Andy Kessler

WSJ: Small Talk, Big Revelations

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https://www.wsj.com/articles/small-talk-big-revelations-holiday-parties-b096e355

Ring a ding ding. Hot toddies. Ugly sweaters. It’s that time of year, when you will find yourself stuck at a family gathering with your cosmic second cousin. Or chatting with randos at a cocktail party where you know only the host. You’re forced to converse. But there’s good news. Everyone has a unique story—success, tragedy, oddity. It just takes effort to extract it.

I wish I were better at conversations. Unlike writing, there’s no backspace key. I often chat with folks who babble away about how important they are, until I eventually pick a spot on their forehead to stare at and plot my exit. Or worse, they don’t talk much and leave uncomfortable silent gaps, making my exit even harder.

Some people jump right in with conversation starters like, “How ’bout those Niners?” Others accumulate trivia to lubricate their cocktail-party conversation. “Did you know that there are more rabbits than rabbis in Israel?” Good, though not my style.

Still, interactions with others are the spice of life. Stuck? Try the FORD method: Ask about family, occupation, recreation and dreams. Questions about kids, jobs, travel or hobbies usually can get people talking until you can eventually ask, “But what do you really want to do?” If they’re under 35, the answer is often “save the world.” OK, save away. At least they’re talking.

We’re always told to avoid getting blinded by the light of MPR: money, politics and religion. But mama, that’s where the fun is! There’s nothing better than conversations with strangers or folks you’ve known your whole life that flow, with back and forth, give and take, volleys and countervolleys, even if it gets a little spicy, until you’ve learned something new about them and maybe about the world.

But FORD goes only so far—something is always missing. Conversations can be shallow. I don’t care that you’re just back from Florence or that your kid works in private equity.

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WSJ: Tariffs Are for Losers

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https://www.wsj.com/articles/tariffs-are-for-losers-global-economy-protectionism-trade-jake-sullivan-hawley-585c4175

Who said this? “To really rebuild the industrial heartland of America, you need a committed national policy of tariffs, of protecting American industries.” It was J.D. Vance during his successful 2022 campaign for U.S. Senate. This thinking is dangerous and pervasive—bipartisan battiness. In reality, tariffs impose costs on all Americans to subsidize a few jobs.

Missouri Sen. Josh Hawley, also a Republican, has proposed the Raising Tariffs on Imports from China Act. All he’s missing is a colleague named Smoot to reprise the Smoot-Hawley Tariff Act and cause a market crash and depression. Mr. Hawley said in June that “in the last 20 years in the state of Missouri, we have lost 60,000 jobs to the People’s Republic of China—that number nationwide is almost four million.” No mention of the better jobs that were created. There were 130 million nonfarm payroll jobs in 2003 vs. 156 million today.

You’re going to hear a lot about tariffs this election cycle. President Trump’s tariff triplets—Steven Mnuchin, Peter Navarro and Robert Lighthizer—whispered populist gobbledygook in his ear that he was Tariff Man. Now Mr. Trump has proposed 10% tariffs on all imports. That sounds strong but it’s actually a weakling move, especially with U.S. industrial capacity already near an all-time high.

In October, the Journal ran an article by Oren Cass of American Compass titled, “Why Trump Is Right About Tariffs.” It’s filled with dime-store economic thinking, claiming that tariffs are for raising government revenue and that our service economy is about “cutting hair” and “serving fast food.” Mr. Cass completely ignores that phones, medical equipment and other imports are often designed in the U.S. Sure, they are assembled overseas, but their value, usually software, is created here. Should we put tariffs on search engines and social networks? Of course not. China blocks ours to force its citizens to use inferior products. Tariffs denote weakness, not strength.

With tariffs, you get false price signals and less innovation. They misallocate capital and human resources by having entrepreneurs chase fake opportunities. Domestic manufacturers love tariffs, which allow them to raise prices, but the rest of us have to overpay for goods while manufacturers become lazy. The largest and lowest-cost electric-vehicle manufacturer in the world, China’s BYD, is effectively kept out of the U.S. by Trump and Biden tariffs, and we now have a glut of unprofitable and expensive domestic EVs.

If all the chips in an iPhone were made in the U.S., I calculate we would be paying close to $2,000 for one and unit sales would decline 50%. Would you upgrade at that price?

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WSJ: Spinning in Circles in 2023

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https://www.wsj.com/articles/spinning-in-circles-in-2023-covid-openai-altman-corn-subsidies-china-dc0ac4ad

My head is spinning from all of 2023’s confusing circular circumstances.

OpenAI’s Sam Altman has often said that artificial intelligence will take jobs away. He was right. It took his job away—if only for 100 hours until he circled back. He is no fan of capitalism, famously saying, “The incentives of capitalism to create and capture unlimited value I’m a little afraid of.” OpenAI, given worries about AI’s “existential risk,” was created as a nonprofit that “benefits all of humanity.” But generative AI requires oodles of capital to run. So, as a born-again capitalist, Mr. Altman had the nonprofit OpenAI create a “capped profit” OpenAI that raised $13 billion from Microsoft and now, lo and behold, actually benefits humanity.

The U.S. doesn’t have diplomatic relations with Taiwan, so as not to upset mainland China, but it will defend Taiwan if China attacks so such companies as OpenAI can get the advanced chips for generative AI that will allegedly “existentially” end humanity.

The U.S. funded “gain of function” research in Wuhan, which led to the pandemic and caused politicians, three years on, to restructure supply chains completely and move away from free trade so that the U.S. could make masks to respond to a pandemic we essentially paid for.

To have any chance at getting elected, presidential candidates must fly to Iowa and promise corn subsidies—almost $100 an acre. This leads to an overabundance of cheap high-fructose corn syrup that’s used in processed foods and sodas. This causes higher rates of diabetes and obesity. The Biden administration had to cap insulin prices, which caused shortages. Also, Medicare has to pay for Ozempic to treat diabetes and obesity.

Thanks to the Obama administration, the U.S. has released billions of dollars to Iran, which funds terrorist groups like Hamas and Hezbollah, forcing the U.S. to provide Israel with Iron Dome missiles and send aircraft carriers to the Mediterranean.

After the Soviet Union fell, the U.S. brokered a deal that took nuclear weapons away from the newly independent Ukraine, and now we have to send Javelins and Himars and tanks and F-16s so the country can defend itself against Russia.

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