 We've talked a lot about the CHIP Act, the CHIP Act, where $52 billion of the CHIP Act are going to be used to subsidize the production of advanced CHIP technology in the United States. We've talked a lot about why I think this is a bad idea, and even if it was a good idea, it's just not going to happen. It's just not practical in the United States to build these things. It's not practical because of our own policies, because of bad laws. Bloomberg, the editors of Bloomberg, to their credit, these are not exactly laissez-faire capitalist advocates. Point out exactly the same thing. The chance that we are going to increase CHIP manufacturing is a significant way in the United States because of the CHIP Act. That case is very dubious and unlikely to actually happen. In 1990, 37% of all the CHIPs made in the world were made in the U.S., and some of the most advanced CHIPs in the world were made in the U.S. Today it's 12%, and the most advanced CHIPs in the world are not made in the United States. 90% of those are made in Taiwan. Now this has national security implications because about 1.9 billion CHIPs are consumed every year by the Defense Department. Just let that sink in. 1.9 billion CHIPs are consumed every year by the Defense Department. Now hopefully they're consumed in weapons that are aimed at protecting us and not at technologies that are aimed at violating our rights. Let's assume this is for protection. If that is the case, then having a regular supply of these CHIPs is important. Not clear that in order to do that, you need to have them produced in the United States. After all, both Taiwan and South Korea and Japan, the three largest producers of CHIPs in the world, are all friends of the United States. Of course, the challenge there is that if there is a war with China over Taiwan, some of those shipping lanes to the United States could be disrupted and it would be good for national defense reasons. They have some CHIP manufacturing in the Western Hemisphere, whether in Europe or whether in the Americas. It doesn't have to be the United States that's part of that issue here if you're really thinking about strategically. It just needs to be in a friendly country that one can easily access supply chains in a time of crisis. It could be in Mexico, it could be in Canada, or it could be in Western Europe. It could even be in some more stable countries in Latin America, although now that I think about it, are they stable countries in Latin America? Good question. One of the reasons it's unlikely that we manage to make enough CHIPs in the United States in the future is that today it takes 25% longer to make a CHIP in the US and it costs 50% more than it does in Asia. It's faster, more efficient, more productive, and cheaper. Not because primarily of labor costs, but primarily because of greater productivity. Asia is much more productive in the production of CHIPs than anywhere else. Now, there are three serious impediments today to deploy significant money in order to build FABS, CHIP manufacturing plants in the United States, three big impediments beyond the issue of the government centrally planning, the government picking winners and losers, put all that aside. Let's say we decided, let's say this was a good idea somehow and let's pretend that that was the case, but let's even pretend or let's just say that private enterprise wanted to invest heavily in CHIP manufacturing in the United States. There are three reasons why it just can't happen. Even if there was private capital, 50 billion of private capital, 100 billion of private capital to go in and build CHIP manufacturing plants in the United States, you can't do it. Why? I mean the United States is the place to build stuff, isn't it? Used to be. The number one impediment for building CHIP plants is red tape. From 1990 to 2020, the time required to construct new CHIP plants, FABS, in the United States rose by 38%. That's just the time. The Clean Air Act, just getting a permit for the Clean Air Act takes 18 months. The National Environmental Policy Act allows for reviews that can last four and a half to five years. There are another half dozen federal laws that come into play, plus endless state and local, not in my backyard, laws, variations. They just slow everything down and of course make a lot of money for lawyers, but slow everything down. At every step, there are regulations, there are agencies, there are bureaucrats who want a piece of this, who want to establish their authority and get to give this a stamp of their permission to feel that they are powerful and they are meaningful. But of course, a delay of four and a half years to get the environmental permissions, if four and a half years technology shifts in an instant, technology shifts so fast, in four and a half years you're four and a half years behind cutting edge. And you might have to build a completely different plant. And when you have to build a completely different plant, you might have to start all over again with the stupid permits. It is, I mean people talk about we've lost manufacturing jobs to China, we've lost this, yeah. When you make it so damn difficult to build in America, when you make it so damn difficult to construct anything in America, this is what happens. You want to see a renaissance of industrialization of America. You need to get rid of the red tape. You need to get rid of the stupid bureaucrats, the regulations, the controls that limit ability to build and produce. Build, build, build should be a platform for some political party. And of course, as a consequence of this, the delays, the difficulties, I mean who's going to invest their money? This is why private money will not be invested. And even though the government is now throwing money at it, they have to have private money to match it, they have to have private interest involved. And the government is not cutting red tape even though it's a government project. The Biden administration is not reducing any of the regulatory constraints. Quite the contrary. So the US is just not going to be a serious competitor when it comes to manufacturing as long as these kind of obstacles, this kind of red tape exists. In Japan, it can take maybe to build a world-class manufacturing plant, to build chips, a fab, it can take maybe 580 days in the United States, it takes 740 days. That's a lot of time. It's a lot of time in the world of technology. Why invest the time in the US if you're going to do it? Another challenge, of course, we've talked about this before, is the US just doesn't have the labor force for it. We are probably about these new fabs that are already underway, the projects that are already underway, are going to require about 300,000 skilled laborers. The United States doesn't have one. It doesn't have them. The number of US students pursuing advanced degrees in fields that are related to chip manufacturing has stagnated for 30 years. Now, there are lots of international students enrolled. There are lots of international students studying in American universities that could be used for fabs, could be used for manufacturing advanced chips. But we make it almost impossible for them to stay in the United States, stay and work here. And as a consequence, companies like Intel, TSMC, who are trying to build in the United States, they can't find workers. They're literally struggling to find workers. If you look at the main degrees that are associated with chip manufacturing, electrical engineering, 74% of electrical engineering graduate students are farm-born. Of computer information sciences, 72% are farm-born. Industrial manufacturing engineering, 71% are farm-born. Chemical engineering, 54%, material science, 52%. We educate them. We subsidize their education often. We get them at an advanced degree, a master's or even a PhD, and we kick them out of the country. I mean, is there a single policy that is dumber than that one in terms of just shoe economics and want to be successful? I don't know of one if there is. And then finally, a final obstacle to the United States actually producing chips is political. It's all the rules that the Biden administration has placed on companies that receive this subsidy. They have to advantage labor unions, which only raises the costs. And again, skilled laborers, they're going to be members of unions. They have to favor demographics. They have to be diverse. They have to empower community partners. They have to offer community investment. They have to give all kinds of benefits to employees, including affordable, accessible, reliable, and high quality childcare, determined by, I guess, the common bureaucrat. Basically, we've just allocated $50 billion to subsidize an industry that we cannot compete in because we, America, has created obstacles to our own competition, our own ability to compete. We have a ridiculous, you can't build anything in America attitude. We have a ridiculous attitude towards immigration and we have an absurd attitude within this law that is trying to establish social policies while trying to, you know, in the name of national defense, establish a significant chip industry in the U.S. It really is insane. It really is crazy. And as usual with crazy and sane things, nobody seems to care. Nobody seems to care. And if all these Republicans who talked about, you know, bringing jobs back to America and industrialization in the middle class and, okay, well, here's an opportunity. You know, I haven't seen anybody in the house. The house has passed all these bills that are meaningless and stupid and do nothing. Why don't they pass a bill, even if it's just symbolic, eliminating a lot of these environmental regulations, streamlining the process of building things in the United States. You know, telling local and state governments that they can't intervene in these projects. But getting the EPA out, pass the bill. It won't, Biden won't sign it, grant it. But then we can blame the Democrats. Then it's clear, the Republicans have provoked this, Democrats against it, cool. Where's this bill? Republicans passed it? Republicans offered it? Any Republican? Any Republican? Even talking about it? There is no pro-growth, pro, you know, pro-market political party in the United States anymore. Suddenly no pro-build, build, build, which is what we need, an attitude towards best building. Thank you for listening or watching the Iran Brook show. If you'd like to support the show, we make it as easy as possible for you to trade with me. If you get value from listening, you get value from watching, show your appreciation. You can do that by going to iranbrookshow.com. I go to Patreon, subscribe star locals and just making a appropriate contribution on any one of those, any one of those channels. Also, if you'd like to see the Iran book show grow, please consider sharing our content and of course subscribe. Press that little bell button right down there on YouTube so that you get an announcement when we go live. And for those of you who are already subscribers and those of you who are already supporters of the show, thank you. I very much appreciate it.