The lesson from Ukraine is that drones are the future of warfare, and lots and lots of small, cheap ones at that. Perhaps that means territorial conquest will be harder, perhaps not. As always military budgeting focuses on the last war, not the next one. Necessity, the mother of invention, proven again in Ukraine.
Yes, we been selling off the farm for the last 40 years.
DARPA also was the start for shale fracking from the OPEC and Saudi oil embargoes in the 70's. And most of the so-called tech geniuses didn't start in their garages. They were usually government funded starters.
Yes, before 1982 stock buybacks were considered "market manipulation" Then the "free traders" started getting their way in the 70's and especially after Reagan was elected. From the crowd who is first to tell us nothing is "free" lol funny
Ok if we use the Fourth Turning and most other "experts" criteria then 80–100-year cycles are when we start looking at drastic regime changes? So, since our beginning we are basically in the 4th cycle of this dynamic, right? 1780-1860; 1860-1940; 1940-2020. So, as the Chinese and others always say the 3rd generation is the one who starts giving the family jewels away. By the 4th it is 90% of the time a done deal. The fortune is gone?! Is this where we could be? The 2028 elections I believe will be where we really find out where we are going to go? Keep selling off the farm or start building and working again? hmmmm? we shall see?
The university = The "New Religion" (religion of nihilism)
Just to add some clarification, share buybacks were not illegal before 10b; in fact, they occurred on a basis in a very different fashion, promoting the thoughtful repurchase of shares, typically in the form of tender offers, at a premium to the prevailing market price.
The issue with 10b is not, in fact, that it safe harbors share buybacks, but that they gave safe harbour to repurchases under the expectation that they would be programmatic. Programmatic share buybacks are, by definition, value-agnostic; as such, they are thoughtless and risk wasting capital. A tender offer, which has faded from use since 10b, was not; it was the definition of a free market, as it was very much tethered to the cost of capital and the returns that could be derived from deploying capital.
This is the wrong direction. The US already spends more on war (Trump's nomenclature) than the next ten countries in the world. Let's target the spending rate of our allies, right around 2% of GDP, instead of the current 3.5%. That would reduce our current, roughly $950 billion war budget to $470 billion, still a big number.
Why do we need 84,000 troops stationed in Europe and 54,000 in Japan 80 years after the end of WWII? Our military and our spy agencies have been intervening and conducting regime change with astonishing regularity for my entire 78 yrs. Who has been defended in all of these actions? Weapons of Mass Destruction? Gulf of Tonkin?
Di Placido gets two very important things wrong. The first, the southern Transcontinental railroad you learned about in school, went bankrupt. All five companies went bankrupt with in two years of completing the railroad. The northern Transcontinental railroad, that was entirely privately funded, was a massive success. At least until it was undermined by government regulations meant to protect the companies involved in the southern railroad. So that is actually an absolutely horrible example of how to bring back industry to America.
The second issue he hints at but fail to explore is that disconnecting trade from mutual defense and shared values has created a massive 'tragedy of the commons'. We've been rewarding the national security threat, non-ally, and giant ball of corruption that is Mexico with ever more factories and investment. This has led Canada to underinvest in it's own industrial base, turn it's housing market into a Ponzi scheme, all while they increasingly underfund their defenses. Yet we still expect the Canadians to rally out to help us protect and defend the foreign supply chains feeding those Mexican factories.
The biggest problem is the mis-belief that a 'commons problem' only occurs when you try to give too much help to the poor. In reality, a 'commons problem' is created anytime you create a system that rewards irresponsible behavior. It will only be fixed when we intentionally and blatantly start changing our trade and defense policies to reward our allies and intentionally exclude non-allies or those that try to freeride off our protections.
A short version is that there is nothing free about "freedom of navigation" and we will quit defending all those foreign built and operated ships. Either because we intentionally change what we're doing, you because we won't have either the money or capacity to replace our increasingly obsolete warships.
The northern transcontinental railroad, consistent with the quote I used, received massive federal land grants. The whole point of my piece -- "thinking wider" -- is that federal subsidies are not enough on their own to reindustrialize and that we need private and foreign investment as well (i.e., more like the northern transcontinental railroad than the others).
Also, the point of the foreign policy argument in my article is the "tragedy of the commons" - I explicitly refer to it as "civilizational welfare." Perhaps you disagree that our allies have been free-riding, but that is different than saying I ignore the problem.
I appreciate your engagement with my piece but think it is unhelpful to say I get "two very important things wrong," then stating two central parts of my argument.
First, I want to express how I believe we're on the same side and want the same things. We want the US to be strong and bring back a world leading industrial base. We want strong allies that share our values like democracy, rule of law, human rights and reasonably clean environments. Okay, lets start looking a little deeper into this plan.
So we expect the French to cut their own pensions and more than double their defense spending, with at least a fair portion of that going to buy American made military hardware. You do know they are in a union with Ireland, who spends just 0.25% of it's GDP on defense. Ireland has used that lack of dense spending to keep it's taxes much lower than France, winning the European headquarters of dozens of American companies.
Ah, but we also expect the Germans to borrow themselves into a hole to get up to spending 5% of their GDP, all while their own economy is de-industrializing. Again buying lots of American made kit. Austria on the other, not an ally, will keep spending a mere 1%.
Are you starting to see the problem? Because I can keep going. Five EU member states are not in NATO. None of the pledges from any of the NATO members are subject to verification or enforceable. Hence why I tried to point out that we have to make it explicit that allies get better trade agreements. There is not much we can do about Europe, but we could start setting examples with allies like Canada and Japan.
I'm not saying Canada should get free trade, not unless they are willing to negotiate a somewhat detailed agreement on their defense posture. Whether they buy from us, or build it themselves, doesn't matter. Preferably, a comprehensive negotiated agreement rather then a simplistic percentage of GPD that encourages waste rather than innovation.
Stop for just a minute and ask, why should America provide help to the Europeans if they give the same trade terms to none allies? Well, wouldn't that also apply to why should Canada help provide security to America if we going give Mexico the same or better tariffs rates.
Also, I'm right about the Transcontinental land grants. We got the worlds best bankruptcy laws out of it, but then we also got almost a hundred years of the government setting freight rail prices. So use college land grant or some other example of the federal government helping push innovation and industry forward. The Transcontinental railroad is just a horrible example.
Mark DiPlacido's analysis of the problem and issues of foreign policy defense and industrialization seem generally pretty solid. In particular, I was pleased to hear Trump go after what can only be considered MIC corruption. Little hints in the news like we can't supply Ukraine with enough munitions without getting dangerously low for our own defense is incomprehensible given our military budget, unless corruption. Military spending hasn't been successfully fully audited for half a century. That is unacceptable. I remain skeptical that Trump will end corruption rather than redirect it to benefit himself but at least he's acknowledged the problem out loud. DOGE should have gone after the MIC as job one. But that would have been a conflict of interest for Musk.
Mark mentioned communications infrastructure. That is existentially essential. We should have redundant fiber networks to everywhere in our country. Relying on satellites is insanely stupid. Relying on commercial players to make it happen has been a failure. Again, because we allowed it to be. I say nationalize where private enterprise has failed in its promise.
As for infrastructure, we need to think bigger than Mark is suggesting. A robust flexible adaptable national grid with multiple redundancies is a Requirement. Also a national water management system is a requirement. Climate change is going to alter water patterns substantially. We need to be able to manage droughts and extremely heavy rainfall equally. They are going to happen more and more. If we want to be sure we can grow our own food, that's gotta happen.
The deficit is ridiculous. It could be resolved sensibly and quickly by getting the military budget under control and taxing the extremely wealthy as was the case in our Middle Class happy time after WWII. Mark talks about the evils of financialization and I completely agree. So much of the financial sector is predatory vampirism and should be outright abolished. Much of trading and investment is about scamming and has nothing to do with productive investment. High frequency trading damages the middle class in the end. Prediction markets benefit only the owners of those markets and do fuck all for Citizens except siphon money from us. Crypto currency is for criminals and scammers. It should be banned. PE needs to be stopped or heavily regulated. It destroys virtually everything it touches in the end.
Mark talks about innovation leadership which the US has enjoyed for a long time. Cutting research and education is absolutely backwards to that end.
Getting our house in order includes stomping down on fraud from the president on down to street grifters. Medicare fraud from end users, complicit doctors and the biggest grifters: the insurance companies must end. Financial grift, MIC fraud must end. PBMs and all the leeching management middlemen in healthcare must go. End those and our national productivity jumps forward with no other changes. Add The infrastructure effort as a CCC and WWII scale national endeavor and protective industrial policy and we could be off and running and secure within a decade or two. With a prospering middle class and a much reduced elite class.
I don't disagree with much of what the administration apologists argue for. I strongly agree with much of what Oren advocates, ignoring the obligatory liberal bashing. I remain deeply skeptical that Trump is the instrument to make this all anything more than a smokescreen for his own power and corruption.
Drones are the future. No longer tactical, they are strategic. And a couple orders of magnitude cheaper than alternatives.
The lesson from Ukraine is that drones are the future of warfare, and lots and lots of small, cheap ones at that. Perhaps that means territorial conquest will be harder, perhaps not. As always military budgeting focuses on the last war, not the next one. Necessity, the mother of invention, proven again in Ukraine.
Yes, we been selling off the farm for the last 40 years.
DARPA also was the start for shale fracking from the OPEC and Saudi oil embargoes in the 70's. And most of the so-called tech geniuses didn't start in their garages. They were usually government funded starters.
Yes, before 1982 stock buybacks were considered "market manipulation" Then the "free traders" started getting their way in the 70's and especially after Reagan was elected. From the crowd who is first to tell us nothing is "free" lol funny
Ok if we use the Fourth Turning and most other "experts" criteria then 80–100-year cycles are when we start looking at drastic regime changes? So, since our beginning we are basically in the 4th cycle of this dynamic, right? 1780-1860; 1860-1940; 1940-2020. So, as the Chinese and others always say the 3rd generation is the one who starts giving the family jewels away. By the 4th it is 90% of the time a done deal. The fortune is gone?! Is this where we could be? The 2028 elections I believe will be where we really find out where we are going to go? Keep selling off the farm or start building and working again? hmmmm? we shall see?
The university = The "New Religion" (religion of nihilism)
No one wearing an American uniform has ever *defended* the United States.
Just to add some clarification, share buybacks were not illegal before 10b; in fact, they occurred on a basis in a very different fashion, promoting the thoughtful repurchase of shares, typically in the form of tender offers, at a premium to the prevailing market price.
The issue with 10b is not, in fact, that it safe harbors share buybacks, but that they gave safe harbour to repurchases under the expectation that they would be programmatic. Programmatic share buybacks are, by definition, value-agnostic; as such, they are thoughtless and risk wasting capital. A tender offer, which has faded from use since 10b, was not; it was the definition of a free market, as it was very much tethered to the cost of capital and the returns that could be derived from deploying capital.
This is the wrong direction. The US already spends more on war (Trump's nomenclature) than the next ten countries in the world. Let's target the spending rate of our allies, right around 2% of GDP, instead of the current 3.5%. That would reduce our current, roughly $950 billion war budget to $470 billion, still a big number.
Why do we need 84,000 troops stationed in Europe and 54,000 in Japan 80 years after the end of WWII? Our military and our spy agencies have been intervening and conducting regime change with astonishing regularity for my entire 78 yrs. Who has been defended in all of these actions? Weapons of Mass Destruction? Gulf of Tonkin?
Di Placido gets two very important things wrong. The first, the southern Transcontinental railroad you learned about in school, went bankrupt. All five companies went bankrupt with in two years of completing the railroad. The northern Transcontinental railroad, that was entirely privately funded, was a massive success. At least until it was undermined by government regulations meant to protect the companies involved in the southern railroad. So that is actually an absolutely horrible example of how to bring back industry to America.
The second issue he hints at but fail to explore is that disconnecting trade from mutual defense and shared values has created a massive 'tragedy of the commons'. We've been rewarding the national security threat, non-ally, and giant ball of corruption that is Mexico with ever more factories and investment. This has led Canada to underinvest in it's own industrial base, turn it's housing market into a Ponzi scheme, all while they increasingly underfund their defenses. Yet we still expect the Canadians to rally out to help us protect and defend the foreign supply chains feeding those Mexican factories.
The biggest problem is the mis-belief that a 'commons problem' only occurs when you try to give too much help to the poor. In reality, a 'commons problem' is created anytime you create a system that rewards irresponsible behavior. It will only be fixed when we intentionally and blatantly start changing our trade and defense policies to reward our allies and intentionally exclude non-allies or those that try to freeride off our protections.
A short version is that there is nothing free about "freedom of navigation" and we will quit defending all those foreign built and operated ships. Either because we intentionally change what we're doing, you because we won't have either the money or capacity to replace our increasingly obsolete warships.
The northern transcontinental railroad, consistent with the quote I used, received massive federal land grants. The whole point of my piece -- "thinking wider" -- is that federal subsidies are not enough on their own to reindustrialize and that we need private and foreign investment as well (i.e., more like the northern transcontinental railroad than the others).
Also, the point of the foreign policy argument in my article is the "tragedy of the commons" - I explicitly refer to it as "civilizational welfare." Perhaps you disagree that our allies have been free-riding, but that is different than saying I ignore the problem.
I appreciate your engagement with my piece but think it is unhelpful to say I get "two very important things wrong," then stating two central parts of my argument.
First, I want to express how I believe we're on the same side and want the same things. We want the US to be strong and bring back a world leading industrial base. We want strong allies that share our values like democracy, rule of law, human rights and reasonably clean environments. Okay, lets start looking a little deeper into this plan.
So we expect the French to cut their own pensions and more than double their defense spending, with at least a fair portion of that going to buy American made military hardware. You do know they are in a union with Ireland, who spends just 0.25% of it's GDP on defense. Ireland has used that lack of dense spending to keep it's taxes much lower than France, winning the European headquarters of dozens of American companies.
Ah, but we also expect the Germans to borrow themselves into a hole to get up to spending 5% of their GDP, all while their own economy is de-industrializing. Again buying lots of American made kit. Austria on the other, not an ally, will keep spending a mere 1%.
Are you starting to see the problem? Because I can keep going. Five EU member states are not in NATO. None of the pledges from any of the NATO members are subject to verification or enforceable. Hence why I tried to point out that we have to make it explicit that allies get better trade agreements. There is not much we can do about Europe, but we could start setting examples with allies like Canada and Japan.
I'm not saying Canada should get free trade, not unless they are willing to negotiate a somewhat detailed agreement on their defense posture. Whether they buy from us, or build it themselves, doesn't matter. Preferably, a comprehensive negotiated agreement rather then a simplistic percentage of GPD that encourages waste rather than innovation.
Stop for just a minute and ask, why should America provide help to the Europeans if they give the same trade terms to none allies? Well, wouldn't that also apply to why should Canada help provide security to America if we going give Mexico the same or better tariffs rates.
Also, I'm right about the Transcontinental land grants. We got the worlds best bankruptcy laws out of it, but then we also got almost a hundred years of the government setting freight rail prices. So use college land grant or some other example of the federal government helping push innovation and industry forward. The Transcontinental railroad is just a horrible example.
Oh and great article. You guys are spot on thank you.
Your republican party I would join.
Mark DiPlacido's analysis of the problem and issues of foreign policy defense and industrialization seem generally pretty solid. In particular, I was pleased to hear Trump go after what can only be considered MIC corruption. Little hints in the news like we can't supply Ukraine with enough munitions without getting dangerously low for our own defense is incomprehensible given our military budget, unless corruption. Military spending hasn't been successfully fully audited for half a century. That is unacceptable. I remain skeptical that Trump will end corruption rather than redirect it to benefit himself but at least he's acknowledged the problem out loud. DOGE should have gone after the MIC as job one. But that would have been a conflict of interest for Musk.
Mark mentioned communications infrastructure. That is existentially essential. We should have redundant fiber networks to everywhere in our country. Relying on satellites is insanely stupid. Relying on commercial players to make it happen has been a failure. Again, because we allowed it to be. I say nationalize where private enterprise has failed in its promise.
As for infrastructure, we need to think bigger than Mark is suggesting. A robust flexible adaptable national grid with multiple redundancies is a Requirement. Also a national water management system is a requirement. Climate change is going to alter water patterns substantially. We need to be able to manage droughts and extremely heavy rainfall equally. They are going to happen more and more. If we want to be sure we can grow our own food, that's gotta happen.
The deficit is ridiculous. It could be resolved sensibly and quickly by getting the military budget under control and taxing the extremely wealthy as was the case in our Middle Class happy time after WWII. Mark talks about the evils of financialization and I completely agree. So much of the financial sector is predatory vampirism and should be outright abolished. Much of trading and investment is about scamming and has nothing to do with productive investment. High frequency trading damages the middle class in the end. Prediction markets benefit only the owners of those markets and do fuck all for Citizens except siphon money from us. Crypto currency is for criminals and scammers. It should be banned. PE needs to be stopped or heavily regulated. It destroys virtually everything it touches in the end.
Mark talks about innovation leadership which the US has enjoyed for a long time. Cutting research and education is absolutely backwards to that end.
Getting our house in order includes stomping down on fraud from the president on down to street grifters. Medicare fraud from end users, complicit doctors and the biggest grifters: the insurance companies must end. Financial grift, MIC fraud must end. PBMs and all the leeching management middlemen in healthcare must go. End those and our national productivity jumps forward with no other changes. Add The infrastructure effort as a CCC and WWII scale national endeavor and protective industrial policy and we could be off and running and secure within a decade or two. With a prospering middle class and a much reduced elite class.
I don't disagree with much of what the administration apologists argue for. I strongly agree with much of what Oren advocates, ignoring the obligatory liberal bashing. I remain deeply skeptical that Trump is the instrument to make this all anything more than a smokescreen for his own power and corruption.