Tag: economy

US Seeks to Boost Semiconductor Chip Manufacturing

The chip shortage has been at the top of mind over the last week after the launch of DeepSeek, a novel AI service intended to compete with ChatGPT. Semiconductor manufacturers have left the US and previous plans to attract domestic production have failed. President Donald Trump has proposed a new idea to force production back to the states through tariffs.

The CHIPS and Science Act launched under the Biden Administration injected $52 billion into American chip manufacturing. Intel was awarded $7.9 billion in 2024 to boost factories in Ohio, Oregon, New Mexico, and Arizona. Still, these incentives have not been sufficient to attract new chip manufacturers to the US, with the bulk residing in Taiwan.

Trump believes that throwing cash at companies is not enough to boost domestic production. “They’re gonna build their factory with their own money. We don’t have to give them money,” Trump added, later claiming: “They’re giving the money, they don’t even know what they’re going to do with it.” Instead, he is proposing tariffs between 25% to 100%, believing companies will come to the US to avoid these impossible taxes.

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Opposing The Keynesian Illusion: Spending Does Not Drive The Economy

Keynes held that the economy can suffer extended periods of high unemployment because of deficient aggregate spending. A contraction in spending results in businesses having excess inventories and reduced revenues. Businesses respond by cutting back and decreasing their demand for labor. Due to “sticky wages,” this results in a large decrease in employment and incomes for workers. The problem comes full circle and self-aggravating because workers as a whole must restrict their spending due to their reduced incomes.

For Keynes, the solution is found in the government, which can increase the money supply and engage in deficit spending. Monetary and fiscal policies are aimed at stimulating (indirectly) and replacing (directly) aggregate spending, respectively. Instead of focusing on these destructive prescriptions, I want to take a closer look at the central placement of aggregate spending in his analysis.

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Rebuilding American Manufacturing: It’s Not Just Plants, It’s People

The latest spotlight on the crisis in American manufacturing may be on steel, but our nation has traded its manufacturing might for financial gains across all sectors – making the same fateful mistake that has befallen great civilizations throughout history. As a founder, CEO, and advocate for American industrial renewal, who’s building the world’s most advanced, efficient factories to counter China’s chokehold on manufacturing, I can tell you that America has just three years – not 10 – to rebuild our industrial base before falling critically behind.  

The vice president and many of the new administration have demonstrated passion for reindustrializing the country and creating a jobs boom that has not been seen in this country for decades. 

This is not just an economic challenge – it’s a moral imperative to secure our nation’s future while being good stewards of our resources, which include the people of this great country. 

The good news is that American innovation and determination can overcome these challenges. In my own company, we’ve developed systems that can transform someone who’s never set foot in a factory into a highly productive team member in weeks, not years. We pay well, offer equity, and provide meaningful work contributing to national security. This isn’t about replacing American workers with automation – it’s about empowering them with technology to manufacture for America faster and better than ever before, creating new and better jobs along the way. 

Likewise, the Trump administration’s commitment to reindustrialization, American manufacturing and our workforce can begin on Day One. To regain our competitiveness, we need the incoming administration to take four broad steps: 

First, we must dramatically reform our permitting process for strategic manufacturing facilities. While China can build a factory in months, American companies often wait years for permits. This regulatory burden is crushing our ability to rapidly scale the production of critical components. 

Second, we need to level the playing field against China’s predatory practices. This means addressing everything from raw material costs to energy rates to shipping subsidies. These artificial costs squeeze what American companies can pay their workforce.  

When Chinese manufacturers can access materials and energy at a fraction of what American companies pay, we’re not competing on merit – we’re competing against a government-subsidized adversary that has been intentionally de-industrializing the U.S. for 30 years. Americans can compete, but not against the Chinese Communist Party making everything from energy to raw materials free. One hundred billion dollars of currently offshored manufacturing business from American companies sourcing in China could return overnight as a result of a more level playing field, creating a jobs boom unlike anything we’ve seen since the ’40s. 

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Race-Baiter Elie Mystal Has EPIC Meltdown Against White People — Blames Them for High Egg Prices Just 5 Days into Trump’s Presidency

In a recent appearance on MSNBC, race baiter Elie Mystal erupted in a fiery tirade against White Americans, blaming them for sustaining what he calls a “disgusting version of America,” all within the first week of President Donald Trump’s term.

This outburst followed Trump’s controversial decision to pardon over a thousand participants of the January 6 Capitol riots.

Mystal had an epic meltdown during a discussion about the broader implications of Trump’s pardons, which he referred to as predictable to those who’ve been paying attention.

“We tried to tell you all,” said Mystal. “Ali, I wrote specifically about this issue, what he was going to do to the Department of Justice multiple times during the election cycle Because as you pointed out in your open, this was all written down.

“I don’t like the shock and awe version of this, because if you had been paying attention, they wrote it down. They told you exactly what they were going to do and exactly how you were going to do it. A majority of White people voted for this. This is the disgusting version of America that people want,” he added.

Mystal then ridiculously blamed White people for the recent spike in egg prices—a mere five days into Donald Trump’s second term as President.

“And, by the way, eggs are still more expensive so you didn’t even get that, great job, white folks!”

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Egg Prices Catapult Into ‘Blue-Sky Breakout’ As Bird Flu Sparks Worsening Shortage

An ongoing and devastating avian influenza outbreak has severely dented the nation’s egg-producing hen population, driving wholesale prices into record-high territory and far surpassing the price explosion seen a few years ago when the bird flu first emerged. This is an alarming trend, and egg prices at the supermarket will likely rise further in the weeks and months ahead.

The latest wholesale data from Urner Barry shows that the price for a dozen eggs has jumped to a record high of $5.4, exceeding the previous peak of $4.65 set in December 2022. Rising wholesale prices are expected to continue pressuring supermarket prices higher.

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New York Times Complains Labeling Mexican Cartels Terrorist Organizations Will ‘Hurt The U.S. Economy’

As Donald Trump gets to work on his agenda, left-wing media organizations like The New York Times are already making fools of themselves.

On his first day in office, Trump signed an executive order designating Mexican drug cartels as foreign terror organizations.

His order stated:

The Cartels have engaged in a campaign of violence and terror throughout the Western Hemisphere that has not only destabilized countries with significant importance for our national interests but also flooded the United States with deadly drugs, violent criminals, and vicious gangs.

The Cartels functionally control, through a campaign of assassination, terror, rape, and brute force nearly all illegal traffic across the southern border of the United States.

In certain portions of Mexico, they function as quasi-governmental entities, controlling nearly all aspects of society.

The Cartels’ activities threaten the safety of the American people, the security of the United States, and the stability of the international order in the Western Hemisphere.

Their activities, proximity to, and incursions into the physical territory of the United States pose an unacceptable national security risk to the United States.

However, The New York Times is now arguing that this move will damage the U.S. economy because of the risk of businesses in both countries violating sanctions against terrorist groups.

Their article states.

The foreign terrorist designation could lead to severe penalties — including substantial fines, asset seizures and criminal charges — on companies and individuals found to be paying ransom or extortion payments.

U.S. companies could also be ensnared by standard payments made to Mexican companies that a cartel controls without the American companies’ knowledge.

As a result, companies in the risk-averse American financial sector may simply refuse to wire money to a Mexican factory, for example, to facilitate cross-border production and trade, or to wire money between personal accounts.

…

If money transfer companies like Western Union also stop transactions to Mexico over worries about properly vetting Mexican clients, it could affect the remittances the country relies on.

That would be devastating for the Mexican economy, which received $63.3 billion in remittances in 2023, nearly 5 percent of the country’s gross domestic product.

The Mexican peso has suffered as a result of the designation, as well as the looming threat of tariffs and trade barriers.

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Joe Biden’s farewell letter is full of classic Biden whoppers

On Joe Biden’s way out of office, he and his puppet masters are doing everything they can to tie Trump’s hands so they can blame him for failing to lower inflation, eliminate unnecessary federal workers, lower energy prices, and deport as many illegals as he promised and should.

They are also rewriting history, pretending that Biden’s four years in office made the world and America safer and more prosperous.

And now, Biden has issued a farewell letter, which was full of class Biden whoppers. Biden has been a serial liar throughout his fifty years in office so it’s completely expected, but he’s really outdone himself this time, starting out with one of his biggest, continuous lies, i.e. that he inherited the worst economic crisis since the Great Depression and his policies turned it around. From a report at Fox News:

Biden began his letter by writing that four years ago when he took office, ‘We were in the grip of the worst pandemic in a century, the worst economic crisis since the Great Depression….’

The media know, or should know, that Biden inherited a rapidly growing economy, yet we see very few who correct Biden’s lies—so most Americans probably believe he actually did inherit a disaster. What Biden was actually handed though was a rapidly growing economy, low energy prices, overall inflation of 1.4%, a fairly secure border, and a relatively peaceful world—his executive orders and policies instantly undid all of that, and made things much worse for the last four years.

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Seattle’s new $20 minimum wage claims 6th restaurant casualty since New Year

Seattle’s new $20 minimum wage for 2025 has caused a 6th restaurant to close since the new year.

Pike Place Market bakery The Confectional closed on Sunday after 18 years in business.

Owner Destiny Sund told KIRO News Radio, “I wanted my team to have a wonderful holiday season, so I didn’t mention to them that we would be closing until after New Year’s Day. So this has been a long week for all of us at The Confectional.”

The minimum wage for all employees in the city limits, regardless of business size, jumped to $20.76 on January 1. Last year, if a worker earned at least $2.72 per hour in medical benefits or tips, the business only had to pay its employees $17.25 per hour, but now, for those businesses that featured tips, the change to the minimum wage was a 20 percent increase. The Emerald City’s increase is $4 more than Washington State’s minimum wage requirement.

Sund added, “That allowed businesses 50 employees or under to subtract $2.00 from the minimum wage. If they could make it up in tips and or benefits. And my employees did make that up in tips.”

She continued, “And just doing the math with the additional increase and the loss of the tip credit, it would cost my business an additional $18,000. And that’s just not sustainable.”

At least five other restaurants in Seattle have closed or are closing just days after the city council’s new minimum wage law went into effect.

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Government Spending Will Cause the Next Financial Crisis

Crises are never caused by building excessive exposure to high-risk assets. Crises can only happen when investors, government bodies, and households accumulate risk in assets where most believe there is little to no risk.

The 2008 crisis did not occur due to subprime mortgages. Those were the tips of the iceberg. Moreover, Freddie Mac and Fannie Mae, state-owned entities, guaranteed a sizable portion of the subprime mortgage packages, which prompted numerous investors and banks to invest in them. Nobody can anticipate a crisis stemming from the potential decline in the Nvidia share price or the value of Bitcoin. In fact, if the 2008 crisis had been created by subprime mortgages, it would have been absorbed and offset in less than two weeks.

The only asset that can really create a crisis is the part of banks’ balance sheets that is considered “no risk” and, as such, requires no capital to finance their holdings: government bonds. When the price of sovereign bonds swiftly declines, the banks’ balance sheet rapidly shrinks. Even if central banks conduct quantitative easing, the spillover effect on other assets leads to the abrupt destruction of the money base and lending.

The collapse in the price of the allegedly safest asset, government bonds, comes when investors must sell their existing holdings and fail to purchase the new supply issued by the states. Persistent inflation consumes the real returns of previously purchased bonds, leading to the emergence of evident solvency problems.

In summary, a financial crisis serves as evidence of the state’s insolvency. When the lowest-risk asset abruptly loses value, the entire asset base of commercial banks dissolves and falls faster than the ability to issue shares or bank bonds. In fact, banks are unable to increase capital or add debt due to the declining demand for sovereign bonds, as banks are perceived as a leveraged bet on government debt.

Banks do not cause financial crises. What creates a crisis is regulation, which always considers lending to governments a “no-risk,” “no capital required” investment even when solvency ratios are poor. Because the currency and government debt are inextricably linked, the financial crisis first manifests in the currency, which loses its purchasing power and leads to elevated inflation, and then in sovereign bonds.

Keynesianism and the MMT fallacy have driven global public debt to record levels. Furthermore, the burden of unfunded liabilities is even larger than the trillions of dollars of government debt issued. The United States’ unfunded liabilities exceed 600% of GDP, according to the Financial Report of the United States Government, February 2024. In the European Union, according to Eurostat, France and Germany each accumulate unfunded liabilities that exceed 350% of GDP.

According to Claudio Borio of the Bank for International Settlements, a government debt glut may cause a bond market correction that could spill over into other assets. Reuters reports that large government budget deficits suggest that sovereign debt could rise by a third by 2028 to approach $130 trillion, according to the Institute of International Finance (IIF) financial services trade group.

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H-1B Visa Undermines American Students and Workers

Last year, I committed to spending this year exploring the education-to-workforce pipeline. Higher education has long been seen as the start of that pipeline, with graduates transitioning from classrooms to careers. My interest in this topic dates back to my time working for Governor Phil Bryant in Mississippi, where I assisted Laurie Smith in studying how the state’s community colleges and training programs prepared graduates for the workforce. The results were underwhelming—a topic for another day. For now, a more pressing issue is the role of the H-1B visa in this pipeline.

In this week’s top article, Rob Jenkins connects higher education to the H-1B visa program, framing the debate over whether to support the program as a proxy for assessing the quality of U.S. education. He poses a critical question: Are colleges and universities producing enough top-tier talent to meet economic demands—and if not, why?

Jenkins argues that American higher education bears responsibility for leaving graduates behind their international peers. He cites a June 2024 Gallup poll showing that only a third of Americans have confidence in U.S. universities to prepare students for the workforce. This crisis of confidence, Jenkins contends, stems from a combination of social promotion in K-12 schools, the dilution of college curricula, and the prioritization of “diversity, equity, and inclusion” (DEI) over academic rigor—all of which, he believes, contribute to the nation’s reliance on foreign labor.

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