministries and reduced the civil service by more than 1/3rd. For this first time in decades, Argentina has an international credit rating. For the first time in decades, Argentina has stabilized its currency and is experiencing real economic growth.
Unless European nations and the EU go through this process of shrinking the size of government and pruning back government obligations, they will not escape the morass of ineffectiveness and ballooning debt and deficit. There's a very simple, blunt statement summarizing the problem.
"If you are in a hole, stop digging."
Energy can be solved. But let's entertain the idea that AI is the real winner takes all. Once AI develops AI, it becomes compute time to further itself. Semiconductors are the foundation for AI. The manufacturer (TSMC) and the fabless company (Nvidia, AMD, ...) making these chips own the key to the AI exponential. ESMC (EU throwing away a few billion for 12/16nm old node) will be competed to death by China bc it will come online only in a few years. We have no 7nm. 5nm, 4nm, 2nm manufacturing capabilities in the EU, by the time the AI develops AI, EU will not get any cutting edge chips and we have no ability to manufacture ourselves. We don't even have the fabless product companies with deep pockets in TRAINING hardware (we do have some inference but they might be wiped out by todays Nvidia DIGITS launch). Poland is like Portugal, ideal for low cost outsourcing software which is the first thing that gets replaced by AI. Without taking into account the today's LLM advances, Amazon and others have reportedly already done 25% of sw development with AI. Even if they lie about it and it is very simple tasks, we really don't understand how bad it is for the EU future. I wish it was different, but trying out these newer models (even the Qwen CN open source ones, the code they write is becoming so good with independent agents writing unit testing which will make the code much much better. We will be able to build power plants and supply energy but if we are talking 2040, the EU will be out of all jobs due to AI. Don't take my word for it, try the models and generate websites, apps, via these online AI suppliers (they cost money but make it super easy). Devin dot ai, even though really simple and with issues, will become stable, for 500$ you will have a full fledged sw resource fully automated. Teams of $6000 dollar cost a year devs is what is gonna destroy the EU. (cost of inference is going down almost weekly now). Like the industrial revolution, most people mock outliers but will be confronted with a lot of cognitive dissonance why they are suddenly out of a job. Let's see how it plays out, but let this be my prediction. I predicted India's rise in semiconductors in 2019 (even Indians laughed at this), the rise of AMD and the downfall of Intel, all in the same year. Intel was still mighty and dangerous (black lists, paying pundits a lot of money to praise their sub par products). Very unpopular takes is my thing. And I have skin in the game (kids and a subcontractor company in semi).
I would recommend watching the recent debate between James Krellenstein and Ted Nordhaus on Decouple Media on the merits of large traditional light water reactors and new non light water advanced designs. If you believe in James K's view that in the short to medium term building large light water reactors is the way to go and agree with both Ted and James that the US lacks the institutional capacity to do this unlike Europe including the UK then one might reasonable conclude advantage Europe in the sphere of nuclear energy.
https://www.youtube.com/watch?v=dZ2-fsclYcM
I personally am even more in camp of James than James is and have no problem with the US building the same institutional capacities that the UK is building for example with the financing agreements for Hinckley C and Sizewell C but I also acknowledge that I am literally one of the only American nuclear advocates that supports this(James K doesn't even share this view). More importantly a lot of the Silicon Valley VC types who have recently been becoming extremely pro nuclear have no desire to go down this road.
I would argue that with the Sizewell C project Britain as hard as it is to believe is actually somewhat ahead of the US in constructing new nuclear. Remember in the US Vogtle is now finished and at the moment there is no follow on AP1000 project to Vogtle while Britain actually has a strategy to keep building EPR's. In all likelihood the next AP1000s will be built in Poland and other parts of Europe.
Another comment I will make is that in terms of construction time Sizewell B was actually a fairly successful project undertaken long after the US and many other countries had completely stopped building new nuclear. Sizewell B was constructed in roughly 5 years from 1991 to 1996. At that point the last new nuclear power plant in the US had last started construction in 1978. Sizewell B was also the first PWR built in the UK. What makes Sizewell B unsuccessful (and to be clear there is a good chance Sizewell B will operate for 100 years so success is a relative term) is there was basically a 10-year period of lawsuits and paperwork leading up to the plant's groundbreaking. BTW, this is actually a pretty good time frame compared to the fifth and largest air terminal at Heathrow Airport(Terminal 5) which spent almost 25 years in various planning and legal disputes before any construction ever started.
**Interesting video below from the construction period of Sizewell B.
https://youtu.be/FyRRBP1WqpQ?si=bR6emAwpAUyDUeDp&t=29
Energiewende was touted by some as the biggest example of the 'entrepreneurial state' and 'industrial policy', and frequently 'renewables' and 'clean energy' are alleged to create jobs ...by ...spending. In fact any substantial spending creates some immediate jobs. Keynes said you can stimulate an economy by burying a large amount of cash in a gold mine, the digging will spur economy. This is true only in the sense that in a large economy there is a delay between the spending and the eventual results of either a higher sustained market or debt crisis. One thing energiewende shows is that substantial expenditure divorced from underlying economic need and efficient provision of the need, will eventually crash economy. Investment priorities need constant grounding and adjustment in market signals. Deregulation is needed to amplify the market signal within financial capital and production capital, and competent state economic bodies need to leverage market mechanisms wherever possible and develop professional competent institutions where they arent possible. The competition between different approaches of EU states is likely very helpful to rapidly discover and share competency and grow state capacity. Cultivating the engines of emerging high productivity economy is important, so are specific strategies aimed to accelerate the left behind, obsoleting sectors into new markets and higher productivity. 'Laissez Faire Modernization', where creative destruction is assumed inevitable and gradual diffusion of higher productivity systems is left to sort at its own pace, is politically fraught, as the nativist victories everywhere indicate. Draghi's spending isnt enough, spending (state institutions) must become smarter on along many lines - software, automation, commercialization, education, infrastructure, supply chain, outsourcing, opening trade, growing foreign economies. Oh, and dont drift into a war for parochial politics that doubles energy prices and retards integration of the EU and Russian science and commerce. EU will rebound and advance, but not without increasing state capacity and shedding US dependency.
Governments do not create wealth. At best they create the conditions for wealth creation. But simply their existence has a large cost. The European Union is a layer of government added on to the existing national governments of the various member states. It serves no purpose except to redistribute wealth among its member nations. It provides no service of any significance other than that. It provides nothing in the way of physical security.
And it return for all that nothingness, it extracts membership fees from its assorted nations. As the EU is an unelected body, it is a perfect example of taxation without representation, i.e. tyranny.